BY: Morgan Thayer
This week we are going to discuss the difference between banks and credit unions, and what it means for you. Both banks and credit unions are financial institutions, but do you know what sets them apart from each other? Do you know the benefits of having one over the other? The most significant difference between the two is that banks are for-profit and credit unions are non-profit. Along with this difference, you will notice things such as customer service, fees, and services offered between both financial institutions to be noticeably different.
1. Customer Service
One noticeable difference you will find with banks versus credit unions is their customer service. Due to the fact banks are for-profit, they are just trying to make another dollar regardless of their service, while credit unions cannot operate without their members. Therefore, their customer service is noticeably better than that of banks.
2. Fees
Banks typically charge higher fees in terms of overdraft protection, monthly fees, and service fees. Credit unions are known to have lower to no fees. If you do research, you will be able to find a credit union in your local community that charges little to no fees for their accounts.
3. Objective
Banks make decisions for the stockholders, while credit unions make decisions for their members. Each member of a credit union is considered a shareholder, while you are considered just another customer by big banks. This results in better customer service, rates, and services offered.
4. Local vs. National
The downside to credit unions is that many times, they are only local to specific communities, while big banks are nationwide. This would result in trouble in traveling and moving. Many local credit unions are members of shared branching, which gives you access to your account worldwide at sister credit unions, but this could be tricky if specific problems arise.
Overall, credit unions are the place to be, with lower fees, friendlier customer service, and a more community-centered focus. Banks, while they are suitable for advanced technology and accessibility, can’t beat better interest rates and service.
