Credit Unions vs Banks

Most people tend to turn to a bank if they want to do their banking. However, there are other companies such as those offering personal loans and other forms of credit that are springing up. However, if people are looking for an alternative to a bank, then a credit union could be a more sensible choice than one of these other companies.

Services

A credit union will provide the same services as a bank. They can supply savings accounts as well as loans which is why many people find them a very good alternative. They may not have the same range of different types of savings accounts, loans etc as a bank, but this may not be a problem as some people get confused by the choice anyway.

Costs

A credit union does not run at a profit. This means that they tend to be able to pay better interest on savings and charge less for loans. This is what makes them very appealing to many people. The customers are also the owners and so charges cannot be increased without consulting them and so they will have some control over any changes in fees and costs.

Size

A credit union tends to be smaller than most banks. This means that it can be more difficult to find a local branch, if you need one. It may also mean that it is more difficult to find an ATM, if you want to draw some cash. The online services may not be as useful either or there may not be none at all. If you live close to a branch then this will not necessarily be a problem, but if you are not near to one and used to online banking, then you may find it harder to be able to do business using them.

Membership

You have to be a member to be able to use a credit union. There will be rules as to who can become a member and you will have to fit these criteria. It will very much depend on who has set up the credit union as to what their membership rules could be. The Pentagon Federal Credit Union is only open to government employees, for example but there are many others with different rules. This means that you may not be able to find a local one that you qualify to become a member of. However, it is worth finding out which ones are available locally to see whether you are able to join any.

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