What You Should Consider Before Transferring to a Credit Union

Robin Sidel brought out quite a few good points in her article Bank Protest Hits Weekend Traffic. Outside the fact that most banks, including credit unions, have their drive thru open just for a few hours on a Saturday morning and the smaller branches inside retail stores like Wal-Mart aren't set up to handle this type of traffic.

Forget the debit card fees, those happen everywhere. Even credit unions are immune to them. I know this as fact because even mine charges a fee when using an ATM that isn't theirs. Banks are a business like any other brick and mortar store you shop at. Sure you can get some better deals at a credit union, but there are other things you should consider before completely closing out your account at the bank you have done business with for years that weren't mentioned in Sidel's article.

The following things to consider when transferring to a credit union are things I have dealt with as a credit union member, a retail worker and while applying for store credit cards.

Over the Counter Checks
When opening a new checking account, even at a credit union, you are given over the counter checks to use while your order is being filled through the bank. This can take the same amount of time when ordering refill checks for your existing account at the bank you have now.

I don't know of any store that is fond of and readily accepts over the counter checks. Most stores I have tried to use them at won't accept them. Why? Over the years they have had too many people use them for goods and have the checks bounce because there wasn't money in the account or because the accounts were closed as fast as they were opened.

New Debit Card
Just like having to get new checks, there are a few weeks you have to wait for your debit card to show up in the mail; providing you meet the qualifications at the credit union for one. Debit cards have stipulations like credit cards. 

Some credit unions will require you to have a checking or savings account with them for a minimum of six months and up to a year before you can apply for a debit card. You may also have to keep a certain amount of money in your accounts as well in order to use it. I'm not saying all credit unions are like that, but you may want to be prepared in the event the one you choose has stipulations on debit card usage.

Low Numbered Checks
The same problem often happens with the low numbered checks, starting with a number under a thousand, are balked at as well. They aren't turned away as fast as the over-the-counter checks, but almost as hard to use.

Not Enough Bank History
Stores, credit companies, and utilities often look at the low numbered checks as if there is something wrong with your credit or finances. Seems crazy, right? Not as crazy as you think.

For example, you are wanting to open a credit card with Kohl's. While they are looking through your credit score, this also includes banking history in some cases. New accounts with banks can hurt you getting that loan or credit card because your banking account doesn't have a long enough history or the kind of activity creditors like to see.

Outstanding Checks and ePayments
It's rather hard to close a checking account at a larger bank the same day you want to because of outstanding checks and epayments. The epayments can include any debts paid by your Mastercard or Visa backed debit card. There are cut off times, just like deposits, when those transactions aren't made either during the week.

Closing Your Checking, Savings, and All Other Bank Accounts
This part wasn't really touched on in Sidel's article, but it is part of the overall picture she painted on having to wait up to 30 to 60 days while opening a new account for epayments. The reverse is true for closing an account at another bank.

Just think before you leap onto the "Bank Transfer" grassroots band wagon. Is it going to be worth your time and energy to go through all the hoops to save a few bucks a month on debit card and checking account fees?