Lower East Side People's Federal Credit Union

Why Moving to a Credit Union is Not a Bad Idea

People often talk about why banks are a bad place to keep your money. They charge lots of fees and have notoriously bad customer service, but there are benefits and drawbacks to both big banks and local credit unions that are important to consider.

Benefits of a Big Bank


Big banks give one thing better than anyone else, convenience. They have lots of locations, usually around the country, so you can get your banking done wherever you are. They also usually have lots of free ATM locations that you can easily get to.


Another big benefit of big banks is that they offer lots of products. They have checking, savings, CDs, credit cards, mortgages, car loans, and any other bank offering you could want. Many also have investment and retirement accounts too.

Downsides of a Big Bank

Customer Service

If you ever had a question for your big bank, good luck getting help. Their phone systems are mazes designed to keep you from speaking to a real person. Their employees are rarely well trained and are encouraged to say to and prevent you from speaking to managers. They know they make more money when they quickly push you away, so they do their best to make money rather than help you.


Big banks are well known for screwing people and charging huge fees. You might get a horrible interest rate on your account and get slammed with a $25 fee if you do anything the bank doesn’t like. You can usually get fees waived if you ask nicely, but there are so many fees to look out for, you might get hit when you are not expecting it.

Benefits of a Credit Union

Customer Service

Sometimes you want to go where everybody knows you name. That is not just a line from a song about a bar, it is often true with credit unions. Credit Unions serve fewer customers and focus on customer service, so they generally go above and beyond what a corporate bank would do to make you happy.


Credit unions are not-for-profit entities, so they do not screw customers to get a bigger bottom line. Interest rates are generally better for customers at credit unions. As a bonus, they also have lower, if any, fees for most checking and savings accounts.

Downsides of a Credit Union

Product Offerings

With smaller size comes smaller offerings. Most credit unions offer standard banking and loan accounts, but don’t usually have the depth of offerings that commercial banks have. They also have fewer customization options than large banks.


If you want a free ATM wherever you go, credit unions are probably not your best choice. While many credit unions work together and have a free ATM network, there are still fewer options than the biggest banks.

What is Right for You?

A bank is right for some people, and a credit union is right for others. I closed my big commercial bank account and now use a combination of an online only bank and a local credit union.

What do you think is best? Do you have any questions? Please let me know in the comments.

Image by edenpictures / flickr

11 thoughts on “Why Moving to a Credit Union is Not a Bad Idea”

  1. Emily @ evolvingPF

    This may be a dumb question, perhaps indicative of my generation – but why does one need customer service from a bank if they are doing everything right? With BoA I needed lots of customer service, which they were terrible at, because they kept making mistakes. But with our current bank, Ally, we never need any customer service because everything just runs smoothly.

    1. Doing things right the first time is part of good customer service. My credit union has never had to fix anything (unlike when I had accounts at US Bank) because it is always just done right the first time, and they are very pleasant to deal with.

  2. I moved to credit unions years ago after BoA (the bank, not the Korean pop star*) hit me with a load of BS fees and then refused to remove them. I said “Fine, I’ll take my money and go somewhere else.” Haven’t missed big banks yet. And just for good measure I canceled my BoA credit card as well.

    (*) BoA, the pop star can hit me with whatever she likes.

    1. That is the best way to show the banks that we don’t want to deal with their terrible customer service. If enough people leave, maybe there will be industry-wide change.

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