Last updated on March 25th, 2022
Bigger isn’t always better – even in the world of personal finance. In an industry where everyone pushes for more – a higher credit limit, a bigger starting bonus, longer introductory APR – consumers will find that it might very well be the little guys who have the biggest benefits. If you’ve never considered it before, here are the most compelling reasons you’d want to switch to a credit union.
Why Choose a Credit Union Account vs. a Traditional Bank?
While today isn’t International Credit Union Day, every day is a great day for switching banks and deciding to join a credit union! Some things money just can’t buy – and a great banking experience is one of them. Credit unions are a tall drink of water when compared to some of the bigger, more well-known, players in the financial industry: simple, refreshing, and transparent.
Both banks and credit unions are financial institutions and offer many of the same products such as checking and savings accounts, credit cards, loans, and CDs – but credit unions offer a personal touch that makes all the difference. Credit unions exist to serve their members, offering competitive rates and unrivaled customer experience and often give back to the local community.
Three Reasons Why You Should Consider Joining a Credit Union
It’s no secret that credit unions offer some of the most lucrative saving accounts and the lowest APR credit cards ever offered – so why haven’t more consumers made the switch? If you’re frustrated with poor customer service, low-interest rates, and having jump through financial hoops, here are the main three reasons why you should switch to a credit union and kiss the big banks goodbye.
1. Credit Unions are Owned By Its Members
No, you didn’t read that incorrectly. If you have savings, checking, a loan, or a credit card with a credit union, you are both an owner and an operator of it. The reason for this is also the main difference that sets credit unions apart from traditional banks.
Banks are for-profit institutions – they’re in the businesses of making money from your money while you may see little to none of their dividends your money helped to earn. Credit unions, on the other hand, are non-profit institutions that exist to pass on the earnings to their members. As such, credit unions are able to offer much more competitive rates on things like loans, savings accounts, or credit cards, than traditional banks would be able to offer.
2. Credit Unions Have Better Rates
Since credit unions are focused on growing your money and putting it back in your pocket, they offer highly competitive rates on all of their financial products to pass the credit union’s earnings on to you. Banks tend to offer higher interest rates than credit unions. This means better returns on your investments such as your savings accounts or CDs and lower interest rates when it comes to taking out a personal, home, or car loan – or opening a credit card.
Did you know that you could earn interest through your checking account too? Credit unions outshine traditional banks there as well. Take, for instance, the average bank savings account interest rates s: the highest yields are nowhere close to a single percentage of interest. Consumers Credit Union based in West Michigan offers an incredible high yield savings bank account of around 4% APY – that’s 80X the national average APY!
Banks are for-profit institutions – they’re in the businesses of making money from your money while you may see little to none of their dividends your money helped to earn. Credit unions, on the other hand, are non-profit institutions that exist to pass on the earnings to their members. As such, credit unions are able to offer much more competitive rates on things like loans, savings accounts, or credit cards, than traditional banks would be able to offer.
3. Easier Access to Your Money (and Fewer Hoops to Jump Through)
Traditional banks often will offer bonuses or alluring interest rates on accounts to get you to deposit your money with them. While scoring “free” money or a competitive interest rate on loans may seem like a win, these punched up perks usually come with a number of limitations such as:
- A monthly direct deposit of a minimum amount
- A required minimum balance that must be maintained at all times
- A specific monthly spend with this account
- Access to other credit union branches and ATMs
- The same online banking and mobile banking access as major banks
Credit unions aren’t interested in keeping your money in their hands, and for this reason, they typically impose fewer restrictions when it comes to maintaining an account and accessing your money when you need it.
Ready to Switch to a Credit Union?
You (and your money) deserve to be treated like the financial rock stars that you are. Moving your money to a credit union isn’t just a commitment to your fattening up your wallet but is also a great way to make a positive impact in your local community. Explore the equally exciting credit union credit card offers to take advantage of low APRs (single digits!), flexible application approval odds, and credit building capabilities of credit union credit cards.
Related Article: The Best Overlooked Credit Cards
