Understanding Credit Unions and Their Relations to Banks

Though often overlooked, credit unions offer almost the same services as banks. What are credit unions, and how do their services differ from typical bank services? While there exist numerous differences between credit unions and banks, the similarities are more than you can imagine.

Credit unions curate personalized customer service that leads to strong customer relationships. Hence, their services are more local-community based as compared to banks. On the other hand, banks focus on customers seeking brick-and-mortar branches, leveraging flexibility and diverse product options.

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When looking for a credit union North Carolina and other states love, make sure you are doing proper research.

Banks are profit-making organizations, while credit unions are non-profit cooperatives. The latter offers services to benefit its members. Meaning, its benefits are dispensed to members. As such, banks have higher interest rates on loans and lower interest rates on savings accounts, unlike credit unions. Traditional banking services are driven by profit maximization.

Banks can either be privately owned or by the government. As such, they have different eligibility criteria, which are generally easy to achieve. Consumers qualify for small loans which increase with their creditworthiness. Credit unions, however, are owned by the members of a community, making their eligibility criteria higher. As such, bank services are easier to qualify than credit unions.

The service structures of banks and credit unions are curated for different customer needs. If you’re out for a more accessible, more flexible financial service, then traditional banks are a good option. However, credit unions are best for growing your savings and for low-interest loans, such as credit union North Carolina.


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