Why You Should Be Banking With a Credit Union
As you explore your options between traditional banks and credit unions throughout Washington, you may be surprised to discover the many credit union benefits you can take advantage of. In fact, many of the perks make credit unions a far better choice for the average consumer. Let's explore the reasons banking at a credit union is a smart money decision.
How a credit union works
Unlike banks, which must answer to shareholders and turn a profit, credit unions answer to their members. In other words, credit union membership has its privileges. First, you must become a member to have an account at your local credit union. This usually requires that you be employed in a certain industry, live or attend school in a certain area, or meet some other membership requirement.
Most cities have multiple credit unions from which residents may choose if they qualify for membership. And most residents of a particular community will qualify for membership at one or more credit unions in their area.
Credit unions are not-for-profit organizations. Rather than dispersing profits among board members or shareholders, the profits are returned to the members — usually in one or more of the following forms:
- Higher dividends on savings
- Lower interest rates on loans
- Lower fees for services and transactions
Credit unions invest heavily in the communities they serve. That means they’re more willing to offer business loans, sponsor little league teams, and participate in local fundraising and community-building events than big banks that operate on a national or global scale.
Member financial education
One of the biggest complaints about traditional banks is the poor customer service. That isn’t the case with credit unions. Credit unions are not only more attentive to member needs, they’re also dedicated to providing financial education to their members.
Credit unions want all members to succeed financially. For that reason, they make every effort to provide members with resources that can help them better manage their money. This sometimes includes offering products and services that can help with finances, budgeting and reducing debt.
More forgiving standards
If you’ve had negative credit experiences in the past, you’ll find credit unions are more willing to work with higher-risk borrowers. This goes along with credit unions’ commitment to financial education. For example, a credit union may offer credit-builder loans or more flexible loan terms and options. They may even have programs available where a financial coach can work with you one on one to help you improve your credit.
Greater flexibility for terms
Credit unions tend to be more willing to forgive a few past credit indiscretions. In general, they also have more flexibility to work with you to adjust loan terms if you’re in a tough spot. Sometimes they can even set up nontraditional loan terms to help meet the financial needs of members.
Personalized assistance and service
Another important benefit of credit unions over banks is the level of customer service you’ll receive. Credit unions are famous for offering exceptional customer service where banks are not.
Much of that stems from the fact that credit unions are more likely to view members as individual people, whereas big banks view them as credit risks and treat them accordingly. As a result, you’ll get personalized assistance and service at a credit union that wouldn’t necessarily be available to you at a bank.
Because credit union members are also co-owners of the organization, they get to vote on certain aspects of how the credit union is run, which may include electing board members or voting on rules or policies. That means members can influence how the credit union operates and have a voice in the organization’s decisions.
Most credit unions are part of a nationwide shared banking network that allows you to conduct basic transactions at other credit unions and ATMs within the network. This can be a huge benefit if you move or travel frequently. It means you don’t have to worry about the lack of a local branch to manage basic banking needs like making withdrawals or deposits.
On average, you’ll find all the financial products you could need at your local credit union — from credit cards and loans to savings, checking and investment accounts. Credit unions offer many of the same services you’d expect from banks that charge higher fees for the same services.
It’s hard to pass up the personalized attention and service benefit alone. When you top it off with lower fees, free financial education and assistance, higher interest rates on savings, and lower interest rates on loans, modern banks don’t hold a candle to Washington credit unions for essential banking services.
Whether you live in a large city or a small town, credit unions work for the benefit of your community in a way that most banks won’t. Beyond your community, though, credit unions support you with financial literacy and financial health. They want their members to succeed and offer the best advice, guidance and products to help you in your financial endeavors.