Money Fix: Switching to a credit union
Are banking fees still annoying you and cutting into your income? Making the switch to a credit union should be considered carefully, experts say. Credit: iStock
While last November's Bank Transfer Day is history, that doesn't mean people aren't still fed up with fees. Many protested by switching to credit unions; should you?
The upsides: When compared to a big bank, there are pluses: Credit unions say you'll get lower interest rates on loans and credit cards, higher rates on deposits and often no-fee checking and savings accounts.
Then, too, you don't see the merger activity common with big banks; you get stability, says Coleen Pantalone, associate dean of undergraduate programs at the College of Business Administration at Northeastern University in Boston.
Possible downsides: At some smaller credit unions, you might not get the mega-suite of services and products of a large bank. Credit unions' business lending is capped at 12.25 percent of their assets. If you're an online banking fan, you might not get all the bells and whistles you're used to. If you're ATM-addicted, your credit union's ATMs may not be everywhere like the big banks'.
But because credit unions have not-for-profit status, they're not obsessed with the bottom line and members are priority No. 1. Membership is often free, and you may not have to be a part of a special group.
"If you live or work on Long Island and have $5, that's all it takes to be a member of NEFCU," says Valerie Garguilo, vice president of marketing and community relations for NEFCU, formerly Nassau Educators Federal Credit Union, in Westbury.
If the switch seems right for you, ask for recommendations or go to findacreditunion.com.
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