As any financial institution, a credit union is the same as a bank, but there is a big difference in the way they conduct business and lend money to customers who join.
Credit unions are not-for-profit financial cooperatives that conduct business for the mutual benefit and general welfare of their member-owners. Banks are for-profit corporations that conduct business to maximize the price of its stock and profit for stockholders. This is where the difference can impact the customer.
Philosophy Credit unions promote thrift, savings and sound credit use to improve member’s lives. Banks focus on what generates profit for the as a company. Most credit unions are locally run as membership consists of specific people from employers, churches, schools or communities. Banks are different in this sense because they focus on national customers and not local communities.
If a bank turns you down for a mortgage or loan, try joining a credit union. It’s always good to belong to one, even if you already have a checking or savings account with another financial institution. You might find a better interest rate than a commercial one.
In addition, the two differences also matter when it comes to a checking account. It’s hard to find a free account, whereas a credit union might offer a better deal on checking. It’s good to shop around, but most of all, try to join one if you can.
If you have good credit, you could get a lower interest rate from a credit union. Those with bad credit should also bank with them in an effort to build trust for future lending. It’s important to note that you will probably have a more friendly business relationship.Stay Connected
Add our Facebook page to receive updates and participate in new tools and features. It's a great way to stay connected with all the latest news.
Receive daily bite-sized updates by following us on Twitter. Receive Tweet-sized 140-character updates on your mobile phone device or PC.
Subscribe to our daily RSS feed to get the latest national news stories. We offer a feed for every topic including business, entertainment, health, politics, science & technology, travel and more.