Stuffing cash under the mattress or into a cookie jar is not the best way to manage finances. Despite what some pundits advise a cash economy has its own set of disadvantages. Few are comfortable carrying around enough cash for all possible needs each day. Banks and credit unions offer safe storage of money and ready access to it through debit cards, checks and online transactions.
When choosing between a bank and a credit union, thought should be given to the relative costs of each, their convenience and the services each offer. Money on deposit with both is insured by the federal government, both make loans and issue credit and debit cards. Fees, loan rates, ATM charges, availability and convenience typically end up as major decison criteria.
Most credit unions offer loans at lower rates than banks. For instance Home Credit Loans can be more than a full percent lower than bank rates. Credit card interest rates are typically considerably lower than those issued by banks as well. While banks tend to be at least twice as large as credit unions, and offer more ATM locations for convenience, credit unions seldom charge members a fee for transactions at their own ATMs. In addition, credit unions nationwide have begun a collaboration which permits fee-free transactions at over 30,000 locations.
Home Credit Loans are not the only credit union loan offered at lower rates than competing banks. Automobile loans are often over a percent lower and boat and RV loans follow suit. While savings account accruals are practically non-existent for both types of institutions, once again credit unions tend to offer higher returns than banks.
One advantage for banks is that anyone can open a bank account. Membership in credit unions is restricted, with rules regarding whether an individual may open an account. With the prevalence of credit unions, however, few find that to be a real impediment. While bank account owners are customers of the bank, and have no voice in financial decisions, credit union members have a stake in their institution, and an opportunity to participate in decision-making.
In Hawaii, Pearl Hawaii Federal Credit Union has grown to be the seventh-largest credit union in the state since it opened for business in 1937. You can connect with them on Facebook for more updates!