Saturday, February 27, 2016, AM | 1 Comment
In 2014, fee revenue at Bank of America, one of the nation’s largest for-profit banking institutions, were almost $1 million, while Wells Fargo reported fee revenue of almost $800,000 as did J.P. Morgan Chase.
Many banks have reported record high fee revenue over the past few years.
In addition, for-profit banks have significantly tightened their lending practices after the recent financial crisis, making it harder for the average consumer to obtain car loans or mortgages.
For this reason, many consumers are turning to smaller, locally-owned credit unions as opposed to large, national banks.
There are several factors that make a credit union a better choice over a bank.
Better Customer Service
Credit unions are cooperatives, making them member-owned.
Because the customer who uses a credit union is actually an owner, the mission of the credit union is to provide much better customer service than a big for-profit bank who is looking at the customer as a profit center.
A recent survey found that credit union customers reported 89 percent customer service satisfaction, seven points higher than the industry average.
Lower Interest Rates and Fees
Because they are non-profit, credit unions are able to pass savings on to consumers by offering higher rates on savings accounts and lower rates on loans.
For customers who carry a balance on a credit card, a lower interest rate can save them a significant amount of money each year.
Credit unions also offer lower fees than many national banks. In 2011, consumers saved over $6 billion in fees by using a credit union rather than a bank.
Credit unions like Saginaw Medical Federal Credit Union typically offer services such as checking and savings accounts with fewer strings attached.
Often the minimum balances at credit unions are much lower than national banks and some credit unions require no minimum balance in order for an account to be free.
Today, most credit unions offer many of the same amenities as larger banks, such as debit cards, online bill payment and online account access.
Another benefit to using a credit union over a bank is that a credit union is locally owned as it is actually owned by its members.
This allows them more flexibility in lending money, opening accounts and handling customer transactions.
In addition, because they are smaller, a customer is not simply an account number as is sometimes the case with national banks.
There are many benefits to choosing a credit union over a bank, including lower fees, better interest rates and fewer account requirements.
However, the two main reasons many people say they switch to a credit union is better customer service and the fact that they don’t feel as if they are an account number when they visit the bank.
Anica Oaks is a Freelance writer and web enthusiast. Read some of her published work on her Google+ page.