6 ways to find a credit union (and why you should look)
By Dana Dratch • Bankrate.com

If your big bank is making you feel like a small fry, maybe it's time you tried a credit union.

It's true you won't find credit unions or their ATMs on every corner. But if you're willing to trade a little convenience for more personalized service -- plus better rates on credit cards, loans and savings accounts -- a credit union is a great way to go.

"It's true with a credit union you give up convenience, but in return, you get better deals," says Clark Howard, author of Get Clark Smart: The Ultimate Guide for the Savvy Consumer and host of a nationally syndicated radio talk show on finances.

Unlike banks, credit unions are member organizations. By depositing as little as $5, you become a stakeholder in the institution.

When credit unions first came into existence, their members had a common bond -- usually an employer or profession. Today, the "affinity group" can be geographic, social, civic, professional or even religious.

More than 80 million Americans are members of credit unions -- up from 70 million just 10 years ago, according to Patrick Keefe with the Credit Union National Association, a nonprofit trade group.

Finding a credit union
The good news: If you want to be a member of a credit union, you probably can. The bad news: They rarely advertise, so if you want a credit union, you have to find one.

1. Start with the obvious: your work. Many employers either have their own credit unions or have joined one. Many professions or professional organizations, such as unions or trade associations, also will have credit unions. So while Bob's Electric Repair might not have a credit union, the Electrical Workers Local might.

2. Hit the Web. The Credit Union National Association's site has a credit union locator that allows you to search by name, city, ZIP code, area code or state, as well as links to lists of community credit unions, corporate credit unions and more.

3. Work the phone. Many states have a credit union league or credit union trade organization and employees there will help you figure out which credit unions you might be able to join. To find your state league, go to the CUNA Web site. Or call the National Credit Union Administration at (703) 518-6330, and they will look it up for you.

4. Go to a church. Or a synagogue. Or a mosque. Some houses of worship have credit unions. If you're a member of a religious community, you could be eligible. Also try the local chamber of commerce and civic clubs.

5. Let your fingers do the walking. Another good source, according to Cherie Umbel, with the NCUA, is the Yellow Pages. Many areas have their own community credit unions -- based on geographic location -- so start with the name of your community. And don't count yourself out if you don't live in a particular area with a credit union. In some cases, it's enough to work or go to school there.

6. And last, but not least, ask Mom. Since many credit unions will let you in if you are related to someone who is eligible, talk to your parents, your spouse, siblings, in-laws, aunts and uncles. Even if you haven't been near a classroom since graduation, having a brother who teaches might be your passport into the local teachers credit union. Rules on relatives vary -- some credit unions limit membership to immediate family -- so be sure to ask.

Shop around
If you've done your homework, you've probably come up with several credit unions. Now the fun starts. Make a list of the things that are important to you and see how your credit unions stack up. Just to be fair, throw a couple of banks on the list, too.

What to look for? Convenience, rates, products and services.

Start with convenience. Do you need locations close to home, so that you can hit the bank before work or on weekends, or do you want a branch near work you can visit on your lunch hour? Can you make do with one location or do you need a network of ATMs?

Look at the products and services you use now. Many banks charge a monthly fee for a checking account, plus more for the checks themselves.

What's the cost of doing business at the credit union? What is their bounced-check charge? Can they offer credit cards? Car loans? Compare rates on their savings accounts and credit cards.

Remember to weigh in anticipated future uses. Planning on buying a home or refinancing the one you've got? Ask about their mortgage rates. Think you might need a line of credit? Find out what it would cost.

Howard, an Atlanta native, admits he was looking for the credit union that could do everything.

"I wanted a wide market menu of services," he says. "Checking, savings, credit cards, the ability to get loans at a deal."

Mike and Kristi Buscemi just wanted better service, but ending up getting convenience too.

"With the mergers and the takeovers, I've noticed customer service is getting worse and worse," says Mike, who was upset at having to pay a number of additional fees for what used to be included in good service.

Last month, the Fitchburg, Wisc., couple joined a credit union. Now, instead of paying $7 a month for overdraft protection, they have it for free. And the Buscemis didn't have to give up much in the way of convenience. After researching their options, the couple picked a credit union located just a quarter-mile from home.

No matter where you park your money -- bank or credit union -- you want to make sure that it's federally insured, says Howard.

Where a bank might sport the FDIC logo, in a credit union you want to look for the insignia of the National Credit Union Administration. Its insurance fund guarantees deposits up to $100,000, just like a bank.

While most credit unions are members of the NCUA, some state-chartered credit unions are not, says Umbel.

Not for everyone
Credit unions are not for everyone.

"People of great means are better off at a bank or a brokerage house," says Howard.

But credit unions are an especially good option for people who are building credit for the first time or trying to re-establish good credit.

"Most credit unions are small and really know who their members are," says Umbel. "They are more willing to give that character loan."

Buscemi believes the biggest difference in the institutions is who is running them, and why they exist in the first place. Banks are a business, he says.

"I think that businesses cater to business, whereas credit unions focus on the individual."

Dana Dratch is a freelance writer based in Atlanta.

-- Updated: March 20, 2003