When I went to Canada in 2013, I was charged only 50 cents per withdrawal I made at any ATM and was not charged any foreign transaction fees on my debit card. That was all thanks to my credit union.
If you’re wondering what the heck a credit union is, I’ll explain that briefly in this post so I can get to how it is an incredible financial resource for travelers. (If you already know how they work, this post is meant to serve as a resource on how they can help in minimizing travel expenses.)
In a nutshell, a credit union is a financial institution – just like a bank. But they’re a little more exclusive than banks because they serve specific communities. They’re also not-for-profit institutions so any extra money it earns is directed back to account holders in a variety of ways (like lower interest rates for loans or higher interest rates for savings accounts). And instead of being a customer, individuals who have accounts at credit unions are considered members who have a say in who the CEO is (yes – you can vote someone out if you don’t like how they’re running the place).
Here’s an example: someone who wants to open an account at Pasadena Federal Credit Union has to meet certain requirements to be eligible, like work for the City of Pasadena or be a volunteer with a member group. The exclusivity might sound like a turn off or a bad thing, but there are credit unions nationwide that cater to specific regions and groups of people. If you attend the University of Southern California and are not affiliated with the City of Pasadena, you may not necessarily want or be able to join that credit union. However, there’s the USC Credit Union for employees, students of the university, and people who reside in the City of Los Angeles.
But really, most credit unions actually tend to be lenient about membership, including PFCU. For instance, for those who want to join it but don’t meet any of the first few eligibility criteria, there’s still a way: you can become a member of the Friends of the Pasadena Public Libraries organization (which will cost $25), and voila! You become eligible for membership.
Once you’re a member, the perks in terms of minimizing costs while traveling are just fantastic!
- You get access to nearly 30,000 ATMs and more than 5,000 shared branches – that’s more than any bank in America! This comes very much in handy when traveling domestically. Through the CO-OP network, credit union members can make withdrawals at other credit union ATMs (ex: a PFCU member can withdraw money surcharge-free at the USC Credit Union ATM). You can also withdraw money at 7-Elevens throughout the country. Just make sure the ATMs have the CO-OP logo and you’ll be able to grab cash without any fees.
- Minimal to no foreign transaction fees. As mentioned earlier, I was charged nothing extra when I used my debit card to pay for purchases while I was in Canada. However, had I used a credit card from another credit union I was considering, I would have been charged a 1% foreign transaction fee. (Still, that’s better than the 3% foreign transaction fee Bank of America charges.) Also, as mentioned above, the rewards of a prosperous credit union are re-directed to its members. At UMe Credit Union in Burbank, for instance, the Visa platinum credit card doesn’t charge any foreign transaction fees. (Credit unions also tend to offer lower APRs on credit cards.)
- Low foreign ATM withdrawal fees. This will vary depending on the credit union, but as mentioned above, I only paid 50 cents per withdrawal I made while in Canada. Compare that to the $5 Chase and Bank of America charge per withdrawal made at a foreign ATM + 3 percent of the amount taken, unless the withdrawal is made at an ATM belonging to an international partner. When on the go, it can be a hassle to find these partners. I withdrew from whatever ATM was most conveniently available in Canada with my credit union debit card and did not have to withdraw large sums of money to avoid paying $5 each time because I was charged such a small amount.
I’m a big supporter of credit unions for these reasons and many more, but for me, I get the most out of taking advantage of what they have to offer combined with what banks can offer (like credit cards).