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Mad at bank fees? Look at credit unions By Candice Choi Last fall, capping a year that saw banks reducing perks and hiking fees, Bank of America said it would soon start charging customers a $5 monthly fee to make debit card purchases. Customers started fuming about taking their business elsewhere and began to seek banking alternatives. Though the announced charge was soon rescinded, among the beneficiaries of all the negative publicity were credit unions. The country’s largest credit union, the Navy Federal Credit Union, said new account openings in the weekend after Bank of America’s announcement were 23 percent higher than normal. The Credit Union National Association and National Association of Federal Credit Unions said many members reported an uptick in inquiries and account openings. And their respective websites that help users locate credit unions, www.ASmarterChoice.org and www.CULookup.com, both saw a surge in traffic. 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. That’s despite the numerous online banks, small community banks, and nonprofit,
member-owned credit unions eager to welcome new customers.
How they work For those curious about what exactly a credit union can and can’t offer, here’s the rundown: To start, 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, university workers, and students or residents of a certain region. Most credit unions also let immediate family members of the target group join. So, chances are that you’ll be eligible to join at least one, but narrowing down a long list of possibilities likely won’t be a problem. Joining means you’ll need to buy a share in the credit union. The typical share value is $5 to $20, according to the Credit Union National Association, a trade group. That money is deposited into a savings account and represents your ownership interest; the money is returned if you decide to leave. About a third of credit unions also charge a one-time joining fee. The median
all your finances in one place, that might be a deal breaker. If you’re switching from a major national bank, also be sure the credit union you’re considering has a physical presence you can take advantage of. Credit unions often See CREDIT UNIONS, page 13
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fee is just $1, but it could be as high as $50. Once you home in on a credit union you can join, be sure it offers the services 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. So if you like having
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