Most people have seen credit unions around their town or city, but many don’t know the difference between local or national banks and credit unions. There are some great benefits to banking with a credit union versus a traditional bank.
Here are some great reasons to bank with credit unions:
1. Keep It Local:
When you bank with a credit union, you are essentially dealing with a small business. So, in turn, credit unions are more understanding toward small business owners trying to get loans and promote the local economy. By keeping it local and banking with a credit union, you are supporting your local economy in a multitude of ways, and because credit unions are ultimately controlled by the customers, or member-owners, the people working there take the time to develop more personal relationships with them which benefits everyone.
2. Lower Costs:
National banks are notorious for charging their customers much higher fees for everything from online banking, checking and savings accounts, overdraft charges and more. Local credit unions are able to offer their members lower loan rates, free checking and savings accounts, and generally lower fees on almost all of their services. This is one of the biggest reasons people switch over from traditional banks in favor of credit unions.
3. Membership:
When you join a credit union, your membership gives you the power to elect who will serve on the Board of Directors, and this ultimately gives you a say in how the organization operates. Many credit unions serve people who are employed in a certain profession, such as teachers, postal employees, or firefighters. Other credit unions offer potential membership to people who live in a certain geographic area. Most people can join a credit union based on one or several of these factors.
4. Better Service:
Since most credit unions are smaller, they pay more attention to the customers that they see day in and day out. Some places will even assign a specific teller or representative to work with you, and this can lead to a more personalized experience. If this person knows you by name and has spent the time developing a relationship with you, they are more likely to help you get approved for a mortgage or get a better interest rate on a CD, among other things. Better service leads to happy customers, and the overall environment of the credit union is much more positive than that of a big bank who cares more about shareholders than customers.
5. Flexibility:
If you have a recent foreclosure in your past, or your credit is in bad shape, credit unions are infinitely more forgiving than national banks in this regard. Because credit unions offer more personalized service, they have more flexibility in determining if you are credit-worthy since the screening process is not automated as it is in larger banks. The credit union representatives can look at factors other than credit scores, employment histories, or down payment sizes to determine if you qualify for a loan. This is a huge advantage to anyone with a troubled credit history, especially when someone has been turned down by the bigger banks.
If you are looking to join a credit union, do some research and find out which one is the best fit. With thousands of credit unions worldwide, chances are you’ll find a great match for your financial needs.