Credit Unions are cooperatives which are owned by members of a specific community, and it is started to provide loans to the members at low-interest rates as well as promote the culture of saving among the members. A national board always registers the Credit Unions.
Advantages of Credit Unions
1. They Impose Lower fees
As compared to banks, credit unions impose relatively lower fees, including loan origination fees and monthly service fees. Transfer fees at Credit Unions are also, and they do not charge ATM withdrawal charges. Moreover, overdraft fees, which tend to be the significant marker for making money, tend to be low at Credit Unions.
The lower fees are advantageous to the client as they help the client to evade many charges, which when added they sum up to a meaningful figure which you could it for other purposes. Credit Unions help one to save your money safely and with no charges.
2. They Offer Better Interest Rates
When a community member opens an account with a Credit Union, he or she will get to enjoy low-interest rates on the loans which he or she will be getting and high-interest rates on withdrawal of savings. Credit Unions can offer much better interest rates because they are not operating on the focus of making a profit but rather on covering costs of operations.
3. You Can Work Even With Poor Credit
Unlike the commercial banks where one will be disqualified from getting loans or any other services in case of poor financial status, Credit Unions will help you despite your situation.
The loan officers at Credit Union will strive to find a loan type which suits a person’s financial status and help him or she gets financial assistance. Credit unions also offer members with financial education, which will help people get to understand how to manage their funds.
4. Standard Customer Services
At Credit Unions, customers are treated with due respect and are highly valued. The entity offers superb and quality customer services. Since credit Unions are smaller in size, unlike banks, which serve a lot of customers, the employees can identify customers’ needs and offer personalized assistance and service to the customers.
5. Credit Unions Benefits The Community.
Since the credit unions are made of members who are from a particular community, its services are synchronized to help the local community where it is found. For example, a Houston Federal Credit Union is made up of members from the Houston community, and so its services will benefit the residents of Houston.
Disadvantages of Credit Unions
1. It Is A Must To Become A member
One has to be registered as a member of a certain credit union for him or her to start enjoying the services offered by the credit union near me. The cost of registration is between $5 and 25 dollars. Of one is not a member he or she will not be able to enjoy the services.
2. They Have Limited ATMs And Branches
Many Credit unions are found only in one location where they mainly operate from. They do not have many ATMs hence causing inconvenience as the number of credit unions cutters is increasing.
3. They Are Not All Insured
Federal Credit Unions are always insured by the National Credit Union Administration, just like the way FDIC insures banks. An example of an insure credit is the Houston Federal Credit Union There are some Credit Unions which are not insured though many have been insured.
4. They Are Not Much Digitized
Banks generate a lot of income from its customers and other investments; hence, they have changed their way of doing things using modern technology. Credit Unions have not yet adapted to the new technology as they lack substantial assets which they can generate money from and improve their technology.
One can join any nearby credit Union if you are a member of that community and start enjoying the highlighted benefits discussed above.