The Facts
Credit Unions offer more benefits than banks do. Some extra benefits they offer are higher interest rates on investment accounts, lower interest rates on loans, lower fees (sometimes no fees) and much more security for your money.
Banks on the other hand will go as far as charging you for calling CUSTOMER SERVICE. NSF Fees can be an arm and a leg and interest rates can be variable. With all the debt banks are headed towards do we really want to be the ones to pay high fees to institutions that may not even be around when we need them the most?
The Scenario
I am 23 at the moment but have had an account with Key Bank since I was 6. Growing up we just assume a bank is the best place to keep your money because its the only financial institution many of us are aware of . Well lucky me, I landed a job at a credit union half a year ago and discovered the world of credit unions. The savings and insurance credit unions offered put things into perspective for me.
Key Bank was full of so many hidden fees and unfair practices.
Here are a couple of unnecessary charges to start off with.
1. Mini statements have a fee of $1.00. It is an option on the ATM machine, yet when you print them out Key Bank does not inform the member they will be charged $1.00. A mini-statement prints out a receipt with your last 10 transactions.
2. NSF Fees of $37.00. No explanation needed. Lets just admit it. Everyone has incurred an NSF at least once in their lives. For many of us its just a miscalculation that causes this or someone you wrote a check to waits 4 months to cash it. Let this happen once or twice in one night and you owe more than $70.00 to the bank.
3. Overdraft Protection costs $25.00 per year. Shouldn't it be free? They already charge you a $5.00 transfer fee each time you use the overdraft protection.
4. Variable interest rates. Who wants to owe a bunch of money to a bank that can decide to inflate interest rates whenever they feel like it?
5. Getting charged for using other ATMs. This usually a fee of $3.00 to $5.00 on top of the fee the 3rd party ATM may charge you.
6. Here is the kicker. This proves banks do not care too much of customer service. Why do I say this?
Because they charge for it!
At Key Bank if you call more than 3 times in a single statement period they charge you $1.50 per call. They do not inform of this so I found out about it after I saw $12.00 in charges for customer service calls on my online statement. The customer service calls were usually brief too.
7. The Bottom Line.
The Banks ONLY care about the investor.
The Solution
The simple solution to saving your money is to switch over to a credit union. Depending on your banking practices you can save $200+ a year.
Most of the things that banks charge for, credit unions offer for free OR a fraction of the price.
For example, my credit union offers the following services free of charge.
1. Free copies of checks
2. Free statement printouts.
3. Free customer service. Isn't it pathetic that receiving free customer service has become a big deal?
4. Stable or fixed interest rates on loans and credit cards.
5. LOW NSF fees. My Credit Union charges $20.00 for NSF fees.
6. Higher returns on CDs,IRAs and more.
7. No charges on using 3rd party ATMS.
8. Free overdraft protection at many credit unions including mine.
9. All members hold equal ownership of the Credit Union. Unlike banks, credit unions are NOT investor driven.
10. Credit Union accounts are insured up to $250,000 by the National Credit Union Administration. The NCUA is the FDIC for credit unions.
11. Unlike banks that are crumbling the credit unions do not participate in risky lending. Therefore your money is safe.
12. Need I say more?
Save your money by switching financial institutions. Let people that care about you and your funds handle your dough. I encourage you to do some research and see which credit union suits you best.
Until than, come back next Monday for Tip#5!
In the mean time, get a credit union account today!
