Active in the United States since 1935, credit unions are not-for-profit cooperative financial institutions created by people with a common affiliation, such as belonging to a labor union, an association, or even working or living in the same place. The following are some of the many benefits of membership in a credit union.
Nonprofit status: For-profit banks and other lending institutions are looking for a return on an investment when a member takes out a loan. Credit Unions, however, have no stockholders looking at the return on their investment.
- Democratic process: The board of directors is elected by the Credit Union's membership and works on a volunteer basis. Unlike banks, credit union members have a direct say in who’s elected to run the credit union.
- Inclusiveness: Credit unions have long-standing reputations for allowing spouses, siblings, and children of members to join.
- Lower fees: Comparatively, credit unions have lower fees for services.
- Better interest rates on loans: Interest rates are typically better through credit unions, which traditionally have been among the leaders in auto loans.
- Funds returned to members: If there are excess funds, they are generally returned to the members in the form of dividends or added services.
- Easy to join: You need only ask your employer, family members, or neighbors about credit unions that they may be part of. The process is then simple, and minimum balances are usually very low.