Why don't more people use Credit Unions?

[Anonymous]

I'm curious as to why more people don't use credit unions as opposed to major banks. Assuming the obvious negative isn't a factor (no nearby branch) it seems that CUs often have better rates on almost everything, are member owned and have some nice perks. My CU gives instant credit for photo deposits and makes my DD funds available a full day early. I have no idea if regular banks do this?

Anyone have common reasons people might avoid CUs?

[Anonymous]

Some of the reason I've read:

1. Branch not close

2. More conservative

3. Harder to get approvals on CCs

I personally do have a few CUs, but their CC rewards are meh.  Bigger banks are better.  As for car loans, some CUs are better.

[Anonymous]

I belong to multiple CUs as well as multiple Banks.  I do like the auto loan, mortgage, personal loan terms of the CUs, but as stated, finding a local branch is difficult or impossible depending upon where you live and which CU.  I like the Banks for CCs and readily available local branches.

I do have my full-time job pay going to my oldest CU and definitely enjoy the early availability 1-2 days earlier than actual "payday."  I also have military reserve pay going to a bank that gave me premier checking and savings for military affiliation and direct deposit.  

Why limit yourself?  Choose both and more than one of each if it suits your needs!

[Anonymous]

Makes sense. My CU is big in CA so branches are pretty convenient. I may be an anomaly, I probably go to a branch once every couple years and an ATM 2x per year.

I have CCs with banks as well, agree they generally have more competitive products.

[SouthJamaica]

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@Anonymous wrote:

I'm curious as to why more people don't use credit unions as opposed to major banks. Assuming the obvious negative isn't a factor (no nearby branch) it seems that CUs often have better rates on almost everything, are member owned and have some nice perks. My CU gives instant credit for photo deposits and makes my DD funds available a full day early. I have no idea if regular banks do this?

Anyone have common reasons people might avoid CUs?

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I think the biggest single reason is they don't have the same advertising budgets, so they're just not in your face the way banks are.

I've had much better experiences with credit unions than banks.

[Anonymous]

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@Anonymous wrote:

Some of the reason I've read:

1. Branch not close

2. More conservative

3. Harder to get approvals on CCs

I personally do have a few CUs, but their CC rewards are meh.  Bigger banks are better.  As for car loans, some CUs are better.

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I agree, I have noticed that with credit unions in terms of CLI, it hard pull. While credit unions usually have very low rates for auto and personal loans.  For Credit Cards, Major or Community Banks are better in terms of Starting limit. Especially when you already have years of banking realationship with a major bank i.e( Checking, Savings) accounts. I was floored when i got a major Starting Limit with my bank's credit card. I do noticed major banks also look at your Fico score which if it high combined with long-relationship, they are more generous than a credit union. Downside of credit union would be their yearly revenues  which is limited compared to major banks which in turn lower or conservative credit limits area.

[wasCB14]

If you don't need to carry a balance, most (not all) CU cards are just kind of meh. Of course, the same could perhaps be said of banks.

[iced]

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@wasCB14 wrote:
If you don't need to carry a balance, most (not all) CU cards are just kind of meh. Of course, the same could perhaps be said of banks.

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Nobody should need to carry a balance on a CC. Those who do are not budgeting or saving properly.

Historically, the reason I never really went towards CUs until about 5 years ago (and to this day, DCU is the only CU I've been a member of in my life) is primarily because CUs had stricter requirements to get in. Anyone with a pulse can get a checking account at the local bank, but often CUs required you be an employee of a certain company, live in a certain location, have a certain occupation, or other such requirements that precluded most of the general public.

[DaveInAZ]

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@Anonymous wrote:

Some of the reason I've read:

1. Branch not close

2. More conservative

3. Harder to get approvals on CCs

I personally do have a few CUs, but their CC rewards are meh.  Bigger banks are better.  As for car loans, some CUs are better.

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1. One of the really nice things about credit unions is shared branching. There's a nice little CU in my small town but they really don't have anything that makes them attractive to me to join - low interest on savings, no rewards CCs - but I regularly deposit cash through their shared branching to my DCU and/or Vantage West accounts. (Vantage West is a local southern AZ CU, but their nearest branch is twice as far away)

2. I would call it more "risk adverse", since they are member owned, non-profit, they don't have the loss reserves that big banks have.

3. Yes, I agree CUs are harder for approvals on CCs, but in my experience they are more accommodating on secured credit, car loans and home equity. I got a 65 month 2.99% loan on a 2016 car bought in 9/2017 from DCU. And I got a Prime +0% (currently 4.75% APR) Home Equity Line of Credit from Penfed on my property most banks wouldn't touch because it's a 10 acre rural property with manufactured home.

4. One reason not mentioned that's a biggie for me: too many credit unions are a hard pull to join. Not a problem if I'm joining to apply for a credit product and they use the same HP, but for a HP just to join they need to have a really, really good reason for me to join.

[creditfan]

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@DaveInAZ wrote:

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@Anonymous wrote:

Some of the reason I've read:

1. Branch not close

2. More conservative

3. Harder to get approvals on CCs

I personally do have a few CUs, but their CC rewards are meh.  Bigger banks are better.  As for car loans, some CUs are better.

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1. One of the really nice things about credit unions is shared branching. There's a nice little CU in my small town but they really don't have anything that makes them attractive to me to join - low interest on savings, no rewards CCs - but I regularly deposit cash through their shared branching to my DCU and/or Vantage West accounts. (Vantage West is a local southern AZ CU, but their nearest branch is twice as far away)

2. I would call it more "risk adverse", since they are member owned, non-profit, they don't have the loss reserves that big banks have.

3. Yes, I agree CUs are harder for approvals on CCs, but in my experience they are more accommodating on secured credit, car loans and home equity. I got a 65 month 2.99% loan on a 2016 car bought in 9/2017 from DCU. And I got a Prime +0% (currently 4.75% APR) Home Equity Line of Credit from Penfed on my property most banks wouldn't touch because it's a 10 acre rural property with manufactured home.

4. One reason not mentioned that's a biggie for me: too many credit unions are a hard pull to join. Not a problem if I'm joining to apply for a credit product and they use the same HP, but for a HP just to join they need to have a really good reason for me to join, like high interest savings.

One minor annoyance with credit unions is that they regularly try to sell me insurance, usually life insurance, that I don't want or need. A couple years ago a CU I no longer belong to offered me a free $10k life insurance policy so I thought "Why not?" Big mistake, almost weekly mailers trying to sell me more life insurance, they only stopped when I closed my accounts.

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I just want to clarify the term, no offend

non profit VS not for profit