Joining a credit union is one of the easiest ways to save money.
Most important points:
- Joining a credit union means becoming a member owner.
- You may pay less fees and get better interest rates on loans.
- You can also vote for board members, or you can nominate yourself for a seat.
There are about 5,200 credit unions in the US, according to research from IBIS World, and that number is growing. And there are plenty of good reasons for that growth. For many people, once they understand how a credit union works, it’s hard to imagine banking anywhere else.
If you currently keep your money in a bank or if you are just starting out and need a financial home, here are six reasons to credit union.
1. You are an owner
When you do business with a bank, you are a customer. When you join a credit union, you are a member. And as a member you own the credit union. No matter how little (or how much) money you have on deposit, you are entitled to one vote when new board members are elected.
And if you want to take a more active role towards the credit union, you can even run for a board position. No member is more important than another, and your vote counts.
2. Non-profit credit unions
Unlike most companies, credit unions operate as non-profit organizations. The purpose of a credit union is not to make a profit, but to provide members with the services and financial products they need. You will find that you will not be smashed and beaten to death by a credit union, because the aim is not to get rich from fees.
Let’s say you take out a loan from your credit union. You will still pay interest on the loan, but the interest will typically be lower than you would pay if you borrowed from another source. The interest paid by members on loans goes back to the day-to-day running of the credit union, keeping it afloat for all members.
3. You are ‘someone’
As a member you are important to a credit union. You’re more likely to be recognized when you walk into a local branch, and it’s often easier to get a loan or qualify for a credit card. Credit unions do not follow the same loan and underwriting requirements as banks, so there is more flexibility when it comes to lending.
Let’s say you need a car loan but haven’t been to school in a long time. Your lack of credit history doesn’t tell the whole story. A credit union representative can quickly check your bank account to see how you’ve handled money in the past.
Being a member of a credit union doesn’t guarantee you money when you need it, but it does give you a head start.
4. You probably won’t pay for checking
While many banks used to offer free checks, that number has declined over the years, with banks realizing how profitable it can be to charge customers for checks.
According to the National Credit Union Administration, the government-backed insurer of credit unions, 76.5% of credit unions still offer free checking bills. That monthly savings can be used for other things, such as investing for the future, building an emergency savings account, or paying your child to play football.
5. You save even more money
In addition to saving on checking accounts with most credit unions, you can also get lower interest rates on loans, pay little or no ATM fees, and earn higher interest on savings account and other financial products.
Most credit unions are locally owned and operated and play a role in community growth. When you join a credit union, you are part of helping your community thrive.
If you’ve been with the same Bank for years and couldn’t be happier you have a great business and there is no reason to change. But if you’re looking for something new and different, do yourself a favor by checking out local credit unions.
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