4 Advantages of Credit Unions Versus Banks
Banks. They are a dirty word in some places, a remembrance of high interest rates, ATM fees, the struggle to get a personal loan, and customer service that is less than good. There was the fall; the mortgage crisis that brought banks a newfound level of distrust. There are options, of course, and one is simple: Switch to a credit union.
Credit unions are the alternative to banks that more than 1.3 million transferred to after the mortgage crisis. Like banks, they are insured, with sums up to $250,000 being insured after a credit union fails. They provide a few measurable benefits over banks.
Here are four benefits of credit unions compared to banks.
One: Better Customer Service
Banks are for-profit organizations. They are there to make money for their stockholders. This means increased fees for transferring money, withdrawing money from an ATM, additional fees for withdrawing from an ATM that is not part of the bank.
This also affects their customer service.
Credit unions are not-for-profit organizations, meaning they exist to serve their members or “shareholders”. They have no need to make money, any more than to cover their expenses. Credit union employees treat members like people rather than as account numbers.
Customer service is important at the credit union; it is questionable at the bank.
Two: Lowered Interest Rates on Loans and Credit Cards
Banks have a fairly set process for determining the amount of money a person gets in a loan and the amount of interest applied to the loan. They ask some questions, pull credit scores, and send the answer in the mail.
A person can talk to a bank manager about their situation, which may pay off. But sometimes it doesn’t.
A credit union talks to their members when they are applying for a home loan or a credit card. They take into account personal situations and that enables the applicant to get a better loan or a lowered interest rate.
Credit unions take the circumstances of their members seriously, which can help the member in terms of financial opportunities within their situations.
Three: Lowered Fees
Banks exist to make money for their stockholders. ATM fees. Withdrawal fees. Transfer fees.
Credit unions take care of their community members first. That means (in some cases) no ATM fees, no withdrawal fees, no transfer fees, and lowered fees in general.
Credit unions do this because they have lowered costs of operating compared to banks and pass those savings on to their members in the form of lowered fees. Banks, unfortunately, have a great deal to manage and a much wider net to grasp from. Their operating costs are higher.
Four: Community First
Banks service nationally, with branches all across the country. Credit unions service locally; local communities and their members are the focus.
If you’re someone who likes a more personal approach to finances, then a credit union might be for you. Credit unions provide great customer service, with the idea that they are taking care of members in a neighborhood (or organization, such as teachers).
There are numerous advantages to this, most notably financial but also personal as relationships can be formed with the workers in the credit union.
Those are four reasons credit unions are better than banks. There are more reasons as well. Choose carefully, as each changes, however slightly, your financial future.