NORTHAMPTON, Mass. (WWLP) - More credit unions offer free banking products than major banks.
Credit unions are considered non-profit financial cooperatives; meaning all of its earnings go back to its members.
A new Bankrate.com survey says more than 70% of credit unions offer free checking. That's compared to 39% of major banks. However, researchers say customers aren't only drawn to credit unions only for the no monthly maintenance fees; overdraft fees at credit unions are on average $26.74, compared to $31.26 at banks.
V.P. of Marketing at UMass Five College Credit Union , Jon Reske, says the trend could be because of the government recently approving new limits on debit card interchange fees. "Therefore there's less income coming in for larger commercial regional banks. And so the pressure is on for them to cut expenses and obviously one way would be to eliminate things like free checking."
Reske says consumers should get in the habit of reading the fine print when signing up for what seems to be free.
He says many major banks have qualifying conditions for free checking, like minimum balances and direct deposit.