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Which Is Better for Your Credit: Big Banks or Credit Unions?

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Depending on what your needs are, both big banks and credit unions can be good choices.

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Credit Union Pros

Credit unions seem to do better than banks in terms of checking account fees.

While the issue of disappearing free checking has been overblown, you may find it easier to open a fee free checking account with a credit union than with a large bank. That's certainly also not a hard and fast rule.

Both of my bank checking accounts have no fees and no minimum deposit requirements and I haven't had direct deposit for years.
Anyone can open an account with a bank, but I was always under the impression that you're supposed to have some sort of affiliation to open an account with a credit union, such as being an employee of the state or Federal government.

Having said that, my credit union's only membership requirement is that you pay a $5 membership fee and deposit at least $5 into a savings account. I did some research on local Atlanta based credit unions and many of them do not have any sort of affiliation requirement, while some do.

Credit Union Cons

My suggestion is you also consider other benefits of doing business with either a credit union or a large bank. Credit unions don't normally have the same number of branches as a large bank and credit unions don't normally have the same sized ATM network either.

If you are considering banking with a credit union, then looking into the proximity of their branches and ATM locations to the areas you frequent is probably going to be time well spent.

You might also find that a large bank has a more complete set of financial services than most credit unions, but interest rates from banks can also be higher than rates offered by credit unions.

These are not hard and fast rules, and it ultimately comes down to which credit union and bank you're comparing.

Editor's Note: This article by John Ulzheimer was originally published on MintLife.

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Twitter: @mint

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