What Is a Credit Union and Should You Switch to One?

what is a credit union advantages vs banks switch loan

In the last year, credit unions were able to warrant $13.8 billion in financial benefits to their members. Credit unions have a little more freedom when it comes to giving their members what they need, in addition to what they want in their financial institution. 

Continue reading to discover what a credit union is and how it can improve your modern banking game. 

What Is a Credit Union? 

A credit union is an alternative to traditional banking without giving up all of the products and financial services. It is a local, non-profit organization that has its members in mind when it comes to every part of banking. 

Credit unions don't treat you as if you are just a number. You become a member of their banking family. Members are considered to be shareholders within the credit union, making it so much easier to invest the profits that they do get back into them. 

University-affiliated credit unions permit students to become financially secure and help them to build better credit habits. This is because they are able to occasionally waive fees and offer a grace period for late fee charges. They also educate students on credit. 

Advantages of Credit Unions 

Lower fees and better loan rates are just some of the many advantages of credit unions. Credit unions are for the people rather than for the profits as they are non-profit organizations. With a credit union, its members get a more personalized approach. 

The members of a credit union are able to save money by making the switch from traditional banking. Credit unions are better equipped to offer special discounts to their members. 

Because they are not owned by investors, members are able to save a lot of money. The profits that are made by the credit unions are invested back into members cutting their banking costs. 

Many credit unions offer free access to ATMs with affiliation to their institution. 

Disadvantages of Credit Unions 

Credit unions do have requirements in order to be eligible for membership. Potential members are likely to qualify if they are related to a current member, have affiliation with a union or school, or are working at an employer that uses the financial institution. 

The fact that they are smaller may have some downsides. Because they are local, you may not be able to find another branch if you happen to be on a trip across the country or decide to relocate to another area without a branch. 

Smaller financial institutions may not be as technologically advanced as a traditional, large bank. Credit unions may not have the greatest online experience when it comes to balance checking and money transfers. 

Making the Switch to a Credit Union? 

A credit union may benefit you better than the traditional bank setting. Make the switch today and you can start saving money at your local credit union. 

Do your research before committing to a credit union. It may be just the thing you have been searching for when it comes to a better financial institute. 

If you found this post helpful on credit union advantages, check out the other content on our blog. We offer a wide variety of articles on on banking, mortgages, loans, financing, funding, and much more.

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