what are the pro's and the con's of using one or the other?
2006-07-14 16:00:12 · 7 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
A credit union is a not-for-profit co-operative financial institution that is owned and controlled by its members, through the election of a volunteer Board of Directors elected from the membership itself. Only a member of a credit union may deposit money with the credit union, or borrow money from it.
A credit union differs from a traditional financial institution (banks, savings and loan, etc.) in that the members who have accounts in the credit union are the credit union's owners. A credit union is a co-operative institution, with policies governing interest rates and other matters set to benefit the interests of the membership as a whole. As such, credit unions have historically marketed themselves as providing superior member service and being committed to helping members improve their financial health. Credit unions typically pay higher dividend (interest) rates on shares (deposits) and charge lower interest on loans than banks.[1]. Credit union revenues (from loans and investments) do, however, need to exceed operating expenses and dividends (interest paid on deposits) in order to maintain capital and solvency. The lowered profitability of credit unions relative to banks is indicative of credit unions' focus on serving members, whereas banks must be concerned with maximizing profits in order to enhance stock performance.
Credit unions offer many of the same financial services as banks, including share accounts (savings accounts), share draft (checking) accounts, credit cards, and share term certificates (certificates of deposit) and home banking.
The for-profit banking industry has a conflicted relationship with credit unions. Bank trade associations are opposed to the tax-free structure on earnings that credit unions enjoy and the American Bankers Association has identified the revocation of credit unions' tax-free benefits as topping its political agenda in 2004 and 2005. However, bank holding companies and their affiliates aggressively compete to provide services to credit unions through their ATM networks, corporate checking accounts, and Certificate of Deposit programs.
2006-07-14 16:04:44 · answer #1 · answered by Spock 6 · 2⤊ 0⤋
A credit union is usally owned by its members, and will usually have a bit better rates than a bank. But some credit unions require a certain affiliation, like school employees only or something like that. Generally they are more local, and won't have branches all across the country, which some banks do. You will have to decide which works best for your needs.
2006-07-14 23:04:52 · answer #2 · answered by poppet 6 · 1⤊ 0⤋
a credit union is a place where its easiar to get loans also when they give you things like auto loans they dont require you to carry full coverage insurance 90 percent of the time
2006-07-14 23:04:08 · answer #3 · answered by worldsbesthighfiver 3 · 1⤊ 0⤋
banks are publicly owned and credit unions are privately owned
2006-07-14 23:07:19 · answer #4 · answered by Nicholas C 1 · 1⤊ 0⤋
i think credit unions are cooperatives while banks are corporations. in cooperatives inerest on savings is tax free in our country.
2006-07-14 23:13:36 · answer #5 · answered by red sun 2 · 0⤊ 0⤋
NOT REAL SURE ,I DO DEAL W/ THE CREDIT UNION-FREE CHECKING!!!!I WAS PAYING LIKE $8 A MTH (8YRS AGO)
NOW THEY ACTUALLY PAY ME TO HAVE MY MONEY THERE-LIKE A PENNY BUT IT BEATS PAYING!
2006-07-14 23:07:07 · answer #6 · answered by CoC 4 · 1⤊ 0⤋
most times its the lending rate.
2006-07-14 23:05:17 · answer #7 · answered by M&T 7 · 0⤊ 0⤋