7 Advantages to Using Credit Unions

Are you considering an alternative to traditional banking? Check out some advantages to using credit unions. They can offer you the personalized service and financial incentives you’re looking for.

A credit union will often offer better interest rates. Credit cards, mortgages, personal loans, and home equity loans typically come with lower interest. Some unions are even regulated so that the interest rates on loans and credit cannot exceed a certain figure. In the same way, interest returns from savings, checking accounts, and certificates of deposit from unions are generally much higher than those from traditional banks.

They also charge fewer fees. Most do not require a minimum balance and offer their accounts free. In addition, credit unions usually don’t charge ATM fees. If you use your credit card from a non-participating ATM that is out of your network, you’ll have to pay a fee for the ATM itself, but this type of financial institution will not charge you on top of that sum as a normal bank would.

Contrary to popular belief, credit unions often have plenty of branch and ATM locations. Many belong to larger networks, allowing you to access plenty of office and ATM locations in your area.

As a member, you are an owner or stake-holder rather than a customer. Banks are for-profit organizations, so their management often makes decisions that will benefit shareholders rather than customers. Credit unions, on the other hand, are non-profit organizations that function like financial cooperatives instead of financial institutions, and their objective is to share profits with members of the union. This allows them to offer lower fees and rates, and it also removes the pressure for them make money at the expense of their customers. Instead, they are free to make financial decisions that will directly benefit their members.

Your deposits are insured in the same way they would be at a bank. The National Credit Union Administration, a government entity, protects balances up to a certain amount, even if the institution fails. If the institution does fold, the NCUA claims that members will begin receiving payments for their deposits within three days.

They take pride in educating their members about making good financial choices. They will likely offer a wealth of information on a variety of finance-related topics, such as investing, managing credit cards, and preventing identity theft. Because these organizations care about doing good for the community, they often offer free classes and seminars.

They’re easily accessible. If you’ve ever spent hours on the phone with a bank’s automated system, you know how unreachable and impersonal big corporations can be. Small cooperative financial institutions generally offer friendlier, more responsive service.