If you’re upset over new bank fees, it may be time to check out a credit union
Whenever a big bank rolls out a new fee, customers start fuming about taking their business elsewhere. That happened again last week when Bank of America said it would start charging a $5 monthly fee to make debit card purchases.
This time around, it seems some customers have finally had it. The country’s largest credit union, the Navy Federal Credit Union, said new account openings over the weekend were 23 percent higher than normal.
The Credit Union National Association and National Association of Federal Credit Unions say other members are reporting an uptick in account openings as well. And their respective websites that help users locate credit unions, www.ASmarterChoice.org and www.CULookup.com, both saw a surge in traffic.
The news may have been the final straw for some. The announcement capped a year of banks pulling back on perks and boosting fees. By contrast, credit unions are known for more favorable fees and rates as member-owned nonprofits. Still, the potential inconvenience and a fear of change have a tendency to keep even disgruntled bank customers from making good on their threats to leave.
There are more than 7,000 credit unions in the country, so the fees and level of service will vary greatly.
But don’t be overwhelmed; each credit union caters to a specific group, such as company employees. Joining also means you will need to buy a share in the credit union. The typical share value is $5 to $20, according to the Credit Union National Association. That money is deposited into a savings account and represents your ownership interest; it is returned if you decide to leave.
About a third of credit unions also charge a one-time joining fee. The median fee is $1, but it could be up to $50
Once you pick a credit union you can join, be sure it offers the service you want. For example, only about half of credit unions offer credit cards. Portfolio management, small business, and other services tend to be more common at banks as well.
Be sure the credit union you’re considering has a physical presence you can adjust to. Credit unions often participate in a shared network. That means members of one credit union can drop in at locations of other credit unions to make deposits or withdrawals.
The main attraction of credit unions for many is the lower fees and rates.
A study by Bankrate.com found that free checking is alive and well at the largest credit unions; three-quarters of the top 50 credit unions offered free checking with no strings attached. Just 45 percent of banks offered free checking with no strings attached this year.
Of course, rates on credit cards, mortgages, and other loans won’t always be lower at credit unions. And the rate you’re offered from either banks or credit unions will vary depending on your credit profile.
Candice Choi writes for the Associated Press.