Top Eight 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 the products that you find at a bank, but with the more benevolent philosophy of a not-for-profit organization.
So why ditch your bank for a credit union? We won’t just give you a reason…we’ll give you eight.
Credit unions consistently beat banks on rates for auto loans, credit cards, CDs, and nearly every other financial product offered. Just one of thousands of examples we could give: In September of 2021, the average credit union 60-month new car loan was 2.83% APR. At banks, that same loan averaged 4.73% APR. If you get a $25,000 car loan, that’s a difference of $1,282 – and that’s just the average savings.
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.
Most people assume that you have to sacrifice convenience by switching from a bank to a credit union. While it is true that you may not see your specific credit union on every corner like you do larger banks like Bank of America, most credit unions take up the slack in other ways:
Credit unions now participate in the CO-OP network. This means that if your credit union is part of the CO-OP network (as most are), you can access your accounts and conduct business nationwide at any participating credit union location just as if you were at your credit union. Check out CO-OP Financial Services to see just how many CO-OP locations are near you.
Credit unions also now offer robust online and mobile banking features, reducing your need to step into a branch and allowing you to access neat features like remote mobile deposit – just like the banks.
4.You are a part-owner of your financial institution
Don’t worry – that doesn’t mean you are committed to a life of polos and boring office meetings. What it does mean is that as a member of a credit union, you literally own part of the credit union. 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 if you aren’t a shareholder or investor – and even then, you’d better own a pretty penny of it if you want a real vote.
5.Credit unions are not-for-profit
Banks make money so their investors make money. That’s very unlike credit unions. As not-for-profit entities, credit unions’ only aim is to please their members. Which is everyone who is a part of their credit union. So instead of pooling out profits to wall street, credit unions are able to return their profits to members in the form of dividends, lower interest rates, high-yield savings and investment options, less fees, and more.
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.
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About MoveCU Inc.
MoveCU is the nation’s first credit union loan marketplace. Now users can instantly find, compare, apply for, and get pre-approval online in minutes on loans from credit unions around the U.S. Using their intuitive industry-leading technology, MoveCU is giving America’s smallest financial institutions a bigger voice and breathing new life into the credit union movement. For more information, visit our homepage.