Tips & Advice
What services are offered by a credit union?
Credit unions offer a wide variety of services, starting with checking and savings accounts. They offer home, auto, and personal loans. They can also offer credit cards and financial services, like debt consolidation, retirement accounts and certificates, investment opportunities. In addition to the many financial services, they also offer access to thousands of ATMs, many for no fee.
Do credit unions offer credit cards?
Credit unions absolutely offer credit cards, and the best part is that they can offer lower interest rates than banks can. Monies made off of interest and fees are put back into the credit union in an effort to provide members with lower interest rates on loans and credit cards. Most credit unions don’t charge annual fees on their cards.
Do credit unions require a minimum balance?
Most credit unions do require a minimum balance. Even an empty account has maintenance, monitoring and activity reporting (statement) costs. Each credit union has its own guidelines on minimum balances and fee structures, so check with your specific credit union to understand their guidelines. Most waive a monthly fee if your balance is over a certain amount, but once it drops below that, they start charging monthly fees. Be aware there may be different minimum requirements for your checking versus your savings accounts.
Do credit unions have ATMs?
Many credit unions have their own limited amount of ATMs, but most credit unions are members of the co-op financial services network, which provides free ATMs to their members all over the country. You can check with your specific credit union, but outside of a few individually owned ATMs, most member have access to them with no fees.
Credit unions are very safe. Most credit unions and their members’ shares are covered by the National Credit Union Insurance Fund (NCUISF). All Federal Credit Unions are protected by the NCUISF. Some, but not all, state-chartered credit unions are insured by the NCUSIF. Others have their own state insurance or private insurance.
What are the benefits of a credit union?
Since credit unions are not for-profit cooperatives, they do not pay out dividends. They use their profits to generate lower interest rate loans and credit cards, and higher interest rate savings accounts. They are not pressured to sell financial services and other for-profit endeavors. Since credit unions are generally set up for specific industries, they can cater their services to a clientele that often has similar needs.
What is the difference between a bank and a credit union?
The primary difference between banks and credit unions is that credit unions are not for-profit financial cooperatives, whereas banks are for-profit institutions. Credit unions are designed to help a smaller client base by generally servicing members of a particular industry, like auto workers or aircraft manufacturers. The profits made by a credit union (off loans, interest rates and account fees) are put back into the credit union -- not doled out to shareholders, like at a bank. This allows them to provide lower interest rate loans and have higher interest rate savings accounts for their members.