Banks vs. Credit Unions: Which Is Right For You?

Bank Transfer Day (November 5, 2011) was started by Kristen Christian, a woman who was fed up with the way banks treat their customers and gamble with taxpayer money. Originally, Christian just invited all 500 of her Facebook friends, and hoped that some of them would heed her call to take their money out of the corporate, for-profit banks.

“I started this because I felt like many of you do,” said Christian. “I was tired– tired of the fee increases, tired of not being able to access my money when I need to, tired of them using what little money I have to oppress my brothers & sisters. So I stood up. I’ve been shocked at how many people have stood up alongside me. With each person who RSVPs to this event, my heart swells. Me closing my account all on my lonesome wouldn’t have made a difference to these fat cats. But each of YOU standing up with me… they can’t drown out the noise we’ll make.”

The Bank Transfer Day Facebook event went viral almost immediately and now has almost 77,000 participants. But reports from around the web say that thanks to Bank of America’s attempt to charge customers extra just to use their debit cards, 650,000 Americans moved their money from a bank to a local or regional credit union. Credit unions are not-for-profit financial cooperatives, whose earnings are paid back to members in the form of higher savings rates and lower loan rates.

It’s okay if you haven’t already opened a credit union account. November 5th is just a target date for action. Any day is a good day to move your money out of the Big Banks!

On the following pages, you’ll find some of the most important differences between banks and credit unions. Use this comparison to help you decide who you want to put in control of your money.

>>Up Next: Credit Unions

How are banks and credit unions different?

  • Banks’ depositors are called customers. Customers have no ownership interest in the institution. Banks are owned by investors who may or may not be depositors.
  • Banks are owned and controlled by stockholders, whose number of votes depend upon number of shares owned. Customers don’t have voting rights, cannot be elected to the board, and have no say in how their bank is operated. Directors are selected by current directors or by large block stock acquisition.
  • Banks are for-profit corporations, with declared earnings paid to stockholders only.
  • Competition between banks prohibits a sharing of resources.
  • The Savings & Loan bailout in 1980s, as well as the more recent bank bailouts, used millions of taxpayer dollars.

>>Up Next: Credit Unions

How are banks and credit unions different?

  • At credit unions, depositors are called members. Each member is an owner of the credit union and has a say in how the credit union’s funds are invested.
  • Since credit union members are owners, each member, regardless of how much money they have on deposit, has one vote in electing board members. Members can also run for election to the board.
  • Credit unions are not-for-profit financial cooperatives, whose earnings are paid back to members in the form of higher savings rates and lower loan rates.
  • Credit unions cooperate with other credit unions and share resources to bring convenience and savings to its members. CU Service Centers and the CO-OP ATM Network are just two examples of this cooperation between credit unions.
  • In the entire history of U.S. credit unions, taxpayer funds have never been used to bail out a credit union.

For more information on why and how to move your money from a bank to a credit union, visit or

Related Reading:

Bankers Decide Their Own Regulations

Bank Of America Cancels Debit Card Fee Plan

Are Fed Bankers Colluding To Enrich Themselves?

Special thanks to my local credit union, PSCU, for providing these facts!

Image Credit: Flickr – fibonacciblue


Annie A.
Annie A.3 years ago

I honestly prefer a credit union over big banks. For me, a credit union is a lot easier to deal with compared to banks and the folks at Oak Trust in Plainfield, Illinois just make the experience even better. Check out their website at

Tim C.
Tim C4 years ago


Richard Lares
Richard Lares6 years ago

The only way for banks to get it is to leave them. For the ones who do not like Credit unions look into Walmart just remenber if you keep the money on the banks role they get your money.

D. A. V6 years ago

I joined my first credit union in 1984, and first reduced, then eliminated my dealings with banks entirely. The benefits become obvious immediately. I am glad to see this post outlining them.

Keevin Shultz
Keevin Shultz6 years ago

Credit Unions

Hannah S.
Hannah Short6 years ago

i have moved all of my money out of the bank already, i dont have much money so once i get me a job or start making money with my short stories i will find me a credit union

Deborah L.
Deborah L6 years ago

Credit Unions Rock! I wouldn't step into BofA if it's President was on fire & needed help! They have stolen & cheated & lied their way into Billions in Profits. Let them reap what they Sow.

Rebecca Smith
Rebecca Smith6 years ago

I will most likely be closing my account on monday.

Danuta Watola
Danuta W6 years ago

Thanks for the info.

Frances C.
Frances C6 years ago

I love my credit union. I quit Bank of America long ago. I also stopped using Verizon who supports right wing causes, advertises on Hannity and Beck. I now use Credo Mobile who supports progressive causes.