Are you a good fit for a credit union?
Consumers worried about high fees
Consumers flock to banks offering free checking. But Todd Pietzsch, public relations manager for BECU in Seattle, says consumers should remember that banks have an incentive to seek profit by requiring a minimum balance or charging high fees for overdrafts.
"As a member-owned, not-for-profit cooperative, a credit union is not motivated by charging," says Pietzsch. "In general, (overdraft) fees are going to be lower at a credit union than at a bank, and credit unions typically do not discriminate by charging additional fees based upon the average balance of the account."
While some credit unions do charge monthly fees, the cost may still be worth it. According to Bill Cheney, president of the Credit Union National Association, an industry trade group, 80 percent of credit unions offer checking accounts with no minimum balance. And mistakes also cost consumers less. Fees assessed for insufficient funds average $25 for credit unions, while banks charge about $10 more on average, says Cheney.
Overdraft fees might not be assessed at all because many credit unions allow their members to automatically apply funds from their savings account to any overdrafts.