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Unique Changes Made to Consumers Credit Union’s Free Rewards Checking

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Consumers Credit Union (IL)

Consumers Credit Union made several changes to its Free Rewards Checking Account that many savers should appreciate. First, you can now earn 5.09% APY for balances up to $10,000. Before this change you could only earn 3.09% APY for balances up to $5,000. However, qualifying for the 5.09% APY is not easy. If you don’t qualify for 5.09%, you can still qualify for 4.09% or 3.09%. If existing members have been earning 3.09% before, they can continue to earn 3.09% with no additional work. In that case the only change will be that balances up to $10,000 can now earn 3.09% instead of just $5,000. So this change is only good news for savers. Below is a summary of what’s required for each month to qualify for these three rate tiers. This summary is based on the credit union’s Free Rewards Checking page as of 3/4/2014:

Qualifying for 5.09% APY for up to $10,000:

  • Meet the requirements to earn 3.09% APY
  • Spend $1,000 or more in CCU VISA purchase transactions, regardless number of purchases

Qualifying for 4.09% APY for up to $10,000:

  • Meet the requirements to earn 3.09% APY

  • Complete 12 CCU VISA Credit Card purchase transactions, No minimum purchase requirement.

Qualifying for 3.09% APY for up to $10,000 (same as before):

  • 12 signature-based debit card purchases
  • One direct deposit OR one ACH debit OR online bill pay
  • Access online banking
  • Receive electronic statements

When you meet all of the basic service requirements for the calendar month, ATM fees incurred during the month will be refunded to you.

Rewards Checking History

Consumers Credit Union's reward checking account has a long history. I first reported on this account over six years ago on August 2007. At that time it was paying 6.01% APY for balances up to $25K. Even though the rate and balance cap have fallen, it's nice to see that the account is still going strong.

My Take on the Changes

First, I’m glad they raised the balance cap from $5K to $10K (A higher cap would have been even better). Earning the higher interest rates will require some work. So not everyone may embrace these new rate tiers.

To qualify for the 4.09% APY will require 12 credit card purchases per month in addition to the 12 debit card purchases. So that essentially doubles the work you have to do. It’s interesting that they don’t seem to give the option of allowing members to use only the credit card for all purchases. That would be a nice feature for those who don’t like debit cards.

To qualify for the 5.09% APY will require monthly purchases of at least $1,000 with the VISA card. Not many savers may be willing to spend that much on a card that doesn’t offer cash back rewards.

How much more money can you make from the higher interest rates? If you maintain a $10,000 balance, the 5.09% APY will earn an extra $200 per year and the 4.09% APY will earn an extra $100 per year. If you only look at this from a financial point-of-view, the best strategy would be to only work for the 4.09% APY, and to use a cash back credit card for making large purchases. If you make $12,000 purchases in a year, you can typically earn at least $120 (1%) by using a cash back credit card.

Easy Credit Union Membership

The credit union continues to make it easy for anyone to join. According to its membership page:

Membership follows a simple, two-step process: Pay a one-time, non-refundable $5 fee to our sponsor, the Consumers Cooperative Association, and then deposit and maintain a minimum $5 in your Membership Share/Savings Account.

There's an online application. It appears to allow you to apply for both the association membership and the credit union membership at the same time. When you select the option "I am a new Consumers Credit Union Member" in the first page of the application, it will display the following:

All credit unions have a common bond and their members need to be associated with it in order to join the credit union. At Consumers Credit Union (CCU), our common bond is the Consumers Cooperative Association (CCA). You join CCA by paying a one-time fee of $5.00.

Credit Union Overview

Consumers Credit Union branches are located in the Illinois cities of Gurnee, Mundelein, Round Lake Beach, Gurnee, Volo and Waukegan. Consumers Credit Union is part of the CU Service Centers network which allows you to perform many banking transactions at any credit union that’s part of the network.

The credit union has an overall health grade at DepositAccounts.com of a B+ with a Texas Ratio of 9.65% (excellent) based on September 2013 data. Please refer to our financial overview of Consumers Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 68588).

How This Reward Checking Compares

If you can handle the credit card usage requirements, you can earn a higher interest rate in CCU’s Free Rewards Checking account than any other nationally available reward checking account. However, the $10K balance cap still hurts the deal. You can earn 3.00% APY for balances up to $20K at INOVA Federal Credit Union, and 3.00% APY for balances up to $15K at Lake Michigan Credit Union. If you maintain a balance up to the caps, you’ll earn more interest at INOVA than at Consumers even if you can qualify for the 5.09% APY. These rates are accurate as of 3/4/2014.

