In recent weeks, banks like Bank of America have announced new fees, including charging for debit card use. The charges generally affect those people who don’t keep large balances in their accounts. In other words, the fees hit lower-income individuals the hardest.

In response to these changes, a lot of people have begun talking about credit unions.

A credit union is a cooperative financial institution owned and controlled by its members. Because the unions run on a membership basis, they are typically smaller, with more competitive rates than banks – including lower or nonexistent banking fees. They often pride themselves in strong customer service and promote local community development.

Credit unions have a lot to offer, and many people are switching because of the new bank charges and/or anger at the way traditional banks have handled the recession/bailouts/etc. A credit union member usually has privileges in all other credit unions, including a variety of locations to deposit or withdraw money, and members normally incur only traditional costs of banking instead of unexpected add-on fees.

A word of caution, though: Credit unions are just as vulnerable as banks to the potential of collapse. All account holders of banks or credit unions should get an independent rating on their banks, credit unions, and insurance companies from an agency that is truly independent, like Weiss.

Remember, if you have overwhelming financial problems, we’re here to help you figure out your options for getting out of debt. Contact us today to talk with an attorney for free.

(Photo by Mokra)