Most people do not realize that credit unions have several advantages over banks. It is less common for members to complain about interest rates, service fees, and other things the way that banks do. Remember that you are not trapped to use a typical community bank for the financial services you require. Credit unions have people who complain as well, but usually the complaints are far less. It boils down to the fact that there is a different business model that credit unions follow, which makes them more customer friendly than some banks. One evidence of this is that it is easier to qualify for loans in credit unions. Read on and learn many more benefits that they offer.
- Customers are first. When you open an account with a credit union, you become a member of the credit union. It works to please its members or shareholders, and not stockholders, changing the focus from creating the biggest profits to creating the best customer service and support. Such a shift results in policies that are more customer-friendly.
- Lower fees. One of the ways banks make money is in the fees. The fees associated with a credit union tend to be lower than banks, and often there are no ATM charges. The overdraft policies less costly and these two elements tend to be a big money maker for banks. With lower fees, you can save money by banking at a credit union where you can avoid some of these larger fees.
- Better interest rates. Credit unions offer higher savings rates and lower loan interest rates. Because they are not focused on making a profit, they instead want to cover operating costs, and pass on more favorable rates to their customers. The interest rates on a loan are often more attractive, and you may even qualify for further discounts if you have automatic payments set up. The interest rates on deposit accounts are higher than most national banks.
- Works with you. A credit union may be more willing to work with you if you have bad or poor credit, or have difficulty getting a loan. Loan officers make qualifying for a loan easier when they meet you directly and providing you are an active member, help find loan terms that meet your needs and don’t negatively impact other members. If you are interested in getting a loan with bad credit history, a credit union may be the best option for you to use. Credit Unions also offer programs to help you manage your budget or prepare for unexpected expenses in a “rainy day fund”.
- Qualifying to join. Credit unions have limitations on who can join them. It can be living in a specific geographical region, working at a certain employer or other types of affiliations like those associated with school systems. Once you join the credit union, you can stay a member for life, even when you stop meeting the initial member requirements. They may have a requirement that you have a savings or share account that remains open to keep your membership.
Indeed, credit unions offers so many advantages over banks. Over the years, these institutions have been identified to offer the best loans for home improvements, home equity loans, auto loans, and private educational funding. It is never too late to join a credit union and enjoy all these benefits that it has to offer.