Given the unrest in banks, time May be right to judge a case
Tuesday, May 6, 2008 | | |Sunday, April 27, 8:42 am ET
By Andrea Coombes
Given the turmoil in traditional banks, the time May be right to judge a case
SAN FRANCISCO (MarketWatch) - Websites May not very polite and that the conditions for eligibility May give you a break, but when it comes to low costs and generous rates, credit unions banks match head-to-head.
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It's not that you can find better deals drastically credit unions, but their products should be among the options that you take into account when looking for savings and checking accounts, CDs, small businesses , Mortgages and auto loans, and credit cards - especially now, Given that credit unions largely avoided the subprime crisis.
Consumers should "include credit unions in their comparison of purchase," said Greg McBride, Senior Financial Analyst with Bankrate.com.
Currently, credit unions pay an average of 2.97% over one year, certificates of deposits, slightly better than banks averaged 2.36%, while credit unions' one-year adjustable rate mortgages average 4.88%, besting banks 5.86%, according to Datatrac, a market-research firm focusing on banking products.
For a standard credit card, credit unions charge an average interest rate of 11.9% compared to banks by 13.6%. And credit cooperatives lower taxes, on average.
"We are nonprofit cooperatives. We did not charge all that, we're not for profit and we do not have to pay taxes on net income we get things done," said Bill Hampel, chief economist with the Credit Union National Association in Washington.
Credit unions are also overcome the crisis subprime better than some large banks. "Credit unions not to play the" Hey, there is more profit to be made by loosening our [loan] standards, "said Daniel Penrod, an industry analyst with the California Credit Union League in Rancho Cucamonga, California "Because we are member-owned, while the dollar has lost is a dollar composition of the money, not a face shareholder, [so] they do not take the risk."
And during these periods of restrictions on credit, credit unions May be likely to approve your loan. Their subscription has not changed for good credit consumers, "said Hampel, and those who have bad credit record can at least give it a try.
"The credit cooperatives, slightly smaller, perhaps more understanding, especially if there were urgent," he said. Most credit unions do not work a subprime-lending program that banks. "Credit unions are not the bulk of subprime loans. They did a few loans to subprime borrowers who have credit history, but they have not been through a loan program subprime" Hampel said.
This is not to say credit unions are protected by the credit crunch. "When it rains, everybody gets wet. If they are dependent on a secondary market to raise capital or securitize loans, they may be affected as any other financial institution," said McBride.
But, like a bank, "insofar as a body made most of their activity through deposits by their own members and holding their loans to home, they can largely escape the effects of the crisis credit, "he said.
Composition obstacle
A caveat: You must be able to join. "The first obstacle is the criterion of admissibility," said McBride. "The good news is membership requirements have been relaxed in recent years, so many people are now eligible for the credit union based solely on where they live or their place of work . "
In some states, a credit union will allow any state resident for membership. Elsewhere, your work or college alumni association May you allow access. Moreover, if a close family member is part of a credit union, you're probably eligible, no matter where you live.
Do not let a body the name you started. For example, Boeing Employees Credit Union, now BECU, was at one time only for employees of Boeing, but then expanded to include anyone who lives in Washington State.
And do not discount small credit unions in your search. "Large credit unions very often help smaller credit cooperatives with any branch staffing for processing transactions. This allows a large number of small credit unions to offer some of the bells and whistles that consumers would associate with a much larger institution, "said McBride.
Finally, do not think you necessarily linked to a local branch. "The misperception is local credit unions are an option," said Penrod. "Credit unions were well beyond this cooperation with the network of ATMs and shared connection, a person can be a member Florida, California come and walk into a branch and start making transactions as if they were in their own branch. "
Did Findacreditunion.com to see if you're eligible to join. Make sure the credit union deposits are insured. Most are covered by the National Credit Union Administration share insurance fund. The NCUA is a federal agency that provides most of the credit unions, Hampel. Did NCUA.gov and click "share insurance" for more information. Others credit cooperatives May be provided at the state level
By Andrea Coombes
Given the turmoil in traditional banks, the time May be right to judge a case
SAN FRANCISCO (MarketWatch) - Websites May not very polite and that the conditions for eligibility May give you a break, but when it comes to low costs and generous rates, credit unions banks match head-to-head.
