When financial institutions, banks and credit unions both, advertise, we promote our great CD rates, or low loan rates. GECU is no different, other than we really do pay better rates on our savings products, and offer lower rates on loans. But that’s for another post. What financial institutions don’t promote or emphasize are our fees. And that’s a shame, because in this day and age, I would argue fees can have a much bigger impact on your financial well-being than a small difference in an interest rate in most cases.
There are all sorts of fees that we charge. Of course people think of overdraft fees perhaps first. Or late fees on loans. Those are punitive fees, punishing the member for violating the terms of their account – not having enough funds in your account to clear a check or ACH transaction, or not making your loan payment on the due date. And these fees can be avoided by not violating those terms. Of course the actual fee still matters, or the willingness of the financial institution to waive the fee for the occasional error or oversight.
What if you never overdraw your account, or are never late on your loan payment? Fees don’t matter to you then, correct? This is where you start to see a difference, both in cost and philosophy. Let’s start with ATM fees. When ATMs first came out, they were hailed as a money-saver for institutions. Instead of paying for more tellers, we can install these machines for members to access their money. No wages or benefits to pay. Woohoo! Then we realized we could charge members and they wouldn’t complain. So maybe we’ll allow you a couple of free transactions, but then we’re going to charge you a fee. Then we realized we could charge non-members for using our machines to make even more money. Just $1 would more than cover our costs. Then it was $2. Then $3. And now some charge up to $5 or more for non-members. And then some of us realized that we could make more money by charging our own members when they don’t use one of our ATMs. So if you use an ATM nowadays not owned by your bank, you might get charged a $5 surcharge by the ATM owner AND another fee by your bank. Ouch! What about GECU? Yes, we do surcharge non-members using our ATMs, but are also part of the Privileged Status Network, where participating financial institutions agree not to surcharge each other. And if you want to use an ATM not owned by us? We give you TEN free transactions a month, and then charge just 75¢ after that.
That’s just one example. Even better, what about statements. We’ll be up front – e-statements are FAR cheaper for us than sending out paper statements. We would love for all of our members to sign up for e-statements. But it is common for both banks and credit unions to actually charge you if you want to continue getting a paper statement. As long as I am here, this is simply something that will not happen. It’s your right to get your monthly statement in whatever format you want. To charge you for that seems absurd.
These are just small examples. What about the big dollar items. How much does your financial institution charge for originating a mortgage loan? We all offer very similar interest rates, but there can be a huge difference in up-front costs, sometimes thousands of dollars. This would be reflected in the APR (yet another article). And if you’ve borrowed for a vehicle in recent years, chances are you have had GAP coverage on the loan, to protect you if your vehicle is totaled and you are upside down. Dealers often charge $795, $895 or even more for this coverage. Other institutions may be right there with them. GECU? Just $450. Half the cost.
Getting back to your checking account, does your institution have a minimum monthly balance requirement? Or even just a monthly maintenance fee, regardless of your balance? How much are you charged for a wire transfer? What about for a cashier’s check? And the list goes on. Even if you are an excellent member with a high balance, there are fees that can really start to add up. That’s why we focus on fees as much as paying and offering better rates. We know fees can have an even bigger impact on your financial well-being than rates. As a member-owned cooperative, it is our responsibility to save you money and improve your financial well-being. That’s our philosophy in action. If you’re reading this, you’re probably already a member of GECU, and know how much we save you. But if you’re not a member, or the next time you hear a friend or coworker complain about their bank, perhaps talk us up. We would like nothing more than to help even more members save and enjoy the value of membership in GECU.