Currency has been around for thousands of years, and with it, some places would keep it for you. Fast-forward to today, and there are financial institutions on almost every corner. They exist to offer a variety of products so we can put money in, borrow money, and invest it to help it grow. While they may look similar, banks and credit unions run differently, and their focus is distinct.
Are you looking to work with a financial institution that benefits you the most? Of course, you do, and that is why you should consider taking your business to your local credit union. Is my bottom line different? This is how credit unions can save money.
They Have Different Philosophies
Credit unions offer virtually all the same products as banks but differ in structure. They started as a system to allow lower-income earners access to credit, and they opened up in underserved communities as a cooperative movement with the idea of a people-centric organization that works towards a common goal.
Credit unions are not private companies with shareholders to please. Instead, they are owned by those with accounts. Instead of just being a client, you become a member and part owner, able to control the business through a volunteer board of members. While banks make profits for shareholders, a credit union gives back to members through reduced rates and better service.
Their Rates Are Better
Financial institutions’ products are very competitive, and realistically, they must be. This is because there are so many options out there, so borrowing and savings rates move constantly.
Banks prioritize revenue for their shareholders and make money through interest rates and fees. As mentioned above, credit unions operate differently. They are non-profit entities and, as such, only need to cover expenses with the surplus returned to their membership. The result is that interest on savings accounts is higher at credit unions. On the other hand, loans and mortgages have lower borrowing interest rates. This makes credit unions the best financial choice for everyone.
Their Lending Criteria Isn’t As Strict
As if a better interest rate wasn’t enough, many credit unions have a lower threshold to qualify for credit. Members can get financing more quickly because they are focused on helping those with unique situations like self-employment and lower credit scores.
This assists local business owners and others with unique circumstances who want to make major purchases like vehicles, mortgages, and business financing.
Their Fees Are Lower
Do you feel fed to death? Banks have raised fees and adding new ones to make more profit. While you may think your rates are good there, the fees eat up the potential gain you receive. Credit unions don’t need to charge all these extra fees and, in some cases, don’t have them. Things like service charges and account maintenance fees seem like money grabs from banks, and this is why credit unions strive to charge fees only for a few services like wire transfers or overdrafts.
They Give to the Community
Credit unions serve the community but not only with local financial locations. They get involved in their communities through various charity efforts and supporting local businesses. This is money pouring into your place, which means aid for those in financial need, lower costs for local businesses that charge less for you to frequent, and community spirit that promotes giving and involvement in your neighbours.
They Offer More Personalized Service
Do you feel like just another number at a bank? This is a common complaint, but not at a credit union.
Great customer service is just the beginning as a credit union member. They are highly focused on customer satisfaction and exceed far beyond your needs. They work with members to consolidate debt, plan for your financial future, offer free financing and community enrichment education, and have tools and resources to keep your information safe.
This is how credit unions can save money. You may have gone to a traditional bank all your adult life out of convenience or because you followed in your parents’ footsteps. It would help if you saw how a credit union could better serve you because that is its mission statement. Ultimately, you will receive great financial products and save money on each transaction you make.