I don’t get the advantage to a bank operating only for exclusive members. Wouldn’t they want as many customers as possible? Lately, many credit unions have opened their doors to all, so what gives? - Jinx
A credit union is more like a co-op. I think they tend to be much more customer oriented as opposed to profit oriented. I’m not sure of what the technical/legal differences are. I have belonged to two different credit unions and have found the service much more personal. Not sure if the interest rates are any better, though.
The biggest difference between a bank and a credit union is that the credit union is owned by the members, not by stockholders. Profits from the CU are distributed back to the members via quarterly dividends.
As noted above, a credit union is a form of co-op.
A cynic might answer that membership in credit unions is usually restricted in the United States because banks bring pressure to bear on state regulators (historically, bank regulation has been primarily a state, rather than a federal, function), in order to restrict competition. I don’t know what a non-cynic would say to counter this.
In the UK credit unions have been set up , mainly in working-class districts , to stop people having to borrow from money lenders who can sometimes charge up to 100% interest. Also this can sometimes be the only way people can borrow money if their credit rating is poor and they cannot open an ordinary bank account.
Basically, banks are sticks in the mud who have no respect or desire to deal with workaday folks. The credit unions were set up so working people could have a way to borrow and save without the ass reaming and rejection you normally get from a bank. They are non-profit, so they don’t put the squeeze on little old ladies in order to appease increasingly short-sighted stockholders.
Can you tell i’m in a credit union?
P.S. My credit union only charges $1 for overdrafts. Not that I do that, but it’s nice to know it doesn’t cost me money not to have money…
In short, there are credit unions, because there are people who want to have financial services without the attendant buggering that banks give you. Credit unions are owned by their depositors and their sole purpose is to provide service to the depositors, not. A for-profit bank’s primary purpose is to enrich its shareholders, which involves paying the most attention to large, institutional depositors and giving everyone else the above-mentioned buggering.
I never realized how big of a difference there is between credit unions and banks until I had to start working with a bank for my small business. I’ve always had my money in a credit union through Ford since I was 12. Banks are all about protocol and fees and paperwork and having to memorize numbers. Credit unions are like keeping your money with a trusted neighbor who pays dividends.
My credit union doesn’t even charge overdraft fees if you have $$ in your savings acct. They just take it out of savings.
Credit Unions are the way to go…I have a credit union savings and a regular so called “free” banking account. The interest on my bank savings last month was 1% (grrrrrr) and my credit union dividend was 1.75%. still sucks but it’s always higher than the bank and before the interest rates were lowered back around 2000-2001 (pre world trade center bombing) I was getting 5.75% at the “Union”
Also, I never have any fees with my credit union. but with my bank I pay anywhere from $10 to $18 per month. So any interest I earn goes right back to those greedy bastards.
I’ve belonged to my credit union for over 20 years. It’s gotten to the point that if I need, for example, a car loan, I get approval almost instantly and I can pick up a check for the dealer that very day. My pay is directly deposited and loan payments are automatically transferred. Service is great. ATMs are free.
Even when I move away, I’ll keep this account - it’s wonderful!
I just joined one for a re-finance, and got treated like the prime borrower that I am, where I’d looked at three different other lenders and they all warmly offered to treat me like a sub-prime push-over. I got over a percentage-point better interest and $7000 less in start-up costs.
My bank, Wells Fargo, has apparently gone into the fee business, so I’m moving my checking and savings over to the credit union.
If WF doesn’t want to be in the banking business, they don’t have to be in the banking business. Hah.
You know, I was a tad prejudgiced towards credit unions until I read this thread. The hours most of them seem to keep around my area are laughable compared to the local banks with many closing early every day (as in before 3) and never open on Sunday. I can go to any First Union, Commerce, or other banks that are open past 5 and 7 days a week. Then again, after dealing with some of the larger banks its renewed my hatred towards them (god I hate banks). Time to check out the local credit union…
My credit union went from being a federal credit union to a state credit union. I’m not sure exactly why there’s a difference, or exactly what differences there are, but I gather that it was going from federal to state that allowed them to relax their membership requirements from serving only employees of the university (and a few other companies) and their families to anyone in the “community.” To become a member, you used to have to show a paycheck from the university (or from a short list of other employers)–but not from NASA or the NSA, which screwed some of my fellow graduate students who were on fellowships. Even being a student of the university wasn’t good enough–you had to be employed by them. Now you just need to prove that you reside in this county (and maybe nearby counties, too, I’m not sure).
