Credit Unions vs Banks

Banks despise credit unions and have lobbied unsuccessfully in the past to eliminate them or who can join them. The Federal agency (National Credit Union Administration - NCUA) that charters and oversees credit unions has relaxed its regulations on joining, making it much easier for people to become a member.

In the past, the only type of individuals that were allowed to join were people that worked on the police-force, firemen, teachers and members of organizations.

Nowadays, membership is not limited to specialized groups or organizations. Thanks to NCUA and other supporters, more than eighty million Americans currently take advantage of a credit union's many benefits.

Credit unions are monetary cooperatives that provide many of the same services that banks offer, including savings accounts, checking accounts, certificates of deposits (CDs) and loans.

Deposits at are federally insured at most credit unions for $100,000 per account (same as banks), through the NCUA. Members of credit unions pool their assets to provide loans and other services to each other.

Credit unions are non-profit organizations that are member owned and operated. When they make a profit, it is returned to its members with high-interest rate savings or low-interest rates loans. Since banks are owned by shareholders, profits are returned directly to its investors—while its customers reap no benefits.

Credit unions do not charge its members to use their own money; whereas banks charge their customers hefty fees to use their own money on checking accounts and/or transactions they make.

• Higher interest rate returns on all types of savings accounts (regular savings, money markets, certificate of deposits, etc.), than commercial banks;
• Lower interest rates on car loans and mortgages than banks;
• Low or no fees imposed on checking accounts;
• Fewer and lower fees on all types of accounts;
• Some credit unions let you earn interest on checking accounts, no matter what the balance and in some cases with no monthly service charges.

Anyone can join a credit union; however, the law places limitations on the people they may serve. A credit union's charter or agreement defines its "field of membership." A field of membership could be an employer, church, school, neighborhood association or community. All employees of an employer sponsored credit are eligible to become a member of that credit union.

• Contact a state league representative. Each state has a representative that would be able to tell you about local credit unions that you are eligible to join.
• Talk with a representative in the personnel office where you work.
• Research credit unions in the phone book. You may have to contact them to see what are their eligibility requirements since they very rarely advertise any of their services.