With the recent news that many banks are going to start charging from debit card use, I was thinking of switching to a credit union or local community bank because I heard they would most likely not do such a thing. What are the pros and cons?
Banks, the big ones, have shareholders and the board to answer to. Credit Unions have members and the board to answer to. You become a member by joining a CU.
Banks' prime objective is profit maximization, a credit union's prime objective is members' welfare.
Personal experience: I didn't mind that the banks charge fees, what was frustrating was keeping up with the policy changes. Have X amount to avoid Y fees. Once you fulfill that, do something else to avoid some other fees. You miss one notice and you'll pay dearly! This constant jumping of hoops was enough to switch.
Not saying CUs don't change rules, but in my opinion, not as frequently as big banks.
On fee, for instance, my overdraft with my CU is $5. With BofA it was something like $35 before regulations put a cap on such ridiculous fees.
Don't switch just because you hear people panicking on the talk shows. Banks are competitive business and won't start charging for using debit cards too fast.
If and when they decide to do such a thing after all - then start shopping and see who doesn't catch up with the fees and still provides the services you want for the price you're willing to pay.
Fees mostly. BOA, for example, just announced $5/month for for all debit cards. Chase has foreign transaction fees, mostly hidden. BOA once famously raised interest rates on credit card holders to 28%, legally. Also, some people do not like patronizing a bank with CEOs that bankrupt the company and then get multi-million dollar golden parachutes. Finally some people have a problem with banks or institutions that suspend accounts based on political or unproven legal proceedings (ala Wikileaks and BOA). Credit unions are less like to be involved in this sort of activity since they are not privately traded, and as such they are not ruled by shareholders who demand bottom line results at all costs.