How Military Credit Unions Work

Military Credit Union Services

By now, you may be wondering about a catch. After all, if credit unions offer slightly better rates than banks, there must be a catch. Luckily, the catch isn't limited services. Walk into a bank or a military credit union, and you can use the same services. Here are some that you might be considering:

If you're on active duty in the military, busy fighting a war somewhere, both military credit unions and banks have programs designed for you. They assume that you travel, that you can't visit the bank in person, that you don't want paper bills and bank statements and that you aren't near a mailbox or an ATM, but that you do have financial business to attend to.

The programs start with online banking, a standard service that's free for any customer. Instead of visiting the bank, you open your laptop and visit a pop-up window, where you can pay mortgages and loans, dispense money to children and pay your bills. Some credit unions are arranging it so that you can make these transactions by text message from a cell phone. You also can set up your account to automatically pay whatever financial obligations you have.

That's cash other people need from you. What about your cash? In many cities, you don't need to hunt for ATMs because you can pay with your debit card, issued free to any customer. (More on this later, too.) Often enough, though, soldiers are in cash-only regions of the world, where you can't do business with a debit card. For instance, the U.S. soldiers in the district of Baraki Barak, Afghanistan, pay bazaar merchants and day laborers in cash. The reason is not only that bazaar merchants won't take a debit card to pay for your pomegranates, but that infusing cash into the local economy is part of the soldiers' mission [source: Dao].

Credit unions and banks compete with the extras. For example, Bank of America attempts to woo customers with a military banking checking account. One Bank of America promotional program rounds the amount of each debit card purchase up to the nearest dollar and deposits the change in a savings account [source: BOA]. Navy Federal Credit Union tries to offer attractive small loans.

That's one potential perk. Read on for some more.