Anyway, getting a car loan was a cinch, I get good dividends on savings and checking, and we saw an investment counselor who did not try to push us into sinking money into a bunch of investments, but advised us that we were doing the right thing for our stage of our lives by having Roth IRAs and stashing extra money in CDs. So, yay credit unions!
I miss my credit union. I was a CU-type through college and through my first job. Then I moved in 1994 and there were no convenient credit unions around, apparently, or ones that offered me membership. I really miss the fee-free services. Sure they have shorter hours and fewer ATMs (often one or zero), but, hey, they’re non-profit institutions. I’m going to go looking for one I can become a member of. Does anyone know whether there’s an easy way to find out if there are any credit unions that will offer you membership?
Actually, there is a credit union at my workplace, but they’re not full service. They don’t even have checking accounts. I need to use a credit union like I do a regular bank.
Credit Union National Association: Find a credit union
CUNA: Credit union history
Put another vote on the Credit Union Bandwagon.
I have had bank accounts since I was 13 or so, and managed to get screwed over on a pretty regular basis by all of them. The smaller banks tended to do less screwing than the national banks, but fees always managed to pile up. The worst was Bank of America (then Nations Bank). I had several thousand dollars in checking and savings accounts with them when I went to college. It was supposed to be spending money for me as I was out of state (plus book costs et cetera).
About two months after I started using it as such I noticed that my balances were about $400 off. I investigated Why this was with my bank immediately. Well first off, since I was using other banks ATMs(there weren’t any for my bank in the area) I was getting charged $2 per trans from that bank (First Union i believe, it was higher being at the college than normal for the time), I was getting charged an additional $2 by my bank for using another banks ATMs, then getting charged an aditional $4 for using an out of state bank (they refused to let me move my account from home state to college state), and on savings withdrawals (where most of my money was) I got charged an additonal $10 for every withdrawal beyond the second one for the month. It would have been nice for them to tell me all this when I set up the account (and no, it wasn’t in the fine print, I reread it) or allow me to fix it, but they never did.
There were many other problems I had, especially in the credit department (unable to get any), but that was the worst, and completely set the tone for how I feel about banks.
Have been with the credit union of my employer for the last 3 years, and have yet to have any problems in my dealings with them. I don’t necessarily like all their rules, but the good thing about the credit union is, that as a member, I can try and vote against them when the ‘shareholders’ meetings occur, so at least I am a participant in my own bank. It would be nigh impossible for someone without significant capital to invest in a private bank to get the same volume of voice that I have with my credit union just by being a member.
Credit Unions are great IF they are run by honest, intelligent folks. Like anything else out there, not all of them are. Unfortunately, the one attached to my employer is awful (I won’t spill the beans and reveal the name although it is attached to a land-grant university in Indiana that happens to be named for a wealthy land owner and business person). For years I was a member because I heard that CU’s are better than regular banks.
Not this one.
My CU charged $15 for overdrafts even though I had overdraft protection and all they did was move money from my savings to checking account.
It took 3 months of filling out (and after they were lost re-filling out) forms to get my money changed from direct deposit to something else. Add in the run around of my employer telling me that this was initiated at the CU and the CU telling me that it was initiated by my employer (the employer was correct, BTW).
The clincher came when I bought a car through their “vehicle locator” service. They only look for a car if you PROMISE to buy it once they’ve located it - they don’t even initiate the process unless you’re locked in to buy from them. I knew exactly which car I wanted so I went with them as they claim their prices were dirt cheap. They do try to give you a low price, but when I went to close the CU agent was worse than any dealer trying to sell me the extended warranty, etc. etc. A week later I was notified by the CU that the car locator dude had “forgotten” to get me to sign a vital piece of information so they were mailing it to me - I had to sign it and return it right away. The form that I was sent had the wrong vechicle identification number typed on it. Needless to say I didn’t sign the form until I got one with the correct VIN. It could have been an honest mistake, but something about the entire transaction smelled fishy.
I now bank with a small local company (4 branches total) and have been very happy.
There was a bit of a flare up concerning this in New York state a few years ago (sorry, no cite right now). The banks in our state wanted to force ‘employee’ Credit Unions to be restricted to that, employees only (of one company, or several companies in one field). Luckily, several hundred thousand angry Credit Union members convinced the politicans to quickly can that idea.
You can go into a First Union? Really? Where???
I’ve been a credit union member since I was five years old. My father was part of the credit union movement almost from the beginning. Today, if you visit the world headquarters for the credit union movement, my father’s picture is in the museum.
