Are credit unions really better than banks?

[TheReal]

I hear this all the time, but what really makes them better? My brother says i should do this. They do the same things, right? And credit unions are smaller so they don't have as many ATMs. Do I really need to switch to one from my bank?

[maryadavies]

It depends on what you need.

With me, when Wells Fargo took over Wachovia, I had a free checking account there. Then Wells Fargo threatened to charge for DEBIT CARDS.

...Since I don't carry around a lot of cash, I switched to a credit union I found real fast b/c they had free checking, and even give you interest. It isn't much but it's something! Also no minimum balance is very nice, that I really like.

I understand they've removed all free checking at Wells Fargo now. Basically everyone's being charged, now. Even if they came from Wachovia.

It might be worth a look, and see if what they got is worth not having a lot of ATMs. ^^ Me, it is worth it since I usually use my debit/check card directly and I don't make a lot of withdrawals. Just deposits from irregular stuff. And..I'm very happy with my credit union.

[snafu]

I believe there are a lot of points to consider before switching financial institutions. Are you happy with your current bank? Is your bank charging for products and services that had been included as part of their service package? If you use mostly cash, need ATM convenience, use teller for transactions, you'd likely find CU unsatisfactory. They have far fewer outlets and ATM machines. You'd need to confirm that there is no charge for using other Credit Union's ATMs.

Do you/will you be shopping for a mortgage in the near future? The structure of most CUs have a formula for rebating a percentage of profit back to their mortgage clients. It takes longer to get approval for a car loan but they will discuss/negotiate interest rates based on your FICO type score. CU's are convenient and cost efficient if you use a lot of automatic service, like automatic deposits, automatic rent/mortgage withdraws, utilities on budget/automatic payment plan/electronic pay, cheque or credit card and use charge cards which are paid in full by each due date while targeting benefits.

How much have you been charged in bank charges since the start of the year? Do you want to reduce costs?

[MonkeyMama]

I hear this all the time, but what really makes them better? My brother says i should do this. They do the same things, right? And credit unions are smaller so they don't have as many ATMs. Do I really need to switch to one from my bank?

Credit unions are non-profit and so members get back profits in some form or other (higher interest on cash deposits, rebates of various sorts, lower fees, etc.).

I find general assumptions about CUs to be untrue. I have always had a CU account and have never banked at a big bank. As to the ATMs, most CUs network together and that is not an issue. I personally have driven around friends looking for specific banks while passing several CUs. (Drives me BATTY!) I can get free ATM withdrawals like anywhere - it has never been any issue. (Most years I've not even lived in the same city as my smaller CUs).

Customer service has always been exceptional because they tend to be smaller and more customer focused institutions.

My current CU instituted mobile deposits long before any of the big banks did. Same for online bill pay. My impression is that they are quicker to change with the times because they just aren't such massive institutions.

All of that said, not all CUs are created equal. I wouldn't assume that all CUs are better than banks. I would shop around your local banks and CUs and make sure you are paying the least fees/interest and getting the most interest possible. Ask questions about any concerns you have or banking needs you have.

[Spiffster]

I used to have Wells Fargo and switched six years ago. I dont miss my old bank one bit.
I never got the argument about limited access to your credit union balance. I can use any ATM I want and any charges are reimbursed at the end of the month. I can also make deposits at ANY credit union since they are all linked up now. (Not a huge deal since I have direct deposit, but its useful at times.) Not only that but my checking account pays 1.25% interest, yeah, thats 1.25% on up to $25k which happens to be my emergency fund.

Credit unions are the way to go IMO, but like MonkeyMama mentioned, you will want to shop around either way.

[Joan.of.the.Arch]

I think it depends on the credit union. Some have fewer services than others.

My CU allows allows use of any ATM, fees refunded. The CU has 32 ATMs of its own, too. They offer mortgage loans without private mortgage insurance, and will never sell your home loan. (I've had that happen, and the first out-of-state outfit was slow to deal with and lost track from day one of what we owed! URGH!)

We once had an auto loan (refinance) with the CU and I don't remember the process taking more than an hour. My CU offers better dividends (interest) than the vast majority of banks. They offer a child's saving account with better rates than the best adult account. They offer 1% APY on checking accounts if you use a debit card a certain number of times each month. Remote deposit and a huge slice of all the other services of modern banks.

Look into more than one CU if available, comparing the details. You might be eligible for some that you would not have thought. For example, I'm eligible for a fire fighters' CU even though I'm not a FF and don't even know a FF.

[Weird Tolkienish Figure]

I hear this all the time, but what really makes them better? My brother says i should do this. They do the same things, right? And credit unions are smaller so they don't have as many ATMs. Do I really need to switch to one from my bank?

Your typical credit union is better than your typical bank, but some smaller local/regional banks are just as good as credit unions.

[ReallyBoredMan]

It really all depends on what you are looking for.

I would say that Credit Unions are better, they might have higher interest rate or less fees but it switching would only make sense if you are currently unhappy with your bank or you are looking for something more.

There are other benefits for being a CU member, they might be able to offer discounts like cheaper movie tickets, cheaper tickets to local events, or a discount on your auto/home insurance. The discount might not be huge, but I'll take any discount I can get on insurance.

I changed from a bank to a credit union because I had a "student" account with a bank and after 4 years they automatically started charging fees, without me knowing. I was still a student because I switched majors and was a semester behind. Apparently after the set time it switched to an account that required a minimum balance, and as a college student I wasn't exactly rolling in the money. :P

As far as withdrawing money, my credit union has it set up where every 7/11 store that has an atm has free withdrawals, along with being part of a network. I have never been charged any fees for taking out any money. Then again I don't generally withdraw money unless I need cash for parking ect.

The only thing with Credit Unions is to make sure that you look at the fine print. There is this one Credit Union that gives you 3% interest checking. There are a lot of hoops you have to jump through monthly in order to obtain that 3%. For example if the balance goes over 15,000, you need to use the debit card 10 times, log online 4 times, and if you do not meet one of those requirements the interest rate is 0.

If you are looking for a lot of branches nation-wide, if you like to walk up to the teller and make deposits, have some sort of benefit of having a credit card and account from the same bank, or you do not have any issue with your current bank and are not looking something new/better then you will be fine sticking with a bank.