Tips on What to Look for in a Credit Union

Tired of long queues, being put on hold, and overall poor customer service? Those are just a few reasons why so many are shifting their patronage from traditional banks to credit unions. As not-for-profit cooperatives, credit unions centralize around quality member experience, community needs, and better rates.

However, with over 6,000 credit unions in the United States today, you may want to choose wisely. Find out what to look for in a credit union below so that you can find the one that fits your needs.

The Shift from Banks to Credit Unions

Credit unions are known for having reduced fees, lower interest rates, and higher dividend rates compared to banks. According to the Credit Union National Association (CUNA), credit union members save over $6 billion collectively by choosing credit unions over banks.

What other reasons have led millions of Americans to [apply-account:body~join a credit union?]

• Not-for-Profit – Consumers are no longer willing to trust Wall Street-type banks that prioritize profit over their clients’ financial wellness. Unlike big banks, credit unions want their members, as well as the communities they serve, to succeed. There’s no better security than knowing your credit union’s success is your own.
• Community Oriented – As cooperatives, credit unions are enticing because of their democratic foundation. Individuals are increasingly interested in a financial institution that represents the interests of their clientele. With a board of directors composed of members who are voted in by all its members, credit unions will have members’ concerns and opinions voiced and reflected in its policy.
• Top Tier “Customer” Service – Credit unions focus on providing exceptional service because members are also owners. Rather than the impersonal experiences one commonly finds at a bank, members can have positive interactions, flexibility, and authenticity at a member-centric credit union.

Review Eligibility Requirements

Before considering a potential credit union, first you should ensure that you are eligible to join. In accordance with the Federal Credit Union Act of 1934, credit unions offer membership to those with qualifying associations to maintain their status as a not-for-profit institution.

The cooperative nature of credit unions creates a focus on common bonds among members. The objective is for the credit union to address the members’ mutual interests.

You could qualify for membership if:

• A family member already belongs to the credit union
• An employer has a relationship with a particular credit union
• A credit union is founded to cater to your community or city
• You attend a church, school, or other group affiliated with a credit union
• Your labor union is associated with a credit union

The requisites for membership vary according to each institution, meaning some research might be necessary, but this shouldn’t scare you away. Once you have met the requirements to join a credit union, it’s a relatively simple procedure to become a member, often requiring:

• Personal information (i.e., Social Security number, home address, date of birth)
• Proof of eligibility
• A completed application
• A minimum deposit to open an account (typically the value of one share of the credit union, often ranging between $1 and $25)

It’s this straightforward process that reaffirms the values of a credit union — that it was made with the member in mind. Moreover, once you’re a member, you’re a member for life, regardless if you no longer fit the initial eligibility requirement.

See What Services are Offered

Just as not all banks are created equal, neither are all credit unions. While credit unions are full-service financial institutions, double-check that they offer the services you need. For example, big-name banks provide personal financial services, yet not every credit union does.

Here are some questions to keep in mind:

• What services do they offer (e.g., mortgages, IRA, credit cards)?
• How long must you be a member before you can take out a loan?
• What type of loans do they offer (e.g., auto, home lending, small business)?
• How is their customer service?

Supplementary Benefits

As mentioned above, credit unions’ charters aim to fulfill the needs of its members’ mutual interests. Consider looking into what benefits you could have access to when choosing a credit union.

A typical promotion might be focused on the financial education of members. This is mutually beneficial among members and the credit union, since members are part-owners. Ultimately, financial literacy encourages the individual’s and overall credit union’s success.

Compare Credit Unions

You’re looking to maximize your dollar. For that reason, you should be comparing different credit unions to find the one that offers great products and services.

While you’ll be saving more, you could find a credit union that has no fee rather than a low fee. CUNA reports that approximately 80% of credit unions provide free checking, and over 70% offer debit card programs without fees. Others might offer better savings programs. Be sure to find a credit union that can fulfill your present and future needs.

Ask About Accessibility

Ideally, the credit union of your choice is easily accessible, with several locations near you. One advantage that banks wield over credit unions is their widespread availability. Large banking corporations have an extensive network of locations and ATMs. Meanwhile, only the most prominent credit unions have branches in several states. This may be problematic should you ever relocate.

Credit unions address this disadvantage by creating an interbank system of connections, collaborating with companies like CO-OP financial services.

Members are granted low or surcharge-free access to ATMs nationwide. If a local credit union does not have a similar arrangement, they could also offer affordable rates for ATM usage.

Ask prospective credit unions about the number of credit union branches within their network and the process of ATM withdrawal, including fees and locations, to find one convenient for you.

CO-OP Network ATMs

CO-OP Network ATMs give credit union members access to nearly 30,000 surcharge-free ATMs at convenience stores, credit unions, and other locales. CO-OP Network ATMS members from other credit unions to access banking services, including:

• Checking your account balances – View how much money is in your savings or checking account, what transactions have processed, and what amount you may spend.
• Deposit or withdraw – Avoid ATM fees by being able to conduct standard transactions at a CO-OP Network ATM.
• Transfer – Need to access money immediately? Move money from your savings account to your checking account.

Thankfully, credit union accessibility is not such a significant obstacle for members anymore.

Take a Look at Their Technology

These days accessibility isn’t restricted to physical locations. With the introduction of computers and cell phones in daily routines, many tasks may now be performed at the touch of a finger. The advent of online banking sites and mobile applications has reduced the need to head to a brick-and-mortar credit union for every financial need. If it’s important to you to be able to do things like pay bills, check account balances, and deposit checks digitally, pick a local credit union that enables those services.

Secure Your Finances

In recent years, trust in bank security has begun to decline. Therefore, before you hand your money to a credit union, it’s worth checking out how they’re insured.

Federal credit unions are chartered by the federal government and insured by the National Credit Union Share Insurance Fund (NCUSIF). NCUSIF provides up to $250,000 in coverage per member.

While state-chartered credit unions are not required to be federally backed, most choose to become federally insured. Approximately 98% of non-federal credit unions in the United States are federally insured.

Read more to understand What is a Federal Credit Union and how it differs from credit unions here.

Getting Started

Too often, financial decisions are made on the fly, without thorough consideration of all options. Avoid making an uninformed decision and take into account the essential factors that will affect your finances and future.

Experience the difference between credit unions and banks first-hand by applying for a savings and checking account at one of the credit union branches near you. Once you’ve found a credit union that meets your requirements, learn How to Open a Credit Union Account. You’ll soon discover how credit unions prioritize their members’ success.