Credit Unions Vs. Banks

Credit Unions vs. Banks
Why Join a Credit Union
How to Join

Credit Unions vs. Banks

Your teen may someday ask, "Hey, Dad/Mom, which is better ... a credit union or bank?" So to help you sound real smart to your child, here's a quick look at the major differences between credit unions and banks.

Who They Serve. Credit unions have members, not customers. When you deposit money in a credit union, you become a member and your deposit is considered your share of ownership. Also, today many credit union charters allow them to accept anyone as a new member, and not just someone working at a particular company, organization, church or school.

Bank customers have no say in how their bank operates, and they're owned by groups of investors who expect a certain return on their investments.

Who Runs Them. Credit unions are democratically operated and run by a volunteer board of directors elected by its membership.

At banks, only the investors have voting power, while customers don't have voting rights, cannot be elected to the board, and have no authority in the overall governance of their bank.

Profit and Non-Profit. Credit unions are not-for-profit, meaning that after expenses are paid and reserves are set aside, surplus earnings are returned to members in the forms of higher dividends, lower loan rates and free or low-cost services.

At banks, only investors get a share of the profits.

Why Join a Credit Union

Because credit unions:

Are focused on people, not profits.
Operate by a "people helping people" philosophy that is hard to find at many other financial institutions.
Exist to serve people – including people of modest means.
Assist members in becoming better-educated consumers of financial services.
Usually offer better rates on credit cards than the average bank card rate
Offer financial education to all members.
Are available in places where banks typically aren't, such as community development neighborhoods.
Provide you an equal voice in how your credit union is run.
Usually offer superior service, convenience, and technology.
Offer the service convenience of today's technology through telephone and online banking.
Many provide no-surcharge ATMs (automated teller machines) that any credit union member can use.
Can put you in business with a small business loan.
Have established a relationship with the Small Business Administration (SBA) to expedite loans to credit-worthy small businesses.

How to Join

If you have interest in joining a credit union, first you'll need to find the right one. As you've read here at GiveMe20.com, credit unions differ from banks in many ways, and a key difference is membership. So here are some GiveMe20 Quick Tips for finding a credit union:

Use the GiveMe20 Credit Union Finder to find a great credit union in your area.
Ask Your Family. If your employer doesn't sponsor a credit union, perhaps your spouse's or another family member's employer does. Many credit unions will allow family members to join.
Check the Yellow Pages. You will find a listing of credit unions in your community. Give them a call. Or click here to find a credit union near you.