Whats the difference between a credit union and a bank?
Generally the services Credit Unions offer are very similar, and at very competative rates. Sometimes CUs are higher, and sometimes Banks are higher. They both pay taxes but since profits are given back to the members, even if they did pay income tax it wouldn’t be much. (unlike some of our countries the largest banks) Credit Unions are also limited in how much they can market, while banks can spend whatever amount they’d like to send you whatever message they want you to hear, and are allowed to make as much money off their customers as they can (and they do this well!). You can use ATMs from all different credit unions with out fees too, not just your credit union’s ATMs.
The primary difference is the reason for existance – Profit/Non Profit, that is the difference. Banks exist to enrich it’s shareholders (who may or may not be customers), while Credit Unions need make enough to pay salaries and keep the lights on. Any extra money made is returned to the members (skip payments, special rates on vacation loans, etc). Rarely did I ever see salaries/bonuses of Credit Unions employees even come close to those paid by banks, and in my humble opinion, people working at credit unions honestly cared about their members, and would frequently make an exception to loan a member money (within the policies set by the board), while banks rarely extended this courtesy. Also, there is a great opportunity to take a loan till payday online for example with Britain Loans.
All in all, you’re free to give your business to whom ever you choose, but I’d take the word of a credit union over a banker any day, as well as a loan. Some bankers can be ok, but I’ll continue to give my business to someone who isn’t out to make a buck for shareholders I don’t know or trust.
Btw, I spent my first career as an auditor of both Credit Unions and “for profit” banks. It was my experiences are the last bank that made me quit and switch careers.
A. A credit union is a member-owned and controlled through a board of directors elected by the membership. The board serves on a volunteer basis and may hire a management team to run the credit union. The board also establishes and revises policy, sets dividend and loan rates, and directs certain operations. The result: members are provided with a safe, convenient place to save and borrow at reasonable rates at an institution which exists to benefit them, not to make a profit.
