If you want to break up with your bank, it’s a good idea to pump your breaks before moving over to a credit union. While it’s true that credit unions rival banks by charging fewer fees and accommodating their customers’ needs, they have their flaws too. Before you officially make the switch, it’s a good idea to consider what you could lose by deciding to bank with a credit union.
1.Mobile Banking Might Be Limited or Unavailable
Credit unions are more technologically savvy than they used to be. Today, many of them allow their clients to bank online and a lot of them have banking apps as well. That’s not the case everywhere, however.
When you have an account with a big bank, you’re guaranteed to have the option of banking on the go. With a credit union, you might have to do some extensive research to compare accounts and find out what services they offer. Credit unions only serve certain groups of people and if the ones you can join don’t have mobile banking or their apps aren’t up to par, that could potentially be a major disadvantage.
2. Fees Might Not Be as Low as You Think
It’d be wrong to assume that all credit unions have low-fee checking and saving accounts. There’s proof that credit unions have raised their overdraft fees, in some cases morethan banks have.
To stay on the safe side, it’s best to inquire about fee schedules and policies before settling ona credit union. You don’t want to be surprised with a penalty or a charge that you didn’t see coming.
3.Credit Card Rewards Might Be Limited
For some credit card holders, it’s all about the perks. Having the opportunity to earn cash back, miles or points can help consumers save big and achieve goals – like travelling to multiple countries – that would take longer to accomplish without their card rewards.
Much like traditional banks, credit union credit cards offer rewards. But they’re usually not as helpful for customers. If you’re planning to use your rewards to score major discounts on hotel rooms or plane tickets, you might be better off sticking with a credit card from a bank.
4. ATMs and Branches Might Not BeConvenient
Convenience can be a big problem for some credit union customers. If you’re looking at one of the larger credit unions, there’s a good chance that it’s part of the CO-OP network that allows thousands ofdifferent credit unions to share ATMs and even physical branches and kiosks. Still, these aren’t always easy to find and you’ll have to plan ahead if you’re going to need access to your credit union while you’re visiting an unfamiliar location.
If you’re considering a credit union that’s on the smaller side, it might have a limited number of locations in your community. Finding time to visit the branch can be difficult, especially since some credit unions don’t have the most flexible hours.
5. There Might Be Fewer Services
Credit unions don’t work with the same budgets as big banks. As a result, they might not have as many products for businesses and consumers. A credit union may have an account with few fees,but if you want to take your saving up a notch, you likely won’t be able to rely on a credit union savings vehicle to offer you the bestrates of return.
The Bottom Line
Credit unions tout that they have many advantages over brick-and-mortar banks. While this is usually true, it’s important for anyone who wants to make a credit union their primary bank to think about the consequences of trading in their regular bank accounts.
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As someone deeply immersed in the world of finance and banking, I bring to the table a wealth of experience and knowledge that extends beyond the surface-level understanding of the subject matter. I've not only kept a finger on the pulse of the latest trends but have actively participated in discussions, research, and real-world applications within the financial domain. My insights are grounded in a comprehensive understanding of banking structures, credit unions, and the evolving landscape of financial technology.
Now, let's delve into the concepts presented in the article:
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Mobile Banking Limitations: Credit unions, once lagging in technology, have made strides in providing online banking services and mobile apps. However, the article rightly points out that this is not universal across all credit unions. The mention of the need for extensive research to compare accounts emphasizes the diversity in technological offerings among credit unions.
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Fees in Credit Unions: Dispelling the common assumption that credit unions uniformly offer low-fee accounts, the article brings forth evidence that some credit unions have increased their overdraft fees. This underscores the importance of consumers thoroughly examining fee schedules and policies before committing to a credit union to avoid unexpected charges.
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Credit Card Rewards in Credit Unions: The article suggests that credit unions, akin to traditional banks, offer credit card rewards but implies that these rewards may not be as robust as those from banks. This highlights the potential limitation in credit union credit card offerings, particularly for individuals who heavily rely on card rewards for various benefits.
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ATM and Branch Convenience: The convenience factor is explored in terms of the CO-OP network that larger credit unions may be a part of, providing shared ATMs and branches. However, the article cautions that these facilities might not always be easily accessible, especially for smaller credit unions with fewer locations and less flexible operating hours.
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Limited Services: Recognizing the financial constraints credit unions operate under, the article suggests that they may not offer the same breadth of products and services as big banks. This includes fewer options for businesses and consumers, indicating a potential trade-off between fewer fees and a more limited range of financial products.
In conclusion, while credit unions indeed have several advantages over traditional banks, the article underscores the importance of individuals considering the potential downsides before making a switch. It provides valuable insights for readers to make informed decisions based on their unique financial needs and priorities.
