Why Credit Unions are better than Banks
Okay, so why should I use a credit union instead of a bank? The usual answer is that credit unions are not-for-profit organizations owned by their members, whereas banks are owned by stockholders, leading CUs to offer better rates and lower fees. I ran across an article that offers more specific information.
1. Lower rates on loans – According to the National Credit Union Administration, as of June 28 the average rate on a 36-month car loan was 2.85% at credit unions and 5.59% at banks. So banks are charging nearly twice as much for the same loan.
2. Higher rates on savings – The rate differences on savings aren’t as great. But interest rates on 10 different types of accounts, from checking to five-year certificates of deposit, are higher on average at credit unions than banks, according to the same website.
3. Better credit card deals – According to the NCUA, the average credit card interest rate in June was 12.85% for bank-issued cards, compared with an average of 11.56% for cards issued by credit unions. In addition, credit union credit cards tend to have lower fees and fewer of them.
4. Easier to borrow – While no lending institution is going to be careless with loans, community-based credit unions tend to be easier to deal with than megabanks. Lending decisions are more likely to be made locally with more flexibility. In addition, while few national banks would make what’s called a “signature loan” — an unsecured loan guaranteed only by your signature — credit unions routinely offer this service to their members with good credit.
5. Convenience – You’d think that a small credit union without a million branches would be less convenient than a giant national bank. Not necessarily. Credit unions have gone a long way toward making their online, phone and in-person services as easy as possible. Many credit unions, such as UKFCU belong to a shared branch cooperative that allows members of one credit union to conduct business at any other member credit union anywhere in the country — even overseas. And when it comes to finding the nearest participating credit union? Yes, there’s an app for that.
6. Lower fees – When it comes to banking fees, you’ll probably find better deals at credit unions than at the giant commercial banks. Whether you’re comparing fees to maintain a checking account, foreign ATM fees, or penalty fees for overdrawing your account, they’ll probably be lower.
For the complete article, click here http://money.msn.com/saving-money-tips/post–7-reasons-credit-unions-are-better-than-banks