Banks are making record profits this year. According to CNN Money, big banks have racked up $6.4 billion in ATM and overdraft fees alone. Retail banks, or consumer banks, are not only frustrating Americans, but are leading them to seek an alternative for their financial needs. That’s where we come in. Many people may not be aware of just how beneficial credit unions can be, or even how different they are from regular banks. Let’s go over a few advantages of making the big switch.
Looking for a financial institution to better serve you? Contact our credit union in Harlingen for more information!
The Difference Between the Two
Credit unions share similar services to traditional banks, like checking and savings accounts, loan products, credit cards and mortgages. However, they’re distinctively different in the following ways:
- Credit unions are not-for-profit institutions that serve the community with many favorable terms.
- Credit unions are member-focused institutions. This means that each is owned and operated by its members instead of stockholders. Each member has a voice when electing board members and can run for election to serve on the board as well.
- Since credit unions are member-focused, potential members have to meet certain requirements that vary depending on who they’re trying to serve. For example, some credit unions may only accept teachers from a certain school district while others serve a certain community.
Members are offered much better financial services than customers at a bank. A survey by Prime Performance Bank and Credit Union Customer Satisfaction found that credit unions far surpassed banks in all categories of customer satisfaction. Many who took the survey rated their satisfaction at 89%, seven points higher than the industry average.
Lower Interest Rates on Loans and Credit Cards
Low interest rates in the financial industry are rare, but not at credit unions. These institutions often pass on the savings garnered from their not-for-profit status in exchange for higher rates on savings accounts and lower rates on credit cards and loans.
Lower Minimum Balances
Banks typically stipulate that customers offer a minimum balance in order to open an account. At credit unions, minimum balances are usually very low, affordable or non-existent. A 2012 Bankrate Credit Union Checking Survey found that 72% of credit unions had no minimum balance requirements!
Credit unions do their best to keep costs low in order to keep members happy. In fact, rather than add fees, many credit unions instead opt to eliminate products or services to cut costs instead of raise prices. This adds a lot of flexibility for members and saves money in the long run.
The Best Option for You
Valley Federal Credit Union is a progressive, family-oriented financial institution that’s 10,000 members strong! We offer services that banks don’t. In conjunction with so many amenities, VFCU also offers lower interest rates, fewer fees and better incentives for new members. Contact our credit union in Harlingen today if you’re ready to become a member!