Making informed decisions has never been more difficult. We live in a time when internet-driven misinformation clouds issues and perpetuates myths. This holds particularly true when trying to make an intelligent credit union vs bank choice. However, a fact-based deep dive shows that community members from all walks of life may be better served working with a local credit union.
Myths and misinformation are a lot like a brush fire. Just when you think it’s finally extinguished, it reignites. Shining a spotlight on these credit union vs. bank myths may not prevent disinformation from rearing its ugly head in the future, but it can help people make fiscally responsible decisions today.
People who haven’t worked with a credit union are often persuaded by this myth. The conventional thinking is that there must be a difference between the two, and fewer products or services than a well-known bank makes sense. Nothing could be further from the truth.
In general, credit unions provide the same financial products and services as banks. If you need a checking or savings account, a loan or credit card, or an Individual Retirement Account (IRA), a credit union offers these and other competitively-priced products. In fact, since credit unions are member-owned, they offer free services to complement those products, including financial advisory, modernized digital banking apps, and youth-centric financial guidance. Credit unions are known for tailoring their offerings to members' needs, and for every stage of life. Take CCCU's Youth Savings account, for example. The account is designed to help kids save while teaching financial independence.
This myth has its roots in some truth, but over the years it has been grossly exaggerated. The truth is that there's a credit union for everyone and you don’t need to switch everything all at once.
While it’s true that credit unions were created for a need to provide quality financial services for everyday workers, you’ll find that today’s credit unions are open to all who live or work in a community. Regardless of age, income, or industry, you can find the account or loan that’s right for you. Credit unions’ membership requirements tend to be broad, making them easy to join. Just look at the many ways you can qualify for membership at CCCU.
If you’ve been with your bank for a while, it may seem overwhelming to move your banking. You might have monthly direct deposits or recurring bill pay transactions that you’d rather not change. However, credit unions help make switching simple – with easy online applications and personalized service from customer service reps who can help answer any questions you have about transferring funds, switching over direct deposits, or setting up online banking.
While credit unions may have fewer branches and ATMs than big banks, they participate in larger branch and ATM networks that provide many of the same services as their own branches do, and they offer surcharge-free ATM access across the country. In some cases, that means that you can have access to even more surcharge-free ATMs through a credit union than you would with a big bank!
It might be safe to say that credit unions may offer different rewards programs than a specific bank. The fact is that wide-reaching organizations offer rewards programs to attract new customers. Just think about how many retail outlets and gas station chains offer discounts and rewards cards. Credit unions offer credit card rewards programs that are tailored to their membership. If there is a credit union vs. bank difference, it’s that the former typically saves people more money overall. Credit unions can also offer their members discounts and promotions that they are able to secure by partnering with other businesses, allowing their members to reap the benefits.
Like banks, federal credit unions are highly regulated and your money is federally insured. When you open an account at a credit union, it is protected by the National Credit Union Administration (NCUA). Its counterpart at banks is the Federal Deposit Insurance Corporation (FDIC). Both the NCUA and FDIC provide government-backed insurance for financial institutions.
The difference is NCUA is specific to credit unions, and FDIC is specific to banks. Otherwise, they serve the same purpose to keep your funds safe. As a result, you can deposit money at a credit union with the same peace of mind and security as you would at a bank.
Fun Fact: Credit union members have never lost even a penny of insured savings at a federally insured credit union.
When a credit union says they are "federally insured by the NCUA", that means your deposits are federally insured up to $250,000 per share owner for each account ownership category you have with a credit union. The NCUA operates and manages the National Credit Union Share Insurance Fund (NCUSIF), which insures deposit share accounts and is backed by the full faith and credit of the United States.
Banks aren’t the only places where you can find 24/7 account access or the freedom to deposit checks or pay bills from your phone. Most credit unions offer secure, easy-to-use online and mobile banking tools to keep you in control of your finances. They onboard technology experts to ensure they integrate emerging technologies that streamline the user experience. And, they maintain robust cybersecurity to protect members’ personal and account information.
Americans often learn about finances from their families and friends, or just go it alone. The need for expert help is real, especially when so many face uncertain economic futures. That's why a growing number of credit unions have expanded their services to include financial counseling and financial advisory in recent years.
They enroll employees in certified financial counseling training, providing their employees with the skills and knowledge required to guide members to sound financial decisions. When it comes to financial advisory, a relatively recent phenomenon, called the “Great Resignation,” has actually benefitted credit unions in this area. Financial advisors have stepped away from corporate jobs to embrace a better quality of life. Many of these experts discovered a better work-life balance offering financial advice to credit union members.
Not only are credit unions equipped to offer financial advice to members, but they are also attracting highly talented people.
Regardless of your credit history or score, working with a credit union opens doors to money-saving opportunities.
Because credit unions operate under a mandate to provide low-interest lending and financial services to members, loan professionals enjoy greater approval flexibility. This means work history, bill-paying consistency, and other factors may be considered alongside a person’s FICO score. This can be to the advantage of people with borderline credit histories.
Credit unions also offer secured credit cards, credit counseling, and other financial products and services than can help people improve their FICO score. But the most important thing to keep in mind is that credit unions are in a position to offer highly-competitive rates on car loans, mortgages, and other borrowing options.
Whether you need an affordable loan for your next big purchase, a simple checking account, or you want to grow your savings ― credit unions offer more of what you need to make the most of your money. Don’t believe the myths. Make the switch to your local credit union. Or, if you’re already a member, make the most of your membership!
At CCCU, our team is here to help you find the solutions that are right for you. CCCU proudly serves people who live, work, worship, own a business, or attend school across 8 counties in Oregon and Washington. We have physical branches located in Portland and Hood River, convenient mobile banking, plus access to 5,600+ CO-OP Shared Branches and over 30,000 surcharge-free CO-OP ATMs nationwide.
Join CCCU today!