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6 reasons why it’s time to switch to a credit union

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Joining a credit union is one of the easiest ways to save money.

Key points

  • To join a credit union is to become a member-owner.
  • You can pay fewer fees and get better interest rates on loans.
  • You can also vote for board members or nominate yourself for a seat.

According to a study by IBIS World, there are approximately 5,200 credit unions in the United States, and this number is constantly growing. And there are plenty of good reasons for this growth. For many people, once they understand how a credit union works, it’s hard to imagine banking anywhere else.

If you currently keep your money in a bank or are just starting out and need a financial house, here are six reasons to consider a credit union.

1. You own

When you deal with a bank, you are a customer. When you join a credit union, you are a member. And as a member, you own the credit union. No matter how little (or how much) money you have on deposit, you have a vote when new board members are elected.

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And if you want to take a more active role in running the credit union, you can even run for a position on the board. No member is more important than another, and your voice counts.

2. Credit unions are not-for-profit

Unlike most businesses, credit unions operate as non-profit organizations. The goal of a credit union is not to make a profit, but to provide its members with the financial services and products they need. You will find that you are not nickel and dimed and slashed to death by a credit union because it is not in the business of getting rich from fees.

Suppose you take out a loan from your credit union. You will still pay interest on the loan, but the interest rate will generally be lower than what you would pay if you borrowed from another source. Interest paid by members on loans trickles down to the day-to-day running of the credit union, helping to keep it afloat for all members.

3. You are ‘somebody’

As a member, you are important to a credit union. You’re more likely to be recognized when you walk into a local branch, and it’s often easier to get a loan or qualify for a credit card. Credit unions do not follow the same lending and underwriting requirements as banks, so there is more flexibility in terms of lending.

Let’s say you need a car loan but haven’t left school for a long time. Your lack of credit history doesn’t tell the whole story. A credit union representative can quickly check your bank account to see how you’ve handled your money in the past.

Being a member of a credit union doesn’t guarantee you money when you need it, but it does give you an edge.

4. You probably won’t pay to verify

While many banks used to offer free verifications, that number has dwindled over the years as banks realize how cost effective it can be to charge customers for verification.

According to the National Credit Union Administration, the government-backed insurer of credit unions, 76.5% of credit unions still offer free checking accounts. This monthly savings can be used for other things, like investing for the future, creating an emergency savings account or paying for your child to play football.

5. You’ll save even more money

In addition to saving on most credit union checking accounts, you can also get lower interest rates on loans, pay little or no ATM fees, and earn a higher interest rate. on savings accounts and other financial products.

Most credit unions are locally owned and operated and play a role in community growth. When you are a member of a credit union, you participate in the development of your community.

If you’ve been with the same bank for years and couldn’t be happier, you’ve got a great deal and there’s no reason to switch. But if you’re looking for something new and different, you’ll be doing yourself a favor by checking out local credit unions.

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