Monday, October 17, 2011

What is a credit union?

I've already explained why I think that now is a good time to switch from your bank to a local credit union. Here are some qualities of credit unions that make them different from commercial banks (e.g., Bank of America, Citibank, Chase, and Wells Fargo), and, in my view, far superior.

A credit union:
  • Is a not-for-profit institution (commercial banks are for-profit companies, which is fine, but you should know that their priority is to increase shareholder value, not to serve customers and protect their money)  
  • Is governed by a volunteer board of directors, elected by members - and if you have an account, you are a member, and can vote
  • Is generally locally-based, and customer friendly
  • Offers credit cards, loans and business account-services, in addition to checking and savings accounts
  • is usually federally insured, just like banks, up to $250,000 (through the NCUA) - check the bottom of their webpage to confirm (BECU and WSECU are insured)
  • often has agreements with other credit unions, so you can use ATMs of other institutions
  • In almost all ways, it feels just like a regular, community bank
(For more info, check out the Move Your Money Project.)

So if you are reading this, consider reading up on credit unions and transferring your money to them. No matter what you politics are, you will probably be happy with your decision. (Here is how to find one in the U.S.)

If you can think of any other positives, or negatives for that matter, please let me know in the comments!

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