Ethical banking -> avoiding big bank credit cards?

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In light of the recent Wells Fargo fiasco, a good way to keep your finances from adding to the power of the large banks would be to close any big-bank credit cards and solely use credit union credit cards. Given that the large banks have the size to offer the best rewards on credit cards, you would probably be leaving a little cashback on the table if you switch away from them. I was wondering if anyone else was planning on doing this? or if you think this would be an effective strategy?

 

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Yep, all the advertising junk mail comes from penfed and the other CU i have an account with.  My bank sells my informat... (more)

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Well, it would be a good social test if we could harness the power of FW, reddit, and other major online boards to boyco... (more)

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Wouldn't a more effective strategy be using those big banks for as much CB as possible while making sure you pay no fees. I know many FW'ers who took Wells for far more than they took us for.

My personal goal is life is to be an unprofitable customer. In order to accomplish that with credit cards, I have come to rely on big banks and their generous rewards and have no plans to discontinue using them.

Avoidance of Wells Fargo is a good idea based on their anti-consumer banking practices, including many times being the high-interest-on-loans institution in local markets. Another part of the empire of the Lizard of Omaha, who acts high-minded while profiting from shady practices. I now avoid anything to do with his operations after being burned by this bank and others of Berkshire's tentacles.

Is hating on Warren Buffett a thing now?

ROTFLMAO.

Haha. IF the big banks want to take advantage of us, the best we can do is turn the table on them and gobble up all the cashback we can!

Shouldn't there be an admissions test for all newbies before they can post here?

starvingtrader said:   In light of the recent Wells Fargo fiasco, a good way to keep your finances from adding to the power of the large banks would be to close any big-bank credit cards and solely use credit union credit cards. Given that the large banks have the size to offer the best rewards on credit cards, you would probably be leaving a little cashback on the table if you switch away from them. I was wondering if anyone else was planning on doing this? or if you think this would be an effective strategy?

 

  My strategy is to use the product best suited to my activities.  I couldn't care less what bank or credit union is involved.

Discriminating based on anything except the value of the relationship is never an effective strategy.

I don't see the appeal of Credit Unions. If you follow the rules, big banks won't make any difference as compared to a credit union. In fact, big banks have more potential for financial gain with rewards, larger branch network, etc.

tennis8363 said:   I don't see the appeal of Credit Unions. If you follow the rules, big banks won't make any difference as compared to a credit union. In fact, big banks have more potential for financial gain with rewards, larger branch network, etc.
  If your credit union participates in the Coop Network, you have 5,000+ branches and 30,000 ATMs:

https://co-opcreditunions.org/locator/ 

Also, credit unions do offer compelling products. For example: I have a couple very good RCAs, Navy Federal is targeting my wife with a $250 credit card offer, Alliant had a $300 credit card offer recently (with one year 0% purchases and BTs with no BT fee), and one of my local credit unions has a $200+ offer for new checking customers.

What makes you think CUs are more ethical than banks?

Tiggerlgh said:   What makes you think CUs are more ethical than banks?
  Because they exist to serve their members, not to make profits, and just about everything else about credit unions.

Because credit unions are very local they can offer products that would not make sense to a wider audience. Many large banks are not able to take advantage of small town incentives like first time homebuyer programs.

Credit unions are more amenable to waiving fees and are not so quick to assess fees in the first place because they don't depend on them to make money.

CU employees can be given incentives to hit targets. People aren't immune from greed, regardless of the format the company they work for takes.

stanolshefski said:   
tennis8363 said:   I don't see the appeal of Credit Unions. If you follow the rules, big banks won't make any difference as compared to a credit union. In fact, big banks have more potential for financial gain with rewards, larger branch network, etc.
  If your credit union participates in the Coop Network, you have 5,000+ branches and 30,000 ATMs:

https://co-opcreditunions.org/locator/ 

Also, credit unions do offer compelling products. For example: I have a couple very good RCAs, Navy Federal is targeting my wife with a $250 credit card offer, Alliant had a $300 credit card offer recently (with one year 0% purchases and BTs with no BT fee), and one of my local credit unions has a $200+ offer for new checking customers.