To find the best reward checking accounts in your area or that are available nationwide, please refer to our reward checking account table. Use the "Filter Accounts" button on top of the table to select either nationwide accounts and/or your state. Also, you can use this button to select the investment amount. This allows you to compare accounts with different rate tiers. For more details about how to use the rate tables, please refer to our rate table guide.


  Tags: Consumers Credit Union (IL), Illinois, checking account

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Comments
7 comments.
Comment #1 by gli (anonymous) posted on
gli
The 3% to 4% jump is a double the 'work' for roughly $8.33 per month (assuming full  $10,000 balance) and that is not even considering taxes... plus one has to spend money 12x on the credit card as well... So all in all, it is not going to be profitable spend $20+ on the CC just to make $5 per month... the 3% requirements are the 'best' for one's time and money IMO.

If it is your only bank/credit union and you just wanted a $5 or so 'cashback' each month - this would be okay. So one's mileage may vary.


All that said - I like seeing different options/rewards/interest tiers etc... This is the most creative  option that I have seen since Santander extra20 checking.

14
Comment #2 by gregk posted on
gregk
Even at 5.09% any RCA with a $10,000 balance cap just doesn't make the cut with me.  Not worth the trouble. 

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Comment #3 by 51hh posted on
51hh
Gimmicks, tricks; I am not falling to this trap.

$10K is a show-stopper.  After that, whatever magic they play; just ignore it and walk away.

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Comment #4 by Anonymous posted on
Anonymous
For just around $40 reward I have to spend over $1000 a month, who would do that. I can save 10 times more just by not spending the money. If someone has that much money for crazy buys, you do not need the rewards.

9
Comment #5 by Charles (anonymous) posted on
Charles
LMCU still seems to be the best balance of effort and reward.

6
Comment #6 by Schris (anonymous) posted on
Schris
These guys are all over the place. They play with the rates and caps all the time.

5
Comment #7 by Anonymous posted on
Anonymous
Spend $1,000 or more in CCU VISA purchase transactions, regardless number of purchases

My debit card of the checking account is VISA. Whether this means I just spend $1000+ every month with that card, then I can earn the 5.09% APY? (12 POS of course.)

2
Comment #8 by jep1960 posted on
jep1960
I think this requirement means that you have to have a CCU Visa credit card issued by CCU and make at least $1K in purchases and also meet the 12 POS, electronic statements, 1DD or ACH debit payment. This is not undo-able. You COULD get the CCU Visa and make 1 Amazon Payment of $1K for say, your rent or mortgage, pay the $1K thru the CCU billpayer and you have killed 2 birds with 1 transaction! The $1K purchase requirement and the DD/ACH requirement. Also, because Amazon Payments allows up to $1K in payments a month without a CC fee you don't run into a cash advance fee! Just make sure you have checked Goods & Services box on the AP payment screen! I have a CCU account but moved it to a more local bank when they dropped the cap to $5K, I might move back now that it's at $10K. The only downside is that I'd lose about 12K a year in United MileagePlus miles by not using my MP CC and using the CCU Visa instead. I want to save the MP miles for a trip to Kenya in the future, tough choice!

6
Comment #9 by gli (anonymous) posted on
gli
A. If you look at the terms and conditions full pdf file there at CCU - it says (for the 5%, $1,000 spending on credit card). So the 4% and 5% tiers require a separate CCU credit card (12 transactions  or $1,000 purchase total each period) in addition to the 12 POS debit transactions.

B. Here's the thing - if one were to spend $1,000 on a credit card that pays 1% cashback... that is already a $10 NONtaxable return/cashback each period.

And if the credit card pays more than 1% cashback on something that you buy,  it would go upwards of $10 in cashback for $1,000 spent.

So is it actually worth the effort of Amazon Payments, gift cards etc.. totaling $1,000 each period for a max of $20 pre taxes each period?  In addition to the 12 POS debits?

Maybe - but think about the other options out there (normal cashback CC spending etc...) before seeing the 5% and jumping headfirst. 

My ten cents after strongly considering this deal (the 3% deal is still a 'good' deal - better than Great Lakes CU with it's $100 period spending requirement to be sure (not as good as LMCU of course)

1
Comment #10 by Anonymous posted on
Anonymous
CCu offers credit cards with 0% balance transfer fee and 0% interest for 6 months on purchases and balance transfer fees with $100 bonus for spending $1000 within 60 days. Also, 1% back on all transactions. I plan to spend $1000 on Visa CC in April. Then will be eligible for 5.09% that month.   Any other month will receive 4.09% by making 12 purchases any amount. This is a good deal.

1