Thursday, October 13, 2011

Bank Transfer Day: Are You In?

The concept of Bank Transfer Day only sprung up this past weekend and already the social media driven initiative has gone viral and gained media attention worldwide. The Facebook campaign is urging Americans to close their accounts at large banks and place their money in local credit unions by or on November 5th in order to show contempt for bank conglomerates, such as Bank of America, who are increasing and establishing new debit card fees at a time when Americans continuously feel the security and stability of their own lives slipping away. 

The page, now supported by over 28,000 who have indicated they will make the switch, states that “Together we can ensure that these banking institutions will ALWAYS remember the 5th of November! If the 99% removes our funds from the major banking institutions to non-profit credit unions on or by this date, we will send a clear message to the 1% that conscious consumers won't support companies with unethical business practices.” After all, not only is mainstream still suffering, but U.S. bank executives continue to enjoy large salaries and bonuses – even after accepting large federal bailout funds.

Whether you’re in or out, there are several distinctions between a credit union and a bank you should be aware of so that your choice is based on more than heightened emotions or the latest buzz.  Here are a few to consider:

•     Credit unions are member-owned. Once you establish an account at a credit union, you become a part owner. That doesn’t mean you can walk in a branch and do whatever you want, but it does mean that you receive higher dividends or interest rates because there are no private investors to be paid first. 

•     Credit unions are not-for-profit. This type of status is why interest rates tend to be significantly better, and fees fewer and smaller, at credit unions than at banks. Again, any profits credit unions do make are distributed as dividends to their members.

•    Credit unions are exempt from most state and federal taxes. This allows them to avoid the need for creative fees that many banks come up with to pass on to customers.  The average penalty for overdrawing an account with a credit union is between $20 and $25, whereas with a bank, fees are usually in excess of $34.

Related Post: 10 Ways to Avoid Overdraft Fees

•    Credit unions have eligibility requirements. Practically anyone off the street can walk into a local bank branch and open a checking account – assuming they haven’t damaged their reputation with a financial institution.  Credit unions, on the other hand, require members to have something in common.  For instance, your college may have a credit union that only allows students, alumni, faculty and staff to become a member.  Virtually everyone in the United States can belong to a credit union because of where they live, where they work or any associations they may belong to.

•     Credit unions are also insured up to $250,000 per account. Instead of being insured by the Federal Deposit Insurance Corporation (FDIC), credit unions are insured by the National Credit Unions Administration (NCUA), which is also an independent federal agency which protects the assets of its depositors.

•     Credit unions don’t usually restrict you to using their ATMs. Most CUs either offer fee-free access to a huge network of ATMs or reimburse your fees if you use other institutions' machines.

            Related Post: 5 Scams That Ruin The Black Community

Some naysayers critique that it’s much simpler for people to click “Like” on a Facebook page than actually taking the time to go and shut down one account only to go somewhere else and reopen another. I guess only time will tell if we as Americans will put our money where our mouth is and send the wakeup call that the majority really should have the loudest voice in this country.

As always, please feel free to share your hearts, thoughts and opinions.

Until Next Time,

Seek Wisdom, Find Wealth & Be Blessed

1 comment:

seasoned_geek said...

An even better reason to transfer your money to small local banks and credit
unions can be found in "Infinite Exposure". This is a novel about how the
off-shoring of IT jobs and data centers leads to the largest terrorist financial
strike the world has ever seen and nuclear war before the end of 2012. You can
read the first 18 chapters for free here: