Our bank relationship tends to be our most important financial decision because it is a daily money action for all of us. However, we often become complacent, ignore onerous fees and don't even open our statements. One way to take an action step is to decide if you should switch to a credit union. I've defined the credit union as part of our financial lingo terms series. So... should you stay or should you go?
What Is A Credit Union? It is a non-profit financial institution that offers banking services to its members. They are usually formed for the employees of corporation or organization. Some are open to the public. Since they operate as a non-profit, they can pass their savings on to their members/customers.
Why Choose a Credit Union? Their fees are lower than banks and they try to offer more competitive interest rates on savings accounts and mortgage loans. This is because they are are passing on their profits to their customers or members. They tend to offer better customer service and will try to work with you if you have an out of the box situation.
The Downsides of Credit Unions. They don't offer near the amount of services and amenities as banks do. They usually have just one location so you might incur ATM fees if you aren't close to that location. Larger banks may offer more protection with identity theft because of their size (I've seen this first hand from my clients).
In some cases, as well, you can only join a credit union if you are part of an organization or have a family member who belongs to an organization.
Regardless of your decision, be sure to pick a credit union or bank that is either close to your home or office.
To find a credit union near you, check out: http://www.asmarterchoice.org/