Switching Banks... (funds, pay, million, rate)

[PurpleLove08]

I'm trying to decide between a credit union and a local bank.

The local bank offers the Kasasa Cash and Kasasa Saver program.
Kasasa cash:

Kasasa Cash is perfect for you if you want:

• Free checking that gives you extra cash each month
• No minimum balance
• Worldwide ATM fee refunds
• Free online banking

To get 3.50% APY* do the following each month:

• Make a minimum of 10 debit card purchases
• 1 direct deposit, ACH automatic payment, or online bill pay
• Receive electronic statements
• Access your account online

Kasasa Cash | First Arkansas Bank and Trust Online | Jacksonville - Little Rock - Heber Springs | Arkansas - AR (http://www.firstarkansasbank.com/personal/personal-checking/kasasa-cash.html - broken link)

The debit card purchases have to be over 9.99 and looking at my spending, it looks like I can accomplish the 10 debit card purchases MOST months but if I don't, I only earn .05% APY.

The Kasasa Saver savings account has my ATM fee refunds deposited into my savings account.

With the credit union, the APY is .10%. They have a debit rewards program even though I think the word "debit" is misleading because in order to earn reward points, you have to select "Credit" when you swipe your card.
[QUOTEEarn one (1) point for every $2.00 when signing for purchases or selecting the "credit" option (PIN transactions not included). Earn one-quarter of one percent (0.25%) cash back for every purchase when signing for purchases or selecting the "credit" option (PIN transactions not included)][/quote]

Their overdraft protection is something I'm not used to:

1. Your Arkansas Federal Visa® Classic or Platinum Rewards MasterCard® will automatically be advanced in $1.00 increments that are transferred directly into your Checking Account. There is no fee for this service but interest begins to accrue from the date of transfer, there is no grace period.
2. If you do not have an Arkansas Federal Visa® or Platinum Rewards MasterCard®, overdrafts will be covered by transferring funds, also in $1.00 increments, from your Share Savings Account. Federal regulations limit overdraft protection transfers from a non-transaction account, such as Share Savings Account, to six (6) per calendar month. Each time a transfer is made, your account is charged a nominal service charge.
3. If funds to cover the overdrafts are not available from other sources, then eligible members have a third line of defense with Privilege Pay. Privilege Pay will pay any item presented for payment against your AFCU checking account that might cause your account to be overdrawn up to $500 (there is a nominal fee for this service).

It's the $1.00 increments that are throwing me off.
I've only overdrafted my account twice in my life. The first time was when the bank didn't deposit my paycheck fast enough and when my mom took out money from my checking instead of my savings.

So....with all that said, should I go with the Credit Union or the bank?

[MAtheBanker]

I'm not a huge fan of rewards programs, but the program the bank you listed is running is legitimate. It's a GREAT way to earn some extra money and do free ATM withdrawals (remember, the fees are credited back once a month--so you'll still be charged when you make the withdrawal, but provided you meet all the criteria, you'll get the fees credited back by the bank).

While the bank's program seems tempting, you need to look at the big picture. What else do they offer? What are their fees compared to the credit union? Is this just a promo, and a program that will only be around for a few months? The bank wants to draw people in with this new program, which will work, but they may get you in other places. A credit union (usually) is in your best interest, and having a great program like the one you listed, is just one benefit to a whole host of benefits they offer. You won't be screwed in the long run by a credit union like you could be from a bank...

It's the enticing offers banks use to get people in to the point where they can't leave...

[sterlinggirl]

I'd choose the CU just so I'd never have to say "kasasa".

[moved]

Credit unions are much better than banks.

[PurpleLove08]

Originally Posted by MAtheBanker

I'm not a huge fan of rewards programs, but the program the bank you listed is running is legitimate. It's a GREAT way to earn some extra money and do free ATM withdrawals (remember, the fees are credited back once a month--so you'll still be charged when you make the withdrawal, but provided you meet all the criteria, you'll get the fees credited back by the bank).

While the bank's program seems tempting, you need to look at the big picture. What else do they offer? What are their fees compared to the credit union? Is this just a promo, and a program that will only be around for a few months? The bank wants to draw people in with this new program, which will work, but they may get you in other places. A credit union (usually) is in your best interest, and having a great program like the one you listed, is just one benefit to a whole host of benefits they offer. You won't be screwed in the long run by a credit union like you could be from a bank...

It's the enticing offers banks use to get people in to the point where they can't leave...

Yeah, I am really leery of having ANY charges for going to a different ATM. I understand they'll refund me the money but I'd rather not get a fee at all, like with the credit union.

