Most people would experience advantages if they switched from a traditional bank to a credit union. Here’s what you need to know before you try to make the switch:
Are You Eligible for a Credit Union?
In recent years, credit union membership has become available to more people but not everyone will be eligible for credit unions. There are credit unions available to employees of a particular business; credit unions for people who live, work or worship in a certain geographic area, and credit unions available to people working in certain industries. Check the credit unions in your neighborhood first to see if you meet eligibility requirements, and if not – look for national credit unions available online if you don’t mind online banking.
Other ways to become eligible for a credit union membership is to become a member of an organization or group in which membership makes you eligible for the credit union.
Credit Unions are Nonprofit
One of the reasons most people will benefit from switching to a credit union from a bank is because credit unions are nonprofit organizations. This means that they aren’t paying federal taxes like banks do – and they can pass on those savings to their members in the form of reduced account fees and better interest rates.
Account Holders are Partial Owners at Credit Unions
Another difference and benefit credit unions have over banks is that when you open an account with a credit union, you become a partial owner. You can vote on Board of Directors, and you will receive a share of profits generated from their operations. Loans and fees earned by a credit union is distributed among all of the owners – which means every once in awhile you’ll see a credit in your checking or savings account that represents your percentage of ownership.
Compare the Account Features
Take a look at the features of your current checking and/or savings accounts and see how they compare to what the credit union you’re considering offers. Will you miss any features your bank offers that isn’t provided by the credit union? Most standard banking services are also available at credit unions, like debit cards, transferring funds between accounts, direct deposits and online bill pay.
If you decide the credit union offers the features you need, you should open an account and make the switch!
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1 users resposed " Making the Switch to a Credit Union "
July 10 2010
My credit union is great. And they don’t charge fees for everything you do like banks do.
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