Top 8 Reasons You Need a Credit UnionWritten by Christina Miller
Edited by Carly Simon-Gersuk
Credit unions were created over one hundred years ago in order to offer communities a low-cost alternative to banks, with individuals pooling their money to make loans to each other. Today, credit unions are full-service financial institutions offering all of the products that you find at a bank, but with the more benevolent philosophy of a not-for-profit organization.
By design, credit unions save you money and increase efficiency. Here are 8 reasons why you need to ditch your bank for a credit union.
Credit unions consistently beat banks on rates for auto loans, credit cards, CDs, and nearly every other financial product offered. At Logix Credit Union, for example, you can get an auto loan for as low as 2.49% APR, while a big bank average is 5.30%. This represents an annual savings of $1,140. With numbers like these, you can’t afford not to join a credit union.
Big banks are notorious for hitting you with fees on everything. As a result, fees account for nearly one-third of a bank’s profit. Credit unions, on the other hand, do not operate to generate large payouts for shareholders, so they are able to offer lower and fewer fees. For example, it is rare to find free checking at a bank but at credit unions it is the norm. According to the Credit Union National Association (CUNA), credit union members collectively save $12 billion per year when compared to bank customers, as a result of better interest rates and lower fees. (1)
Most people assume that you have to sacrifice convenience by switching from a bank to a credit union. While it is true that you won’t see your credit union on every corner like you do larger banks, like Bank of America, credit unions have partnered up to offer a shared branch network. This means that if your credit union is part of the CO-OP network, you can access your accounts and conduct business nationwide at any credit union location within the shared branch network just as if you were at your home credit union. Check out CO-Op Financial Services to see just how many CO-OP locations are near you, https://www.co-opfs.org/Shared-Branches-ATMs.
In addition, many credit unions now offer robust online and mobile banking features, reducing your need to step into a branch.
4.You are a part-owner of your financial institution
As a member of a credit union, you are a part owner of the institution. Each member has an equal share and equal vote on policy issues. How much say do you have on policy issues at your big bank? None.
5.Credit unions are not-for-profit
Unlike banks, credit unions don’t have shareholders. This means that credit unions are able to return profits to its members through better rates, lower fees and quality service.
6.Service is top priority
The credit union motto is, “Not for profit, not for charity, but for service.” Credit unions have long prided themselves on having superior customer service. Part of the draw of a credit union is having more personalized service than you would get at a bank. While banks go strictly by the numbers when approving loans, credit unions will sometimes take a more human approach, taking a member’s personal circumstances into consideration.
7.Believe in financial education
With a strong tradition of member education, credit unions strive to help members become more financially literate and independent. Most offer workshops to members as well as programs for students and the community.
Credit unions are the only democratically controlled financial institutions in the US, with decisions made by an unpaid, volunteer board of directors. This board controls the credit unions operations and represents the interests of the members, which a bank’s board typically operates to benefit stockholders and not customers.
Written by Christina Miller
Edited by Carly Simon-Gersuk