Why not Credit Unions

[williamachamberlain]

I see a lot of members on here getting credit cards and what not. Some have to start at the bottom or completely start over which is understandable. We've all been through rough places and have to start over. I'll never understand why more people don't bank at CU's? They  usually have better rates and are more forgiving than big banks. If you can get on with NFCU/PenFed or USAA, do it.  

[Brian_Earl_Spilner]

I keep chase even though I have multiple credit unions because I know I can depend on them. Their system is available 24 hours a day, every day, unlike NFCU. Money is transferred on an expected and always on time timeline, unlike any of my credit unions. No matter where I am in the country, there's always been a chase nearby for emergencies. I bank primarily with credit unions, but when it's something important, I use chase.

[iced]

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@williamachamberlain wrote:

I see a lot of members on here getting credit cards and what not. Some have to start at the bottom or completely start over which is understandable. We've all been through rough places and have to start over. I'll never understand why more people don't bank at CU's? They  usually have better rates and are more forgiving than big banks. If you can get on with NFCU/PenFed or USAA, do it.  

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Banking at a CU and using CCs from a CU should be treated as two different things. There's many of us who do checking/savings with a CU but do not use their credit cards or loan products.

The answer to your question ultimately depends on individual profile. With stronger profiles, the 'usually have better rates' and other advantages vanish as the big banks want those customers and become competitive or even advantageous. The big banks offer better credit products for such profiles. With the right profile, someone has access to products and services at big banks that would make 'getting in' with  CUs and using their products a downgrade.

[OmarGB9]

I agree with @Brian_Earl_Spilner's reasoning. It's simply because large banks have a bigger footprint/easier access to funds in the event of an emergency compared to most CUs, especially of course local ones. They also (generally) have better rewards programs on their credit cards.

But, it's still good to have a CU or a few in your back pocket for better rates on auto loans/mortgages/personal loans, etc.

[distal_cluster]

I use my local CU for all checking and other "routine" banking. Their interface is great, and I feel very comfortable and welcomed in the local branches. Sometimes their auto loan rates are competitive, sometimes not. I also have a CC and PLOC with healthy limits, but all of my spend goes on various cards with better benefits. Retirement accounts are with a traditional brokerage, and then liquid savings are in a HYSA.

Different tools to achieve your financial goals!

[kremonis]

I am surprised this reason was not mentioned. CU are often unblocked. That severely limits their supply of potential customers. There are plenty of times I read about a bank account or credit card issued by a CU and [Mod Cut: Not here, please.] I find out I live outside their region and there is no back way to get an account.

[NRB525]

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@kremonis wrote:

I am surprised this reason was not mentioned. CU are often unblocked.

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Georestricted?

[kremonis]

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@NRB525 wrote:

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@kremonis wrote:

I am surprised this reason was not mentioned. CU are often unblocked.

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Georestricted?

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@NRB525 

Thank you! That is what I meant.

[BijouMan]

Credit cards are where major issuers shine, with great rewards and free automatic currency exchange. Credit unions' credit cards are usually very basic and domestic-only (foreign transaction fee). However, for banking, credit unions can often be more appealing. You might find features at credit unions such as coin machines which the big banks have already completely phased out.

[Anonymalous]

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@williamachamberlain wrote:

I see a lot of members on here getting credit cards and what not. Some have to start at the bottom or completely start over which is understandable. We've all been through rough places and have to start over. I'll never understand why more people don't bank at CU's? They  usually have better rates and are more forgiving than big banks. If you can get on with NFCU/PenFed or USAA, do it.  

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USAA is a bank, not a credit union. The membership requirements fool a lot of people.

I think banks and credit unions each have their strengths. Credit unions are more likely to get to know you. They're more forgiving, and typically have better rates. They make training people about credit part of their mission. A lot of that has to do with their structure. They're member owned, rather than for-profit companies, so while they can't just hemmorage money or they'll go out of business, there's less pressure to squeeze out every dollar.

Conversely, banks are for-profit. Which means they care less about people, and more about what they make off people. While that sounds bad, it does have advantages. They're a lot more competitive, which is why they're more likely to push the boundaries when it comes to new things like Zelle, or stuff that attracts new customers, like flashy sign up bonuses and credit card rewards.

This is intertwined with size. It's easy to forget, but the largest credit union in the US wouldn't even make it on the list of top 30 banks. And Navy Fed is absolutely huge as credit unions go, fully three times the size of the next. The typical credit union is much smaller than even regional banks, much less the big national banks. As a result, they don't have the same resources to throw at things like credit cards, or apps, or fancy online systems.

I think they're both useful, for different reasons.