Everyday Cheapskate: Answers to Your Questions on Credit Unions, Banks and Deadbeat Parents
CREDIT UNIONS VERSUS BANKS
Dear Mary: What is the difference between a bank and a credit union? -- Justina
Dear Justina: Great question! A bank is a for-profit financial business run by paid board members that's primary purpose is to make profits for the shareholders.
A credit union is a nonprofit financial business that's owned by its members and run by unpaid volunteer board members. In a credit union, the profits go back to the members in the form of better rates and lower fees.
To find a credit union you can join, go to MyCreditUnion.gov and click on "Credit Union Locator."
OVERDRAFT PROTECTION SOFTENS THE BLOW
Dear Mary: When a person, who shall remain nameless, overdraws her bank account by accident, is there anything she can do to stop the chain of events and horrendous fees? -- Bettye
Dear Bettye: Don't worry. Your secret is safe with me. Banks hope you won't fight back by requesting a courtesy credit, but you should. The minute you realize you have a problem, call the bank or go into your local branch in person.
Many banks will credit back the fee, or some of it, if it's your first offense.
You need to move into prevention mode by setting up an overdraft protection account that attaches to your checking account. Then, to make sure you never have to use it (you have to pay it back, so it's not some kind of gift), get into the habit of checking your balance frequently (set up your account online so you can check using your smartphone), and never let it drop below, say, $100. Ever.