Credit Unions Versus Banks; Which Do You Use?

Most people in this country probably use big banks – Bank of America, Citibank, etc.. They are almost everywhere, they have services that everyone can use, and they are big names in the banking industry so most everyone knows about them. We use Bank of America for our checking accounts, ING for our savings, and various brokerage houses for our investments. However, I have been giving a lot of thought to starting to use Credit Unions for some of our banking needs because of how much they support the communities that they are in. They take their profits and inject it back into the community, the members “own” the bank, a lot of times they offer lower interest rates on loans, and you might even know your personal banker! I have seen other personal finance writers talk about knowing their banker…but for us here, not only do I rarely step foot inside the bank, but even if I did I bet there would be different people working there every time. Anyway, I came across this site dedicated to credit unions and found it to be pretty interesting reading and thought I would pass it along. My dad was always a member of his work credit union, and because of that I do have a small savings account at that credit union that I have had since I was a kid. But learning more about credit unions has really given me pause to using big banks when I could probably be doing more good with the money I do keep in the bank by banking smaller.

Sure, the big banks have ATM’s everywhere so you can quickly access your money at no cost…but shouldn’t I be supporting my local smaller banks because they are basically non-profit organizations? I don’t know! If you have any thoughts on the matter, would love to hear your opinion on subject. Do you use credit unions over big banks? And why?

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Comments (12)

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  1. Wil says:

    Actually, the ATM thing is a myth. Many Credit Unions play nice with each other and don’t charge fees at their machines for members of other CU’s. I personally tell people to look at as many factors before choosing bank or credit union. There are strong benefits to both.

  2. eric says:

    the credit union in our area sucks. it’s so huge it might as well be a big name bank. they’ve got the pull in the area, and they throw their weight around.

    i can’t remember a positive experience i’ve had with them. in fact, when they found out we were going with a different lender for our home loan, they called us to complain. the girl on the phone didn’t even ask us to consider switching back to the credit union. she just complained that she had done more paperwork for us, and now we aren’t going with them.

    there have been countless other experiences… such as sending back $600 worth of checks in the mail all in one envelope after our wedding b/c they weren’t endorsed correctly (wife’s name change), rude people on their phones who don’t even speak in complete sentences. once, when applying for a “phone-a-loan” the girl simply said, “need security.” that was it. no “i’m sorry, i need more information.” or “for that amount, we require ____.” just “need security.” i thought she needed someone from their security department!

    if this is what big banking is like, i’d like to find a SMALL credit union.

  3. Emily says:

    I grew up using a credit union, and I have 100% always loved it. They only have four offices, but they have great service and everything I’ve ever needed. They also play nice with other CU’s, so I’ve never had to pay an ATM fee.

  4. beerbear says:

    They will claw BECU out of my cold, dead hands.

    1. Free checking with 7.5% interest on first $500 balance.
    2. Amazing online bill pay.
    3. LOC based overdraft protection for Checking.
    4. Very competitive loan and CD rates.

    I use it for everything except my savings (still clinging to ETrade’s 5.05%). Although I may move to a money market once I reach the $10K minimum.

    I haven’t used an ATM in years. Just buy a Clif bar and get cash back.

    I know people who use BOA or WaMu and I’m always baffled why they put up with the crap.

  5. MoneyNing says:

    I use a bank (Wells fargo) but I actually do pretty much everything online so any online bank would’ve been good enough.

  6. david says:

    What is a good credit union to check out? Anyone have any personal experience with a particular one that is open to anyone?

  7. Wil says:

    @ david:

    With credit unions, it really depends on where you live. There is a couple of websites that will help you. http://www.co-opnetwork.org will get you to ATMs, which will usually be at the credit union itself. Additionally, you can try http://www.cuswirl.com, which will tell you service centers (credit union branches that play nice with each other and will do transactions for other credit unions), I’m not near MY computer right now, but bankrate has a good listing as well.

  8. I’m a bank kind of man, although I recognize the perks of C.U.s.

  9. bo says:

    Yes! Now this is something I can contribute too!

    Okay, I am totally in agreement with beerbear. I would have to smoke something pretty serious to be with a bank over a CU. If you have no idea of some of the benefits of a CU let me blow you away.

    -No ATM fees since CU’s work together.
    -Biggie: my CU is getting ready to join the service centers so you can go into another CU or a CU service center and make any transaction like you were in your home CU. (It’s called shared branching)
    -I don’t pay yearly fees on any of my accounts
    -I don’t pay a yearly fee to have/use a debit card
    -I don’t have to have a minimum balance on my 1 credit card
    -I make interest off my checking account (and it’s not the crappy 0.0005% either)
    -The interest rates on my car and house are the lowest in the state. I couldn’t have bought either if I would have gone through a bank or 3rd party finance institution.
    -Free bill pay
    -Incredible online banking, and when I say incredible I mean incredible. I have no need to go to any branch (except for a cash/check deposit, well I could mail it in) because I can do every transaction online
    -And for those of you interested, you can apply for any loan (even a mortgage) on their site
    -Since my CU plays a big role in the community, you can go to tons of restaurants/businesses and get cash back when you make purchases

    Again, why would I swap from a credit union to a bank? Oh wait, I wouldn’t…

  10. david says:

    Thanks for all the comments everyone, appreciate the help and I am going to look into a CU in my area to do some business with!

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