As Bob Dylan once said, times they are a changin’. And they are. More and more of us are no longer willing to waste our hard-earned money paying the fees and fines that line the pockets of the rich. We’re looking for ways to cut costs and invest in ourselves. This is why so many of us are choosing to make the switch from one of the 5 major banks to a credit union. In fact, 10-million, or roughly one-third of Canadians have already made the switch.
What is a credit union?
Credit unions are different than banks and other financial institutions. Members aren’t just members. They’re also owners, which means that they are part of a democratic system that invites them to vote on how their money is invested. Votes aren’t based on shares, but on membership; that is, each member gets one vote.
It is said that credit unions serve their customers, or members, not profit. Typically, they use their ‘profits’ as a means to provide their members with a broader range of products and services at better rates. Credit unions provide all of the same services that regular banks do, including online banking, savings and chequing accounts, and credit cards.
What the people are saying?
According to a national survey conducted by FirstOntario Credit Union in November 2011, the average Canadian has been with their bank for more than 15 years. The respondents were polled about their banking practices and preferences, the level of satisfaction they felt with their current financial institution and whether or not they were willing to leave their bank.
Of the more than 2,500 Canadians polled, more than 40% are unhappy with the service fees that their bank charges them. Some 42% said that they are either “unsatisfied completely” or “somewhat satisfied” with their bank. Despite dissatisfaction, nearly 10% said that they were reluctant to switch banks. It was felt that switching banks would be too much trouble, especially since most respondents have been with the same bank for their entire life.
Why aren’t we switching financial institutions?
According to the FirstOntario Credit Union press release, people don’t leave their banks for other financial institutions because of “serious misconceptions.” Staying with a bank that doesn’t offer you the products and services you need is like staying in a bad relationship. Most stay out of convenience, even though they know there are better options out there. For many, “even the thought of switching is daunting.”
It’s true. I know I could be doing most of my banking for free, yet I’m still paying fees and services charges. True to my word (and my New Year’s resolution), I did visit my bank and make sure that I was getting the most for the least – at least, from my institution. But I know I could be getting more for nothing. So why haven’t I switched?
To be honest, the idea IS daunting, and apparently I’m not alone in my thinking. According to the press release, here are some misconceptions about switching financial institutions:
- Switching banks can have a negative impact on your credit rating
- It’s complicated changing to another bank
- The bigger the bank, the better the benefits
- Only chartered banks in Canada are regulated
- Only big banks offer online banking
Sadly, I’ve been a victim of a few of these misconceptions. I have always believed that it’s better to go with a bigger bank, and that because they’re bigger they’re more regulated, making my money safer. I have also believed (falsely) that switching banks would be bad for my credit score and could affect my chances of getting a mortgage or line of credit. I have also always assumed that switching financial institutions would be somewhat complicated. Apparently I have been wrong about this as well.
My mission
The website, www.myownbank.ca, provides personal testimonials written by consumers who have chosen to deal with credit unions, rather than major banks, but I’ve always been a bit wary of testimonials. For this reason, I’ve decided to make looking into this matter my mission. I’m going to have a look at some of the local credit unions, ask a lot of questions and decide whether or not I want to make the switch. I can no longer remain with my current bank just because we’ve been together for as long as I’ve banked. It’s time to choose the institution that’s right for me. And I strongly urge you to do the same.
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