Benefits of Credit Unions

From a very early age, my parents (a teacher & accountant) stressed the importance of saving and the benefits of credit unions. In addition to their joint checking accounts, they each had credit union savings accounts related to their profession. I am a terrible saver but know that it's past time for me to start a credit union account also. Below are some of the great reasons to follow my parents' advice and sign up with a credit union in your area.

  • Lower rates on loans & credit cards - Because credit unions are non-profit they reinvest their surplus and are able to offer better rates. Whether you need a home, auto, business loan, or line of credit, their rates are hard for traditional banks to beat.

  • Forgiving Qualifications - If your credit is not the best or you have little/no credit at all a credit union will help you qualify when other banks may not.

  • Lower Fees - Credit Unions don't need big fees to pad profits, as a result, they typically have no/low fees for their accounts. You may also not need as large of a balance to start their accounts.

  • Insured accounts - Be sure to check how your credit union insures their funds. You want a credit union that is federally insured in case of an emergency.

  • Local Presence - Credit Unions are local small businesses and as such do wonderful things for their local community. Many give back in the form of scholarships, grants, donations, and low-cost business credit.

  • Higher Interest Earned - Credit Unions aren't out to make a profit so they can afford to pay out higher interest rates on savings.

  • Personalized Credit/Financial Counseling - Most credit unions have financial planners and credit councilors to help you plan for the future.

While credit unions have many advantages, they also have a few drawbacks. Your credit union may have limited locations and ATMs. Credit Unions are typically behind on technology and may not have a great website or app, ATM functionality, or 24/7 customer service. You also may need to qualify for a credit union by living in a specific location, belonging to a certain profession, or attending a specified university.

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