Is a Credit Union Right for You? | Personal Finance Blog

There are times when an ordinary, everyday bank just isn?t the right solution for your financial needs. Perhaps the banks in your area simply don?t offer the kind of rates that are particularly competitive. Maybe the problem is poor customer service or difficult-to-access locations or ATMs. All of these are good reasons to consider joining a credit union, or at least looking into the benefits of joining a credit union.

Credit unions are closed-access institutions, but that doesn?t mean that you won?t be able to find one to suit your needs. There?s a credit union out there for everyone, you just have to know where to look for it. Most people are familiar with the concept of unions as to how they relate to industry, rather than finance. Credit unions, however, are like industrial unions only in that they offer services only to people within a certain group. This may be the residents of a specific geographic area, those who work in a certain field, or those who serve in the armed forces. Each of them provides a benefit specifically tailored to the needs of their members that isn?t available to just anyone. Another intriguing benefit is that you aren?t necessarily a customer when you join a credit union. You are, in fact, a voting member of the institution, and by extension, a stakeholder in the credit union?s future.

The reason that credit unions are so exclusive is that banks wanted it to be that way. Because credit unions typically have lower overhead than banks due to their ?not-for-profit? status, they can offer more competitive interest rates on savings accounts, lower fees on premium checking accounts, and lower interest rates on loan products, along with a host of other great perks. As was mentioned previously, though, there are credit unions that exist which encompass practically everyone you could imagine.

Begin your search for a good credit union by asking the human resources department at your place of work. In some cases, you will find that the company has a standing agreement with a credit union that covers employees within a demographic area. Often, the fees associated with membership in a credit union are nominal at worst, and are much more preferable to the fees at regular banks for such indiscretions as overdrafting an account.

Studies recently have put forth that customers who use credit unions also typically are the more satisfied with their level of customer service, a trait that all too often is simply not found with large, national banks and equally as often, smaller regional banks. That?s not to say that bigger banks don?t have a few perks to be considered, as well. The first is that large bank branches that are usually very conveniently located. The same can be said for smaller community banks, while there may only be a handful of credit union branches in your area. Additionally, large banks may offer services that a small credit union can?t manage because there isn?t sufficient demand in an area for them to justify having such services.

The decision to join a credit union is one that you shouldn?t take lightly, but if you can and do, then you just might find that it was the best decision you?ve ever made.

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