Americans are experiencing a growing distrust with big banks. They don't like how banks are selling their mortgages, charging fees for debit cards, or sneaking in covert charges to increase their profits. This has forced consumers to turn to alternatives for everything from CDs to checking accounts.
One of the most prominent alternatives is a credit union. They offer a few unique advantages driven by a more consumer-friendly philosophy.
Let's explore four reasons why credit unions are recommended over banks by the common person.
1. They're Cheaper
Large financial institutions have an unsightly overhead, which translates to additional fees that the consumer must pay. They're able to collect an average of $150 in additional fees each year because of this.
Credit unions are different. They don't have those unsightly fees because they're intended to serve a local audience. This translates to free checking, overdraft fees that are smaller and fewer stipulations to keep your accounts free of charge.
2. They're Just as Accessible as Big Banks
It’s true that credit unions are smaller. This means you might have to go outside of their network if you want to access things like ATMs, but most credit unions will do their best to allow you access or reimburse you for using ATMs outside of their network.
Couple this with features like online check depositing to see how credit unions are just as accessible as any big bank.
3. They Have Better Interest Rates
When large banks operate, they have to save a penny everywhere they can. This includes giving you less back for interest and credit rewards.
Credit unions are different. They operate on a smaller scale in hopes that their customers will trust them more. This results in fewer costs and a larger margin of profit for credit unions, which they then give back to the customer in the form of higher interest rates on checking and savings accounts.
4. They Work for the Customer
Banks are financial institutions that work to further their own profits. They take large risks that put the customer's money at stake because of this.
Credit unions are different. They put the customer first, which means that they only make decisions that benefit both the business's interest and your own. Some credit unions like PenFinancial Credit Union and others even allow customers to hold a part of the company as their own to allow you to feel even more secure in the decisions that they make.
Credit Unions are Generally Better than Big Banks
The simplest answer concerning why people say credit unions are better than banks lies in the way credit unions operate. They're smaller with more advantages because they focus on working with the customer.
If you're interested in seeing what a credit union can do for you, then now is one of the best times to do so. You may be able to escape the fees and hassles that big banks are imposing upon their own customers by doing so.