www.CUNA.org/newsnow (4/29/11) A look by Bankrate.com at consumers who routinely join credit unions -- which was picked up by FoxBusiness.com (April 27) -- shines a spotlight on credit unions in five situations.
The article, "Are You a Good Fit for a Credit Union?" outlines five groups of consumers "who routinely join credit unions" and shows the benefits for each:
1. College students who learn about finances at the credit union. John Iglesias, CEO of Salal CU, Seattle, and Shay Olivarria, author of "10 Things College Students Need to Know About Money,"point out that students don't always get the best deal from a bank. Credit unions focus on financial education and provide college students with a support system for learning about money.
2. Consumers worried about high fees. Bill Cheney, president/CEO of the Credit Union National Association, points out in the article that 80% of credit unions offer checking accounts with no minimum balance and mistakes cost consumers less at credit unions. On insufficient-fund fees, banks charge about $10 more on average than credit unions.
3. Credit card holders. Card customers who opt for bank-issued cards are likely paying more than they would at a credit union, said Daniel Penrod, senior industry analyst at the California and Nevada Credit Union Leagues. Credit union card rates are a percentage point lower than banks' rates, and often fees are fewer and lower.
4. Prospective borrowers. Although mortgage lenders offer similar rates and products, credit unions service their own loans, said Penrod. If something goes wrong, the borrower has a better chance working with a lender whose servicing is local.
5. Worried about big banks. A California songwriter says she switched to a credit union for "political" reasons, citing concern about large banks' role in the 2008 financial crisis. With a credit union, her money stays in her hometown and gets loaned to "people like me."
