If you go into “identity theft mode” and dig through my trash can, you will find out that I have two checking accounts: one at Bank of America, and another at Orange County Teachers Federal Credit Union — a superb credit union in the region.

The former is for convenience, the latter is for service.

If you’re consistently getting poor service at your national bank and you’ve tried various branches in the region, you should definitely consider the option of credit unions.

Credit unions are not-for-profit co-operative financial institutions. There are a few differences between credit union and traditional banks that you should note:

  1. Members who have accounts in the credit union are the credit union’s owners
  2. The policies set fort by the credit union are generally those that benefit the members. Because of this, credit union often tout superior banking service and the commitment in improving its member’s financial health.
  3. Often times, credit union interest rates for deposits are higher, while interest rates for loans are lower, when compared to that of traditional banks.

Besides the usual better service, you will also find much more favorable rates at credit union. When compared to Bank of America, my credit union has better financial products in almost all aspect. From savings, checkings, CDs, auto loans, and credit cards — all of them either have higher savings rate, significantly lower fees, or lower interest rates on loans.

Wowzer! Better service AND better products? Where do you sign up?

Unfortunately there are a few negative aspects to credit union:

  1. Member restrictive. Credit union restrict their membership to a specific segment. For example, OCTFCU is restricted to employees of educational institutions (and some students) in the Southern California region.
  2. Branches are limited to the service area, and the same applies for ATM access.
  3. Compare to national banks, credit union’s online banking may be a few steps behind in terms of capabilities and features.
  4. Most will not have a 24-hour customer service call center, so if an emergency arise, you may be fresh out of luck.

Still, a credit union is a great alternative or supplement to traditional banks for financial products, and some of their products such as credit cards are non-member restrictive, especially useful for those with little or no credit.

Students should also consider a credit union for their banking needs, especially since many universities and colleges across the nation have their own credit union that the student can utilize.

Finally, if you have difficulty finding a credit union that you qualify for in the region, ask around — many credit union extend their membership offerings to the immediate family members, siblings, spouse, parents, grandparents, children, etc. Don’t have any reason to call up your brother whom you haven’t talked to in five years? Now you have one! Woot!

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