Credit Unions are a fast-growing force in the financial market, giving private banks a major reason to increase their business methods to customers. The US Government released a figure in April of 2012 showing that the number of Americans joining credit unions in the fourth quarter of 2011 reached 1.3 million. This is over double the amount of people who joined in 2010 overall, with that number being 600,000. Growing concerns over the financial market is the primary reason for these skyrocketing numbers.
The primary similarity between a credit union and a bank is the availability of checking/savings accounts, financial products, and specialized accounts. However, the main difference is the fact that a bank holds the money placed into it by a customer, while at a credit union, the customer (referred to as a member) buys a share of the union, making them a sharing owner with other members. Credit unions are not for-profit institutions like banks. This does not mean that credit unions do not make a profit. When a profit is made, it leads to better rates on loans and savings. The main drawback of a credit union is their scarcity, making it slightly more difficult to do business with one as opposed to a bank.
The main benefit of a credit union is the fact that it is non-profit, which means that members are not used by the union to make a profit. These methods include ATM fees, for example. The fact that they are exempt from a federal tax also allows unions to use these added expenses to be put towards the union’s revenues. The unions themselves, however, do regulate their member’s activities. They prevent interest rates on a member’s checking or savings account from increasing by placing stricter guidelines on exceeding their rate.
2008 saw one of the most serious banking crises to happen since the Great Depression. Banking institutions were on the verge of collapse and the American people’s trust for them began to falter. Most big-name banks have been labeled as profit institutions, costing Americans an arm and a leg for fees and services while incompetently...
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With the way traditional banks operate, there is little room for account holders to be in control. There are few incentives, pricey services and constant changes. This prevents banks from providing customer needs. While this is sometimes inevitable in life, it should not be the case when your money is involved. Valley Federal Credit Union...
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Most Americans have a bank account by the time they are 18. At this age, people are encouraged to start building credit and learning key money management skills. Since so many people open bank accounts early on, they are less likely to look around for better options as the years pass. Like so many relationships...
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As millennials become more and more financially savvy, many are developing a preference for credit unions over large corporate banks. According to the Credit Union National Association, a Washington, D.C. trade group, almost 2 million millennials became credit union members between 2013 and 2014. What’s making millennials change their minds? Now is as good a...
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Credit unions across the nation are still seeing a large influx of consumers who are in search of better services and products not offered by traditional banks. Over 7,000 credit unions are reporting greater earnings and more memberships than ever before. If you are interested in switching over to a credit union, keep the following...
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A new study conducted by the Consumer Federation of America reveals that few Americans are incorporating savings into their personal finance management plans, which may leave them vulnerable in the future. Basic necessities like housing, food, clothing and utilities are becoming more expensive by the minute. Conversely, the average household income has decreased over the...
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More people are choosing credit unions according to a report by the National Credit Union Administration (NCUA). The report found that customer deposits are over $1 trillion with memberships at a steady increase. What is it about credit unions that make people more and more inclined to make the switch? Financial security and sustainability should...
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