Have you ever had such a terrible customer service experience or been charged so many fees at your bank that you seriously considered closing your accounts, but didn’t because, well, would another corporate bank be any different? Credit unions are a viable alternative to big banks. After a terrible customer service experience, this was exactly the course I took.
There are always considerations when changing banking institutions. Your number one concern should always be bank fees. While credit unions will often have lower fees than a corporate bank, this is not always the case and should never be taken for granted.
So what exactly is a credit union? A “cooperative financial institution chartered by the federal government and owned by individual members”. This means that when you put your money in the credit union, you become a part owner.
Credit unions do have membership qualifications which may prevent you from becoming a member. Typical qualifiers include employment in a specific company, working in a certain profession, or living in a certain place. However, if you have a parent or spouse who fits that qualification, you may also qualify. If you live in an urban area, there are probably a variety of local credit unions, so shop around. Chances are you’ll qualify for one of them.
One of a credit unions primary benefits is in their lower interest rates, especially for loans. Because they are not a for-profit organization, like a large corporate bank, they reinvest money in the company to keep rates lower for their members. Additionally, rates on savings accounts may be higher.
Now, banks do outstrip credit unions in the number of available free ATMs. However, many credit unions cooperate with each other so that you can use a different credit union or branch to withdraw money and not incur a fee. This feature isn’t present in all credit unions, however, so be sure to check.
For me, the difference has always been in customer service. Not once in all my years using credit unions have I ever felt like just a number. I joined my first credit union at 13, when my parents decided it was time for me to open a savings account. Of course they were co-signers and I couldn’t withdraw money without their signature, but the experience was friendly and felt adult. Since then, I’ve joined CapEd, a local credit union for teachers and students. Although my current credit union is larger than my first, tellers are always friendly, and those employed at the branch I frequent remember my name.
Only you can decide if a credit union is the right fit for your financial life. But if experiences at big banks have left you fuming, it might be time to consider a change.
Written by Mckenzie Candalot, Staff Writer – Mckenzie Candalot graduated from the College of Idaho with a B.A. in English Literature. She has a passion for written language and helping other women take control of their finances. When not blogging or reading, she enjoys cooking and spending time with loved ones.