Should You Switch to a Credit Union?

Has your experience with your current bank been less-than-stellar? You’re not alone. Many feel their banks don’t serve their needs according to their expectations.

If you’re one of those people, you may be considering switching to a new bank. Before you, be aware that choosing a new bank isn’t your only option.

You could instead choose to make the switch to a credit union. Credit unions offer many of the same benefits, services, and products as banks, while also standing apart from banks due to certain unique features. When deciding whether it’s best to switch to a credit union or a new bank, consider the following factors:

1. Fees

Affordability is one of the main reasons to consider switching to a credit union. In general, transaction fees, overdraft fees, and other such fees are lower at credit unions than they are at traditional commercial banks.

This highlights one of the key differences between banks and credit unions. Banks must please their shareholders by earning profits. Charging hefty fees is one way they do so.

Credit unions, on the other hand, operate on a non-for-profit basis. They don’t need to keep shareholders happy. As a result, they can offer lower fees and more attractive interest rates.

 

2. Customer Treatment

Credit unions are local institutions. They may be part of networks to ensure their customers always have access to ATMs regardless of where they are, but in general, they’re parts of their communities instead of links in a worldwide chain.

This can significantly improve the customer experience in the eyes of many. At a bank, customer rules and customer service guidelines are dictated by executives who may not be involved in the communities their various branches serve. This results in a standardized set of rules and procedures that can turn customers into nameless and faceless entities.

That’s not the case at credit unions. Because credit unions are local, many feel the service and treatment they receive at credit unions is far superior and much more personalized when compared to the service a major bank tends to provide.

 

3. Voting Rights

The main decision-makers at a credit union tend to be volunteer board members. However, those board members are elected by all members of the credit union.

Every member of a credit union typically has equal voting rights. This means when you’re a member of a credit union, you theoretically have a say in how the institution operates.

That’s obviously not the case when you’re a customer of a commercial bank. Decisions are made at the top. You have no say at all.

 

4. Concerns

Despite these benefits, you might be reluctant to join a credit union because of certain fears you have based on common misconceptions about credit unions.

For instance, some believe that because credit unions are local when a member isn’t near a branch, they can’t access banking services. That’s not the case. Again, many credit unions are part of networks, and many modern credit unions also offer the same online and mobile banking options that traditional banks offer.

Credit union accounts are also insured. Deposit money in one, and you can be confident it’s safe.

 

These are all factors to keep in mind when deciding between a new bank or starting fresh with a credit union. If you’re not happy with your current bank, the reasons could be linked not to the bank itself, but to issues that are common across all major commercial banks. A credit union might thus be the only institution capable of genuinely satisfying your preferences.

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