Poll: Do You Use a Bank or a Credit Union?

There are a lot of options out there when it comes to banking and everyone wants your money. From community banks to national banks, there is something for almost everyone. But even if you don’t want to use a bank, most people have the option to turn to a credit union. Both credit unions and banks strive to provide the same basic services, but they are quite different in terms of how they operate and the benefits you might receive.

Banks are typically for profit organizations. Shareholders want the bank to do well so that they can make money. Unless you’re a shareholder, you don’t see any of the profit. With a credit union, they are non-profit entities and are member owned. That means if you’re a member, the savings and potential profit can be passed on to you as dividends.

There are pros and cons to both types of institutions that depend largely on where you live and what kind of services you need. I personally use both a bank and a credit union. We still use the credit union that we were members of when going to college and now qualify as alumni. Our credit union is where we go for loans if possible because the rates are typically better. One drawback is that we moved quite a distance from where we went to college, so there are no local branches. In addition, their online banking features are not very robust. So, that’s why we usually look to them for good rates on auto loans or credit cards instead of checking accounts or online bill pay.

For the bulk of our banking, we stick to a large bank like Chase. We do a lot of stuff online so the great online banking features are very useful and it’s nice having a branch on almost every corner. We don’t have any of our loans through them, but it’s very convenient for day-to-day banking. So, we enjoy some of the benefits of both a bank and a credit union. What about you? Do you stick to one or the other exclusively, use both, or neither?

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Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.

21 comments
annieaugust948
annieaugust948

I honestly prefer a credit union over big banks. For me, a credit union is a lot easier to deal with compared to banks and the folks at Oak Trust in Plainfield, Illinois just make the experience even better. Check out their website at www.oaktrust.com

Rosa
Rosa

My partner and I each belong to a credit union, and have a joint account at a big bank that used to have a branch a block from us. He also has a spending money account at TCF, which has branches all over the place around here - it's a "student" account so there are no fees even though there's never more than a few hundred bucks in it.

We are currently refinancing our mortgage through his credit union, also - their rate was nearly identical to other banks we found through Bankrate, but they actually called us back and acted like they wanted our business.

There are some downsides - interest rates aren't consistently higher on savings, my credit union has increasingly inconvenient hours, and I got hit with fees on the "no fee" network that nobody at the CU could explain or promise wouldn't recur - but every time I get mad and start looking into banks, their ridiculous fees and high balances required to earn any interest pushes me back to the credit union.

pays to live green
pays to live green

I just use Suntrust bank. I have good success with them considering that I have an auto loan, mortgage and checking account through them. They have always given me good rates on my loans and have never had a problem with my checking account.

C in DC
C in DC

We currently use both, but as soon as we no longer have one particular financial obligation that makes using the bank convenient, we're moving everything to our credit union accounts. We belong to a large credit union with excellent online services and branches near us. The only drawback is the lack of convenient ATMs, but I'd rather pay the occasional ATM fee than the fees our bank has begun to charge.

savings
savings

I think I might be a little bit biased on this but I guess a lot of people will go for the credit union rather thank a bank..But that's just my opinion..

Kevin W
Kevin W

@Mike L
I was referring specifically to the CO-OP network. According to
http://www.co-opfs.org/public/locators/atmlocator/
"CO-OP Network membership provides surcharge-free access..."
My understanding is that you avoid the surcharge if both your institution and the ATM's owner are in CO-OP. When I am traveling I look for a local CU's ATM and they are almost always free. In a pinch I'll use a major corporate bank's ATMs, and those do charge a "foreign bank" fee.

Kate Kashman
Kate Kashman

We belong to three credit unions and one bank, but the bank is USAA which is much more like a credit union. They are awesome!

Mike Leone
Mike Leone

"If your CU is in those networks then you can use the tellers and ATMs of any other CU in the network for free."

You refer to like the PLUS network of ATMs? Isn't there a charge from the institution that manages the ATM? For example, I qualify for the local credit union (I'm a state employee). They have no ATMs all that convenient to me, but they are a member of the PLUS network, so I could use the local Citizens Bank ATM. However, Citizens would charge me for using a "foreign" debit card at one of their machines. If I was a Citizens customer (and I am), there is no charge. That's a bit of a negative, to me.

Budgets are Sexy
Budgets are Sexy

HELL YEAH USAA! They've been rockin' it out for years - if only we could get all our friends signed up with them....I believe I have at *least* 13 accounts with them :) I'm a big "all in one place" kinda guy.

Daniel
Daniel

Credit Union (SchoolsFirst) merely for deposits & my Car loan

Banks (Schwab & ING) for everything else

Kevin W
Kevin W

I have been a member of 3 credit unions and have nothing but good things to say about the experience.

CUs are designed to serve their members, nothing less, nothing more. That ethos carries through in lots of little ways -- good loan rates, no "gotcha" fees, excellent customer service. They are not under pressure to turn a profit, so they don't bother trying to upsell you on all sorts of expensive products the way commercial banks seem to.

On the travel issue, I would add that most CUs are members of the "CU Service Center" and "Co-OP ATM" networks. If your CU is in those networks then you can use the tellers and ATMs of any other CU in the network for free. This accomplishes essentially the same thing as joining a national chain bank.

N-Girl
N-Girl

I use the household money at a bank that has been around for 100 years (Rockland Trust). They have been great with me and have great customer service. My husband has an account with Navy Federal Credit Union. We would like to have just one institution, but unfortunately the nearest Navy Federal Credit Union is in the next state from me, and Rockland Trust is not in Gulfport, MS for my husband, who is on active duty. I do transfer money from the household acct to the credit union for his use, until his allotment kicks in from his pay. We used to have Bank of America, but they nickeled and dimed us with fees when my husband served active duty in Iraq.

Brent
Brent

We just moved out money from Bank of America to a local bank. It only has one location but isn't a Credit Union. As a result I had to choose Bank, but don't feel it is 100% accurate.

I didn't want my money in a bank that took money from the government so we moved it. I almost went with USAA and still might at some point after I determine how much I like or don't like this local bank. I've really started shifting my thoughts on national vs local.

Miranda
Miranda

I use both. We have a national bank that has a lot of branches so that we can easily take care of things as needed when we travel (my parents and my husband's parents live on opposite ends of the country), and we also have a local credit union that we use for a lot of things. I love the credit union...

Jeff@StretchyDollar
Jeff@StretchyDollar

Yeah Chris! USAA rocks. We've worked with them for a while and their products and customer service are top-notch.

Suzie
Suzie

Having a a Health Savings Account balance (no longer eligible to participate in HSA) of which I do not plan to make withdrawals allowing account to grow tax-deferred, I am moving HSA from Mellon Bank where incurring monthly service fees with a tad of interest to a credit union with no fees & just at tad more interest.

Chris
Chris

I use USAA and I can't appropriatly get across how great they are to work with. Products and services are excellent and customer service is top notch. I can't believe I'm not getting paid for this plug!

2009 Taxes
2009 Taxes

Credit unions are the best to work with and you don't have to worry about bailouts, tarps, etc.