Ask 10 people what they think a credit union is and you’re likely to get 10 different answers. The most common response is that a credit union is “like a bank, only smaller,” which would make any credit union evangelist cringe.
In reality, credit unions aren’t necessarily smaller than banks (just ask Navy Federal Credit Union), and while the basic operations are similar, there are plenty of differences that separate banks and credit unions—differences that may encourage you to make the switch today.
1. Credit unions don’t have the same products and services as big banks
The public generally views credit unions as small, community institutions worlds away from the connected world of banking. But as mobile technology has become increasingly intertwined with consumer banking, credit unions have adopted technological tools to meet their members’ needs. Now, with a credit union, you can find the same—or even better—versions of the mobile apps and online banking platforms offered by the big players.
In fact, credit unions may be beating the big banks at the mobile technology game entirely. The Austin-based software firm Malauzai surveyed 875,000 digital banking users from over 400 banks and credit unions in November 2017, and found that 72% reported actively using their credit union’s mobile app during the past 90 days. Meanwhile, only 62% used their bank’s mobile app.
And it appears as though credit union mobile technology is still progressing.
In November 2017, the credit union support organization Constellation Digital Partners received $500,000 in funding from CU Solutions Group to continue their work providing credit unions and their members with a secure, cloud-based digital platform for banking transactions. This is Constellation’s 12th infusion of funding since launching in May 2017, and word on the street is that their product is a game changer. Stay tuned.
2. Credit unions are exclusive, and difficult to join
Another myth about credit unions is that they are difficult to join. Sure, many credit unions do exist to serve specific professions or groups, like labor unions, government employees, and members of the military. But many are community-based and only require you to live, work, worship, or attend school in a specific geographic area or community. You can research the specific membership requirements here.
Along with being inclusive, credit unions generally charge lower fees to join than the typical bank. For example, you can open an account at Vantage West for as little as $5. And your deposits are insured—for up to $250,000 by the National Credit Union Association (NCUA).
3. Credit unions don’t have as many locations
You can’t travel a block without encountering a major U.S. bank branch or ATM, so you’re off the hook for thinking that credit unions don’t have as many locations as banks do. This gives some consumers pause because they think they can’t access their money as easily—but they can.
Many credit unions participate in Shared Branching, giving you access to over 5,000 branches and ATMs across the U.S. In Tucson alone, Shared Branching offers 33 locations to access your money. With 5,000 locations nationwide, Shared Branching actually provides more locations than most big banks offer. Click here to find a list of shared branches near you.
4. Credit unions don’t offer reward programs
Of all the misconceptions listed here, this one might be the least accurate—at least where Vantage West is concerned. Vantage West Connect Rewards Visa® Signature gives you 3 points for each gasoline purchase, 2 points for groceries, and 1 point for all other purchases. Best of all, you can choose from a list of categories—travel, restaurants, utilities, charitable organizations, Amazon, and more—and get 5 times the amount of points for relevant purchases.
Vantage West also offers Rewards Checking and Rewards Checking Plus accounts. You’ll earn points on every qualifying debit purchase and be able to redeem your points for things like cash back, merchandise, and travel.
If that weren’t rewarding enough, the I Love My Credit Union program delivers you discounts on cell phone service, home services, insurance, retailers, and more. Members of Vantage West also receive discounts on products, services, and memberships to local organizations, such as 20% off an annual membership at the Reid Park Zoo. What bank rewards you like that?
5. It’s difficult to switch from a bank to a credit union
If you can set up a Facebook account, you can switch from a bank to a credit union. Most credit unions offer switch kits that list the exact steps to make the transfer as easy as possible.
The switch kit begins with any fees required to join, which are usually low compared to most banks, and outlines how you can change your direct deposits, automatic payments, and any withdrawals associated with the account you wish to close. You can easily manage bills and subscriptions tied to your accounts with free apps such as Trubill, which allow you to cancel or change subscriptions in bulk with a simple click.
Lastly, you’ll need to send an authorization to your bank to close the account. When you provide your bank with your new credit union account number, they will automatically transfer your remaining balance to your new account—and that’s it. You’re now a credit union member.
Credit unions make it easy to switch, but it’s up to you to research which financial institution is right for you. Check out different credit union websites to compare fees, interest rates, and loans to see which fits your needs best.
Understanding the unique characteristics of a credit union allows you to make informed decisions about your financial future. Don’t rely on secondhand information to make your financial decisions. Take charge and make the switch.
Some products and services are subject to approval. Certain restrictions apply, so consult your local credit union website for all the important details. Federally insured by NCUA.