You didn’t know but now you do. 5 great reasons why you should join a credit union.

So, why should you join a credit union?

Traditionally, we are more inclined to join banks rather than a credit union. But do you know what a credit union is? Here, you are going to find out about how beneficial the credit union can be to you.

Commercial banks are businesses. Their sole purpose is to figure out how to make more money from its customers (you!). Interest rates are often very low (or nonexistent), loan rates are often competitive, and they always try to sell you new products because you are a customer.

That is not to say commercial banks haven’t got great products, but let’s just say that naturally as a business you’ve got to expect that you cannot be and indeed shouldn’t be the sole focus of the bank. They gotta make their money too you know!

That’s where credit unions come in. Credit unions are unions that exist to help its members. That’s why they often have better interest rates on both loans and deposits. Credit unions, by law, have to have membership requirements. Credit unions are often tied to a geographic area or particular group, so as long as you qualify you can join.

Of course, you can still belong to a commercial bank and still join a credit union, all we’re saying here is you could get a better deal from a credit union, because some banks have been known to give customers quite a raw deal. And I don’t think you as a customer want to get the short end of the stick.

So, we’ll just lay it bare before you and let you do the picking

• Better interest rates on loans: Bet you didn’t know that, did you? But it’s true. You could get significantly lower rates on a car loan from your credit union than from most banks. Great init?
• Personal loans are more likely: The prospect of getting a personal loan at a credit union is much higher than at a commercial bank. In a theme that you’ll see repeated in many other reasons, credit union relationships are much stronger and so the likelihood of getting a personal loan is higher as non-financial factors are taken into consideration.

• Better interest rates on deposits: Here’s the big one. You couldn’t dream of earning an interest on your regular current account. While I wouldn’t recommend putting your savings in a current account, the fact that you can earn something, while your money is waiting to be spent on bills certainly beats earning nothing. Credit unions give interests on current accounts.

• Less profit-driven, takes fewer risks: When you are beholden to shareholders and have the pressure to constantly generate bigger profits, you might be tempted to take greater risks. We see the fallout of that mentality today, with banks failing left and right. Credit unions aren’t immune to loan defaults but when you don’t feel the constant pressure to generate profit, you don’t take on those riskier loans. That leaves a healthier financial institution.

• You can be involved at a credit union: Did you know that the Board of Directors at a credit union is comprised of members who volunteer their time, are unpaid, and elected by the union membership? If you don’t like the direction your credit union is going, you have a say in it.

So what would you rather have?