Why a Credit Union Isn’t For Everyone

I joined Alliant Credit Union back in December. So far, I primarily used the savings account. Because all my bill payments are on autopilot, I didn’t want to go through all the trouble of making changes to the checking account. But I’ve come to like Alliant Credit Union more and more. I decided use its checking account for some bills.

The biggest difference is that Alliant pays 1.5% interest on the checking account balance versus others paying near zero. There are no minimum balance, no interest rate tiers or cap, and no debit card usage requirement. To get the 1.5% rate, you only have to get paperless statements and have one electronic deposit a month (ATM, direct deposit, or transfer from another account).

As I mentioned in the previous post, anyone can join Alliant Credit Union by joining a PTA or by donating $10 to Orphan Foundation of America. Alliant doesn’t pay me in any way if you join.

Although Alliant doesn’t reimburse ATM surcharges, there are many free ATMs around me — all ATMs at US Bank branches are free; so is the ATM near the cafeteria at work. Some of those free ATMs can take deposits even though they are run by someone else. It’s quite amazing to be able to deposit a check at a different bank’s ATM and have it show up in the credit union’s account instantly. It makes Alliant Credit Union feel more local.

While doing the setup for the checking account, I also learned why a credit union isn’t for everyone. Having used some mega banks in the past, I see banks do many things better than a credit union. Whether you care about those things is a different matter. I already mentioned a few small things in the previous post. Here are a few more.

Vague Email

Look at this odd email Alliant Credit Union sent to me:

From: [email protected]
To: [email protected]
Subject: Add Payee Notification

This e-mail was generated to notify you that your ACH account has added a new Payee.

That’s the whole email; I only left out a confidentiality notice footer. Can you tell what the email is trying to say? I have a checking account and a savings account, what exactly is my ACH account and why did it decide to add a new Payee? Who is this new Payee? Alliant Credit Union’s domain is alliantcreditunion.org. How come the from-address is alliantcreditunion.com? Is it real or phishing?

If you guessed the email was triggered because I added a payee in online bill pay, you’d be wrong. Try again.

Debit Card Activation Asks for SSN and Date of Birth

I received a debit card in the mail. When I called the toll-free number on the sticker to activate it, I was asked to punch in the full debit card number, my Social Security Number and date of birth. I’m not sure if the activation toll-free number is operated by the credit union itself or a vendor. If it’s operated by a vendor, did the credit union give out my SSN and date of birth to the vendor?

I did call from my home phone. For cards issued by some other banks, I only had to enter the last four digits of the card number and the activation system used caller ID to validate against my home phone number on file. It was faster and more secure.

Frequent Security Challenges

When I log in to online banking, more than half of the time I’m challenged to answer a secret question. It doesn’t matter if I’m logging in from the same computer with the same IP address. After a while, it gets annoying. I also wonder if the frequent challenges will make the secret questions less effective. The more often I answer them, the more opportunities for criminals to intercept my answers.

Online Bill Payment Always Shows Payment by Check First

When I add a payee to Alliant’s online bill pay, it always shows it will be paid by check. It doesn’t show when it will be delivered. There’s no online directory to search for known billers for electronic payments. I learned from FatWallet forum that the system will update the payment method (electronic transfer or paper check) only after it makes the first payment. Until then, you have to schedule more lead time and assume it will be paid by a paper check.

You see providing a checking account is more complicated than doing a savings account or CD. I don’t know if Alliant Credit Union is typical among credit unions. Being one of the largest, it should be better than average. There are still rooms for improvement in many areas. That’s why a credit union isn’t for everyone.

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  1. anie says

    We have been on and off with our local CU for a long while. Mostly now it’s just a local place to bank as I have everything else at USAA. LOVE them.
    Anyway, I’d say that the email is phishing: the difference between .com & .org are enough to alarm. ACH stands for Automated Clearing House and it’s here and there in regards to payments made with a debit card, if I remember correctly. If you haven’t set up any bills to pay I would be concerned~

  2. J says

    “As I mentioned in the previous post, anyone can join Alliant Credit Union by joining a PTA or by donating $10 to Orphan Foundation of America.”

    For what it’s worth, Alliant will donate this $10 on the applicant’s behalf if the applicant uses the mail-in form to join Alliant:


    Alliant’s offer to donate $10 on the applicant’s behalf appears in Section 1, Membership Eligibility.

  3. eva says

    Hm, I think you are generalizing overly. You have a poor experience with one institution, is that really indicative of practices throughout an entire class of institutions? My credit union does none of these things (it is also a closed union requiring membership through certain local nonprofit organizations). How do you know some banks do not also do these things?

  4. Ken says

    Any further updates? Have you tried Alliant lately? I believe they have made improvements to their website and they have also added $20/month ATM-fee reimbursements.

    • Harry Sit says

      I’m still using Alliant for my primary checking account. Since I wrote this six years ago Alliant made improvements. I recommend it.

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