Banks vs. Credit Unions – 3 Differences That Matter
From the outside, banks look sophisticated and glamorous. There’s all that hype advertising and flashy logos. But, when it comes down to it, those things don’t matter much. What counts is how each institution will look after your money and what kind of service you can expect from them. 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. Consider these differences between big banks and credit unions when deciding which options best meet 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. 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.
Additionally, rather than spend money on advertising and marketing, credit unions rely on the community for marketing. The money saved is rolled back into services for members or distributed back to members as dividends.
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 cashback at many supermarkets and retail outlets with any debit card. They don't even charge a fee. Hundreds of ATM locations have become irrelevant.
Credit unions rely more on interpersonal relationships within their community. They are invested in the success of local businesses, giving back to community initiatives and organizations, and most importantly, their members overall financial success.
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.
Different Dollar Benefits to Customers
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 cards with the enticement of gifts and cashback. 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. More than a few people who sit down and do the math discover credit unions provide improved dollar benefits.
Credit unions offer consumer loans, debit and credit card services, online banking and bill pay, checking accounts, retirement investments, mortgages, car loans and more. They are a great place to take care of all your banking needs.
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.