Whether you’re looking to open a new savings account, apply for a car loan, or search for ways to better your credit, you may be interested in changing your banking situation. While it might seem easy to go with the newest online bank that pops up, don’t forget to look into a credit union. There are many benefits to joining a credit union, such as receiving products and financial services that big banks cannot provide.
What is a credit union?
When determining if a credit union is a good option, you first need to understand what a credit union is. Unlike traditional banks, credit unions are non-profit institutions owned by those banking with them, also known as members. That means the bank’s profits go back to credit union members in the form of higher savings rates and lower fees and interest rates.
Credit unions offer many of the same services big banks provide, such as savings and checking accounts, car loans, home loans, IRAs, and more. This puts them on par with many larger banks while providing a much more personalized experience.
There are also two types of credit unions: federal and state. Federal credit unions are supervised and regulated by the National Credit Union Association, while state credit unions, on the other hand, adhere to state-specific guidelines and regulations. Either of which may change the offers or protections the credit union provides to its members.
Advantages of a Credit Union
While there may be benefits to joining a traditional financial institution, there are products and services that you only get with a credit union membership. Because credit unions are created for and run by their members and not shareholders, you know your best interests are always in mind. Here are some reasons to think about joining a credit union.
Lower Rates on Loans and Credit Cards
Credit unions frequently offer lower interest rates on credit cards and loans. This is tied to their not-for-profit structure. Unlike big banks, they aren’t pressured by shareholders to charge the highest rates to create profit. Instead, what they make on fees or interest on loans, goes back to the members for further low loan rates or higher savings account rates.
Higher Rates on Savings Accounts
The same goes for better rates on savings accounts. Credit unions can offer higher interest rates for savings accounts because they aren’t trying to pay shareholders or meet specific profit goals yearly.
At T&I, you become a credit union shareholder when opening a savings account. Not only does this mean you’re benefiting from high-interest rates, but you’ll have voting rights in the company to help make decisions about its future.
More Forgiving Qualification Standards
For most big banks, your credit score is all they look at to approve or deny your loan or account application. This makes it difficult for those with poor or no credit to improve their credit or even do most of life’s essentials in today’s society.
Credit unions, however, are more likely to look at applicants as a whole, understanding they are more than a number. They will look at your current position, see what you currently owe, and your payment history to determine if you’re a good candidate for the financial services you’re seeking.
Committed to the Local Community
Because most credit unions are created for a specific geographic area, they are usually members of the same community and are committed to building a better environment for those they serve.
Credit unions often supply grants and scholarships to teachers, students, and others in need and provide sponsorship to local charitable organizations, enabling community members to achieve better financial stability and independence.
Credit unions are known for providing better customer service than larger banks. The employees live in the same community as its members, so they can offer regionally specific advice to those like them.
Because credit unions are smaller, employees can also spend more time with their customers to offer a more personalized experience to help meet each unique financial goal.
Education and Guidance
One of the most unique aspects of a credit union is the personal finance guidance and education they provide to their members, often at no cost. The topics range from how to raise credit scores, ways to lower payments, and how to eliminate debt.
This is almost unheard of for larger banks, who often don’t prioritize the needs and goals of their clients. T&I Credit Union offers these services in-house and provides seminars for local businesses to help create a successful financial future.
If your credit union is federal, like T&I is, deposit accounts will be insured by the NCUA for up to $250,000, just like at big banks. According to the NCUA, credit union members have never lost a cent of insured savings at a federal credit union. So you can rest assured that your money is always safe.
What to Consider Before Joining a Credit Union
The benefits of joining a credit are apparent. Between personalized service, lower rates for loans and higher rates for savings accounts, and lower qualifications for those looking to rebuild their credit, a credit union can help anyone create a better financial future.
But everyone’s financial situation is different; therefore, you need to consider everything that comes along with a credit union membership before making a decision.
Credit unions require their customers to be members. Requirements usually consist of living in a particular area or having a specific profession. T&I’s field of membership includes anyone living, working, or worshiping in the following counties in the State of Michigan: Lapeer, Macomb, Oakland, Livingston, Washtenaw, St. Clair, and Wayne.
Beyond location, memberships are typically lenient, and joining may be as simple as depositing $5 into a savings account.
Much like membership being exclusive to a specific geographic area, credit unions will have fewer branches than traditional banks. A branch may not be close to where you live, and if you travel, you may not find an ATM to take out cash or be able to visit a bank if you’re having trouble with your accounts or card.
Not Top of the Line Technology
While in 2022, most credit unions have been able to keep pace with larger banks on the technology front. Options like mobile banking, online banking, and peer-to-peer payment platforms like Zelle are commonplace. But, smaller credit unions may not offer the same technologies as larger banks, making certain financial needs difficult.
Explore if a Credit Union is Right for You
If you live in the local area and are looking to open an account with higher APYs, lower your loan amounts, or create a closer relationship with your financial institution, get in contact with us at (248) 588-6688.
We offer a variety of accounts like checking, savings, money market, IRA, and CDs, as well as loan services like home loans to auto and watercraft loans. Whatever your financial goals, we can discuss the best options for you.