Many of us give little thought as to where our hard earned money is kept. We concentrate on making money, and that takes up our time. For most of us too, keeping track of our daily finances is a struggle. That cannot be avoided. Most of us don’t hide our money under mattresses or in our undergarments, but where do you keep your money? In America, we have many alternatives to manage our finances. What is the right choice for you?
Credit unions and banks compete against each other for our business and money. They are both financial institutions, and they both offer services. They are as individual as we are. What door will we choose to walk though when we deposit our check?
Most people do not know how Credit Unions operate. There are cooperative financial institutions. What this means to you is that when you open an account, you are now part owner of the credit union. A volunteer board of directors who make the decisions regarding services provided and the costs of these services govern credit unions.
Credit Unions typically charge less for services, although the range of services may be limited compared to banks. For example, when you are in Italy, you certainly would not find a credit union atm, but bank atms may be abundant.
If you want to feel special, credit unions are for you. Credit unions have limited membership, which means you will probably have to belong to a select group. This can include a specific company, area, club or church. Banks have no prejudice on offering services to Joe Smith who doesn’t live in the area. They don’t care if he lives on the other side of the world.
Credit unions are nonprofit organizations. Their mission is to provide affordable services to their members. Whatever profits are earned are returned to members in the form of dividends and lower cost services. Credit unions usually have lower fees and minimum balance requirements. Students benefit greatly from this feature, as they don’t need a college degree in order to understand bank fees and rules. Credit Unions offer the simplicity that banks don’t.
Customers do not share ownership in the bank they belong to. They are for profit, and they make high profits for their shareholders, usually a small group of investors. For the high fees they change, you are offered convenience in return. They do not limit their services to a select group and can serve anyone-anyone that can pay a high monthly service fee and higher interest rates.
Do the tellers at your bank know you personally? Do know you by name, or view you as just a number? Many commercial banks now have segregated the people who walk through their doors. People are expected to form two lines-one for noncustomers, the other for bank customers. How does this make the noncustomers feel? They feel so embarrassed that they would never join that bank. The noncustomers are also expected to provide fingerprints via a messy inkpad when cashing a check. Some get angry with this procedure and rub the ink all over the teller counter or just walk out. Why are people made to feel like criminals for just not banking at that institution?
Credit Unions normally have less stringent procedures. Due to having a select field of membership, they get to know their members personally. There is less chance of identity theft and fraud at credit unions because the employees are intuned to the financial habits of their members and recognize fraud immediately.
What about going the extra mile? Credit unions are known for helping people. Each credit union has its own mission statement and strives to follow it. Employees of these credit unions feel valued. Bank employees often feel sold as they are their bank is bought by another.