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CUNA discusses howwhy of switching on IMSNI blog
MADISON, Wis. (1/26/10)--Since the 2008 U.S. banking collapse and bailout, frustration has led consumers to turn to credit unions, the Credit Union National Association (CUNA) told an MSN blog called “The Red Tape Chronicles.” “It has been developing for the last several months,” Bill Hampel, CUNA chief economist, told the blog. “Annual growth in credit union members had been very weak for the past several years ... but during the first 11 months of 2009, our growth rate doubled.” Credit unions added two million new consumers during that time, Hampel added. The article focused on the hows and whys of switching financial institutions. The costs of switching to a credit union from a bank engender costs associated with direct deposit of payroll checks, automated online bill payment of mortgages and auto loans, recurring debit card transactions, automatic savings plan deductions, and credit card bill payment, the blog said. Ending all these transactions, and starting the payments anew, is such a hassle that “inertia” often takes over, Hampel told the blog. “Changing where you have your checking account can be a royal pain in the neck,” he said. “It's like if you lose a credit card and have to inform all those people you have a new one, only much worse than that.” However, credit unions provide clear benefits--in the form of better interest rates on loans and deposits, Hampel added. According to Datatrac Corp., average credit union credit card rates are currently more than one full interest point lower, car loans are 1.5% lower, and one-year CD rates are 0.30% higher, the blog said. The blog article generated several positive comments from consumers about credit unions. See the link.
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