SAN FRANCISCO (2/3/14)--Consumers remain disillusioned with banks--a 2013 Gallup poll reported 74% of Americans had "some or very little confidence" in them--and an article in the San Francisco Chronicle pointed out the many pros of belonging to a credit union.
"Part of the distrust comes from the fact that banks are fundamentally profit institutions, meaning they're more likely to take risks with your money, and will often sock users with high fees and have low rates on deposit accounts," the Jan. 30 article said. "With a credit union, on the other hand, you are more likely to see lower fees, get slightly higher interest rates, and experience better customer service."
When it comes to accessibility, it's a draw between big banks and credit unions. Bank ATMs and branches are plentiful, but credit unions have a shared ATM network and mobile options to help members find ATMs.
"Hands down, credit unions are friendlier on the fee front," the article said, citing a two surveys. MoneyRates.com reported banks have an average monthly maintenance fee of $12--an extra $150 out of a consumer's pocket every year--overdraft charges of more than $30 and out-of-network ATM charges of about $3.
When it comes to checking accounts, more than 70% of the largest credit unions have free offerings, compared with 39% of banks, a Bankrate.com survey showed. Overdraft fees are less than $30, and if there are monthly account maintenance fees, they are $2-$5 and don't require a large balance to escape them, the article said.
Interest rates were nearly a draw, primarily because overall rates are so low. Although credit unions do offer higher-yielding accounts, they might need more to entice a consumer to switch from a bank.
Credit unions remain at the top for customer service, particularly when compared with the big banks. The article hedged a bit, saying, "as their customer base grows, it will be crucial for the industry to ramp up resources to meet demand."
Overall verdict? "Credit unions are better." Big banks may have flashy commercials and glossy logos, but credit unions are "by far the best option for banking today."