6 Good Reasons to Bank With a Credit Union

In your community, you might have noticed one or two credit unions nearby. If you’re not sure what they are or why you should bank with a credit union, read on.

First, it’s important to define a credit union. It’s a non-profit organization similar to a bank except that it exists to serve the needs of its members as opposed to maximizing the wealth of its shareholders by earning a profit.

Now that you understand what a credit union is, you can gain a better understanding of what credit unions offer. Here are 6 reasons why you should bank with one.

1. Credit Unions Have Your Back

Because they’re not motivated by profit, credit unions tend to offer cost-effective banking solutions. That’s unlike many major bank branches that are well-known for nickel-and-diming their customers with hidden, sneaky fees.

When you bank with Schools First Federal Credit Union or some other similar credit union, you can rest easy knowing that your banker isn’t out to get as many dollars from you as possible.

2. You’re More Than a Customer

When you bank with a credit union, you’re not just a customer, you’re an owner.

That’s not a typo. The organizational structure of a credit union is such that customers are owners. As an owner, you’ll have voting rights with all the other owners/customers.

Banking with a credit union gives you the opportunity to help make changes at the credit union that will benefit other customers.

3. Favorable Loan Rates

Loan rates are usually much better at credit unions than traditional banks. If you’re looking to get a long-term loan at an affordable interest rate, you’ll likely find that the credit union in your vicinity offers interest rates that are better than the big-name banks. That lower interest rate could save you thousands of dollars over the life of the loan.

4. Good Credit Card Offers

If you’re thinking about using a credit card to make big-ticket purchases that you likely won’t pay off within a month, then you should consider picking up your plastic from a credit union. The average interest rate for credit cards offered by a credit union is 11.55 percent. That compares favorably with an average interest rate of 12.89 percent from regional banks.

5. Borrowing Standards

Have you been turned down for a loan by a local bank? Consider talking to a credit union about getting a loan.

Why? Because the loan standards at many credit unions are more lenient than the standards at banks. As a result, you can not only get a loan from a credit union, but you can also get the loan with a lower interest rate than if the bank had approved it.

Specifically, check out credit unions for car loans. Sometimes, you can find rates as low as 2 percent.

6. Savings Account Rates

Not only do you pay less on a loan from a credit union, but you will also likely earn more when you park your money in a savings account at a credit union. On the average, credit unions pay a higher interest rate than banks.

Credit unions are easy to ignore if you’ve never banked with them before. However, if you compare the quality of service offered at your local credit union with the service offered at banks, you’ll likely find that the credit union stands above the competition.