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From Bank to Credit Union Print
Wednesday, 10th May 2006 (by J.D.)This article is about Choices, Real-Life
I was an account-holder with US Bank for eighteen years. I paid an $8 “service charge” every month, as well as many other fees. Worst of all, I had to put up with truly awful customer service. Many people have similar experiences with US Bank. Yesterday, The Consumerist posted a story of one man’s encounter with US Bank customer service ineptitude. It’s typical of stories I hear.
I finally switched my accounts to a local credit union last May. I delayed making the switch for years because I thought I had too many automatic transactions that interacted with my US Bank account. Here’s how I finally made the switch:
- I withdrew several hundred dollars from US Bank and used this money to open an account at the credit union.
- One-by-one I transferred any automatic transactions to the new account.
- When I was sure that everything was working as intended, I went in and spoke to a banker. I took all my money in cash and then immediately deposited it into my credit union account.
The process was easy.
In retrospect, I’m not sure why I waited so long to switch. At the credit union, there are no fees for anything. (Well, there’s a $1 fee if I overdraw my checking account and they need to use money from my savings account to cover the draft.) The only drawback I’ve found is that the credit union ATMs aren’t as ubiquitous as the US Bank ATMS, but this is actually very easy to plan around.
Even the credit union’s on-line banking services are superior. That’s right: a four-branch credit union has better on-line capabilities than one of the largest banks in the nation.
This simple change has saved me at least $96 a year in bank fees, and has actually made dealing with a financial institution a pleasant experience.
May 17th, 2006 at 6:32 am
[...] Little expenses like this deprive you of money better spent on other things. (Before I switched to a credit union last year, I was paying $96 a year for the privilege of having an account at U.S. Bank.) I set up my insurance account to bill monthly when I was a broke college student; it never occurred to me to change it. [...]
March 23rd, 2007 at 9:31 am
USBank (or any large bank for that matter) vs Credit Union. To me this comparison is not even fair… for the big banks. To them, you are really just a number that they will take any chance they get to profit from. Its all about the share holders! (profit) There really is no personal aspect to customer service at such a bank. Today, even the smallest CUs have all the features of the big banks (online bill pay etc.) most CUs have very loose terms for accepting new customers. WHY ISNT EVERYONE A MEMBER OF A CREDIT UNION. Compare the numbers too. Its simple math, and its smart!
March 24th, 2007 at 12:43 pm
I came to Vermont from Canada in 2001. In Canada, banking is a little different in that there are a handful of very dominant national banks - Montreal, Toronto Dominion (TD - yes, that TD)- Nova Scotia. In addition to lousy service (I was once told it would cost me a $5 service fee when closing a savings account) the fees were so widespread that it seemed as though the banks were simply experiments for seeing how many fees an individual could pay.
Once in the US I got an account at a smaller bank hoping to avoid this. “Free checking!” was attractive, but as a grad student, maintaining the $1000 balance required not to be levied a hefty service charge proved challenging at times.
Finally, I joined a regional credit union. In five years, I have never paid a cent of fees. In fact, I’ve made money both through interest and dividends as a credit union member. I have my mortgage and car loans through them, and they offer much better hours, service, free classes (buying your first home, retirement planning, etc.) and free assistance with identity theft. Heck, they’re even going to host a farmer’s market this summer.
Why would any individual ever do business with a chartered bank? I have yet to understand why.
March 25th, 2007 at 5:32 am
Matt, I did the opposite of you: I moved to Canada from Vermont in 2002. The fees charged by banks here still blow me away; I remain astounded that there is no such thing as free checking or ATM service here. I did find a bank (Banque Nationale) that offered free checking and ATMs as long as you kept at least $2,500 in your account, but they did away with that a year or two after I moved here. Unfortunately here in Québec, even credit unions charge high fees. The Desjardins credit union’s fees are just as high if not higher than those of the regular banks.
March 25th, 2007 at 5:52 am
brad - When I still lived in Canada I fell in love with President’s Choice Financial. They have free chequing, unlimited free Interac and every transaction that I ever needed to do could either be done at a PC Financial or CIBC machine, online, or over the phone.
Before that I’d been with TD and dealt with their 90 day out-of-country cheque holds (NINETY DAYS!), $20 daily withdrawal limits, and snooty attitudes. I was shocked that they managed to do any business whatsoever.
March 25th, 2007 at 10:11 am
Thanks, Melanie but unfortunately their no-fee banking is still not available in Québec. If they bring it here I’ll switch in a hearbeat…I paid over $170 in bank fees last year!
June 6th, 2007 at 5:21 pm
J.D.
I know it’s been a while, so who knows if you’ll read this any time soon, but find out if your credit union is part of the Co-Op network (http://www.co-opnetwork.org). If it is, you have access to more ATMs than any several major bank customers put together.
The web site has an ATM locator. I have 100 places I can get money within 8 miles of my city center, about 55 of these will also accept deposits. In my area, and every other major city I’ve visited in the last 6 months, the company that runs ATMs for 7-Eleven joined the Co-Op Network. That gives me cash access just about everywhere, as I don’t think it is possible to be more than 5 miles from a 7-Eleven in North America outside of some of the larger deserts.
October 26th, 2007 at 5:45 am
[...] by chance and it’s not at all difficult to do. JD recently just wrote about how he made the switch from a bank to a credit union, in part to avoid US Bank’s $8 a month maintenance fee. He’s been paying that fee for [...]
October 26th, 2007 at 10:00 am
I love my credit union. It’s convient and easy with the bonus o fnot having maintenece fees on it.
October 29th, 2007 at 1:01 am
[...] at Blueprint for Financial Properity argues that you should never pay banking fees ever. Looking at one of my past posts, he points out that by staying with my bank instead of moving to a credit union, I paid $1728 in [...]
December 12th, 2008 at 5:00 am
[...] I was an account-holder with a major U.S. bank for eighteen years. I paid an $8 “service charge” every month, as well as many other fees. Worse, I had to put up with truly awful customer service. (The bank insisted, for example, that I was stuck with that $8/month fee, even though they had long since waived it on my wife’s account. They were also notorious for waiting to process loan payments; no matter how early I mailed them, they would show up a day “late”.) I hated the place, but I was afraid to change because I thought it would be difficult. It wasn’t. [...]
December 15th, 2008 at 3:59 pm
Community banks are not only more appealing as they have demonstrated the most restraint not offering bad loans. Plus you can earn more money with community banks through reward checking.
You should look into Checking Finder (https://www.checkingfinder.com/). This search tool will find community banks paying up to 7% for reward checking. Just type in your zip
August 27th, 2009 at 9:42 pm
I worked for 12 years at the 6th largest CU in the US. Loved it. They treated their members (customers) with the utmost respect as they owned the credit union. They treated their employees very well too. They have a reputation for paying higher salaries, especially for the tellers, new accounts, as they’re the ones who have face to face contact with the members. It boggles my mind that more people aren’t members of a CU. They tend to provide better customer service, lower fees, better rates, etc. Any profit goes back into the CU to provide lower fees and better rates and not to the corporate execs, as is the case with banks.