MADISON, Wis. (8/15/12)--U.S. consumers are turning to credit unions, as they tire of rising fees and scandals at banks, according to a Monday Fox Business article, picked up from Bankrate.com.
Credit unions added 1.3 million new members last year to a record-high total that well exceeds 90 million nationally, according to statistics compiled by the Credit Union National Association (CUNA) and cited in the article.
It listed five advantages of using a credit union for personal finances:
1. A not-for-profit status fosters a member-first mentality. Credit unions have superior member service. "Credit unions are cooperatives owned by their members," Pat Keefe, CUNA vice president of communications and media, said in the article. "Their mission is to provide their members with affordable financial services--not to gouge them as profit centers." Credit unions ranked better than banks in all categories in the most recent Prime Performance Bank and Credit Union Customer Satisfaction Survey, with customers rating their overall satisfaction at a new score of 89%, seven points greater than the industry average, said Fox Business.
2. Consumers can find lower credit card interest rates at credit unions. Credit unions usually pass on savings from their not-for-profit status throughout their complete product line, offering members higher rates on savings accounts and lower rates on loans and credit cards, said Greg McBride, Bankrate.com senior financial analyst.
3. Consumers can dodge minimum balance rules. Credit union accounts have fewer requirements. While many accountholders at banks are forced to adjust to higher minimum balance requirements, 72% of financial institutions surveyed in the 2012 Bankrate Credit Union Checking Survey had no minimum balance requirements to avoid fees.
4. Lower fees still are rising, and credit union fees are lower than at most banks. Many credit unions have flexibility in how much they charge, and many try to keep costs low for their members, McBride said. For example, credit unions may eliminate products or services to cut costs rather than add fees, McBride explained. That flexibility adds up to big savings. Keefe said credit union members nationwide collectively saved nearly $6.3 billion last year by doing business at a credit union instead of a bank.
5. Credit unions have shared ATMs and branches to access cash. Large banks advertise the convenience of their ATMs or nearby branches, but some credit unions have joined forces to offer their members cash access with the CO-OP ATM network and a shared branch alliance. The CO-OP ATM network includes nearly 30,000 cash machines, and shared branching gives members the ability to conduct in-person transactions at nearly 4,700 branches nationwide, Keefe said.
To read the article, use the link.