subject: Knowing Why To Choose Credit Unions Over Commercial Banks [print this page] Credit unions are kind of like associations with many members. In order to join one, you need to have the qualifications that a particular one accepts. Some may accept those in the same community, while others might only accept people who work in the medical field or are educators. There are a variety of different types. The common denominator is that they do not have stockholders, and if any profit is made, it is put back into the institution in a way that will benefit the members or the company who are in reality the owners of the institution.
If you are interested in actually owning a portion of one of the credit unions in your area, then you will want to look into the qualifications to be a part of certain ones. As each one is owned by a different group of people, each one will vary to some degree. You may be pleasantly surprised to find lower service fees and even lower loan rates depending on what the institution earns.
Traditional commercial banks differ from the other in that they do have stockholders. Like most large businesses, it is the stock market that virtually holds together the banks. Although, your money is guaranteed to a certain amount in most banks, there is still the danger of the stock market roller coaster.
Even though the stock market is often up and down, it still sometimes seems that something governed by stockholders rather than members would be safer. The reality is that either way should be protected.
Whether you choose credit unions or commercial banks is really up to you. There are likely downsides with either choice, because nothing is perfect. If you qualify to be a member of one of the former in your area, it will not hurt to try it out to see if they are everything they claim to be. If they are, then go ahead and stay with them. If you believe you are lacking something by going to credit unions, then be sure to look into a commercial bank.
It is a good idea to do your research into the pros and cons of both options. In the end it can only be your decision whether or not you choose credit unions or commercial banks. The choice may or may not affect your future depending on how the economy changes over the years. The most important thing is that you make an informed decision so that you have no one to blame except yourself if you run into a problem.
