It’s just getting downright ridiculous isn’t it? Sure, banks have to make a profit, and they’re still cleaning up the carnage that came from lending money to anybody who walked in with a heartbeat and a pen to sign the papers, but why all these fees? Just when you get used to one fee, here comes another.
Obviously, recent legislation (Dodd-Frank) played its part in motivating banks to add new fees, but since we can vote with our feet (and our dollars), I think it is time to look at alternatives to large banks.
For some reason, and who knows why, there is a sector of banking institutions that just can’t get the love and respect they deserve – credit unions. In the past, you used to have to meet a specific criteria in order to be a member, but now the membership requirements are about as strict as, “you have to drive by our branch at least once a year.”
I’ve been a member of a credit union for nearly 15 years now – since I was old enough to join one based on my grandfather’s decades-long membership during and after his service in the Marines.
I’ve financed vehicles (back when I used to do that) through my credit union at incredibly low rates. I have enjoyed higher yields on CDs and money market accounts, and even turned to them for a mortgage – mostly because they were so easy to deal with and the rates were competitive. I still maintain a local bank account with a small, regional bank, mostly for convenience, but I do all “serious” banking with my credit union.
Some credit unions have more strict criteria based on geography, membership to a particular organization, employer-based, etc. However, chances are virtually anyone can now join a credit union – and here’s why they often make for the best personal bank account.
Four Reasons to Choose Credit Unions Over Big Banks
1. Free Checking. Fat chance of finding a bank that has totally free checking these days. Although there are crafty ways of avoiding checking account fees, no bank is going to tell you that. Most credit unions still have totally free checking account for members.
2. Free ATMs. Most credit unions belong to networks within the National Credit Union Administration or NCUA. If you go to any credit union that is part of this group, you will often receive no fee ATM transactions. It doesn’t always work out like that, but even if you do pay a fee, it’s going to be a lot cheaper than traditional bank fees.
3. Better Interest Rates. Credit unions are non-profit. When you join a credit union you have to pay in to it as a shareholder. It’s only about $5 that you pay as your “share,” but that $5 makes you an owner of the credit union and because of that, you’re entitled to benefits. Credit unions often have better rates on loans, and better interest rates on deposit accounts.
4. No Strange Fees. If you’ve taken a large amount of cash in to a bank lately, you’ll notice that they charge you for the deposit. Isn’t that kind like McDonalds charging you to purchase lunch, and then charging you for the food? If it seems silly, it is, but that’s the new normal with banks. Credit unions have also been affected by legislation and have beginning to hop on to the fee bandwagon, but not with outlandish fees like this.
Potential Drawbacks to Using a Credit Union
If you’re a “techno banker,” credit unions may not be your cup of tea. Their internet banking platforms aren’t nearly as robust as traditional banks, and you may feel like you’re looking at one of those old school blue screens when using them. They also don’t come with all of the transfer capabilities or other advanced online management tools.
Still, if you’re fed up with the big banks, there’s an option, and that option is the credit unions. I would encourage you to head over to the NCUA website today and find your nearest credit union to investigate their offerings and strongly consider making the switch.
How have your experiences with credit unions differed from those with a big bank?