The Credit Union Difference

You may think that there is no real difference between a credit union and a bank. You can submit cash and checks for deposit or withdrawal. You can open financial savings products through both of these institutions such as savings, checking, or money market accounts. You can also receive loans through both banks and credit unions. So what is the difference? From the outside looking in, both institutions seem very similar.

                 

Here at HCCU, and at all credit unions, each of the members is an owner of said credit union, while banks are owned by investors who may or may not be depositors. Since the members are the owners, they each have one vote in electing board members who help to make decisions for the credit union. The board members of these credit unions are not paid; they are volunteers who represent the diversity of the membership. Credit unions spend much of their focus on consumer loans, savings products, and providing essential services needed by the membership. On the other hand, banks focus primarily on commercial loans and big business accounts that generate significant income.

                

Why should I do my banking with a credit union? The answer is simple.  Credit unions are nonprofit organizations whose earnings are paid back to the members in the form of higher savings rates and lower loan rates, leaving more money in YOUR pocket. According to the NCUA the average credit card interest rate for banks is 1.29% higher than credit unions. Also while credit unions are not careless with the loans they give out, they tend to be easier to borrow from than megabanks. Finally, the customer service at credit unions is more personable than banks with a larger clientele, making for a better experience every time you come in to make a transaction.

Become a member of a credit union today!

Post by: Matt K