Two of my favorite writers, Liz Pulliam Weston and Bill Maher, suggested in recent columns that now may be the time to leave your bank and join a credit union. Ms. Weston’s advice was more along the lines of informing her readers that “you can get better interest rates and better treatment at a member-owned credit union than a bank”. If you know Bill Maher’s reputation, you can imagine how different the tone of his blog post was.
And you’d be right. Maher did not even attempt to be tongue in cheek, but blasted the banks with his typical caustic but amusing bits of persuasion such as:
They took our money… and made record profits — and paid themselves record bonuses.
They took our money… then returned to the risky behavior that led to the worst financial crisis since the Great Depression, with record unemployment, bankruptcies, and foreclosures.
It’s a pretty simple idea: If enough people who have money in one of the Big Six banks — that is, JP Morgan/Chase, Citi, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs — move it into a local community bank or credit union, then collectively we, the people, will have taken a big step toward fixing our broken financial system.
Ok, fine, you might say – I’ll be sticking it to the Big Banks if I move my money away from them and towards a credit union. What’s so great about a credit union over a bank – in other words, what’s in it for me?
The first big difference is that a credit union only has members. If you open an account at a credit union, you are automatically a member. Banks, on the other hand have shareholders, who invest in the shares to make money.
A credit union is run by a volunteer member board who have no interest in making a profit since they have nothing to gain personally. Their interest is in what is best for the credit union members. Any member can attend a baord meeting and voice their complaints or ideas. A bank has a board of directors whose bonuses depend on maximizing the profits of the shareholders.
Since credit unions are non-profits, they can offer many free services like checking accounts, and use of other banks’ ATMs. They can usually offer lower interest credit cards, and if you miss a payment, you can talk to a live person who may elect not to report the delinquency to the credit bureaus.
Maher cited a new website, MoveYourMoney.info, created by Ariana Huffington (of the Huffington Post) which lays out the “tenants” of the credit union revolution.
If you need help finding a credit union, here is our guide to finding one. Anyone can find a credit union for which they qualify. For instance, Arizona Federal Credit Union will take anyone who lives in Maricopa county (that’s where I live).
What about you? Read to make the move to a credit union? Tell us about it by leaving a comment!