Friday, March 22, 2013

Why Banks are Sometimes Better than a Credit Union

I think we’ve all heard the news in the media on how credit unions are much better than banks when it comes to fees, rates, and motivation; however I think this depends more on your situation.  As I ever quest to be the contrarian, I often try to determine why the alternative opinion might make sense.  Also, on a personal level, I choose banks far more than a local credit union.  In short, here are my reasons why I prefer to use a bank instead of a Credit Union.  I should also disclose that I do in fact work for a regional bank, so take my advice with a grain of salt if you like.
1.)    Convenience – When it comes down to it, convenience is probably the top reason people choose banks over credit unions.  With more branches and ATMs, getting access to your money is probably far easier at banks.
2.)    Digital Functionality – Generally speaking, banks are far more likely to have the smart phone apps, or interesting websites to allow you to better manage your money.  Also, banks are far more likely to be linked to third party software such as TurboTax or 
3.)    Rates – Credit Unions are not always the best options when it comes to interest rates.  True, they have a significant advantage when it comes to paying taxes and general motivation to help their union members, however their operations are usually small and far more cost prohibitive.  With their larger, and usually more efficient size, banks can often make up for the advantages that credit unions have just be shear efficiencies of scale.
4.)    Diversity of Financial Products – Often times, credit unions are too small to be able to offer consumer, mortgage, commercial, and business banking loans all in the same place let alone things like insurance.  You usually only get all these items under one roof when you are dealing with a bank. 
5.)    Restrictions on Credit Union Membership – This reason has been lessoning more and more in recent years, however many credit unions have membership stipulations that could be restrictive to people in your case.  You may not even have the option to use a credit union. 
It’s up to you to decide whether these reasons fit your lifestyle.  Personally, I feel that if you are responsible, don’t rack up fees, and need a diverse array of financial products in the most easily and convenient ways to access them, then a bank is your best bet.  That all said, credit unions certainly do have their place.
Wonderful Moment of the Day: Happy Spring!

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