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Credit Unions vs Banks


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I currently have been with my bank for about 3 years and I like that fact that they are open 7 days a week, offer overdraft protection and secured loans that report to CR. However, I would like to buy a home at the end of the year and I want to know it is to my advantage to establish a relationship with a CR not to mention I am currently doing credit repair. I am looking to open an account with first community CU in TX.

1) I was thinking about opening an account with the CU to obtain credit but does this matter if your credit is not that great. 580 avg scores

2) I have less then 1 year to pay on my car and I dont want another car anytime soon I am just hoping to get a mortgage & CC with CU. Is this possible to do with less then a years relationship if I am trying to get a home loan in Dec?

3)I want to split my DD between both banks is this to my advantage?

4) I currently have a checking and savings with bank what type of account do I need with credit union?

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Welcome to Credit Union "thinking"!

You will LOVE your credit union (no matter which you choose).

Although credit unions (and everywhere else) want to have your entire banking relationship, they'll take whatever you choose to give them. You will get better loan rates, higher deposit rates and low or no fees for your accounts.

For applying for a mortgage &/or a credit card - you can apply the same day as you open your accounts. Length of time as a member is not a factor. (Credit scores are of course.)

You can split your Direct Deposit between both institutions, but it won't be a factor in granting credit. Have your Direct Deposit put to the account that is the most convenient to you to access your money - bank or credit union.

Credit Unions are not-for-profit. They are not owned by shareholders like banks are. They are owned by the members that use the banking services. When you open your account with the credit union, you'll open a "Share Savings" account with a required minimum deposit. Every member is a "shareholder" in the credit union and are required to have a savings account. If you choose to have a checking account, it can be to your benefit. Check it out.

BTW, I work for a credit union and the difference is DRAMATIC between banks & credit unions. I don't have the same apprehension to going to a credit union as I did going to a bank. Banks seem to make everything harder and credit unions want to make things easier for their members.

Just my observations!

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Gee, DHK... no way could anyone who regularly reads this board figure out that you work for a credit union!! LOL

The only credit union in my area that I qualify to join has one "branch" which is only open a few days a week, no website for online banking, and you have to do everything in person at this one office, even withdraw money (I'm about 45 minutes away by subway). Its only credit card is an MBNA affinity card. I can't imagine a more inconvenient, backwards way to bank.

In my opinion, this is the image credit unions have to most people. I'd love to join one, but I'm not about to jump through hoops to find one that will have me, or join one that will have me, but is totally electronic so I can't deposit checks (a reality for the self-employed).

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Dear slynbrown,

This is a very good idea.

There are a few times in life when you need a bank, so maintaining your relationship with the bank will help you at those times.

Credit Unions are really geared to serving their customers therefore they will be very helpful in your quest to rebuild your credit.

Also very important: you should never keep all your eggs in one basket.

Bank failures in America are legendary, however there are very few credit unions that fail so you'll be in better shape if the bank fails and is closed for a couple of weeks while the FDIC bails it out.

Be aware that the CUs are being discovered by Wall Street and we are at the beginning of a great nationalization and consolidation of CUs. In time CUs will be almost as nasty as banks are, when that happens you'll have another banking relationship to back you up.

Good luck,

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Be aware that the CUs are being discovered by Wall Street and we are at the beginning of a great nationalization and consolidation of CUs. In time CUs will be almost as nasty as banks are, when that happens you'll have another banking relationship to back you up.

I would have to disagree to a point. Credit Unions are NOT publicly owned companies (no stockholders). Their main drive is to serve their members (us). Banks need to drive profits up AT THE COST of their customers. Credit Unions drive profits up FOR THE BENEFIT of their customers.

Depending on the driving force of WHY the institution is in business, will determine the type of service to be expected.

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DHK, I'm understand your dissagreement...

There is no doubt that CUs are good servants of their owners, (members.) They are usually rather profitable.

However, The major players on Wall Street are actively searching for Credit Unions to buy, most notably Berkshire-Hathway (Warren Buffet's Company.) 20 years ago I was employed by a very profitable Building & Loan Association that was consistantly staving off takeover attempts, and we were a Mutual company (owned by the members.) If there is an ounce of decent profit to exploit, Wall Street will be right there trying to capitalize on it.

100 years ago Most Savings Institutions were mutual companies, now there are only a handful left. 25 years ago no one could conceive of the disappearance of the Savings Industry. Today it is virtually non-existant, You rarely seen a Savings and Loan Assocation anywhere and FSBs (Federal Savings Banks) are only a small percentage of the number of financial institutions serving the general public. (and FSBs are not really saving institutions anymore either...) The've been merged into the banks because of shifts in the market, ( deregulation, etc...)

MOST CUs are owned by the members - Not all. The continuing trend is to incorporate and merge CUs all over the US.

60 years ago most Insurance companies were owned by the members. Now most insurance companies are incorporated.

(This is where Warren Buffet got his start...)

20 Years ago no one could conceive of a national office supply company dominating the market. Every major city had a dozen large and small office supply companies. Today...

10 Years ago no one could have ever conceived of Corporate National Hair Salons - Today they are taking over the market...

5 years ago no one could conceive of national (corporate) home service companies. Today they are just beginning to gain momentum and put little service companies out of business... (ServiceMaster, American Home Shield...)

Just because the trends in the market are not yet readily apparent doesn't mean it they aren't happening and aren't going to gain momentum.

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Radio Guy,

Here is the problem with your assertion. Change is not necessarily bad.

Deregulation actually killed a lot of banks especially the ones who had the "old school" rules of banks, like banker hours, etc... Soon, there will be plenty of banks in Wal-Mart, malls, and plenty more will be open seven days of the week and much longer hours than "banker hours"...

As for "exploiting" profit. Profit is not a dirty word. It is part of our free enterprise economy. It is how you "get" profit that may be dirty.

As for the Savings and Loan outfits, I am glad that most of them went out of business although not glad that the taxpayers had to pick up the tab. Most of them were run by unscrupulous loan officers. One boss of mine was the only guy in his partnership that did "not" go to jail because the loan officer had told that if he did NOT falsify documentation for his loan, that he would close his account.

As for the rest of the economy changing, I am not a Luddite and I am estatic that big changes are happening every day... Especially when they involve economies of scales...

I am glad that we have mega supermarkets instead of high priced mom and pop grocery stores where I would have to go to a half dozen places to buy things... And so much can be said on just about every industry...

And if a company "refuses" to change with the times, are we supposed to be sad and continue to buy their products or services, like VHS, cassettes, eight tracks, etc...

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Hey Ravenous-

I never asserted that the change in the CU industry was bad.

(That may or may not be true, but that is not what I was attempting to discuss because it is beyond the scope of this post or site.)

I said change is coming- be prepared.

(And then I merely backed up my assertion with my observations and first hand knowledge of the changing face of the banking industry.)

I believe that when the CUs change or are absorbed into banks they will act more like banks and not treat the customers as well as they do now...

I think most people here would agree.

My warning is just to keep your eyes open and when they tell you in writing they are changing - pay attention, ( read your mail!) All those customer friendly policies can change - be prepared, (and read your mail,) so you won't get lulled into a false sense of security.

Have a back up plan (another bank,) of course you should clean up your credit so you can qualify for overdraft protection, but until that time pay attention so you're not a victim of policy changes.

Good luck,

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