When searching for the most responsible banking options, customers are faced with a wide variety of choices. Two of the most common financial institutions include traditional banks and credit unions. While commercial banks may have a familiar face, it’s the community-focused aspect of credit union banking that makes it the superior option of the two. One of the most prominent differences between commercial banking and credit unions is ownership. While banks are corporate-owned, credit unions are actually owned by the customers. Instead of functioning like a corporation, they work to provide accessible financial services to members and many also promote community development projects. Unlike banks, credit unions are not-for-profit institutions that are interested in passing profits through to their members. The quality of customer service and support is greatly reflected in this business model and you may find it appealing.
There is no shortage in services provided by credit unions as opposed to traditional banks. Credit unions offer a range of options that include banking, borrowing, investing, insurance and mortgages. They are celebrated for their ability to provide lower rates on their financial product offerings. Credit cards obtained through traditional banks typically have a high APR, but many customers enjoy the accompanying rewards programs. Luckily, credit unions offer the best of both worlds – great rewards programs and a low APR. Just as credit unions can offer lower interest rates on loan and credit products, they also boast higher savings rates on checking, savings and deposit accounts. This means that your money will grow much more quickly through credit union banking than traditional banking. Because their interest is not in making a profit, they can pass along the lower rates to members.
Yet another way to save money through credit unions is by taking advantage of their low fees. Everyone uses debit cards and ATM machines for the convenience of not having to have cash on them. Banks serve to make money on fees, while credit unions are just looking to provide responsible banking to their members. It is rare that credit unions will charge ATM fees. Instead, they’re devoted to helping their members avoid the majority of bank fees. Because of their invested in their members, customer service is a credit union’s main priority, even if their clientele finds themselves in a delicate financial situation. Though a member may have poor credit, a loan officer from a credit union is much more likely to work with them to find a loan that fits their budget and lifestyle. They are interested in the individual, not just the bottom line.
Overall, credit unions are heavily focused on providing an optimal banking experience to their members. There are many different credit unions that all have some form of membership requirement, but once you meet those requirements, you are a member for life.