3 Reasons To Choose A Credit Union Over A Bank

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Are you happy with your current bank, or are you considering switching? If you're thinking about making a switch, now is the time to look into credit unions. While not everyone can join a credit union, there are numerous reasons you should if there is one in your area that will allow you to become a member. Here are three big reasons you should consider a credit union as you look for a new place to bank.

You'll Be an Owner

Anyone that deposits money into an account at a credit union instantly becomes a member, or owner, of that business. As an owner, you will get to vote for several things, including:

• The members of the board of directors – the board of directors runs the credit union, but you can place your votes on people that you like or that have similar values as you.
• The way the business is run – you may also have a chance to vote for changes in the business, such as new products they offer, or new branches they will open.

When you do business with a bank, you will only have the right to vote if you own stock in the bank, and you must own a certain amount of stock to even have the right to vote.

It's Non-Profit

One of the big reasons people choose credit unions over banks is due to the structure of each of these businesses. Banks are in business to make money, and the top officials of banks are the people making the majority of the money.

A credit union is not in business to make money. It is a not-for-profit organization, which means the employees make money working there, but they are not there to score huge profits from customers. All of the profits made are divided between the members of the credit union, and because of this credit unions offer:

• Lower fees on products – according to Business Insider, banks charge average monthly fees of around $12.26 to customers for checking accounts, whereas 70% of credit unions offer free checking accounts.
• Higher interest rates on savings accounts – Money Crashers reports that most credit unions offer interest rates that are 4 to 10 times higher than the rates at banks.
• Lower rates on loans – in addition to offering free checking accounts, most credit unions offer low rates on loans to members. Remember, they are not in business to make huge profits, and this is why they are willing to loan money for lower rates.

Banking is a normal part of life, but choosing to complete your services at a credit union could help you save money and make more money.

They Work With Bad Credit

Finally, if you have struggled with bad credit in recent times, banking with a credit union could be the best decision you ever make. Credit unions are generally much smaller than banks, and the employees tend to get to know the customers better.

Because of this, credit unions are customer-friendly. They want to help their customers, and one of the ways they do this is by working with people that have bad credit.

In most cases, a credit union would be much more willing to offer you a loan than a bank if you have bad credit. Credit unions have less-strict loan requirements and rules, and they tend to take other things into consideration when processing loan applications.

One of the downsides with credit unions is that they offer limited membership. You might have to work for a certain company or industry, or live in a certain area to join. Most people however, would fall into one of these categories and could find a credit union that would accept them. If you are ready to make the switch, contact a credit union in your area to learn more.

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7 November 2014