I don't think the program will only be around a few months but I read they have seen a large increase in customers due to the program. They do say the rates could change at any time and I doubt the APY would go up but you never know.....

I like the non-profit status of credit unions and like that they share their profits with their members. I'm more than likely going to go with the credit union.

Thank you for your input. Now I just have to wait for my pending charges on my BOA account clear.

[MAtheBanker]

Originally Posted by PurpleLove08

Yeah, I am really leery of having ANY charges for going to a different ATM. I understand they'll refund me the money but I'd rather not get a fee at all, like with the credit union.

I don't think the program will only be around a few months but I read they have seen a large increase in customers due to the program. They do say the rates could change at any time and I doubt the APY would go up but you never know.....

I like the non-profit status of credit unions and like that they share their profits with their members. I'm more than likely going to go with the credit union.

Thank you for your input. Now I just have to wait for my pending charges on my BOA account clear.

The rate can and will go down. I work at a credit union who also participates in "Rewards Checking", and our rate (at its highest) was 6.01% APY. Guess what we're down to now? 1.01% APY. It sucks! Of course, I don't work for the best CU in town. I'll admit that much

1.01% isn't horrible, though, compared to what other financial institutions pay for checking accounts, but still...that 6.01% was SO MUCH better, and we got a crap-load of business from it--several million in a matter of days.

[The Dissenter]

Originally Posted by MAtheBanker

The rate can and will go down. I work at a credit union who also participates in "Rewards Checking", and our rate (at its highest) was 6.01% APY. Guess what we're down to now? 1.01% APY. It sucks! Of course, I don't work for the best CU in town. I'll admit that much

1.01% isn't horrible, though, compared to what other financial institutions pay for checking accounts, but still...that 6.01% was SO MUCH better, and we got a crap-load of business from it--several million in a matter of days.

Think that's bad? The credit union I work for has our rewards-type checking for only .60%. Yuck!!

Pretty much nearly no one is paying good solid interest. I'd go with the credit union anyway because the ATM access.

[PurpleLove08]

Originally Posted by MAtheBanker

The rate can and will go down. I work at a credit union who also participates in "Rewards Checking", and our rate (at its highest) was 6.01% APY. Guess what we're down to now? 1.01% APY. It sucks! Of course, I don't work for the best CU in town. I'll admit that much

1.01% isn't horrible, though, compared to what other financial institutions pay for checking accounts, but still...that 6.01% was SO MUCH better, and we got a crap-load of business from it--several million in a matter of days.

The APY for the credit union is .10. It isn't better than Bank of America.
The bank I was considering moving to is 3.5.
I think what I don't gain in APY from the credit union, I gain in their little rewards program.

Wow, several million?

[PeteyNice]

I don't see how the credit union in the OP competes with the bank. The savings rate is vastly superior and they refund ATM fees. Even if they do cut the rate it isn't as if it would go down from 3.5% to 0.10%. 3.5% on what you have in the bank should be higher than 0.25% of what you spend in a month.

I wouldn't give the credit union a second look.

[PurpleLove08]

Originally Posted by PeteyNice

I don't see how the credit union in the OP competes with the bank. The savings rate is vastly superior and they refund ATM fees. Even if they do cut the rate it isn't as if it would go down from 3.5% to 0.10%. 3.5% on what you have in the bank should be higher than 0.25% of what you spend in a month.

I wouldn't give the credit union a second look.

The thing about the bank refunding ATM fees is that you have to make 10 debit charges worth 9.99 or more.
If you don't do that, you're stuck with the ATM fees.

I've compared the interest I'd earn on what I typically keep in my savings and it's about a $17 difference. Wow...17 bucks. Whoop tee doo.

I can easily spend $17 in a year on ATM fees if I don't meet the qualifications.
I looked over the transactions I've made so far this month and I feel some months I may not make the cut on the 10 $9.99+ transactions. I am trying to save more of my money and I also want to use cash more (hence I will probably need to go to the ATM a lot).

I still have until tomorrow to make my choice. I will probably end up going with the credit union despite their low APY. I think I save more money by not having to worry about ATM fees and such.

If I feel the bank is a better deal down the line, I can always switch. =]

Update: I think I've found a MUCH better local bank. They offer ATM refunds no matter how much you spend a month. All I have to do is save the receipt from the ATM I visited and they will refund me back the money. =]
I hate it's such a waste of paper each time I use an ATM out of town but I guess it's the price I'll have to pay.