Ok, thanks for the info.

I haven't found a single thing that cu's offer which I can't find the same or better at a large bank (and yes, I have 2 CU accounts). Also, there are some large credit unions that probably act just like regular bank.

Guess it all depends on what you are looking for. 

gnopgnip said:   Because credit unions are very local they can offer products that would not make sense to a wider audience. Many large banks are not able to take advantage of small town incentives like first time homebuyer programs.
 And some are as big or larger than some of the national banks.  CUs just like banks vary greatly.  There are also small town banks what makes them worse than CUs?

tennis8363 said:   I don't see the appeal of Credit Unions. If you follow the rules, big banks won't make any difference as compared to a credit union. In fact, big banks have more potential for financial gain with rewards, larger branch network, etc.
  It really depends on what is offered by your local CUs. Some things I like in my local CUs, that I dont find in the local branches of bigger banks:

1. Free coin counting machine.
2. Free notary service.
3. More friendly staff, less crowded.

They are not my primary checking account but I do use them for notary and occasional check deposits (they are conveniently located and gives an excuse to take a short stroll during lunch).

The above may not be universally true and change over time. For example, my local CU used to offer a credit card that had two great features:

1. No fee BT with grace period (treated just like a purchase). I could literally transfer from my CC account to my checking account and get free interest (when rates were higher than it is today). They eventually stopped that "feature".
2. 1% cash back; automatically credited to the CC each statement with no minimum. This may not be great today but it was when cash back rewards were not the norm.

In short, look around for what your local CUs (and smaller banks) offer --- do this periodically. You may find some local niche products that you can benefit from.

fwuser12 said:   
tennis8363 said:   I don't see the appeal of Credit Unions. If you follow the rules, big banks won't make any difference as compared to a credit union. In fact, big banks have more potential for financial gain with rewards, larger branch network, etc.
  It really depends on what is offered by your local CUs. Some things I like in my local CUs, that I dont find in the local branches of bigger banks:

1. Free coin counting machine.
2. Free notary service.
3. More friendly staff, less crowded.

They are not my primary checking account but I do use them for notary and occasional check deposits (they are conveniently located and gives an excuse to take a short stroll during lunch).

The above may not be universally true and change over time. For example, my local CU used to offer a credit card that had two great features:

1. No fee BT with grace period (treated just like a purchase). I could literally transfer from my CC account to my checking account and get free interest (when rates were higher than it is today). They eventually stopped that "feature".
2. 1% cash back; automatically credited to the CC each statement with no minimum. This may not be great today but it was when cash back rewards were not the norm.

In short, look around for what your local CUs (and smaller banks) offer --- do this periodically. You may find some local niche products that you can benefit from.

Thanks. My Chase branch is always dead and has free notary (I only keep it open for cash deposits and transfer to Ally). It is less then 1 mile from the house. Closest CU is much further. 

Will keep it in mind, however. 

fwuser12 said:   
tennis8363 said:   I don't see the appeal of Credit Unions. If you follow the rules, big banks won't make any difference as compared to a credit union. In fact, big banks have more potential for financial gain with rewards, larger branch network, etc.
  It really depends on what is offered by your local CUs. Some things I like in my local CUs, that I dont find in the local branches of bigger banks:

1. Free coin counting machine.
2. Free notary service.
3. More friendly staff, less crowded.

They are not my primary checking account but I do use them for notary and occasional check deposits (they are conveniently located and gives an excuse to take a short stroll during lunch).

The above may not be universally true and change over time. For example, my local CU used to offer a credit card that had two great features:

1. No fee BT with grace period (treated just like a purchase). I could literally transfer from my CC account to my checking account and get free interest (when rates were higher than it is today). They eventually stopped that "feature".
2. 1% cash back; automatically credited to the CC each statement with no minimum. This may not be great today but it was when cash back rewards were not the norm.

