Credit Unions are a good option

Credit unions can be a very good alternative to banks as long as you meet certain conditions. In general, credit unions can perform many of the same services that banks perform, but there can be exceptions to this.

Credit unions are member organizations and this is the biggest difference between them and banks. When you join a credit union you, in essence, become a stakeholder in the institution. In the past, most credit unions were formed around certain professions or formed around certain employment bonds. Today, much of that has changed. The credit union is still a membership process but the bond can be anything from regional to religious. Many different types of groups now have their own credit unions, and finding one that you can join has never been easier.



According to the Credit Union National Association there are over eighty million Americans currently enrolled in credit unions. This huge number of participants is not a fluke. There are reasons why people choose credit unions over banks.

One thing you may notice about credit unions is that they do not advertise themselves very much. If you want to find a credit union that you may be eligible to join, you have to look for it.

The best place to begin looking is with your employer. There are many employers who have their own credit union or have access to one. This can be especially true if you work in a union or if you belong to a particular trade association.

The Credit Union National Association's website has a very useful locater that can help you find credit unions through an online search. You can use this search engine to help narrow down possible institutions that are in your area or that belong to certain trade associations. Once you find some suitable selections, you can visit their websites to see if you meet their requirements.

Some religious organizations have credit unions set up for members of their faith. These are usually not administered by the local church, synagogue, or mosque but rather by the larger regional or national headquarters of the faith. In addition to many religious-based credit unions, there are also civic institutions that have credit unions.

Many universities and colleges have credit unions that are available not only for faculty but for students as well. Student credit unions are often more geared up to help with the special needs of students than local banks might be.

It is not often well known but many credit unions will allow family members of an already enrolled member to join. In other words, if your father is a member of a particular credit union, you may be able to join too simply because you are his child. This is not the case with all credit unions, but it is the case with many and it is worth asking about.

While credit unions can be useful for many people, they can also be limited in what they can do. Much of what a credit union can do for you will be determined by how many members it has. This can come into play if you are looking for home loans or other big dollar loans. Smaller credit unions may not be able to meet these types of needs, in which case dealing with a bank would be the better choice.

Credit Unions Vs. Banks

Tension has always existed between credit unions and banks. When credit unions were first organizing in the United States in the early twentieth century, the banking industry was opposed, remaining so ever since. These tensions have only been exacerbated as many credit unions have grown, expanded their fields of membership to include large communities and whole states, and in the eyes of some, are indistinguishable from banks.

Due to their status as not-for-profit financial institutions, credit unions in the United States are exempt from federal and state income taxes (but, not from employment or property taxes, among others). Additionally, credit union members pay income taxes on dividends earned through financial participation in the credit union; this is similar to the taxation structure enjoyed by many banks incorporated under Chapter S.

Bank holding companies and their affiliates aggressively compete to provide services to credit unions through their ATM networks, corporate checking accounts, and certificate of deposit programs. In 2007, the American Bankers Association barred credit union employees from attending ABA sponsored educational seminars. This includes online classes that require registration. Based upon the pretext that the ABA only wants to serve its members, the American Bankers Association continues to attempt to weaken credit unions and take back the 6% market share that credit unions currently hold.

Credit unions maintain that no matter their size or field of membership, the fact that they are owned by their members and not shareholders makes them fundamentally different from banks.

I have an account at a Credit Union and I'm very happy with their service.


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