Comments on: If Credit Unions Are Better, Why Don't More People Use Them?

By: Big Brother

Big Brother — Tue, 20 Oct 2009 06:48:23 +0000

I searched this because I have only heard good things about credit unions and was genuinely curious why more people didn't sign up for accounts there. Some of the points made are very logical and reasonable, but I would like to say that point five is unnecessary- it is a total bare assertion fallacy. It says that banks are better than credit unions because of the fact that banks are better than credit unions.

By: Nate

Nate — Fri, 14 Aug 2009 19:46:47 +0000

One factor is left out in favor of credit unions. While banks would never do this, nearly 1/3 of all credit unions in the US share their branches with each other. These credit unions belong to the CU Service Centers network (see http://www.cuswirl.com for locations). This network allows members access to over 6,000 branches nationwide. Their are only 2 banks in the WORLD with more locations then any credit union in this network.

I think the key problem for credit unions is point #2. Banks do a better job with marketing. The major reason is because credit unions give their earnings back to their member/owners while banks spend more to make more.

By: Castellano

Castellano — Thu, 06 Nov 2008 07:25:03 +0000

Never use a bank for checking! I was caught just like I read once on a forum. I closed the account and it was reopened when I forgot to stop a automatic withdrawal for $15.00. The bank charged me the $15, and an overdraft fee, plus another fee for being negative. I read my email one day, about the website not being able to get the money. I said "oops" to myself and changed the account. A few days later is when I received a letter from the bank saying I owed almost $100!!

A friend of mine is a banker, and he said they started doing that a few years ago, in order to capitalize on fees, and it was in my policy. He told me there was no reason for anyone to use a bank other than convenience, and building a relationship for a loan, but even then most credit unions can do that.

This is MY OPINION: STAY AWAY FROM BANKS FOR CHECKING!!!!!!

By: Anonymous

Anonymous — Fri, 09 May 2008 03:04:00 +0000

Since I moved to the US from Canada 7 yrs ago, I've only used one "bank" and it's the First Tech CU, then I use Fidelity for investments and 401K. I never thought I'd go to a CU when I was in Canada, it had seemed like why would I use a wig if i still have hair on the head. Anyway, I have to say I've been very happy with my CU. It has a reasonable savings rate of 2.667%. Free money orders. Deposit box. Yes it's true the ATM's are sparse compared to the banks, but I live in the 'burb so they are still very accessible. Although no cashback, their visa is comparable to most. Same 1% int'l fee. I like most their stress-free auto-credit card payment from my checking, then i do my audits once in a while. But after reading this blog and the reader comments, I'm interested to check out the Fidelity mySmart and Charles Schwab, just to keep my options open. Last point before I forget, their human service is excellent, very personal, and I never have to feel like I need to prep for battle with heartless bankers to ask for anything I need.

By: Anonymous

Anonymous — Wed, 07 May 2008 05:37:00 +0000

I have been with my credit union for years and years. I am happy with them. No fees, higher CD rates and it seems like they look out for me. BUT after moving to a different state, I find that it is difficult to stay true to my CU without sacrificing convenience (no CU locations in new state I've moved to, and have to find co-op CU to make deposits). So with my hands tied, I had to open account with a bank for ease of use.

By: TFB

TFB — Thu, 01 May 2008 19:52:00 +0000

Anon - NCUA also has a Find a Credit Union search form you can use. USAA is not a credit union. It's a savings and loan, like Washington Mutual, which most people think as a bank.

By: Anonymous

Anonymous — Thu, 01 May 2008 19:02:00 +0000

findacreditunion only works for about 60% of the states. Is there one that works for all of them?

Fortunately, I "bank" with USAA, which I believe is a credit union. But I'd love to also have a local "bank" account, for stock power forms, a safe deposit box, and the like.

By: atlas

atlas — Wed, 30 Apr 2008 14:19:00 +0000

My guess is that big banks refrain from taking their customer's money just up to the point that they don't run them off. They do this through advertising (my bank's name is on the local stadium, yipee!) and fluffy programs like keep-the-change.

I just left Wachovia for a regional credit union two months ago. Wachovia began charging a $3.99/month PFM fee for downloading account activity into my personal finance software. They also duplicated ATM fees from non-Wachovia ATMs. Neither of these fees are uncommon, but why would you pay it when you don't have to? Think about this, soulless corporate banks have one objective – to maximize profit. While you aim to save your money, they aim to separate you from it as often as possible without running you off.
On the other hand, credit unions are non-profit organizations that are owned BY the account holders. Mine assesses absolutely no fees whatsoever. Sure, I may pay a fee to the ATM when I withdrawal from a non co-op machine, but my credit union doesn't duplicate that fee, and I prefer to just get cash-back (if I need cash) when I make a purchase. Additionally, they offer 5% on checking and savings, (Wachovia offered 0% on checking, and 0.05% of savings), and offer lower rates than big banks on loans, mortgages, and LOCs.
For me, it was a no-brainer.

By: mcfnord

mcfnord — Tue, 29 Apr 2008 23:26:00 +0000

it took me a while to realize that charles schwab had the most value. i'm reluctant to believe people actually vote with their pocketbooks. unless you're obsessed with finance and accounting like i am, you probably settle on "good enough" without even knowing what's possible.

By: Anonymous

Anonymous — Tue, 29 Apr 2008 22:41:00 +0000

My credit union is fine, nothing special. It's interest rates are decent but not great. Mortgage rates are worse than average.

Here's my take on why people shun CUs:

1) People are mobile. CUs are generally regional. I can be pretty sure Wells Fargo will be available everywhere in the US. Not so for First Tech CU.

2) Who cares about interest on a checking account? Honestly, this is one of the stupidest reasons to pick a bank. Let's say you get 2% on your checking account. If your average balance is $1000, that's $20 over the course of a year. That's chump change, even in the context of other chump change.

3) CUs are relatively unknown. Everyone heard of Bank Of America, and Wells Fargo. But who's heard of People First Credit Union? And when people think about their money's safety, size and name recognition matter.