Credit unions are not-for-profit financial institutes that are similar to banks. The main difference, however, is that they are owned and operated by their members. Another difference also lies in their operation, as they focus more on prioritizing their members’ finances than generating profit for shareholders, thereby emphasizing community support.
With all the financial operations happening today, it is easy to get confused or not be in the loop about some of them. If you want to understand what credit unions are useful, continue reading. From community engagement to education to personalized services to better rate offers to specific products, a credit union comes with a solid set of benefits and usefulness.
Let’s explore the credit union’s use and what they do.
1. Focuses on the community
One of the main distinguishing aspects of a credit union is its unwavering commitment to community focus. Unlike large commercial banks, credit unions prioritize the communities they serve.
This can be seen through their various operations. For example, they will provide tailored financial services that address the local needs of the union members. They also contribute to a thriving economy in the areas where they operate.
This dedication to their community sets credit unions apart and creates a stronger sense of belonging among the members.
2. Personalized services
Due to credit unions operating on a much smaller scale in comparison to banks, they can provide their customers with more personalized services. They have more time and resources to better understand their customers, thereby gaining a heightened knowledge of how to obtain the member’s goal, be it setting up a savings plan, budgeting, credit management, obtaining a loan, or managing their finances.
This approach enables the members to feel more at ease with the union and rely on their advice, making for a healthy, trustworthy, and flourishing business environment.
Credit unions also work to educate their members on financial matters. Being well-read on financial matters is critical for the running of the union by the members. A more informed member will be more equipped to make important financial decisions that positively impact the union.
Credit unions, such as workshops, seminars, webinars, additional informational materials, and more, put forth diverse educational opportunities. These educational activities cover a wide spectrum of information, from budgeting to saving to retirement planning and investing.
4. Better rates
Another benefit of a credit union is access to better rates. This could be lower fees, better loan rates, and interest rates.
Unlike banks seeking profit, credit unions are designed to operate in their member’s best interest. This means lower fees for the members, which positively impacts their finances. These lower fees are applied to their banking.
Furthermore, a credit union member can benefit from a better loan rate. They offer loans with more favourable terms and a greater emphasis on their members’ financial success.
These unions are also known for their better interest rates, making financial aspects much more affordable for their members. Whether the member is seeking a mortgage, auto loan, personal loan, or credit card, credit unions consistently provide interest rates notably lower than those traditional banks offer.
5. Limited products
Unlike large banks with more resources and products to offer their clients, credit unions have a more member-focused approach, leading them to provide a limited array of products. This narrower product availability, however, is not a limitation. It works to the union’s and its members’ advantage, allowing the union to provide more personalized banking experiences for their clients. They can better their limited products, ensuring their utmost quality and, therefore, greater customer satisfaction. By fine-tuning their products, they can minimize potential risks and create safer and more reliable products for the members.
If even some of these points sound attractive, you might consider joining a credit union! To do so, there are a few steps you would have to take.
You would need to determine your eligibility, which could be based on your employment status, geographic location, and so on.
After figuring out these details, research possible credit unions to join and contact them.
They may have you fill out a membership application in which you would be asked to provide important personal information and hand in the necessary documentation.
If your membership gets approved, congratulations! You can continue to open an account and begin enjoying the exclusive service of a credit union.