Not everybody knows what a credit union is. Essentially, a credit union in Florida is very similar to a bank. The key difference, however, is that they are operated by members, rather than by company owners. There are pros and cons to this, and you must be aware of those in order to decide whether a credit union account is right for you or not.
The Pros of Credit Unions
- Opening up an account with a credit union means you become a member. This means you can vote on policies as well. Banks focus on making a profit, whereas credit unions focus on their members.
- Credit unions charge very low fees. Banks have service fees, ATM fees, overdraft fees, and more. With a credit union, there may be some overdraft fees, but they are lower, and there aren’t any ATM fees. This means you save money. Holding an account is free, and there isn’t usually a balance requirement.
- The savings rates are higher and the interest rates are lower. This is because they don’t look at making a profit. Hence, you save money once again. They also often use fixed rates, and they are happy to work with people with poor or good credit alike. They even often credit building help and budgeting assistance.
The Cons of Credit Unions
- Because a credit union doesn’t charge an ATM fee, there are fewer ATMs that are able to handle credit union cards. If you choose the ATM of a different bank, you will have to pay their fee. Sometimes, however, the credit union will reimburse you these fees, so do look into that.
- You have to qualify to join a credit union. This often means living in a certain geographical area, working for a certain employer, or being in a certain school. That said, membership is for life so if you no longer meet those requirements at a later date, you won’ t lose your membership.
- They often have limited technology, because they are nonprofit organizations. As a result, they cannot invest in up to date and expensive technology. Some don’t even have online banking, for instance. This seems a bit backwards to most of us, since we are now so used to everything being online.
Simply put, a credit union offers all the products that large banks offer. This includes checking accounts, business loans, mortgages, debit cards, credit cards, and so on. They are, however, a nonprofit organization, which means they cannot invest in advertisement, in technology, or in ATM machines. As a result, they offer different amenities than regular banks. This brings some particular advantages and disadvantages with it that you must research before you decide whether or not a credit union account is right for you. With loans, for instance, you can usually only access very small amounts that you must pay back before you can borrow more. This is very different from the bank, and, some say, fairer, but it can also be a huge disadvantage if you are strapped for cash.