Disadvantages of Credit Unions



It’s difficult not to get annoyed by big brick and mortar banks these days. With mounting fees and a lack of customer service, many are considering ditching their traditional banks and opening up accounts at credit unions.

Photo: Ramburg Media

While this may work for most people, there are still some disadvantages you may need to take into consideration when planning your next financial steps. While it’s true that the pros of credit unions far outweigh the cons, some people may find themselves sticking with their traditional bank when taking the following into consideration.


For the most part, credit unions are community banks that are run by it’s members. As a result, it may be difficult to find the same credit union in Sydney as you would in Brisbane or Melbourne. Further more, credit unions aren’t typically on every corner like big banks are making it slightly inconvenient for depositing and withdrawing money.

As a result there is also fewer access to ATMs, making way for the possibility of being hit with ATM fees on all ends.

(Quick Note: Some credit unions do offer a certain amount of ATM transactions at other banks at no charge. The number, however, is usually very limited and it does depend on the credit union. The other option that some credit unions provide is refunding you for your ATM use.)


Bigger banks are open longer. Period. Point Blank. Some of them are even open on weekends making them extremely convenient. Credit Unions typically only operate during business hours  which can prove be difficult and inconvenient for people who have strange work hours.


Big banks have partners overseas that make it convenient for travelers to access cash without getting hit with ridiculous exchange rates. It may be a little more difficult to accomplish that through a credit union.

Access to New Technology is Limited

Big banks have extensive online banking interfaces, 24/7 online customer service chats and mobile apps to keep you up to date on your finances. While several credit unions have begun to offer these services, they aren’t as sophisticated as what you would get at a brick and mortar bank.

Membership is Restricted

Credit unions often focus on a certain community such as a geographic location, profession, government employment or military service. In other words, you may not be eligible to join the credit union of your choice.

However, anyone can find a credit union to join. Sometimes it just takes a small donation and you’re good to go.


Generally speaking, credit unions are typically insured by the appropriate government entities. However, depending in your location the local laws may not require such insurance. As a result, some credit unions may not be insured. Make sure to do your research before opening up an account.

Fewer Services

If you need any financial services beyond the basics you may be better off at a bigger bank. Since credit unions do not have as much money as the bigger banks they may not have all the services you need. This is particularly true at smaller credit unions.

Although some disadvantages are apparent with credit union, the money you’d be saving and the extra interest you’d be gaining is well worth doing some research.

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