Millions of Americans these days use credit unions as an alternative to traditional banks. In some surveys, banking institutions have a lower approval rating than the United States Congress. Many people believe that banks are more interested in satisfying their shareholders than serving the needs of customers. They feel that credit unions value their business more than banking institutions. Banks are often busier than unions. As a result, some people feel that their services are subpar. This is another reason why people are doing more of their banking with credit institutions. The following five reasons are why more Americans are doing business with these institutions:
Credit Unions Are Easy To Join
According to one financial expert, about 40 million Americans are eligible to join a credit union and do not know it! You can join one and benefit from becoming a new member almost immediately. Another way in which you can join one is through your church or employer. Or maybe a family member or friend is already a member. They can help you open an account. There are over 8,000 unions in the United States. You should not have a problem finding one. Research the Internet and find the best one to serve your needs.
Credit Unions Promote Ownership
The executives of a banking institution oftentimes are more concerned about making profits for their shareholders. The customer is often neglected. The shareholders are the owners of a bank and share in the profits. Executives often feel pressure to satisfy them. For example, if a bank imposes a fee on customers, it does not affect shareholders. People become frustrated because they are paying more for their banking, but their needs are not served. Both credit unions and banks are in the business of making money. The difference is that credit institutions put customers first and profit second. The thinking behind this is that if you take care of customers' needs, then they will continue to do business with them. If you give people what they want, why should they go somewhere else? Union members are the owners and customers of their branch. Banks tend to put shareholders first and customer service second. The customers and shareholders are separate. People that are part of one have a strong sense of community because they share ownership. They realize that their actions affect other members. For example, if someone does not repay a loan, it will negatively affect other members. This can make it more difficult for someone else to get a loan. An ancient slogan is, "not for profit, not for charity, but for service," and credit institutions still operate under this slogan.
Credit Unions Offer Lower Interest Rates
Generally, these institutions offer lower interest rates on loans and fees than banks. According to one National Credit organization, the interest rate on a new car loan is almost 7% dealing with a bank. However, the rate is about 5.5% when borrowing from a credit union. Unions offer free accounts and do not charge fees. At many banks, you have to deposit at least $25 in to open an account. They are regulated by the federal government. Because of this, they cannot charge more than 18% on loans and credit cards. This is great for customers because it protects them from being charged outrageous fees. They offer free checking and lower interest rates on auto and student loans. If you are thinking about purchasing a home, you should think about applying for a home loan at a your local branch. Interest rates are often lower for mortgage loans than at a bank.
Credit Unions Are Great For Business Start-Ups
Contact a credit institution if you are thinking about starting a business. Ask them to help you get started. If you already have an account, getting a business loan will be easier. Many times, banks are reluctant to give people loans to start up businesses. They are ideal for small business people. They are more willing to offer suggestions on how to make your business succeed. Think of them as being a cheerleader for you. They will take you through every step you need to know so that you can get off to a good start. If you pay off the loan and prosper, it benefits all the members. It will make it easier to borrow more money in the future and expand your business.
Credit Unions Promote Financial Literacy
Banks often do not inform customers about important financial information. Many Americans are financially illiterate. They do not know how to balance a checking account, or properly use credit cards. Identity theft is a big problem in the United States. Some people do not know what they can do to prevent it. Credit institutions are more likely to explain these things to customers. Some of them offer financial seminars on topics such as real estate and stock market investing. You should look through some of their brochures. If you do not understand something, do not hesitate to ask an employee.
Credit unions are easy to join and you should take advantage of all the services they offer. They give you the opportunity to be an owner in their enterprise and offer low interest rates than banks. If you are looking to start up a business, they are ideal for you. They promote financial literacy, which will help you make better financial choices. They are a great alternative to traditional banks and you should consider opening an account.
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