Banks these days can charge annoying monthly fees and can be harder to get loans from, so If you’re trying to decide if you should stick with your bank, or perhaps go another route, consider some of these reasons why a credit union might be your better bet. Credit unions are created for communities themselves, and unlike corporate banks, they offer more services and more options than a bank might, all without certain restrictions or obligations. I personally chose to convert to a credit union and it was the best financial decision I ever made. If you’re on the fence, check out these tips and consider making the switch yourself.
1. No Fees
Any credit union you choose is unlikely to have any monthly charges, has no fees for minimum balance requirements, and doesn’t require anything to open an account except a small amount they ask you to start a savings account with, which is usually around $5. This saves you more money and writing checks, using debits, ATMS,etc. is all free as well.
2. Better Loan Rates
One of the biggest advantages to using a credit union over a bank is they offer better loan rates than banks do. This helps save you money in huge ways, and can help you get a lower interest rate, which improves your credit, and how much you pay back over time.
3. Credit Forgiveness
Another reason to choose a credit union over a bank is they cater to everyone, even those with bad or poor credit. Most anyone can get an account at a credit union, whereas some banks will turn you away if you don’t have good credit.
4. Member Benefits
With a credit union, you’re actually a member, not just a customer. Banks are for-profit institutions and their primary goal is to make money for the larger corporate entity, from the stakeholders, or customers like yourself. This is why you get fees at banks versus credit unions, and at a credit union, they’re catering to you, not you catering to them.
5. Lower Credit Card Fees
All credit unions offer credit cards just like banks do, but with much lower rates. Interest rates can be as low as 1-6% at a credit union, versus 20-30% at banks. This saves you money and helps your credit score in the process. Many credit unions will even lower your interest rate if you have your paycheck direct deposited into your account as well.
6. Multiple Perks
Perks at credit unions are almost too many to name. Free checking, unlimited debit and ATM use, rewards for having your paycheck direct deposited into your account, credit card perks and even perks for being with the same credit union for multiple years. Always ask your credit union about everything they offer and be sure you take advantage of it!
7. Higher Savings and CD Rates
Many banks and credit unions both offer multiple retirement plans, CD savings plans, money market plans and stock plans. Yet at a credit union, higher rates are given with lower pay out fees. This is even more of an incentive to open up an account with a credit union versus a bank, and it helps make you money in the meantime.
If you’re considering where your money is going each month, and how it is either benefiting you or hurting you, do be sure to give consideration to these reasons to consider a credit union. I have a feeling you’ll be glad you did and wished you had made the transition sooner. Do you belong to a credit union or bank?