Are you tired of the high interest rates and fees being charged by your bank? Are you fed up with the poor customer service you’re getting every time you call your bank’s hotline?
You don’t have to just take all these in and live with the discontentment because there is an alternative (and in many aspects, a better one) to handling your finances and that is through credit union.
What are Credit Unions?
A credit union is a financial cooperative mostly owned by one of its members whose aim is to provide credit at competitive rates, promote thrift, and provide several other financial services similar to what local banks offer.
You might be wondering how it is any different from a bank. Well, while they both typically offer the same types of services, credit union seems to have more benefits for its customers than a bank does and each of them are detailed below:
People Over Profit
One of the major differences between banks and credit unions is that banks are “for profit” while credit unions are “non-profit”. What does this mean for you? It only means that banks are out to make money for their respective stockholders and that as far as they are concerned, you are a customer.
For credit unions on the other hand, you are a stakeholder the moment you open an account with them. You are a member of the team and they are after your best interest being part of the family. You’ll even notice that most of its policies are catered towards its stakeholders which is good for you.
Better Interest Rates
Since credit unions are not for profit, they usually offer high savings rates and lower interest rates on loans, which is the total opposite when it comes to banks. Interest rates can be lower for loans. You may even get discounts choosing to avail of the automatic payment setup.
Credit unions are able to balance the rate and lower them because they are not after profit which means that you are better taken care of compared to being a customer in your local banks.
Have you ever wondered how banks make money? Apart from your contributions, it’s usually through the fees they charge that they get profit from. Transfer fees, ATM fees, and other fees are just some of the examples.
With credit unions, you can expect lower transfer fees and more often than not, free ATM fees.
Better Customer Service
This is probably one of the glaring differences between the two in a sense that credit unions are willing to work with you and get you an alternative solution should you not qualify for a credit card for example due to bad credit. They’re more flexible considerate compared to banks and willing to listen to reason.
Don’t feel trapped if you’re no longer happy with your bank’s services. Credit unions are available to provide you the same services, even better than what you’ve been used to getting. The only disadvantage that credit unions have is its size because it tends to be smaller and localized which means lesser branches and ATM machines to go to.
If you’re constant traveler who relies on ATM for cash, credit unions may not be the best option for you in terms of accessibility.
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