As more Americans have become frustrated with their large, corporate banks, many have been moving their business to credit unions. Credit unions offer some amazing benefits and could be a great resource for many people.
What is a Credit Union?
A credit union is a financial institution that is owned by its customers as a co-op. Each member votes on board members and major changes to the institution. They are not for profit companies and are generally consumer focused, with little or no business offerings.
Because they are cooperative owned financial institutions, they generally charge low fees and have competitive interest rates for loan and credit accounts. I joined my first credit union when I purchased my first car because it had better auto loan rates.
How to Find a Credit Union
Most credit unions have restricted membership requirements. My credit union started as an organization for public employees. I was able to join because my father had an account and worked at the local Chamber of Commerce. It is now open to all Colorado residents.
Some credit unions only take employees of certain companies. Some only take residents of a defined geographic area. Others are open to anyone.
To find a credit union, start by talking to your company’s HR department. If they do not have any ideas, there are a few good resources to find a good fit for your needs:
CU Lookup – Maintained by the National Association of Federal Credit Unions, the CU Lookup tool allows you to search by location or affiliation.
NCUA – The National Credit Union Administration is the FDIC for credit unions. It has tools to help you research credit unions before you join.
How to Choose
If you find more than one credit union that you are eligible to join, take a look at their offerings. Some credit unions offer a short list of account types while others are full service institutions with options for loans and investments.
I wanted a credit union with competitive loan rates, which is why I joined my credit union. If you are looking to use a credit union for your banking needs, make sure you it has a location near home and good ATM access.
Bank or Credit Union?
This is a decision that you have to make for yourself. If you are happy with your bank and are not charged fees for your activity there, there is no reason to go through the hassle of moving. If you are upset with your bank, and large banks in general, and want to make the move, a credit union could be a great fit for you.
Please share your thoughts and experiences with credit unions in the comments.
Image by The Consumerist.
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I have belonged to a credit union for years and I really like it. I seem to get much better customer service than I ever did at the bank. I like feeling like I am part of the community too.
Glad to hear a success story. Credit unions can be great for a lot of people.
I joined the Xerox Credit Union when I worked there in the 70s. For the most part, their interest rates or lending rates beat other sources.
It is great to have a long term relationship that is still obviously better than most alternatives. Is it convenient for you to use or do you have another bank as well?
They have a relationship with a local branch of another credit union nearby. I also have a long term relationship with a commercial bank as well.
We belong to a big credit union, but it still feels like personal service every time we go in.
That is a great feeling. Most banks make you feel like your customer number is your identity. Being treated like a human is a refreshing story in today’s financial institutions.
I’ve been a member of my local credit union for my entire conscious life (read: parents opened accounts for us). While I don’t use them for anything anymore, I do still keep the minimum $25 in my share account for the sake of keeping the same 4 digit account number I’ve had my entire life. It was originally a steel-workers credit union (fitting that the main branch is in the middle of what is *still* an empty wasteland formerly known as Bethlehem Steel). They then opened up to VA employees as well, which is how my parents got in. Five or so years ago they went with live-work-school-worship countywide eligibility.
Also agree with Miss T – I hit the drive-up every month to throw a check into my mom’s account. Don’t know the teller, but a few times lately, after they bring up the account and see the name, they ask how my mom is doing (not well).
It is great to go somewhere where everybody know’s your [mom’s] name.