Put the Credit Where It's Worth

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Put the Credit Where It's Worth

In a world that thrives on consumerism and big business, it’s common for people to want to invest in a financial institution that promotes security and flexibility. While most banks offer the basics, such as online banking, rewards cards, and mobile apps, many people don’t realize that credit unions provide these same benefits and much more.

Credit unions, by definition, are “not-for-profit organizations that exist to serve their members rather than to maximize corporate profits,” according to www.MyCreditUnion.gov. They are community-oriented, financial cooperatives that are operated by members to help people. With the creation of financial cooperatives in the early 19th century, some of the first credit unions were built to help farmers purchase livestock and seeds. In a way, credit unions helped plant the seeds of financial freedom and strengthened the roots of people helping people.

Many people often refer to “The Credit Union Difference,” which is a common term to reference all of the benefits that set credit unions apart from banks. Ownership, volunteer boards, and financial education for members are some of the bigger benefits, but one of the most substantial benefits is the social purpose of People Helping People. Unlike banks, “credit unions exist to help people, not make a profit.

Another benefit credit unions provide are lower loan rates. The Credit Union National Association conducted a study in 2011, “Commercial Banks and Credit Unions: Facts, Fallacies, and Recent Trends,” which debunks many myths about the credit union industry. Bankers claimed that credit unions did not benefit members to which the study proved that “credit unions are lending as banking institutions pull back. Consumers and businesses claim that they are unable to obtain loans from their banks but credit unions are filling this void. Overall, credit union loans grew by nearly 7% during the more than three-and-a-half years since the recession began. In contrast, over the same period, bank loan portfolios declined by over 7%.”

However, despite all of the benefits credit unions have to offer, they still only account for 6% of the banking market, while commercial banks represent 81%.

The reality is that the majority of people are completely unaware of the extraordinary things credit unions have to offer. For many consumers, Bank of America, CHASE Bank, and Wells Fargo are the only options in mind, because we live in a world where “bigger is better.” This false association of bigger banks equaling security paired with the lack of knowledge of credit unions are the reasons why we live in a preeminent banking world.

 

Now that you know the facts, which financial institution would you rather support?

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