Bank Treating You Like Doo-Doo? Try a Credit Union!
Posted by Cap in Personal Finance |If you go into “identity theft mode” and dig through my trash can, you will find out that I have two checking accounts: one at Bank of America, and another at Orange County Teachers Federal Credit Union — a superb credit union in the region.
The former is for convenience, the latter is for service.
If you’re consistently getting poor service at your national bank and you’ve tried various branches in the region, you should definitely consider the option of credit unions.
Credit unions are not-for-profit co-operative financial institutions. There are a few differences between credit union and traditional banks that you should note:
- Members who have accounts in the credit union are the credit union’s owners
- The policies set fort by the credit union are generally those that benefit the members. Because of this, credit union often tout superior banking service and the commitment in improving its member’s financial health.
- Often times, credit union interest rates for deposits are higher, while interest rates for loans are lower, when compared to that of traditional banks.
Besides the usual better service, you will also find much more favorable rates at credit union. When compared to Bank of America, my credit union has better financial products in almost all aspect. From savings, checkings, CDs, auto loans, and credit cards — all of them either have higher savings rate, significantly lower fees, or lower interest rates on loans.
Wowzer! Better service AND better products? Where do you sign up?
Unfortunately there are a few negative aspects to credit union:
- Member restrictive. Credit union restrict their membership to a specific segment. For example, OCTFCU is restricted to employees of educational institutions (and some students) in the Southern California region.
- Branches are limited to the service area, and the same applies for ATM access.
- Compare to national banks, credit union’s online banking may be a few steps behind in terms of capabilities and features.
- Most will not have a 24-hour customer service call center, so if an emergency arise, you may be fresh out of luck.
Still, a credit union is a great alternative or supplement to traditional banks for financial products, and some of their products such as credit cards are non-member restrictive, especially useful for those with little or no credit.
Students should also consider a credit union for their banking needs, especially since many universities and colleges across the nation have their own credit union that the student can utilize.
Finally, if you have difficulty finding a credit union that you qualify for in the region, ask around — many credit union extend their membership offerings to the immediate family members, siblings, spouse, parents, grandparents, children, etc. Don’t have any reason to call up your brother whom you haven’t talked to in five years? Now you have one! Woot!
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5 Comments to “Bank Treating You Like Doo-Doo? Try a Credit Union!”
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October 11th, 2006 at 8:43 am
Cap-
Great post about CU’s vs banks. We (bloggers in CU land) love to see people talking about the credit union environment. I’ve been reading your blog for a few months now and it is always informative and entertaining. Keep up the good work!
October 11th, 2006 at 9:17 pm
Hi Cap! I wanted to add that many credit unions partner with other CUs to offer branch services well outside their geographic location. My credit union’s membership is limited to a relatively small area in upstate NY and a tiny bit of northern PA. But, through partnerships, I can make use of branch services at select credit unions here in California. This was particularly helpful when I accidentally went over my alloted 6 transfers out of my savings account one month. I had to go to the branch to transfer $ into my checking account so I could pay my credit card bills!
October 12th, 2006 at 1:53 pm
And I just want to apologize for digging through your trash when I was in identity theft mode ;)
October 12th, 2006 at 5:28 pm
The CU’s around me have pretty low interest rates for their money markets and CDs. If they would up those, they’d be stomping the competition. I’m trying to not have a physical bank and so far it’s succeeding…other than a mishap with some 6 transfer limit on my accounts and a fat $50 fee last month.
Maybe I should read the fine print a little more.
October 16th, 2006 at 11:12 am
Robbie: thanks for the compliment and I appreciate the visit.
Michelle: Great tip. Totally forgot about that. I do have access to most the CUs ATM in the region, if not the branching service.
laurie: no problem. you may keep the unused sanitary wipes.
binary dollar: you may want to check out these two post.