Credit Unions: The Pros And Cons Of Moving Your Money To A Not-For-Profit Financial Institution

Credit unions have seen a rise in membership as big banks have come under scrutiny for their never-ending profit-making measures.

While the Occupy movement, Bank Transfer Day and the fallout of Bank of America's $5 debit card fee have all heightened public skepticism of large financial institutions, big banks still control more than 12 times the assets of credit unions, according to the National Credit Union Administration's figures.

And though credit unions provide cost-effective financial services and money management options, they might not be the most suitable choice for everyone. Check out the infographic below to determine which financial institution would be a best fit for you.

Clarification: The original headline of this story misidentified credit unions as non-profit organizations. In fact, credit unions are not-for-profit organizations.

Infographic by IBM Southeast Employees’ Federal Credit Union

 

From our partners

• How To Get Away With Being Bad At Your Job - The Billfold
• The Sharing Economy - LearnVest
• Uninsured: How To Get Health Care Without Insurance - The Billfold

Comments

[MAH999]

10:12 PM on 05/26/2012

You can check the ratings of banks and credit unions here.

http://www.bauerfinancial.com/btc_ratings.asp

[James Spray]

04:46 PM on 05/13/2012

Use this search tool to find your nearest credit union "branch" location. Virtually all of the credit unions are linked via this service - http://www.cuservicecenter.com/

[Stanley Bonk]

02:26 PM on 05/13/2012

The other nice thing about credit unions is that they're depositor-owned. That makes a big difference. The more money you have in a credit union, the more of it you own. I sometimes wonder why more people haven't caught on about them. I was fantasizing for a moment about everyone in the country leaving the banks and moving all their money to credit unions, but then it occured to me that there might be problems with that. One of the appeals of credit unions is that they're relatively small, compared to banks. If they got too big, who's to say that one of those banking bigwigs like Lloyd Blankfein wouldn't move in and hijack the whole busiess?

[sweet baby2456]

07:41 PM on 05/12/2012

Well thank you for this article just confirms what i already knew and why i have never used a big bank and always used a credit union

[inapickle]

08:11 PM on 05/11/2012

The headline here was pretty misleading; it made it sound like there was some big downside and it was just a comparison which showed Credit Unions are better by almost every measure.

I can use my CU debit card at any machine in the country- though I have to pay fees for some of them. Most credit unions have deals with other credit unions and you can use their ATMs for free. More importantly, how many people even use ATMs regularly anymore? 99% of the time I get money out while I'm at the market or drug store and that's always free. People always seem to think this is a much bigger issue than it is. Love my credit union.

[alumcreek]

10:18 AM on 05/11/2012

Just wonder which PR firm placed this article with HuffPo. It not assembled by a reporter since no editor would have authorized the time expenditure.

[alumcreek]

10:16 AM on 05/11/2012

When I was growing up I was told that firms who advertise are in competition with other firms and as such supply the needs of the customer for less in order to hold on to market share. This is pure rank BS.

How often are the products you see advertised extensively as the least expensive? Does the word never come to mind?

Banks were a service that made money by aiding their depositors. These days they see their depositors as strictly cash cows and treat them as just that. They charge more and serve less and treat you nmegligently if you are not a major depositor.

[Gamey]

10:51 PM on 05/10/2012

There are at least 2 more domains which should be similar to CUs: healthcare and home energies. For the latter, at least some people get to participate in electric cooperatives but they are not competitive enough.

[tedshubris]

12:08 PM on 05/10/2012

When Bank of America acquired Fleet, I considered moving over, but didn't partially because of an existing family finance entanglement. Over the years, they've driven away all the good bank employees at the branches that I did my business, they've sold off the most convenient branch in my home town, increased their fees, tightened their lending, and generally become impossible to work with.

Just a couple of weeks back, I bought a house. Since I don't need to worry about my credit score for a few years, I'm finally ready to move my money. I opened a Credit Union account, paid off the last of my credit card balance with BoA, and as soon as my first direct deposit clears with the CU, I'm going to go in and close down that friggin' account.

