Credit unions are the best alternative to traditional big banks. The goal of a credit union is to serve its customers banking needs through a personal approach, accepting that the customer is the most valuable asset to the company. Credit unions survive on membership, and members are the real owners of the company, and not the other way around as with big banks. Here are the benefits of joining a credit union.
How to Join a Credit Union
Joining a credit union is limited to qualifying members. You can either live in the neighborhood that a credit union represents, work for a company that has its own credit union, or be part of a demographic that a credit union represents. For instance, the Monterey Federal Credit Union is limited to residents of Monterey County. Navy Federal Credit Union is limited to members of the navy. Credit unions also serve people that have a certain employer, like the USC Credit Union serving employees of the University of Southern California. To join, members must be eligible and purchase a share of the credit union. That share also counts as a vote in the credit union’s officer elections.
Members Have Voting Power with Credit Unions
This vote actually means something. Members have the authority to set loan limits as the credit union grows. They have the power to elect the board of directors which set the interest rates that are charged. Along with a board of directors, a watch dog committee is also established to make sure the credit union is staying true to its high savings and prudent borrowing philosophy.
Customer Service is Crucial to Credit Union Survival
Customer service reps for credit unions are trained to give their members the best advice for their family, and not the best advice to benefit the bank. If the members have good advice and financial planning, then the bank thrives. More money can be safely lent out, more money comes into the bank as interest that then gets divided amongst the members in the form of dividends. A credit union is cooperative, and is therefore able to fairly price their rates on savings accounts and loans which helps stabilize their members’ finances and solidify the company.
So if you are thinking about transitioning from your big bank to a credit union, consider the above. Always ensure that the bank is protected by the National Credit Union Association (NCUA) and check out the benefits of your particular neighborhood.