In short, look around for what your local CUs (and smaller banks) offer --- do this periodically. You may find some local niche products that you can benefit from.

  1 & 2 can be found at many large banks (probably even WF) if you have an account.  3 is very subjective and will vary by location for both Banks and CUs. and what kind of day the teller is having. 

I have a local CU as well and not against them at all but I do not see where they completely trump large banks either. and the list above does not help prove the case.

Tiggerlgh said:   I have a local CU as well and not against them at all but I do not see where they completely trump large banks either. and the list above does not help prove the case.
  I am not necessarily trying to prove anything. Just asking one to look around to see if there is anything niche that their local CUs offer that the local branches of the big banks dont (and vice versa). I have accounts in most big banks with a local branch as well as a couple local CU and one in Alliant.

ETA: I enjoy the Chase new checking/savings account bonus every year. No CU even comes close to that kind of offer.

fwuser12 said:   
tennis8363 said:   I don't see the appeal of Credit Unions. If you follow the rules, big banks won't make any difference as compared to a credit union. In fact, big banks have more potential for financial gain with rewards, larger branch network, etc.
  It really depends on what is offered by your local CUs. Some things I like in my local CUs, that I dont find in the local branches of bigger banks:

1. Free coin counting machine.
2. Free notary service.
3. More friendly staff, less crowded.

They are not my primary checking account but I do use them for notary and occasional check deposits (they are conveniently located and gives an excuse to take a short stroll during lunch).

The above may not be universally true and change over time. For example, my local CU used to offer a credit card that had two great features:

1. No fee BT with grace period (treated just like a purchase). I could literally transfer from my CC account to my checking account and get free interest (when rates were higher than it is today). They eventually stopped that "feature".
2. 1% cash back; automatically credited to the CC each statement with no minimum. This may not be great today but it was when cash back rewards were not the norm.

In short, look around for what your local CUs (and smaller banks) offer --- do this periodically. You may find some local niche products that you can benefit from.

  Yeah, always YMMV.  Personally I have stuck with a local bank (11 total locations), that I have had luck to have here.  The only CU product I have found to be competitive is auto loans.
My local bank has:
- $500 min balance on the older checking accounts I have for no fee, and no direct deposit requirement
- Notary? (I'm assuming, haven't needed one.)  Also, Signature Guarrantees for free (Have used that).
- Immediate availability of almost all deposits.  Deposited a BT check last friday and it was already available on Monday.
- nice employees.  Example: they comp'd the last two cashiers checks because I didn't add the fee to the withdrawal slip and they only asked after I wrote the total.  And they didn't want me to write out a new slip.
- Phone service (as well as internet, but I don't use their internet banking) available to check balances and make transfers without data service.

On the other end of the spectrum, things I have found lacking in the CU most conveniently located by my work and from family member's experiences at some other CUs:
- Extremely long hold times for even tiny deposits.  I was told 14 business days for a ~$1000 check from my mortgage servicer.
- poorly trained staff (mishandling paperwork related to accounts)
- Noncompetitive, expensive mortgage rates
- poorer fee structures for checking accounts
- no signature guarantees

tennis8363 said:   
stanolshefski said:   
tennis8363 said:   I don't see the appeal of Credit Unions. If you follow the rules, big banks won't make any difference as compared to a credit union. In fact, big banks have more potential for financial gain with rewards, larger branch network, etc.
  If your credit union participates in the Coop Network, you have 5,000+ branches and 30,000 ATMs:

https://co-opcreditunions.org/locator/ 

Also, credit unions do offer compelling products. For example: I have a couple very good RCAs, Navy Federal is targeting my wife with a $250 credit card offer, Alliant had a $300 credit card offer recently (with one year 0% purchases and BTs with no BT fee), and one of my local credit unions has a $200+ offer for new checking customers.

Ok, thanks for the info.

I haven't found a single thing that cu's offer which I can't find the same or better at a large bank (and yes, I have 2 CU accounts). Also, there are some large credit unions that probably act just like regular bank.

