3 Differences Between Credit Unions and Banks that Matter

3 Differences Between Banks and Credit Unions

It's obvious that big banks spend heavily on marketing and advertising to attract new customers. But many of us remember the financial crisis and how massive corporate institutions mishandled hard-working Americans' money. That's why everyday people often consider an alternative to these corporate giants.

If you are weighing your options, community credit unions such as We Florida Financial take a different approach. Please consider these differences between big banks and credit unions when deciding which options best meets your expectations.

Credit Unions and Banks have Different Goals

While both credit unions and banks offer customer services such as checking accounts, savings accounts, loans, and credit cards among others, the two institutions have opposite financial goals. If that statement seems almost counterintuitive, consider this fundamental difference. Banks are for-profit businesses. Credit unions are non-profit community organizations. Big banks have to take your money and make more money to satisfy stockholders. When you join a credit union, you become a member-owner. Customer service is the goal.

Different Customer Service Approaches

Perhaps the biggest pro to working with a large banking institution is that it probably has numerous and convenient locations. A decade ago, this made a substantial difference to customers. The use of ATMs without paying fees had value. But living in the technology age has quickly changed the way people move and access money.

These days, you can get cash back at many supermarkets and retail outlets with any debit card. They don't even charge a fee. By that same token, gas cards linked to any checking or savings account has become so convenient, hundreds of ATM locations have become irrelevant.

Credit unions rely more on interpersonal relationships within a given community. Today's customer doesn't need thousands of ATMs. People working at your local credit union get to know you and your family. It's personal, not just business.

Dollar Benefits to Customers Differ

It's generally fair to say that big corporate banks have the high ground on credit card rewards programs. They leverage people to apply for their card with the enticement of gifts and cash back. That's because they are usually charging higher rates and higher fees that turn them a profit. Big banks rely on people carrying balances and paying dearly for that convenience.

But credit unions generally outpace big banks on products such as CDs, loans, mortgages, free checking, low-interest credit cards, and a wealth of other big-ticket items. More than a few people who sit down and do the math discover credit unions provide improved dollar benefits.

It's important to understand that both types of financial institutions are federally insured. If you are thinking about opening a new account, revising your banking needs or are interested in a specific product, We Florida Financial is a community credit union serving everyday people with nine branches in Broward and Dade counties.