Advantages of a Credit Union Over a Bank

Credit union supporters invoke pictures of the flag, motherhood, apple pie, and all the good things that people treasure. Detractors, usually banks, typically complain that credit unions have an unfair advantage. Consumers, however, are supporters as the advantages offered by a credit union often result in higher paying savings accounts and lower interest loans.

History

After originating in England in 1844, credit unions spread to Germany, Canada and to the United States in 1908.

Features

As part of a cooperative financial institution, every credit union member is an owner and has a vote in deciding operating issues. One member equals one vote, regardless of the size of their accounts.

Misconceptions

People often incorrectly think that a credit union is just like a bank, but without many of the services.

Types

There are two primary types of credit unions. Those that offer membership to groups or companies and those that offer services to the public as defined by geography (cities, towns, states, or regions).

Benefits

Because they are cooperatives and not-for-profit entities, credit unions need not maximize profit for a small number of stockholders, so they return some profit to their members (owners) with better savings rates and lower loan rates than many banks.

Resources

• More Information About Credit Unions