When we are out and about in the community, we often hear two things. What’s a credit union? and I didn’t know I could join. To be clear, if you are living in Southern Illinois you are more than likely eligible to join SIU Credit Union. And no, you don’t have to been connected to Southern Illinois University to join the credit union.
But when you explain what a credit union is, it’s almost guarneteed to be followed with … so you’re a bank. Um, no. Here’s the difference.
Banks and credit unions may offer similar products and services. But the similarities stop there. Crucial differences exist–in ownership, in cost of borrowing money, and in use of services.
* You own your credit union. Credit unions are member-owned nonprofit financial cooperatives dedicated to improving members’ lives. More than 90 million members own 7,905 U.S. credit unions with combined assets of $869 billion. Stockholders own banks. Banks make money for stockholders, not for customers.
Credit unions are the only democratically controlled financial institutions in the United States. You and other members elect a volunteer board of directors to oversee the credit union. The manager or reports to this board. Bank directors, however, are paid and legally bound to make decisions that benefit stockholders, not customers.
* Credit unions have the best rates. Credit unions price loans, pay interest on funds you’ve deposited, and charge fees to provide you with high-quality, low-cost services. Banks price products and services to make a profit.
Credit union loan rates also are better. Money market, savings, and interest checking accounts carry higher rates–giving back more to members. Interest rates on credit cards and auto loans average one to one-half percentage points lower than bank rates. Credit unions make consumer loans and some member business loans. Banks offer consumer loans, but really emphasize business loans.
Because you’re an owner of SIU Credit Union you have a say in how we do business. Let us know how you think we’re doing, and what services you want at your credit union.