Difference between bank and credit union?

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Difference between bank and credit union?

Postby shoptalk01 » Thu Nov 08, 2012 10:32 pm

I totally screwed up. I've been sitting here trying to compare banks and I totally forgot about credit unions. Are credit cards / loans easier to get with a credit union? do they have better checking accounts or what is the reason most people join?

Should I take it, if the word "federal" is in the title anyone can join? I talked to a couple and they are local, you need to have a residence or employment in the county so I don't qualify. I was told there are a couple of federal ones, but I don't know where they are, I've been driving around trying to look for them but no luck. Some of these places are in really small downtown buildings without much signage.

So now do I hit the place harder where I already have a card or do I open my 2nd checking account where I want to get something in the future?

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Postby sakhalin » Thu Nov 08, 2012 10:37 pm

I'm not sure if credit cards or loans are "easier" to get with a credit union, but they generally tend to be "better" as in lower rates and/or better benefits. At least that's how it is with the credit unions. As for the "federal" stuff, some CUs require you to be an employee of the federal government to be eligible. I think for PenFed you could "donate" a small fee to a participating organization and then after you do that, you're eligible to join.
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Postby Snowman » Thu Nov 08, 2012 11:14 pm

Shop- Like sak has said before, Penfed requires that if you are non military or have no prior family members that are with them that you have to donate to a charity that is affiliated with them. There are CU's that are for certain employment places (i.e Firefighters, Police Officers, Utility workers,) I live close to about 3 Credit Unions and they all require that you live in the area or close proximity in order to open an account with them, or you can try and online CU like DCU. Usually their rates for members on car loans and the like are pretty low and therefore for the most part it is better to be with a CU IMO. However, I currently bank with BOFA because I like to have a large bank that is brick and mortar, and they have not done anything yet that would me leaving them as a customer and going to a different bank, they have been good to me in the 2 years that I have banked with them. I think you should open an account so that way you can open a CC account in the future. That was how I got my BOFA card, I have had a good relationship thus far, and they saw I was loyal so they approved me, even though it is a low limit card.
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Postby Midori » Fri Nov 09, 2012 9:08 am

My parents signed me up for a federal credit union savings account about 30 years ago. I still have it. In the past, I mostly used it for socking away money when we were saving to buy a house, but nowadays, it gets a whopping 0.20% APY on savings, so it's been sitting idle for the last few years while we do better things with our investment $$.

When I decided I wanted to build some credit history independent of my spouse, I gave my credit union a call. Was there something they offered for their members to build credit?

They offered me the choice of three different loans, but never gave the impression that being a credit union member-- even a 30+ year credit union member-- would necessarily make it easier to get a card at all. They didn't even discuss any of the basics about the cards to see if I could somehow squeak in-- they were just focused on credit-building loans that I could pay back slooooowly. Since I knew I already had paid back student loans, mortgages, etc, I wasn't interested in building "more credit" with a pretend loan I didn't need.

That being said, the three cards they offer aren't particularly competitive... "up to" 1% cash back, or reward points, or a 7.7% APR vs a 9.7% APR. I'm more likely to keep using them for savings, and for checking, if I lived closer to the geographic area they serve... an easy way to get an account with no service fees, no transaction fees, $5 minimum balance to open a savings account, ten cents cash back on all debit card purchases, no minimum balance requirements for checking, etc.

(For what it's worth, it was RBFCU out of San Antonio.)

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