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The Benefits of Credit Unions Versus Banks

At first blush, credit unions may seem strikingly similar to banks. After all, they offer the same types of products and services. But this does not mean that the two are the same, as credit unions offer a lot of benefits that you cannot get at banks. 

These benefits include:

1. Credit Unions are More Involved in the Community

Banks are for-profit entities. This means that everything they do and every service they perform is geared toward making themselves and their shareholders money. Credit unions, on the other hand, are nonprofit entities that are interested in developing the communities in which they operate. As a result, an Escondido credit union and similar institutions in other communities are more involved with local businesses than a bank with headquarters in a city thousands of miles away. The role of credit unions in local communities is a nurturing one. When you bank at a credit union, you are not only helping yourself but your fellow residents as well.

2. Credit Unions Offer Better Service

When you are a customer of a bank, you are not much more than a set of numbers. But when you join a credit union, you’re not a customer of theirs; you’re a member. In essence, you become one of the owners of the credit union. The deposits you make there grant you shares in the company. This is why credit unions pay dividends instead of interest. This is also why they provide you with better customer service; you are one of the owners, not just a set of numbers.

3. Credit Unions Offer Better Interest Rates

As mentioned above, banks exist to make profits for themselves and their shareholders. Because of this, they offer the lowest possible interest rates on deposits and charge the highest possible interest rates on loans. But credit unions are not out to make a profit. They exist to help their members and their community. For this reason, they offer the best possible dividends on deposits and charge the lowest possible interest rates on loans.

4. Credit Unions Have Lower Fees

Banks can make you dizzy from all the fees they charge. They see fees as a means to increase their profits, so they are always looking for ways to charge them. While credit unions also charge fees, they do so only to limit their expenses so that they can better serve their members. Because of this, there are fewer fees at credit unions and they are generally less expensive.

5. Credit Unions are More Forgiving of Past Financial Problems

Because banks care more about profits than their communities, they are a lot less willing to take a risk on someone who has had financial problems in the past. This can result in the rejection of loans for folks trying to improve their financial situation. It can even prevent someone from opening a checking account. But credit unions are more lenient and thus more likely to work with you if you have had some problems in the past.

In conclusion, while credit unions offer much of the same services and protections you can get from a bank, they offer benefits that no bank can match. For this reason, they are an attractive option that everyone should consider when shopping for banking services.

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