3 Reasons to Ditch Your Credit Union for a Big Bank

In light of the financial crisis, Occupy Wall Street protests, legal issues, and much more, many have begun to question whether or not they should keep banking with their megabank, or switch to a credit union in an effort to stick it to the man.

While there can be bad apples at big banks, that can be true of any institution. In fact, banks can offer unique products, rewards, and convenience that is incredibly beneficial to their customers -- who are people like us.

Many often lament the customer service provided by big banks, but there is evidence that is changing. In the 2013 J.D. Power U.S. Retail Banking Satisfaction survey, Jim Miller, senior director of banking noted, "many of the big banks have made great strides in listening to what their customers are asking for: reducing the number of problems customers encounter and, more importantly, improving satisfaction with fees."

This is evidence that banks have listened to the complaints of their customers and are actively trying to improve.

Certainly there are many reasons to be upset with some of the things that have transpired at big banks in recent years, so even though it may not be a popular opinion, here are three reasons you should switch from a credit union to a big bank.

1. Technology offerings

Source: B of A.

Consider JPMorgan Chase -- the winner of the Keynote best mobile banking app -- which lets you check balances, transfer funds between accounts, find ATMs and branches in unfamiliar areas, pay your bills, and lets you deposit checks with only a picture.

In today's connected world, many banks have charged into the rapidly changing technology landscape. While some credit unions offer iPhone or Android apps for their customers and websites to access accounts, few can deliver the same quality provided by the major banks.

Yet not only are the mobile offerings great -- but banks also have the resources that allow you to have simpler and easier access to your money. For example, Bank of America (NYSE: BAC  ) recently announced it would have "express" branches that are open for extended hours where customers can interact with a teller (at times through a video screen) between 7 a.m.-10 p.m. on weekdays and 8 a.m.-5 p.m. on weekends. While many disdain the megabanks for their lack of personal touch, having access to a teller at practically any time is a unique benefit.

2. Rewards
Even if technology isn't a major draw, certainly we could all benefit from better rewards that often mean more dollars in our accounts.

For example, Discover (NYSE: DFS  ) offers not only rolling 5% cashback rewards that allow you to earn money for regular purchases on gas, at restaurants, and other purchases depending on the quarter, but it also provides unique access to its ShopDiscover platform, which can give you between 5%-20% cashback at many leading online retailers.

Not only can you earn cash, but Discover also lets you turn that cash you earned into even more money. For example, you can turn $60 of cashback into a $120 gift card at Carnival Cruise Lines.

Beyond cashback rewards, there's also the added benefit of banks offering free checking, high interest rates on savings accounts, and a wide ATM network, which means you don't have to pay to access your own money. Capital One (NYSE: COF  ) , with its free Capital One 360 account, will not only reimburse you for ATM fees charged at up to 38,000 locations, but it also doesn't charge a flat rate for overdrafts, and will even give you $50 for opening an account.

3. Everything is under one roof
The final thing big banks can uniquely offer is their all-inclusive product offering. Our lives can be so disjointed at times, so comfortably knowing that all of your money is available to be accessed at one place with one simple username and password can be very reassuring.

For example, Wells Fargo (NYSE: WFC  ) can allow you to manage your checking and savings accounts, but also investing and retirement accounts. And you can access your credit card, mortgage, student and car loans, and insurance all in one place. While that may be concerning to some for security reasons, the ease of use provided by Wells Fargo and almost every other bank is tough to match.

Certainly, credit unions can be great things, as some people desire closer, personal relationships, but if you're looking for an all-inclusive banking relationship that offers both great benefits and rewards, you'd be hard-pressed to find something better than the services offered by a major bank.

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Read/Post Comments (11) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 20, 2013, at 4:12 PM, PeteH66 wrote:

    Sure, 5% "cash back" sounds great for the cardholder, but don't for a second imagine that the bank is coming out of pocket from the goodness of their heart: that 5% gets charged to the merchant whose product or service you're charging. As a small merchant offering summer rental cabins, I get jammed via larger processing fees for each and every reward card used by any of my guests -- which means, of course, that I had to raise rental rates on ALL my guests to make up for the higher fees Bank of America charged me. Higher rates mean I risk not being as attractive to price-sensitive guests, and I may NEVER be able to make up those lost bookings.

    Also, when I refinanced the mortgage an another commercial property, my local credit union offered me a rate two full points lower than the local bank, which is saving me more than $10,000 every year of a 15-year term.

    To say nothing of the systemic risk posed to our economy by the too-big-to-fail banks, who take full advantage of the implicit government guarantee underlying their (occasionally irresponsible) policies.

    Move your money to a credit union.

  • Report this Comment On October 21, 2013, at 4:50 AM, GETRICHSLOW2 wrote:

    There are surely some good banks out there but I will stick with my credit union. They are less interested in big profits and they keep it simple by not making everything fee based.

    It don't matter what products and services you receive, you are paying for them one way or another. Nothing is free.

  • Report this Comment On October 21, 2013, at 8:24 AM, jpthiel wrote:

    Everything discussed in this article is available via my Credit lower rates, saving me literally $1000s per month.

    Now why would I switch again? Oh ya to collect points or something?

    No Thanks....

  • Report this Comment On October 21, 2013, at 8:26 AM, emeraldeyes45 wrote:

    Just look at the stocks held by Motley and this author; they have a vested interest in keeping people at the big banks!

  • Report this Comment On October 21, 2013, at 8:26 AM, outoffocus wrote:


  • Report this Comment On October 21, 2013, at 8:31 AM, RealityCheck1930 wrote:

    I will "Ditch (my) Credit Union for a Big Bank" if and only if the Big Bank eliminate all fee and service charges like my Credit Unions i.e. go back to its previous policies for its royal customers/depositors.

  • Report this Comment On October 21, 2013, at 8:48 AM, alexf wrote:

    Sure. When the big banks:

    1. apologize publicly, in a big full page add in major newspapers for their part in the 2008 debacle

    2. some of their executives get brought to court and charged - personally - for what they did and if found guilty get the full extent of the law

    3. stop charging outrageous fees for everything ($25 for a wire transfer that costs them pennies, usage of their own branded ATMs in their own branches, which should be a free service to customers, etc.). Never forget they use daily, billions of dollars from their customers that we graciously give them to keep for us for free (ok, not free exactly. My bank payed me two pennies in interest last month).

    Sheesh. Can't believe this article. Shame.

  • Report this Comment On October 21, 2013, at 8:48 AM, Rusty56 wrote:

    Why would I utilize a Credit Union who doesn't pay taxes? If I have to pay so should they. Why are they considered a Not for Profit - seriously?? I'll stick with my bank, yes they are better and pay taxes. think about it people.

  • Report this Comment On October 21, 2013, at 9:08 AM, Quickwhit22 wrote:

    I agree with "jpthiel," most credit unions offer all of these services at a much lower cost.

    (Not to mention their customer service is usually better and they have more of an interest in investing locally)

    I think the "spirit" of the Fool is in favor of credit unions rather than Big Banks. If it isn't, then all the articles on conscious capitalism are a waste of time.

  • Report this Comment On October 21, 2013, at 10:29 AM, misterfrost wrote:

    Now that's the kind of rubbish that gets you guys called shills..

  • Report this Comment On October 21, 2013, at 2:32 PM, mrnmoney wrote:

    My credit union offers all of these. chase does have the better app but I rarely would use it anyway

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