What Is The Difference Between A Credit Union And A Bank? [FACTS]

By: | 10/24/2012 05:19 PM ET

What Is The Difference Between A Credit Union And A Bank? - What is the primary difference between the local credit union in your county and a commercial community bank? Well, they are similar in many ways, but fees and other charges will vary.

One financial institution is non-profit and very much involved with the local community, while the other has to maximize their fees to please stockholders and other investors.

For example, the credit union’s philosophy promotes thrifty saving that can improve the lives of its members. They are usually owned locally and consist of people from local employers, churches, schools, and communities. However, a commercial institution is far different, since their focus is state-wide and they commonly aim for national customers to achieve profitability and meet their goals.

If you get turned down for a mortgage or loan because of your credit, try joining a local union financial institution. It’s always good to belong to one because they offer many perks and they aim to please. You might find a better interest rate than at a commercial institution.

In addition, the differences also matter when it comes to the principles of each bank. It may be hard to find a free account today, but the community establishments seem unchanged and they offer more savings. It’s good to shop around, but its best to join one if you can.

Another difference is that you might find a lower interest rate with a credit union. People with a lower FICO scores should also bank with them, in an effort to build trust for future lending. It’s also important to note that you will probably have a more friendly business relationship.

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