ADVERTISING
It's not that you can find better deals drastically credit unions, but their products should be among the options that you take into account when looking for savings and checking accounts, CDs, small businesses , Mortgages and auto loans, and credit cards - especially now, Given that credit unions largely avoided the subprime crisis.
Consumers should "include credit unions in their comparison of purchase," said Greg McBride, Senior Financial Analyst with Bankrate.com.
Currently, credit unions pay an average of 2.97% over one year, certificates of deposits, slightly better than banks averaged 2.36%, while credit unions' one-year adjustable rate mortgages average 4.88%, besting banks 5.86%, according to Datatrac, a market-research firm focusing on banking products.
For a standard credit card, credit unions charge an average interest rate of 11.9% compared to banks by 13.6%. And credit cooperatives lower taxes, on average.
"We are nonprofit cooperatives. We did not charge all that, we're not for profit and we do not have to pay taxes on net income we get things done," said Bill Hampel, chief economist with the Credit Union National Association in Washington.
Credit unions are also overcome the crisis subprime better than some large banks. "Credit unions not to play the" Hey, there is more profit to be made by loosening our [loan] standards, "said Daniel Penrod, an industry analyst with the California Credit Union League in Rancho Cucamonga, California "Because we are member-owned, while the dollar has lost is a dollar composition of the money, not a face shareholder, [so] they do not take the risk."
And during these periods of restrictions on credit, credit unions May be likely to approve your loan. Their subscription has not changed for good credit consumers, "said Hampel, and those who have bad credit record can at least give it a try.
"The credit cooperatives, slightly smaller, perhaps more understanding, especially if there were urgent," he said. Most credit unions do not work a subprime-lending program that banks. "Credit unions are not the bulk of subprime loans. They did a few loans to subprime borrowers who have credit history, but they have not been through a loan program subprime" Hampel said.
This is not to say credit unions are protected by the credit crunch. "When it rains, everybody gets wet. If they are dependent on a secondary market to raise capital or securitize loans, they may be affected as any other financial institution," said McBride.
But, like a bank, "insofar as a body made most of their activity through deposits by their own members and holding their loans to home, they can largely escape the effects of the crisis credit, "he said.
Composition obstacle
A caveat: You must be able to join. "The first obstacle is the criterion of admissibility," said McBride. "The good news is membership requirements have been relaxed in recent years, so many people are now eligible for the credit union based solely on where they live or their place of work . "
In some states, a credit union will allow any state resident for membership. Elsewhere, your work or college alumni association May you allow access. Moreover, if a close family member is part of a credit union, you're probably eligible, no matter where you live.
Do not let a body the name you started. For example, Boeing Employees Credit Union, now BECU, was at one time only for employees of Boeing, but then expanded to include anyone who lives in Washington State.
And do not discount small credit unions in your search. "Large credit unions very often help smaller credit cooperatives with any branch staffing for processing transactions. This allows a large number of small credit unions to offer some of the bells and whistles that consumers would associate with a much larger institution, "said McBride.
Finally, do not think you necessarily linked to a local branch. "The misperception is local credit unions are an option," said Penrod. "Credit unions were well beyond this cooperation with the network of ATMs and shared connection, a person can be a member Florida, California come and walk into a branch and start making transactions as if they were in their own branch. "
Did Findacreditunion.com to see if you're eligible to join. Make sure the credit union deposits are insured. Most are covered by the National Credit Union Administration share insurance fund. The NCUA is a federal agency that provides most of the credit unions, Hampel. Did NCUA.gov and click "share insurance" for more information. Others credit cooperatives May be provided at the state level
