A lot of people choose their bank or credit union on the basis of proximity or convenience, but few stop to consider key differences between the two. While it may be tempting to boil things down to the big-business feel of banks versus the friendly neighborhood feel of credit unions, doing so would be an oversimplification of the deeper motivations that truly make credit unions great for members. At their core, credit unions are predicated on the philosophy of people helping people.
Read on to learn more about the benefits of banking with a credit union.
No Sacrifice Required
Some people think opting for a credit union means they’ll get a limited selection of financial products and services when compared to what’s offered by banks. But don’t be fooled by their size. Just because credit unions are smaller, it doesn’t mean they can’t meet your financial needs. Most offer all the services members need for various aspects of their financial dealings, including checking, savings, credit cards, loans, ATMs, electronic banking, and more. See what kinds of services are offered by Keesler Federal Credit Union.
By the People, for the People
To understand what sets credit unions apart from banks, you have to understand the operating model of each institution. Banks are for profit, while credit unions are not-for-profit and member owned. When you become a member of a credit union, you also become a co-owner alongside other members. This gives you access to member perks, as well as a say in important credit union decisions. These member voting rights support a democratically controlled operation that centers members’ needs in the decision-making process.
Attractive Rates for All
Because they operate on a for-profit model, banks must deliver their profits to stockholders. This is why banks are more likely to charge service fees and loan origination fees.. While this model is great for stockholders, it doesn’t really do much for members. Credit unions, on the other hand, reinvest all their profits into member perks that serve the entire credit union community. These perks include lower fees and better rates on loans and savings accounts. At Keesler Federal, one of these perks is the member giveback program.
And if higher interest rates on savings and lower APR on loans aren’t enough, you might enjoy knowing that your participation in the credit union is contributing to the financial wellbeing of others. According to Credit Karma, “A lot of credit union members like the idea that their checking and savings accounts help other members of the credit union get mortgages to buy their first homes or secure business loans to build the businesses of their dreams.”
Come One, Come Many
Some people hear the term “credit union” and assume membership requires a specific affiliation or status. It’s true, credit unions require some kind of eligibility, (such as a certain employer or geographic qualifiers) to use the credit union. That’s one reason why credit union customers are called members. But, many credit unions have multiple qualifying ways to join, including family membership ties and memberships in some non-profit organizations.
The truth is, credit unions tend to have more forgiving standards for qualifications than banks. This means consumers with poor credit scores or limited financial history are more likely to qualify for a credit card or loan.
Free Financial Empowerment
Education is a big part of the members-first ethos that’s characteristic of credit unions. Most credit unions endeavor to provide their members with as much educational content as possible. By demystifying the intimidating world of finance through free classes and online resources, credit unions support the financial literacy of their members. This literacy builds over time, leading to informed members who make sound financial decisions.
Check out some free financial guidance from Keesler Federal Credit Union and get started on your own journey to financial wellness.
*Membership and Credit Eligibility Required.