Credit Unions Hold Upper Hand Verses Banks

When it comes to institutions willing to provide personal loans and other traditional financial services the choices appear to be endless. There is an incredible range of lenders that are scattered across the country and across the world. Although the roll of newer institutions such as internet cyber lenders have grown in recent years the two most popular categories of lending institutions continue to be banks and credit unions.

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Banks Have Many Positive Aspects

Banks continue to be the largest consumer lending institution both in terms of dollars and number of locations. People are attracted to the ease of finding a branch location. Whether an individual is at home, at work, or on the road they rarely have any trouble locating a local branch office. Banks are also very good at rolling out beneficial new technology. Historically they have been on the cutting edge of such break throughs as drive through ATM's, direct deposits and debit cards. An additional benefit is the fact that banks are open to the public. It is not necessary to belong to a particular organization or group as a prerequisite for membership.

Advantages of Credit Unions

In spite of all the positive benefits that a bank offers there are still many reasons why a credit union might be the best choice for you.

Credit Unions generally have lower interest rates on loans.
Credit Unions generally have higher rates on savings accounts.
Credit Unions have historically been perceived as offering more personalized service. This mode of operation is quite distinct from the culture of larger institutions with hundreds or thousands of branches and thousands or millions of customers.
Credit Unions generally charge less in fees.

Credit Unions are non profit cooperatives (member owned). These institutions do not pay a board of directors and do not have to worry about creating a return on investment for stockholders. Consequently they are able to pass along savings to their members. Although competing financial institutions will always play a valuable role in society there are several important factors which allow credit unions to hold the upper hand over banks.

Historically, credit unions overall have lower fees, lower interest loan rates and higher savings interest rates.

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About the author:

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.