Same goes for my small business, though it might take a bit longer to clear out our line of credit balance to let us move. Then, over to the Credit Union we go.

B of A can kiss my assets goodbye.

[ziggrl]

04:55 PM on 05/19/2012

I did the same thing this year.

[sylvia wadlington]

10:51 AM on 05/10/2012

Wonder what bank paid for this? From all the tiny print I would guess it was one of the big five. Since the republicans refuse to stop sabotaging the country's recovery it sure would be a great time for the big five to fail again, especially since it is just before an election. Don't think our dysfunctional congress could agree on a bailout and America could start over with regulations that keep these monsters caged.

[J T K]

12:32 PM on 05/11/2012

A bank had to pay for it because it said the harsh truth about there being downsides to credit unions and there are some things the big banks do better? I hate to tell you but despite being cheaper, the credit unions aren't perfect and unless you're part of one of the large ones then you are going to lose features vs a big bank, especially in terms of 24/7 access and easy cash access while traveling.

[Linda Seide]

10:44 PM on 05/09/2012

I joined a credit union yesterday. The service was outstanding; it took less than 10 minutes to get everything set up. My checking and savings are connected; I got a debit card on the spot and there are no fees for using it. It took less than five minutes to have my monthly disability check automatically deposited. Plus, with online bill pay (yes, it's free), I'm eligible to receive $150 just for joining! What big bank does that these days? Plus, their rates for everything are much lower than my bank's are. They even offer a Visa credit card with 1.99% apr if you transfer a balance from another credit card. You can be sure I'll be doing that, especially since their rate is only 8.24% after six months.

[ziggrl]

04:58 PM on 05/19/2012

Check the fine print before you transfer your credit card. They sneak in fees like $50 to transfer or 5% of the balance which ever is more.

And don't completely close out the credit card. Leave it open with a zero balance. You never know when you'll need it.

[OLEGAR]

07:18 PM on 05/09/2012

My "local" bank treats me very well and so does the Credit Union with whom I have membership since 1966. I just hope our local bank stays local. At present I have no need for C/U checking but I feel very safe about the IRAs that I have there. Interest on savings might not be as good as a mutual fund but I won't change unless some unforeseen need arises.

[BarryWeber]

06:19 PM on 05/09/2012

My credit union is located inside of a local hardware store. Six people work there. They all know my name. There isn't a single service I get from a bank that I can't get there. It is simple, easy, and quick to do business there. End of story.

[J T K]

12:30 PM on 05/11/2012

Can you get web access to your account 24/7 with easy tools for not only checking your balance and transactions but being able to transfer funds to other people? Is there an app? Can you go anywhere in the country if not the world and get access to your money in every city?

I already know the answer to at least one of those, probably most if not all of those, is no which is why as much as I hate them I'm still with BoFA. For credit unions to compete they'd have to work together to the point where they'd be bordering on violating collusion clauses in antitrust laws.

[BarryWeber]

08:48 PM on 05/11/2012

I can do all of those things, and have. Through my desktop, and through the app on my phone. We pay all of our bills digitally through our various accounts there.

[justoneguy60]

08:41 AM on 05/14/2012

I have CU accounts in two states, and I'm able to do exactly what you're talking about. But, it might be that my CU has different policies of doing business compared to yours. My two banks are networked, so our banking just makes it easier to handle all transactions.

[tiarra03]

05:10 PM on 05/09/2012

I love my credit union, I have been a member for 5 years now and when I moved to a different state I was able to conduct business with a local credit union in my new town without becoming a member because they all belong to the same network.

[unfoxworthy]

04:49 PM on 05/09/2012

Pro's of moving your money to a Credit Union...
you're snuffing out the life's blood of the 1%.
Con's of moving your money to a Credit Union.
It may take 5 WHOLE minutes!