When it comes down to it, there are often numerous benefits associated with credit union banking. A credit union is bank that has capital pooled together from its members or depositors. When money is spent or used, the money comes from this pool. Also, a credit union is a non-profit organization, so you often have smaller interest rates and fewer fees, which can be a breath of fresh air compared to some big banks. However, there are a number of disadvantages that you want to consider before you open an account at a credit union. It is important to weigh these benefits and disadvantages, because you want to be sure your money is protected and kept in the right place. Here are some pros and cons of banking with a credit union.
One of the biggest pros is that credit unions have excellent service. The truth of the matter is that big banks treat their customers as sources of profit and not as people. Credit unions, on the other hand, treat people with respect. When it comes down to it, credit unions, like 1st Financial Federal Credit Union, are non-profit businesses and the depositors are members, so you won’t be bombarded by pushy sales tactics or rude tellers.
However, one big con is that you have to jump through a lot of hoops to open an account. Indeed, you have to be a part of a certain community or you must have a certain religious orientation to open an account. Because these banks ensure membership for life, they want to make sure you fit all the necessary profiles.
If you are part of a certain organization or if you meet the requirements of becoming a member, credit unions often have lower interest rates. Again, because credit unions are non-profit businesses, you won’t have to deal with high interest rates. In fact, setting up an account with a credit union and applying for a credit card is one of the best ways to boost your credit. If you don’t have credit, setting up a credit union account is one of the best ways to develop your score. Moreover, if you want to open up a business or purchase a house, you may want to apply for a loan with a credit union before you visit a big bank.
At the end of the day, credit unions can’t offer some of the same rewards as big credit cards and banks. Big banks have high interest rates, but the credit cards and accounts they offer come with a number of benefits that you just can’t get from credit unions. Of course, these are incentives to get you to spend, but if you are wise about your spending and keep things in check, these bonuses can help you save money on things like plane tickets and they can help you reap rewards. In the end, credit unions can usually only offer a bare bones credit card, so if you are looking for cash back rewards or air miles, you may want to stick with a bigger bank.