Advantages of Using Credit Unions

With interest rates on savings products decreasing and monthly fees and penalty charges increasing at many banks around the country, it’s no wonder people are in search of something better. Short of stashing your cash under your mattress or burying it in the backyard, what can you do to get better interest rates on your savings and lower fees on your transactions?

Credit unions may be the answer you’re looking for. While it’s true that credit union membership was only open to a small percentage of the general population in years gone by, almost anyone can qualify for membership to a credit union these days. There are credit unions available to people based on where they live, where they work, or even because of associations they belong to. If all else fails, you can join an association simply to gain access to a credit union – people do it all the time!

What’s the big deal about credit unions and why should you go through the trouble of trying to qualify for a member? There are a number of advantages to using credit unions as compared to traditional banks, including:

Credit Unions are Non Profit

Because a credit union is a not-for-profit organization, they’re not constantly looking for new ways to increase their business profits! Seems like a simple revelation, but the fact is – banks add fees and lower interest rates to boost their own bottom line – most of which ends up in the pockets of banking executives in the form of higher salaries and big bonuses. In a credit union, if the institution makes more than necessary to sustain it’s business operations, the account holders get the extra funds in the form of dividends, because:

Account Holders Become Owners of Credit Unions

When you have an account with a credit union, you are a partial owner of the institution. This not only gives you the potential to earn dividends, but means the union is always acting in the best interest of it’s members rather than the executives.

Better Interest Rates and Lower Fees

When you get a credit card through a bank, chances are you’ll have an annual fee and high interest rates. A credit union issued credit card rarely has annual fees and the interest rates you’re charged are much lower in comparison. Additionally, if you make a payment late on your credit union card, you probably won’t be faced with an instant interest rate hike like you most likely will through a bank-issued card, since they look for any reason to raise your rates to get more money out of you to boost their profits.

Checking accounts through banks have been increasing fees left and right. The average overdraft fee for checking accounts at banks is up to a staggering $39 per item! Make one little mistake and suddenly you’re entire next week’s paycheck is eaten in fees. With a credit union, you’re more likely to get charged around $20 for the mistake.

ATM fees are much lower, if not non-existent with many credit unions, as well. Some will even refund ATM fees paid throughout the month, up to a certain maximum limit.

Want to find out if you qualify for credit union members? Visit JoinACU.org.