Big banks came under fire lately. Customer have been turning to Credit Unions in record numbers as an alternative to large corporate banking options. But what is a credit union and how does it compare to large banks when it comes to managing your money and helping big purchases. Here are the key leverages:
Credit unions are not-for-profit financial institutions that are owned by the same people who belong to the union. Since every member of a credit union is an equal owner, customer satisfaction tends to be higher as well. While banks are for-profit-organizations typically owned by stockholders. According to Bankrate.com, "Credit unions have topped the consumer satisfaction ratings in American Banker's annual survey for 12 years in a row."
More Attractive Rates and Better Returns
It only offers zero percent (0%) if you pay off the balance before the zero percent financing period ends. Then, you can be charged interest going back to the date of the purchase. Usually it applies to those with the best credits. While finacial institutions don't typically cater zero percent, they just tend to offer good rates for the life of the loan.
Low Minimum Balance Requirements
At a time when Big banks are charging fees for falling below a minimum balance, many credit unions have very low or no balance rewuirements sometimes just $5 to $10.
Less Restrictive Eligibility Requirements
Many Credit Unions have less restrictive loan requirements. So if you've been denied a loan by a big bank, a credit union may be able to work with you.
Investing in a credit union carries the same amount of protection as investing in a bank - insured up to $250,000 - but you get the added benefits of lower rates and better services.
When customers weigh in, credit union wins. Banks fell short of credit unions in the American Customer Satisfaction Index in 2011. The lowest scoring companies: Bank of America and JP Morgan Chase.