the downsides of Credit Unions
Feb 08 '00 (Updated Feb 22 '00)
This is a counter epinion on babyvalere's praise on Credit Unions = CUs
The good about CUs:
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* Better terms
Lower interest on mortgages than banks - I did shop for one last summer) than banks. Great auto loans. Better or same interest on savings or CD accounts as a bank but with lower minimum deposit.
* Lower minimum monthly balance
Some people claim here that CUs offer free accounts. I have yet to find such a CU. But the minimum monthly balance to avoid the service fee is lower than on banks. This differs.. Point Loma CU (San Diego) required $100, Capitola's requires $500. Not free..
* Membership-owned
Look at a bank (big building, prime location, usually more expensive architecture). YOU pay for that but you don't own it :-( . Look at a CU. Always a smaller building, at the outskirts of a mall or so. They save money that way and pass it on to you.
A banker told me once when I asked for their terms "You will not want to make your banking decision based only on the account fees". Umm.. no surprise this wisdom came from one of the more expensive banks haha
Now the Downside:
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I think that they are good only if you want to do standard business with them. If you have a request out of the norm you may find them unprepared and I also think that the employees are less trained than in banks. And they are less willing to take a risk than banks - in other words, CUs are more conservative.
And I can back all of this up. I am not talking about ONE singular case but about experiences I made over many years.
I list these humorous experiences below..
Conclusion:
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I recommend to go with the CU. If you are lucky then there is more than one in your area. Compare them. They most likely have different terms (I chose the wrong one because it is super close to my home).
Here my bad experiences with CUs:
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1) a CU in Germany. POORLY TRAINED EMPLOYEES.
They have exactly the same concept there, member-owned, membership required, best terms, poorly trained employees :-)
Some relevant infos:
My CU was in the same building as my employer where I worked for 6 years at that time. I saw the CU's employees EVERY day when I walked into my office or on the parking lot. I was banking with the CU for 4 years.
On October 1990 I had spent a weekend in Italy and found that the ATMs there did not accept my ATM card. But they had not eaten it either.
When I came back I applied for my travel visa to Australia and I had to send my ID to the Australian embassy.
A few days after my return from Italy I notice that my local ATMs don't accept my card anymore either.
Here my dialog with the teller. I am not exaggerating.
me: "madam, the ATM rejects my card. I did put in the right number."
friendly teller (ft): "Let me see" [takes the card] "are you sure you did not use your credit card PIN?"
me: "Quite sure. I don't know my credit card pin."
ft: "Your account is blocked due to security." [checking some files]
"You never got a PIN on this card. You can use it only to print statements."
me: "Ummm.. I think... I think I used it 2 weeks ago at the ATM."
ft: "That must have been with your credit card."
me: "I have the letter with the pin at home! I saw it just this morning."
ft: "You know that you have to memorize the PIN and destroy this letter. But this file says you never received a PIN."
me: [shy, quiet voice] "Ok, you may be right. Ummm.. can I have some cash money from my account?"
ft: "ID?"
me: "I sent it to the embassy.. it will be back in a week." [quieter] "I have been a customer for years".
ft: "It's policy. I cannot give you money"
me: "Oh.. nice.. thank you then.." [sarcastic, but she did not get it] "May I go home now?"
Next day I returned with the letter and the PIN. She confiscated it as she had confiscated the card a day before.
I did not get a cent from them until I got my ID. Luckily I had a savings account with a second bank! (Remember that I saw these guys every day!)
2) 6 months later, same CU. CONSERVATIVE HABITS.
I buy my first home. I go into 12 banks (not by phone, I just walk there), 3 insurances and another institution.
All of them 'have this red carpet'.. you know.. immediate attention.. everybody was more than willing to loan me money. I also tried my own institute. The CU.
The loan officer set up an appointment - 4 weeks to wait.. it is worth it, I hoped.
Turns out that since I could not put 20% down .. I got a very rude rejection. I was about 25 that time.. look at my baby face :-) he just treated me like a teenager.
They put that guy away from customers behind closed doors later I noticed.
3) CU in Point Loma (San Diego). POORLY TRAINED EMPLOYEES.
I check out some banks how much a wire transfer to Germany is. Different banks give me $45, $50, $55.
The PLFCU: $15. WOW! I thought if I do wire transfers a few times that I will save big!
I ask again to confirm that there is no misunderstanding. Yes, to Germany. Yes, $15.
I am sold. Later when I try to do that it turns out they cannot wire international.
They'd have to wire to Citibank New York etc.
4) CU in Capitola/ Bay Area. CONSERVATIVE too.
I shop for a mortgage to buy a house in the USA. The loan officer is conservative. Luckily I could come up with over 20%. No way otherwise. I had to document every single $100 that I would bring in. They acted as if I tried to bring in drug money. In short - it was difficult but I got approved at a rate better than bank rates.
5) CU in Capitola.
Within 90 days 3 times they charged one of my accounts a 'service fee' although I was always over the minimum balance. So every month I'd have to ask them to reimburse me :-(
It was not always the same account, so I am confused. In January, they claimed it was a y2k problem.
hahaha.
In spite of 1) through 5) I still recommend going with CUs because some of them have really great terms and even the others are better than banks. You may occasionally experience an issue but they are cheap.
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Epinions.com ID:
ptiemann
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Member: Peter Tiemann
Location: Capitola, CA
Reviews written: 260
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