If you are reading this you are probably in one of two categories: you already have a bank account and you want to open another account, or, you are deciding whether to open a bank account or a credit union account. Oh, and you are a travel junkie like me who wants to keep their finances in order, while having the funds to enjoy all the sights and scenes of this great planet at leisure.
It is important to know the distinction between a bank and a credit union and the trade-offs of each. For one, a credit union is not-for-profit, and they “exist to serve a community” based on a shared quality, either location, faith, employer, etc. The benefits that a credit union offers serve large groups of members, as opposed to a small group of owners, or individuals, as banks do. Even if you already have a bank account, it is a good idea to think about opening up a credit union account as well. Here are three benefits you get from a credit union account:
- Excellent Customer Service
Because credit unions are not-for-profit, they aim to serve their constituents first and foremost. They feel like home because the decisions that benefit you, benefit them as well, and they are truly there to help you. Because they are unified under a “bond of association” like location or faith, etc. They have a strong incentive to serve their customers, because it is in their best interest to serve to their needs. This is why they tend to have appealing product offerings. Credit unions also tend to be more forgiving if you do not have a credit history or have a damaged credit history. Whereas, at a bank it will be hard for you to get a credit card or low rate loan with poor credit history.
- High-Interest Rates On Deposits, Low-Interest Loans
You can open a free checking account or savings account today without a fee, and get a greater annual yield on your deposits, than banks. Some credit union interest rates can go as high as 6.17%! Another useful aspect of credit unions is the access to products like credit cards, business loans, car loans, and credit cards at a low rate, without a large minimum balance. This is wonderful especially if you are a small business or LLC. Think about the business expenses that you take on launching and maintaining a business from tools, space, to business travel. Having accounts dedicated for business use can make it easier for you to track those expenses at a lower cost, with less of a burden because of the low interest.
- Education And Assistance
Credit unions are very hands-on and helpful. Not everyone is fortunate to gain financial literacy at a young age. If your credit history for whatever reason, is not up to par and it’s impacting your ability to access loans to secure a car or home, a credit union can help you with it. You can get personalized credit assistance to guide you out of debt or to a higher credit score. There are financial advisors and financial workshops that can help you become informed on how to manage your finances properly and educate members on a wide variety of topics within personal and business finance.
Credit unions are an excellent option, that of course come with their limitations as well. Think about what is in line with your values, and personal finance goals and choose accordingly. Explore the credit unions in your locality or within a community you’re a part of. Remember, you are not tied to just a bank. It is a popular choice to have both a bank account and a credit union account, in fact, it is highly recommended!