Have you ever felt like your bank is just a faceless corporation that doesn’t care about you as an individual? If so, you’re not aloneIn recent years, big banks have been increasingly coming under fire for their high fees, impersonal service, and overall lack of customer-friendly policies.
Fortunately, there is an alternative to traditional banks that offer a more affordable and personalized banking experience: credit unions.
In this article, we’ll take a look at what credit unions are, how they differ from traditional banks and some of the reasons why you may want to consider using one for your banking needs.
What is a Credit Union?
Compared to traditional banks, credit unions typically have lower interest rates on loans and mortgages, as well as lower feesAnd because they are not-for-profit organizations, credit unions often put their members’ interests firstSo if you’re looking for a more affordable and personalized banking experience, a credit union may be the right choice for you!
How Do Credit Unions Differ from Traditional Banks?
For starters, credit unions are not-for-profit organizations while traditional banks are for-profitThis means that credit unions don’t have to answer to shareholders, which allows them to focus on their members instead.
Another big difference is that credit unions are member-owned while traditional banks are shareholder-ownedThis means that credit union members have a say in how the credit union is run, while traditional bank customers do not.
Finally, credit unions typically have lower interest rates on loans and higher interest rates on savings accounts than traditional banksThey also tend to have lower fees, which can save you a lot of money over time.
Why Use a Credit Union?
There are many reasons why you may want to use a credit union instead of a traditional bankHere are just a few:
1Lower Interest Rates on Loans
Credit unions typically offer lower interest rates on loans than traditional banksThis can save you a lot of money over time, especially if you have a large loan balance.
2Higher Interest Rates on Savings Accounts
Credit unions also tend to offer higher interest rates on savings accounts than traditional banksThis means you can earn more money on your savings over time.
3Lower Fees
Credit unions typically have lower fees than traditional banksThis can save you a lot of money over time, especially if you use your account frequently.
4More Personalized Service
Credit unions typically offer more personalized service than traditional banksThis means you can talk to a real person when you have questions or concerns, and you’ll likely be treated more like a human being than just another account number.
5Member-Owned
As mentioned earlier, credit unions are member-owned while traditional banks are shareholder-ownedThis means that credit union members have a say in how the credit union is run.
6Not-For-Profit
As a not-for-profit organization, a credit union doesn’t have to answer to shareholdersThis allows them to focus on their members instead.
7Local Focus
Credit unions typically have a local focusThis means they are more invested in the communities they serve and are more likely to offer products and services that meet the needs of their members.
Credit unions typically have better customer service than traditional banksThis means you can talk to a real person when you have questions or concerns, and you’ll likely be treated more like a human being than just another account number.
9Fewer Restrictions
Credit unions typically have fewer restrictions than traditional banksThis means you can use your account in more ways and for more purposes.
10More Flexible
Credit unions are typically more flexible than traditional banksThis means they are more likely to work with you if you have financial troubles or need to make a change to your account.
Are There Any Downsides?
There are a few downsides to using a credit union, but they are typically minorFor example, credit unions may not have as many branches or ATMs as traditional banksThis can be an issue if you need to access your account in person frequently.
Another downside is that credit unions may not offer all of the same products and services as traditional banksFor example, they may not offer investment products or credit cardsHowever, most credit unions will offer basic banking products and services such as savings accounts, checking accounts, and loans.
Finally, some credit unions have membership requirementsFor example, you may need to work for a certain company or be a member of a particular organizationHowever, many credit unions allow anyone to join.