For the vast majority of my life, I made the mistake of banking with a traditional financial institution. My first stop was Susquehanna Bank, a local bank based on central Pennsylvania. From there, I changed to Wachovia in order to have a branch local to me in North Carolina and Philadelphia. Wachovia eventually went broke and was purchased by Wells Fargo. Having opened that account in 2005, I ended my relationship with Wells Fargo in 2012 for a credit union instead.
The credit union difference is a pretty big one. The first thing is that interest rates paid to consumers on a monthly basis using my new financial institution, the Pennsylvania State Employees Credit Union (PSECU) are ten times higher than those offered by Wells Fargo or any other major bank in the country. The accounts also incur zero fees — ever. Every account is free, from savings to money markets and beyond.
Interest rates on lending products from PSECU and other credit unions are often quite a bit lower than those offered through the big banks. As an example, I have a PSECU credit card at a mere 6.9 percent, while a major bank credit card also in my wallet demands 9.9 percent interest. The difference is for a big reason:
A credit union is a member-owned financial cooperative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members. Many credit unions also provide services intended to support community development or sustainable international development on a local level.
While banks use interest rates to gather profits, credit unions use the profits generated from those interest rates to reinvest them in financial services and community development. My checking account, savings account, and money market account all pay a monthly dividend. The same was not true of Wells Fargo, which paid me no interest and required $16 in monthly fees for the mere pleasure of banking with them.
PSECU also comes with another added advantage. At the end of the year, if the credit union has exceeded its goals for profit and reinvestment, it pays the leftover money to its customers. Free money, just for banking with a company that is dedicated more to customer service than executive enrichment. On top of it, my customer service interactions have always been extremely helpful and positive, and I’ve fully invested all of my financial assets in PSECU’s offerings.
If you have an account at a big bank, or even a local traditional one, it’s time to move on. Get paid to do your banking. Claim your share of the profits. Support your community and sport a smile every time you call your bank. Choose a credit union — now.