When choosing a type of financial institution to rely on, it’s worth taking the time to learn more about credit union versus bank advantages and drawbacks. This is particularly true when it comes to the different products that each institution may offer, average rates, and how their fees compare with one another. Depending on your goals, whether it’s saving more money or qualifying for a loan, one of these institutions will likely be a better fit for you.
For example, credit union benefits include lower banking fees on average when compared to those of commercial banks. However, these benefits are not without their drawbacks. Credit unions commonly offer less variety for loans or may be stricter when it comes to determining the requirements necessary to obtain a loan.
When comparing credit union versus bank benefits and drawbacks, it’s essential to list what is most important to you when choosing a financial institution. Do you enjoy having a variety of credit card and loan options? Would you rather save money on banking fees?
One of the many advantages of credit unions is the ability to save more money in general. Because credit unions are non-profit organizations, banking fees are usually lower compared to commercial banks.
Unlike banks, credit unions commonly do not require their members to maintain an account balance. In some cases, monthly membership fees may also be lower compared to their commercial banking counterparts.
On the other hand, in the commercial bank vs credit union debate, banks typically have more options for their account holders. You will likely find a greater variety of personal loan, credit card, and other loan options than you would with a credit union.
However, while commercial banks typically have more options, they often charge higher interest rates and fees for those various loans and credit cards.
Commercial banks may also offer more technology-based products, such as banking apps and other conveniences, which not all credit unions may be capable of offering. Some credit unions offer online banking and apps, but they may not include as many features as commercial banks.
Finally, credit union benefits commonly include free features and assistance, such as in-person and online seminars covering financial topics like planning for retirement or managing your credit cards. Credit unions also commonly offer information on preventing identity theft and may provide tools to help you manage your finances.