Bank tellers under fire for forcing unwanted services upon customers. So-called “golden parachutes” for financial executives and CEOs who — by measurements of any other industry — failed miserably but were still rewarded, handsomely. A stumbling stock market where your investment more or less remains stagnant. It all makes you wonder: Whom can I trust with my money? The answer is simple: None of the above, when credit unions are an option. For readers looking into a Philadelphia credit union, we’re here to explain the difference between traditional banks and credit unions and what benefits the latter has to offer.
On its face, credit unions resemble the workings of your standard bank. These institutions have checking and savings accounts, will accept your deposits, and can offer you other financial services like loans and credit cards. That’s where the similarities stop, however. The key difference between credit unions and banks is the ownership structure. While big banking institutions across the U.S. exist primarily to make money off of — you guessed it — your money, credit unions are member-owned and operated. The added benefit there is that credit unions are a not-for-profit operation, so any profits made are often turned around so that members can be offered lower loan rates and other reduced fees. The idea above was once based off of the idea that belonging to a credit union was exclusive, in so far as potential members had to apply for membership. Typically, such membership offers were made based off of your job or group to which you belonged, family or location where you live.
Credit union members will reap many benefits compared to those of traditional banks. Beyond the aforementioned lower loan rates, many credit unions won’t charge as high a fee for a bounced check or overdraft fee. While those with complicated financial needs may not flourish with the options available at credit unions, consumers with common requirements of banks – deposits, loans or savings accounts – should appreciate the higher returns and lower costs of credit unions.