Credit unions are a fantastic option for most people to use for their banking needs instead of a bank. Unlike a bank, they are owned by and work for their customers. This gives them many advantages over traditional banks. Even better is that most local credit union support the people and businesses in their community in many ways such as holding fundraisers, lending money to local small businesses, and the like.
This guide at Money Crashers gives some of the ins and outs of being a credit union member. As they point out credit unions are non-profits instead of for-profits like banks are. This means they are able to offer their customers things such as higher interest rates on their saving accounts and CDs. They can also offer highly competitive interest rates on the credit cards they offer and loans for buying a car, house, starting a business, and so forth.
Most credit unions have much lower fees than what any bank will offer to their customers. They will offer checking accounts, electronic transactions, withdrawals, and other services free of charge. They often don’t have any minimum balance requirements in order to avoid being charged a monthly fee. While they will charge for bounced checks and the like their fees are typically quite a bit lower than what a bank would charge.
Because they are local credit unions usually have a lot better customer service than you will find at some faceless bank. The tellers will often remember each person and it’s not nearly as hard to get help when needed at a credit union than going through some maddening phone tree when dealing with a national bank.
There are some disadvantages to credit unions, but they can be minimized. Most don’t have many branches, for example. However, most are part of a network that allows members of different credit unions to use other credit union’s ATMs and branches free of charge in order to deposit or withdraw money. Their online technology isn’t generally as good as national banks however they are definitely making inroads in this regard.
In fact, This article at Bankrate shows that credit unions can offer a number of unique advantages over national banks when it comes to online services due to their smaller size. They are more nimble and can offer what is called an omnichannel experience. What this means is that you can do something like order checks online and then stop in the branch to pick them up. Many credit unions have all of their financial products on a common platform which means it can all tie in together, unlike massive banks where everything is on a different platform.
Due to the strong focus on customer service, better interest rates, lower fees, and access to a wide range of ATMs it makes a lot of sense to go with a credit union instead of a bank. You will also know that you are supporting a local business who is deeply invested in supporting local people and businesses instead of some faceless bank headquartered in New York City or wherever.