Guess it all depends on what you are looking for. 

  Consistently low auto loan rates. It's hard to find that in the banking sector. Some CUs will event count 2-3 year old cars as new for financing purposes.

Haha. Mine is all the way down in 23rd according to this list. http://creditunionaccess.com/top50creditunions.htm

Argyll said:     No credit union is larger than a national bank. They don't even come close. The largest credit union by far is NFCU with $75 billion in assets. There are only five credit unions with $10 billion in assets.  In comparison,  JP Morgan Chase has $2.42 trillion in assets.  Bank of America, Citigroup and Wells Fargo have over $1 trillion in assets each.   There are a dozen or more national banks with over $200 billion in assets.  Credit unions are much, much smaller than national banks.  They have to be because membership is restricted to various classes and local areas.
 

You are correct that there are about a dozen national banks with over $200 billion in assets, but there are nearly a thousand national banks in the U.S.  Only about 20 of them are larger than NFCU.  Most national banks are fairly small.  As a matter of fact, about 80% of the national banks are under $1 billion. 

While big banks often misbehave, credit unions have limited service and can be remarkably anal. I use BoA for all my in person banking and ATMs. They have great ATMs and they are everywhere and the in person service is adequate for my occasional use. I use a few online only banks to handle pretty much everything else. And if I need help at 2AM, no problem. Try that with a credit union. When I have problems with credit cards and "fraud lockouts", it's always the credit unions that are the ones giving me problems.

While big banks often misbehave, credit unions have limited service and can be remarkably anal. I use BoA for all my in person banking and ATMs. They have great ATMs and they are everywhere and the in person service is adequate for my occasional use. I use a few online only banks to handle pretty much everything else. And if I need help at 2AM, no problem. Try that with a credit union. When I have problems with credit cards and "fraud lockouts", it's always the credit unions that are the ones giving me problems.

I'm a member of PenFed Credit Union because they offer some financial products I like. I received a voicemail a couple of weeks ago from someone claiming to be from PenFed and asking me to call a number regarding my account. I thought it sounded suspicious so, I called the customer service # for PenFed and asked about it. It took a while, but the CSR eventually discovered it was a 3rd party authorized to solicit me with an offer for something.

That was pretty annoying. However, I wasn't completely shocked that a big credit union like PenFed would do something like that. I know my local, for-profit, small bank would never pull that kind of nonsense, and that's why I do most of my banking with them. But, it's still worth it for me to keep doing business with big, national credit unions like PenFed because of the loss leader products they offer (ex 5% cash back on gas).

Argyll said:   
Tiggerlgh said:   What makes you think CUs are more ethical than banks?
  Because they exist to serve their members, not to make profits, and just about everything else about credit unions.

  Ethical like this?

https://www.justice.gov/usao-wdva/pr/former-lynrocten-federal-cr...

ArbitraryChicken said:   I'm a member of PenFed Credit Union because they offer some financial products I like. I received a voicemail a couple of weeks ago from someone claiming to be from PenFed and asking me to call a number regarding my account. I thought it sounded suspicious so, I called the customer service # for PenFed and asked about it. It took a while, but the CSR eventually discovered it was a 3rd party authorized to solicit me with an offer for something.

 

  Yep, all the advertising junk mail comes from penfed and the other CU i have an account with.  My bank sells my information to no one to send me junk mail.

jerosen said:   Is hating on Warren Buffett a thing now?
  Well, it would be a good social test if we could harness the power of FW, reddit, and other major online boards to boycott the top 10 companies invested by Berkshire Hathaway and see how much hurt it could be dealt.  I am willing to bet $1 with Mortimer on this.

ETA:  From the 2nd quarter 2016 financial statement:

Approximately 61% of the aggregate fair value was concentrated in the equity securities of four companies (American Express Company – $9.2 billion; Wells Fargo & Company – $23.7 billion; International Business Machines Corporation (“IBM”) – $12.3 billion; and The Coca-Cola Company – $18.1 billion). 

 



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