In light of increasing credit card fees and loopholes in the CARD Act, fed-up consumers are ditching banks for credit unions to take advantage of lower interest rates, better banking practices, and consumer-friendly policies. Credit unions continue to have some of the best deals on credit cards as well as a consumer-friendly approach that is a welcome reprieve from exorbitant credit card fees and predatory practices. But just how do credit unions measure up against big banks?
The Up-And-Coming Contender
Credit unions, an alternative to brick-and-mortar banks, offer the same financial services as banks but are operate differently as member-owner, not-for profit institutions, which some argue makes for better service and bigger savings.
Credit unions are member-owned in that when you join you are considered a part-owner, whereas banks are owned by investors and operate for investors’ interests. Credit unions are considered not-for-profit because profits are distributed back to members in the form of lower interest rates and higher dividends; banks are for-profit because they make money for their investors. In essence, credit unions prioritize service and savings for its members, and are not in the business to pay off high-priced execs or hungry stockholders. Also, rest assured that it is still a safe place to keep your money, as credit unions under the National Credit Union Administration- similar to the FDIC– are insured up to $250,000 per account. [Read story at Credit Karma blog].
Posted by Bruen
at 12:01 AM PST
