Credit unions are beneficial alternatives to banks for people who want both the services banks provide and the commitment unions have to serving their members.
Credit unions are nonprofit institutions that help its members by letting them have a voice in decisions that affect them like rates rather than commercial banks that are owned by shareholders where profit is the priority.
Angelica Tejada, Chase Bank member and undergraduate Baruch College student said, “I have known people who have gotten their credit cards stolen with Chase.”
Credit unions are community based. New York University Federal Credit Union serves NYU students, alumni, faculty, etc., which gives the school’s community a specific place to go.
Although credit unions are localized, they have less ATMs and branches which makes them less convenient. There are more than double the amount of Chase Banks than Municipal Credit Unions in Manhattan alone.
Some credit unions don’t ask for a minimum fee or have lower fees and charges than banks. This helps people be cost-efficient. Allegacy Federal Credit Union has no monthly fee or minimum balance for people opening a SmartRate Checking account.
Chase Bank charges a $12 monthly service fee for Chase Total Checking accounts unless you meet one of the listed exceptions they mention. For example, the fee is $0 if electronic deposits made into the account are totaling $500 or more or you have “a balance at the beginning of each day of $1,500 or more in this account” during each statement period.
“There’s a different approach with credit unions. It’s like they keep you in mind instead of having some kind of greater agenda” said Tejada.
There are less requirements for joining a credit union. Bank of America requires a social, email address, address, and a way of making the opening deposit, whereas MCU requires an ID, a job ID or pay stub and proof of address within the last 30 days. This was outlined in their FAQs.
The money that credit unions receive gets invested in lowering fees and rates for its members. Lower East Side People’s Federal Credit Union charges a $30 ATM overdrawn fee for debit card users, while CitiBank charges “$34 for Overdraft and Returned Item Fees,” for anyone with a Regular Checking account, Savings or Money Market account according to their Basic Banking Package information.
The National Credit Union Administration’s December 2019 “Comparison of Average Savings, Deposits and Loan Rates at Credit Unions (CUs) and Banks” chart says that the average rate for a 15 Year fixed-rate mortgage is 3.57 for banks, but only 3.45 for credit unions.
Although commercial banks may be the easiest choice for a majority of bankers, “Most people don’t know about [credit unions], but the client comes first with them,” said Tejada.