MADISON, Wis. (11/15/11)--In the aftermath of the Occupy Wall Street movement, U.S. News & World Report Monday noted that many Americans are looking to do business more with local businesses and financial institutions, as opposed to large corporations and banks.
The publication listed "seven ways credit unions are better than banks." Credit unions:
1. Make consumers a top priority. Credit unions work in the best interest of members, not stockholders. Therefore, they offer better customer service. Credit unions are more focused on ensuring they provide members with a high level of service and competitive rates.
2. Have low or no minimum-balance requirements. Credit unions lower balance requirements so maintaining an account is less stressful, while corporate banks continue charging high fees for dropping below a minimum balance on savings and checking products.
3. Offer lower fees on financial products. When they shop around for a loan or a checking account, consumers will find that credit unions usually offer lower fees on basic transactions. A local credit union can probably offer the best financial products and packages. Most credit unions still offer free checking with no strings attached
4. Have lower interest rates. Credit unions usually offer lower interest rates on mortgages and credit cards. Many offer the most competitive rates for mortgages, personal loans and credit cards. Nonprofit credit unions also are less prone to add on fees for different loan products.
5. Secure the member's funds. Deposits at a credit union are insured up to $250,000 by the National Credit Union Shared Insurance Fund. Members have the same level of risk as customers at a regular bank.
6. Offer bonus checks. Profits can be divided up into bonus checks for members rather than shared with a few stockholders. Members should check with their local credit unions to find out what types of bonus programs are provided to members annually.
7. Are less restrictive in credit eligibility requirements. Consumers should consider applying for a loan through a credit union if they've been denied a loan from a large bank. Many credit unions are willing to work with consumers who have a low credit score. Credit unions also can make exceptions for unique circumstances--such as going through a bankruptcy or being self-employed.
In another article published last week, U.S. News & World Report advised consumers who are looking to credit unions to check out membership requirements, fees, availability of services and interest rates. The article also urged consumers to check that a credit union they are interested in is insured by the National Credit Union Administration.