Have you been considering joining a credit union? If so, you may be confused about the differences between credit unions and banks – and you may not know about some of the most important advantages of choosing a credit union.
As you might expect, we’re a bit biased at Addition Financial. We’re a credit union and we know what we provide to our members every day. But, if you’re new to credit unions, here are seven credit union advantages you should consider as you make a decision.
#1: Advantageous Interest Rates
The first credit union advantage to consider is that most credit unions have better interest rates than banks. The reason? It all boils down to one thing: profits.
You see, credit unions are not-for-profit organizations. The same cannot be said of banks. Banks set their interest rates with an eye toward earning maximum profits for their shareholders. By contrast, credit unions are owned by their members. They set interest rates lower than banks to help their members build credit and make it affordable for them to achieve their financial goals.
#2: Credit-Building Tools and Opportunities
Traditional banks have extremely strict guidelines when it comes to qualifying for a credit card or a loan. If you’re someone with a limited credit history, or if you’ve had financial difficulties in the past that have affected your credit score, you may find it difficult to get the financial assistance you need from a bank.
With a credit union, there are often more relaxed standards. If you’ve had problems with your credit, joining a credit union can give you the credit-building tools and opportunities you need. For example. Addition Financial offers Opportunity Checking, an account that’s designed to help people establish or rebuild their credit.
#3: Low Fees
Bank fees can be outrageous. It’s common for banks to charge a monthly account fee. They may also charge penalties if your account dips below a certain level or if you accidentally overdraw your account. Those fees and penalties add up and they can make banking quite costly for some people.
Credit unions do charge fees, but as a rule, they’re lower than the fees at banks. Again, it comes down to profits. Banks need to keep their shareholders happy by earning large profits every quarter. Credit unions are beholden to their members. Their focus is on helping people with their money. They are non-profit organizations and they have a member-oriented mindset about fees.
#4: Excellent Customer Service
If you bank at a traditional financial institution, you’re probably going to be a small fish in a very large pond. The customer service you receive may be indifferent at best – and you won’t get much personal attention when you do ask for help.
Credit unions make excellent customer service a priority. That is, in part, because the people who they serve are members of the credit union – not just customers. The goal of a credit union is to build a community where members can benefit from joining and get the help they need to achieve their financial goals. Joining a credit union gives you access to an array of assistance and services that you simply can’t get with a bank.
#5: Membership
At a bank, you’re a customer. It’s a similar relationship to the one you experience when you walk into a store or a car dealership. You’re one of many. You have no stake in the business and you’re ultimately at the mercy of the people who own the business. They set the prices and if you buy from them, you’ve got to do it on their terms.
Credit union customers are members of a community. The members of a credit union are not faceless customers. They’re part of a family of members who band together to manage their finances and achieve their goals. It’s a very different relationship from the relationship you can expect to have with a large bank.
#6: Community Building
You may have noticed that banks seem to be getting bigger and bigger. Large banks purchase smaller ones and your choices as a consumer narrow. Big national banks tend not to be involved in the communities where they have branches.
Credit unions are communities. Many credit unions service the residents of a specific community, meaning that you must live or work there to join. There’s a sense of community service in general, and many credit unions participate in local events, as well.
#7: Special Perks
In addition to the benefits we’ve already mentioned, some credit unions offer special discounts to members. For example, at Addition Financial we offer reduced prices on tickets to local sporting events. We also provide our members with insurance discounts and other deals that we think will help them improve their lives.
Joining a credit union offers members some unique advantages that they can’t get from a bank. To learn more about how Addition Financial checking accounts can help you achieve your goals, please click here now.
Posted on Jun 9, 2019
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