The differences between banks and credit unions have come into sharper focus in recent years. The reason for this is because banks have increased their fees and other means of income to remain profitable. Credit unions have not been as aggressive in raising rates in their profit making centers. While these two opposing models of doing business as financial institutions have been fully explored, the following five ways that credit unions defeat banks at their own game are worth examining again, particularly if you're in the market for a new place do to your banking:
Since credit unions are not “for profit” entities, they are not under as strict of requirements as banks are to make money. Therefore, they do not consider banks as direct competition and are able to keep their fees lower.
What fees are we speaking of? There is a list of fees that you should be aware of any time that you open a new account: monthly minimum fees for checking and/or savings accounts, overdraft or NSF fees, and ATM fees. These are by far the most often levied against customer accounts, but you need to check with the institution that you are considering for an account to be take a look at the others as well. Compare the fees between two or three institutions (even between credit unions). Wise choices always begin with information gathering efforts.
Better Interest Rates
We are not just talking about interest that you pay on a loan, mortgage or a credit card, but we are also including interest rates that are earned on interest bearing accounts as well. In short, you keep more of your money by banking with a credit union. While all financial institutions are subject to federal regulation when it comes to financing a house, any fees that you incur along the way are generally lower than a bank or what you will find offered by a mortgage broker.
The FDIC is in the throes of rescuing failing banks and reports are saying that the money is running out. But that is not the case with Credit Unions. The funds that are on deposit with these institutions are guaranteed by a different organization – the NCUA. Yes, both banks and credit unions are insured by the Federal government, but right now, the safer bet is to have your money in a credit union.
Less Stringent Loaning Rules
Have you ever been turned down by a bank for a loan of any kind? If so, then you know what a frustrating experience that can be. Take your business to a credit union and see what happens. Since a credit union is member-owned, the rules are more relaxed for granting of loans. Yes, they too are subject to certain provisions and even a credit check, but they are also more forgiving and willing to work with you. They actually care about you and want your business, which is a lot more than can be said about large, impersonal banks these days.
Better Customer Service
What a joy to come into a credit union and have someone actually greet you from behind the counter and act as if you are important no matter how much money that you have. The fact is that most employees of credit unions are members, too, so that puts you on the same level as them.
Credit unions are great place to put your money and trust when it comes to financial advice. Take it from one who has been a member for years, credit unions have always been a wonderful alternative to banks and will continue to be as long as they remain customer centric in their operations.