Banks are not the only financial institution around. If you use a bank simply because that’s what you’ve always done, you might be surprised to learn that when it comes to managing your finances, auto loans, mortgages, and planning for your retirement you could do better with your local credit union. Of course, at United Financial Credit Union we are biased, but financial advisers will also tell you why a credit union is better than a bank.
Nearly a decade after the Great Recession of 2008, many folks are still feeling leery about big banks. The idea of banks that are “too big to fail” still haunts many of us. That’s why choosing a credit union can give you peace of mind. Small and local has its advantages. We’ll take a look at why, but first let’s take a look at you.
The Value of a Dollar
Are you the kind of person who:
- Uses coupons, whether clipped from the newspaper or downloaded onto your smart phone?
- Comparison shops before purchasing any item over $50.00?
- Researches products in Consumer Reports?
- Reads verified customer comments online?
- Roots for George Bailey, who goes up against Mr. Potter in Frank Capra’s Christmas classic It’s a Wonderful Life?
If you answered yes to any of these questions, then you’re the kind of person who should join a credit union. You’re the kind of person who knows the value of a dollar.
More than that, when you watch It’s a Wonderful Life, and you root for the working people of Bedford Falls to succeed in getting out from under Mr. Potter’s thumb, you show yourself to be a person who has values.
If Mr. Potter, who would have turned Bedford Falls into Potterville, sounds eerily too much like the Wolf of Wall Street of our time, you’re not alone. If you’ve been feeling like big banks take advantage of you, take a page from George Bailey and choose a credit union instead.
Vive la difference!
A credit union is not a bank. The key difference between them is that credit unions are not for profit while banks are for profit institutions. The ripple effect of this single difference is significant. Think about it. Big banks base decisions on making shareholders happy. What’s good for shareholders isn’t always good for customers. You’re on the wrong side of those deals.
Credit union members, however, are both members/customers and owners. In this case, what’s good for owners is also good for members/customers. That’s because credit unions are a form of cooperative. When you join a credit union, you are doing more than opening an account. You are taking ownership of your finances as well.
Cooperation vs. Competition
Although George Bailey technically operated a Building and Loan, it was structured in much the same way as today’s credit unions are. Both are small, community financial institutions that pool the resources of its members for the benefit of all.
In a key scene in the film, George explains that every penny of their money isn’t stashed in the vault when folks panic and start a run on the bank. Instead, one person’s loan payment goes out as a loan to someone else. George shows them that they are all in it together. Their fortunes are linked. When they cooperate, they help each other out. Is your bank offering you a helping hand?
Okay, It’s a Wonderful Life was filmed in black-and-white, and you could argue that its portrayal of George Bailey’s Building & Loan versus Potter’s bank was drawn too heavily in black-and-white, too. Big banks and bankers aren’t necessarily evil and unethical like Mr. Potter. But did you see headlines about credit unions behaving badly during the Great Recession? We didn’t either!
Fierce competition among the big banks can lead to risky decision-making. A cooperatively owned business works to moderate risk for its members based on decision-making by its local community. Which do you prefer?
When everything in our country claims that “bigger is better” it can be tough to believe that “small is beautiful.” So let’s put the advantage of size to the test. What do you look for in your financial institution?
- Looking for higher interest rates on savings? A credit union gives you a better rate than a bank. That’s because big banks tend to have higher overhead costs, which are passed on to you, the customer. Credit unions pass on their low overhead savings to their customers in the form of higher interest rates.
- Looking for lower interest rates on loans and credit cards? Again, you’ll do better at a credit union for the same reason as point #1. Do you see a pattern developing?
- How about lower fees? Guess who does better? A credit union. Fees are consistently lower at a credit union, and in some cases, credit unions don’t charge a fee at all!
- Customer service? You got it—a credit union! Hands down, customers are happier with their credit union. People know you by name. If you’re rebuilding your credit, because your credit union knows you, you might qualify for a loan that your bank would refuse.
You have good reason to choose a credit union. From mortgage rates, car loans, CDs and more, United Financial Credit Union will deliver what you’re looking for in a financial institution. And when the credit union does well, it passes on dividends to every single member.
That’s money you can take to the credit union!
In some ways, we’ve tried to argue that a credit union is like a bank—offering the same products and services. And perhaps a percentage point here and a few cents there don’t offer enough difference to convince you to shift your accounts to a credit union. So consider this:
- Does your bank listen to you?
- Does your bank give you a vote?
- Do you control the bank?
- Or does your bank control you?
Maybe it’s time to say, “Goodbye, Mr. Potter! Hello, George Bailey!” Join a credit union and you join the owners’ club!
How to sign up
If you aren’t ready to go all in, consider starting small. It doesn’t take much to open an account. And while it’s true that some credit unions have strict membership guidelines, at United Financial Credit Union, all you need to qualify is to live, work, or worship in the Great Lakes Bay Region of Saginaw, Bay, and Midland counties.
Stop in at one of our six locations in Auburn, Bridgeport, Chesaning, Freeland, and Saginaw. Or sign-up on our website when it’s convenient for you by choosing Open an Account and following the simple instructions. All it takes is $25.00 to open a Savings account and you become a member!
Once you’ve joined, you’ll be saying, “It’s a wonderful life!”