Reasons
to use a
Credit Union
instead of a corporate bank
“
With so many ways to get information in this ever-changing world, it’s
Last year, 2 million
people between the
ages of 18 and 35
joined a credit union
sometimes hard to make sense of the noise. Making a decision about
something as critical as your financial institution requires research and
thought, as well as a good gut check about the kind of organization you
want to do business with.
Lately, it seems most banks use technological bells and whistles as a lure,
so you’ll be more likely to take out loans and use other services that cost
money. But, is that really the best reason to trust an institution with your
”
financial needs?
Last year, 2 million people between the ages of 18 and 35 joined a credit
union and 28% of credit union members are under the age of 35 while
54% are under 50. Credit unions can offer so much more than the latest
technology, including a full range of products and services, and the kind
of personalized, educational information you need to truly succeed.
Do the research and see for yourself how non-profit credit unions
compare to their for-profit bank counterparts. As you do, consider these
five categories:
“
We were impressed by the way you
treated people. From the moment we
walked in the door, it was awesome.
– Norman, Clifton Park
”
EASE OF SERVICE
Take a look at the difference in customer service provided at a typical bank and the experience you have at your local
credit union. Banks have earned a reputation for cumbersome customer service and out-of-touch policies. Getting
information about financial services, such as credit repair or auto loans, sometimes means sitting on hold for hours or
queuing in endless branch lines.
Credit unions, on the other hand, are literally owned by their members and take pride in providing more personalized,
proactive service. When you stop in for a visit, are you greeted by a smiling face? Do you feel welcomed? With an
industry-wide philosophy of “People helping people,” credit unions strive to provide the expert knowledge members
need to better manage their money day to day, and make difficult financial decisions.
“
Buying a house is stressful enough.
Finding a lender should not be.
– Liz, Halfmoon
LENDING PRACTICES
”
Commercial and retail banks are designed to create profit for their shareholders and corporate owners who
expect a predictable, stable rate of return on their investments. This demand makes it difficult for bank lenders to
deviate from pre-determined formulas and profit requirements.
Credit unions are community institutions specifically designed to benefit their members, and helping people out
is part of what they do. And, because they are non-profit organizations and do not have the same pressure to
maximize their returns, their rates tend to be lower than those of banks. They also tend to take a look at your
entire financial picture to find details that may not be reflected in the conventional lending formula.
Consider these scenarios: You have just started a new job and your tax returns from last year aren’t a good
indicator of how much you are actually earning. That’s not in the formula, so it doesn’t matter. Or, perhaps, your
credit history was hurt by an old medical bill? Banks stop reading after the first few words of that sentence. In
short, there’s no room for flexibility and interest rates tend to be much higher.
3
ONLINE BANKING IS NO LONGER A NOVELTY
In the early days of the Internet, only large commercial and retail banks could afford to offer online banking as a
service to their members. Now, these services are everywhere and credit unions are on board, too. In fact, many
credit unions are leading the digital evolution and provide a complete suite of online, mobile and text banking
services at your fingertips, from bill pay and remote deposit, to funds transfers, person-to-person payments and
personal financial management tools. Credit unions are also integrating e-commerce services making it easier than
ever to open accounts, apply for loans and send and receive money electronically.
When asked, approximately 67 percent of young adults stated that mobile banking services at banks don’t meet
their expectations. Most people don’t handle paper checks anymore and online banking is really all they need.
If online and mobile banking capabilities are important to you, be sure to compare your local credit union’s apps
to the retail bank you are considering and see if there is a meaningful difference.
“
Everyone is ready to assist you and
there is no pressure. I got pre-approved
for my Auto Loan and it was easy.
– Angeline, Syracuse
”
“
CAP COMis the best. They’ve helped us do
so much, and now we have a chance to
make Kelsey’s career dreams a reality.
– Michele, Colonie
EDUCATIONAL RESOURCES
”
Credit unions aren’t just driven by a desire to help make their members’ financial lives easier, under the
Federal Credit Union Act promoting financial literacy is a core credit union mission. A big part of that
mission includes providing the educational resources you need to make better decisions about managing
your money in real-life situations.
Whether you need advice about home buying, planning for college, making a budget, managing debt or
using credit responsibly, credit union representatives will be happy to sit down with you and go over all
your options, explain the pros and cons and help you feel more confident about the choices you make.
Many credit unions also offer complimentary workshops about major financial decisions like purchasing
your first home, paying for college, retirement planning and investing, and provide extensive online
resources you can access whenever you’re looking for a quick answer.
At the end of the day, giving you the knowledge you need to be confident and secure with the financial
decisions you make is one of the primary reasons credit unions exist in the first place.
“
I choose to bank with someone who
support the things that matter to me.
– Christine, Melrose
SAVINGS
5
”
Credit unions typically offer more competitive rates on savings accounts and certificates because they don’t have to set
aside money to pay shareholders. Instead, they can return that money to their members in the form of higher dividends
on your deposits – savings accounts, dividend-bearing checking accounts, money markets, certificates and IRAs.
The National Association of Federal Credit Unions (NAFCU), in cooperation with Datatrac, a financial research company,
regularly analyzes the average rates of credit unions and banks across a variety of standard deposit and lending products.
You can access the most recent NAFCU rate data here. Compare the earned dividends on a credit union checking or
savings account to those offered by a for-profit bank to see the difference.
The difference between banks and credit unions doesn’t end with rates. When you are looking at your options, keep in
mind that the fees and surcharges you pay will also affect how much of your money you get to keep.
Start with the account you will probably use most often, your checking account, and compare some of the costs. Are
there monthly maintenance charges? What are the overdraft fees? What is the minimum balance I need to maintain?
What about ATM fees?
Earlier this year, Bankrate released the results of its 2015 Credit Union Checking Survey of the nation’s 50 largest credit
unions and concluded that you are “twice as likely to find a free checking account at a credit union than a bank.”
CONCLUSION
Even though both offer a wide range of financial products and services, there
are real some differences between banks and credit unions that can have a
significant impact on your financial health and well-being over the long term.
Like anything else, the best way to find the right financial institution for you
and your family is to do a little research and ask a few questions.
Then, go open an account at a credit union. You’ll thank yourself later!
ABOUT CAP COM FEDERAL CREDIT UNION
CAP COM Federal Credit Union is proud to have strong roots in the Capital
Region. As a credit union, we are member-driven and we focus on great
service, convenient products and competitive rates that help make your life
just a little easier. From birth to retirement – we’ll be with you every step of the
way. CAP COM is your one stop for Savings and Checking Accounts, Auto and
Home Loans and a great, fixed-rate credit card.
If you’d like to become a member, visit www.capcomfcu.org.
Federally insured by the National Credit Union Administration. Equal Housing Lender.