5 Reasons to Choose a Credit Union Over a Bank
We may earn money or products from the companies mentioned in this post.
As an online business owner and coach who started from scratch, I know how hard it was to chase the path towards financial stability. It can be difficult to earn money and save! You need to think through every financial decision, since every cent matters. Managing finances is most especially challenging for gen Z and millennials who are just starting out with their jobs or with their businesses. What investments should you take on? Where is the best place to stash your hard-earned money? Should you entrust your money to a bank or a credit union? Well, I can help you with that!
Young professionals and business owners have many choices for where they develop credit, store their money, and take out loans. Before deciding on the best kind of financial institution that can benefit you, do a bit of research first! I suggest joining a credit union. There are many ways a credit union can help you improve your credit, and establish your financial future.
First, what is a credit union?
A credit union is a non-profit financial institution that is owned by individuals who use its financial products. Members have access to the same products and services provided by banks, like checking accounts, savings accounts, credit cards, and loans. To make sure that their best interests are represented, the members elect a board of directors to manage the credit union.
So, Why are Credit Unions Better Than Banks?
1. Credit unions have simpler terms that are easier to follow.
A lot of credit unions provide savings and checking accounts with easy-to-follow, simple terms. For instance, you can get free checking. Every check withdrawal and debit card purchase may come free as well.
You can also get a free savings account, provided that you maintain a specific minimum balance. It’s true that many traditional banks provide free savings and checking accounts, but those deals come with loads of provisions and rules.
What if you don’t meet those requirements?! It is these types of inconveniences and restrictions that give credit unions an added advantage.
2. Credit unions provide more flexibility.
Do you have a flawed credit history or employment issue? If yes, most banks will most likely deny you a credit card or loan. Since they process a big amount of applications each month, they streamline their work by setting strict requirements.
They look into your deposits, credit score, and income. If you fail to meet those requirements, you’re declined without further consideration. As for credit unions, they have a member-focused philosophy.
Even if you have a troubled financial past, I’m sure a credit union will be willing to work with you.
3. Credit unions have a more customer-focused approach.
The moment you open an account with a credit union, you become a part-owner and member of that union. Credit unions are owned by members, not stockholders. Their non-profit model is centered on creating the best client service and support experience.
4. Credit unions offer better interest rates.
Credit unions offer lower loan interest rates and higher savings rates. Since they are not focused on generating profits (only on covering their operating costs), they can provide better interest rates to their members.
For loans, you can even qualify for more discounts if you go for automatic payments. Clearly, as compared to banks, credit union members can save more money on student loans, mortgages, and car loans.
5. Credit unions offer a wide range of financial offerings.
A credit union may be small, but that doesn’t mean they can’t support you in reaching your biggest dreams. If you think that they offer fewer services compared to banks, think again.
Apart from financial counseling and education, they provide credit cards, home equity loans, member business loans, and consumer loans.
While it’s true that some credit unions don’t provide as many services, in general, these financial institutions also cover a wide range of banking needs.
One of the most important decisions you need to make as an entrepreneur is to look for the perfect hub for your finances. Need to open a bank account for your own business?
Your financial institution of choice must be able to attend to your business needs efficiently. Why not join a credit union? Click here to learn more.