Credit Unions appear on every corner. They compete for your business with commercial banks. But, many people don’t understand their purpose or difference.
The key to credit unions is they are non-profits. They are financial cooperatives. And, that means their gains benefit their membership. Membership in credit unions has been limited to those who belong to a union, religious organization, employer, or community. Now, credit unions offer special services and features to compete with traditional banks
If you want to improve, diversity, and exercise your financial smarts, you should consider what’s in a credit union for you.
How to choose a credit union to best suit your needs
Credit unions offer benefits to depositors, borrowers, and shareholders that often beat similar deals offered by for-profit financial institutions:
- Customer service:As banks got larger, their customer service suffered. At credit unions, customer service is a priority. As membership organizations, they have put a value on teamwork and communication, participation and customer attention.
When you shop for your best credit union, you should notice how personable and attentively the staff behaves. They should greet you warmly and offer to help. But, you should also notice their interaction with their teammates. As a mutual membership organization, the credit union employees are members who should share their warmth and common interests.
- Community interest:Seeking to differentiate themselves in competition with big banks, credit unions will contribute to your local Kansas community. They offer benefits to local businesses and members.
But, a credit union like Altana should also participate in community events and contribute volunteer hours to local libraries, food banks, charities, and the like. Community activities help employees offer service on a first-name basis.
- Member benefits: As explained in Forbes, “Consumers might find that credit unions offer financial products or services with more favorable terms than those offered by large commercial banks. That’s because profits may be returned to members in the form of better account terms, lower interest rates, fewer fees or additional services.”
Credit unions are taxed differently than for-profit banks, and they should pass such savings on to members. For example,Consumer Reportsrecommends, “Choose a credit union for a car loan because those institutions often offer the lowest rates—another good reason to join one.
For example, credit unions were charging only 2.79 percent on 48-month new car loans on average in the fourth quarter of 2017, while banks were charging 4.64 percent, according to the latest comparison by the National Credit Union Association, using data from S&P Global Market Intelligence.” So, you might check on the advertised car loan rates at the credit unions on your shopping list.
- Bottom-line needs:If you’re shopping for a credit union, you want it to meet your practical needs. For example, some credit unions beat commercial banks with extended and weekend hours.
You may want to review the credit union’s online banking and ATM access and reliability. And, you should consider their additional services, like credit cards, home loans, insurance, and merchant banking services.
Financial smarts
These are all important things in your search for a credit union to best suit your needs. Many people do all their banking through local credit unions. For many people, credit unions are their closest financial service location. And, many customers divide their financial business between both credit unions and commercial banks
You don’t need many financial smarts to see the added value in credit union savings and banking. And, if its personal touch and community service mean something to you, you can form a positive and productive financial relationship.
