We all need a place that we can go to keep our money safe, ask for loans, and open lines of credit, but where we choose to place our financial trust is no small deal.
I’d like to share an option with you that you may not yet be aware of. So sit tight and let’s discover the advantages of credit unions and the potential limitations of this financial institution.
How credit unions are different than banks
Unlike traditional banks, credit unions are nonprofit organizations that operate similarly to banks in terms of services that they can provide.
However, the main distinction is that credit unions are owned and controlled by the members of that credit union. So, as a member, you also get a vote on decisions that affect the organization.
How credit unions better serve their members
They focus on covering operating costs and ensuring that the members are happy rather than a bank that focuses on creating huge profits.
This focus on the member experience is the main benefit because lower fees result in more savings for those members. That’s you!
At credit unions, you can expect better interest rates on savings, accounts, loans, and mortgages, and they’ll almost always be available for you.
If you aren’t completely confident about what interest rates are be sure to take a minute, to read a great article called “What Is APR & How Does APR Work?“
Credit unions are communities that approach members like you with a personal touch. If you have poor credit or low income, they don’t just tell you to leave. They’re often willing to work with you and maybe even educate you on how to improve your financial situation.
Disadvantages of credit unions
This all sounds wonderful, right? “So what’s the catch?”, you might ask. Well, it’s the same as any challenges that are faced by people who may live in a small town.
Accessibility is a big factor. There are only so many locations available, so ATM and banking assistance may be harder to access while traveling. You can’t expect all of the technology that the big banks may have available for the hottest app or the nicest website.
Not everyone can be a member either.
Some credit unions are based on a specific area of residence or a certain demographic. You may have the requirement of being part of a certain line of work to be part of the accepted credit union community.
Advantages of credit unions
- Controlled by the members who get voting power in organizational decisions
- Lower fees and interest rates for members
- Assitance for lower-income members
- Potentially easier to get loans with poor credit
- Financial education is available
Disadvantages of credit unions
- Unique qualifications to become a member like a neighborhood or a specific line of work.
- Limited access to ATMs
- Limited banking technology such as online banking and apps
- Limited hours available for banking assistance
Chances are likely that there’s a credit union that would just love to have you. Just make sure that it would be the right banking situation for all of your needs.
If you travel a fair amount and would require a large network and the latest banking technology, this may not be the right option for you.
If you like the community aspect and personal touch, this may be a great option for you and for your financial future. The next step is to pay your local credit unions a visit and ask questions. Do your homework and find out about the requirements and fees before you make any decision.
What have your experiences been with credit unions? Have you used one before or even considered this option? Let me know in the comments below and thank you so much for joining me today.
Please share this article with loved ones that could benefit from this information and make sure to subscribe to my newsletter for more ways to achieve the financial future you deserve.
I’m Judy Copenbarger.
See you next time. And God bless.
Judy Copenbarger is the Founder and President of Comprehensive Financial Services, based in Irvine, California.
She holds a Juris Doctor Degree, with a Taxation Emphasis, is FINRA Registered and maintains various Securities and Insurance Designations. Her professional expertise is in Estate Planning, Retirement and Education Planning.