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

By: Nic

Nic — Tue, 12 Apr 2011 22:31:08 +0000

I have been with my credit union since I was 13 years old. I even moved away to a place where I can’t access my credit union physically and I still don’t have issues. Mainly because my credit union is part of a larger network, meaning that I can go to other credit unions and get the same service, for no additional fee. I also do more online banking than ever before.
I personally think more people use bigger banks because they are actively pursued, and they perceive it as a hassle to change banks. I also think that big banks create incentives to stay and make it feel uncomfortable to switch out.
Credit unions charge less fees in total, have among the best customer service I have ever received as a consumer, and have incredible rates for being a member.
I always recommend joining a credit union to everyone I know.

By: A Person

A Person — Mon, 04 Apr 2011 04:17:14 +0000

I think this is nonsense. No one will ever make an argument as to why banks are better than credit unions. The only thing that exists concerning CUs on the internet is propaganda written by people already using credit unions…I don’t trust what any of these people say. Nor am I fan of major banks. My theory is that y’all’re all liars.

By: Nikolai

Nikolai — Tue, 07 Dec 2010 00:53:10 +0000

Another reason is that not just anybody can join any credit union. E.g., only Stanford University employees can join Stanford Federal Credit Union.

By: Rick Cranston

Rick Cranston — Thu, 03 Jun 2010 20:44:42 +0000

Take a look at http://www.culoanzone.com. It’s an example of what we are doing in CO using collaborative marketing and paperless technology so that one, people can see credit unions and two, can join credit unions, and three, take out a loan paperlessly. Also, with shared branching, credit unions from all over the country share facilities to give members thousands of convenient locations to perform transactions just as if they were in their home credit union. Whether you are at work, home, or your favorite travel destination, your local credit union is now avalable thru shared branching.

By: J

Wed, 12 May 2010 00:04:41 +0000

Thanks, KD.

For what it’s worth, I think the ATM situation has improved for credit unions. Many credit unions have pooled their ATMs together into one large “CO-OP” network, creating a pool of 28,000 surcharge-free ATMs for their members:

http://www.co-opfs.org/public/locators/atmlocator/

Another shared credit union ATM network is CU24, which claims 50,000 surcharge-free ATMs:

http://www.cu24.com/ATMLocator/

Access depends on the credit union. First Entertainment members can use the CO-OP network. Pentagon Federal participates in the CU24 network. Alliant Credit Union members have access to both the CO-OP and CU24 networks.

By: KD

KD — Sun, 09 May 2010 13:08:38 +0000

J, thank you for sharing your experience. I have been in the US for 8 yrs and I have always used a credit union. First, at school and now in the city I work. I have always been treated fairly by them. One thing I think was different for me was I never cared for ATMs. I have hardly ever used them. So, the credit union with just a couple of ATMs but with better products and service was a better fit for me. People generally tend to use ATMs a lot and understandably, they want a bank with a large network. Besides, credit unions have membership requirements. So everyone does not qualify. But usually being a member of some particular nonprofit is a one way to gain membership.

By: J

Sun, 09 May 2010 05:39:56 +0000

TFB – in my case, it was a mix of inertia, ignorance, and (until recently) coverage under a non-HSA compatible plan. I was mostly happy with ING Direct’s checking and savings accounts, and I liked my Citibank Driver’s Edge rewards. I was not happy with HSA Bank’s interest rate or investment options, but I was not sure if I could open a new HSA if I was not covered by a non-HSA compatible plan. I also did not know about the options offered by Pentagon Federal and the Alliant Credit Union.

My first wake-up call happened early last year, when I missed a Citibank email notification that my online statement was ready. My payment was late. I got hit with a $35 late fee and about $35 worth of interest. I called customer service and explained my mistake. The rep kindly removed both the late fee and the interest charge.

Several months later, Citibank raised my interest rate to 30%. I always pay off my balance in full, so this should not have mattered. However, I did not feel comfortable using a credit card with a 30% interest rate. The 3% foreign exchange rate bothered me, too, so I started looking around.

I wanted a card that was *not* run out of a South Dakota bank in order to evade usury laws. Federal credit unions cap their credit card rates at 18% by law, so they seemed like a good place to start. This led me to Pentagon Federal and its fee-free “Promise” Visa.

Along the way, I discovered Alliant and its 1.5% interest rate on savings/checking and 2.5% interest on HSAs. With its “cashless” branches and online presence, Alliant seems to be the credit union equivalent of ING Direct. In addition to a higher interest rate, Alliant offers physical check deposits, scanned check deposits, a larger ATM network and named beneficiaries for accounts. ING Direct requires that I go elsewhere if I need to cash and deposit a physical check. I also cannot name beneficiaries for my ING Direct account. Once I discovered Alliant was an option, I set about replacing ING Direct and HSA Bank with it.

I am not sure why more people are not using a credit union. In my case, I honestly did not know better options were available. I opened a Bank of America account because it was there, not because I knew any better. I applied for a Citibank credit card because my parents used a Citibank card.

I’m becoming aware of better options now thanks to the Internet, but most of my co-workers still use big banks.

By: TFB

TFB — Sat, 08 May 2010 03:05:32 +0000

J – Thank you for sharing. Clearly you are getting a better deal with credit unions. I have accounts with Alliant too. Can you tell us what took you three years to move your other accounts from banks to credit unions? And why do you think more people are not using a credit union?

By: J

Sat, 08 May 2010 01:53:00 +0000

In 2007 I moved my checking account from Bank of America to First Entertainment Credit Union in order to reduce fees. I am pleased with First Entertainment’s “Value Checking” account. I also use their “First 500″ savings account, which pays 7% interest on the first $500 if I use e-statements and either direct deposit or bill pay.

This year I’m switching the rest of my finances from banks to credit unions. I am replacing my single Citibank credit card with a Pentagon Federal “Promise” card, which carries no fees — not even foreign exchange fees. This should be useful when traveling abroad and shopping at non-US web stores.

I also signed up for a membership at Alliant Credit Union. This credit union will replace my ING Direct Orange Savings and “Electric Orange” accounts, as well as HSA Bank. I will get a better interest rate on these three services, and I will have them in one place, simplifying my finances. I’m also interested in trying Alliant’s “eDepositPlus” feature, which will let me scan checks for deposit.

By: Josh

Josh — Thu, 11 Feb 2010 22:52:17 +0000

Most people are too lazy to research banks they’ve never heard of. They go with big names. Definitely a sense of security with big names. If that doesn’t prove to be a false sense of security now after the past few years, I don’t know what will!

Also location is very important. More branches with big names. 1 close to work, 1 close to home, 1 on the way to the grocery store, 1 IN the grocery store!
Mobile access is bigger now than ever! I need a minimum of a mobile site to check balance, transactions, pay bills, etc. A dedicated phone app is preferable. Iphones are usually 1st in line 4 that.