Only 27% of Americans have confidence in banks, but what are your other options? Check out the pros and cons of keeping your money with your big bank.
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Two Cents was created by Katie Graham, Andrew Matthews, Philip Olson CFP® and Julia Lorenz-Olson and is brought to you by PBS Digital Studios. We love dropping some knowledge on all things personal finance and helping you make better money decisions.
Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson
Directors: Katie Graham & Andrew Matthews
Written by: Philip Olson and Andrew Matthews
Produced by: Katie Graham & Amanda Fox
Images by: Shutterstock
Music by: APM
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Are Credit Unions Better than Big Banks?
When it comes to financial institutions, we often find ourselves facing a wide range of options. From big banks to credit unions, each offers its own set of advantages and disadvantages. Credit unions, in particular, have gained attention in recent years due to the unique benefits they offer to their members. But are credit unions truly better than big banks? Let’s take a closer look.
One of the most significant advantages credit unions have over big banks is their cooperative nature. Unlike big banks, which are often driven by profit maximization, credit unions are not-for-profit organizations owned by their members. This ownership structure means that credit unions prioritize the needs of their members over generating profit for shareholders. Consequently, credit unions can often offer lower fees, better interest rates, and more favorable loan terms than big banks, which can make a substantial difference in the long run.
Moreover, credit unions tend to have a more personal and community-oriented approach compared to big banks. Since credit unions are often geographically based or centered around specific industries, they develop strong ties within their membership base, fostering a sense of belonging and community. This closeness allows credit unions to better understand the diverse needs of their members and provides them with personalized service and tailored financial solutions. Customers are not just another number; they are valued members of a close-knit community.
Additionally, credit unions often come out on top when it comes to customer satisfaction. Numerous surveys have consistently shown higher levels of customer satisfaction among credit union members compared to big bank customers. Credit unions are renowned for their excellent customer service, emphasizing quality interactions and personalized attention. Members frequently report feeling more valued and appreciated when conducting their financial transactions at a credit union.
Supporting local economies is another notable point in favor of credit unions. As not-for-profit organizations, credit unions tend to reinvest their earnings into the local community. By providing small businesses with loans, supporting scholarships, and engaging in other community-oriented initiatives, credit unions play a crucial role in fostering economic growth and development at the local level. This community-focused approach is a stark contrast to big banks, which often prioritize their own interests or global investments.
Yet, it is important to acknowledge that credit unions may have some limitations too. As smaller financial institutions, they might have a more limited scope in terms of branch locations and service accessibility. Their technological infrastructure might not be as advanced as that of big banks, possibly impacting their online banking capabilities. Furthermore, credit unions usually have a narrower range of financial products and services compared to big banks due to their smaller scale.
Ultimately, the choice between credit unions and big banks depends on an individual’s financial needs, preferences, and local availability. While credit unions undeniably offer various advantages, big banks can provide a broader range of products and services, metropolitan accessibility, and technologically advanced platforms. It is crucial to consider one’s personal circumstances to make an informed decision.
In conclusion, credit unions have distinctive features that set them apart from big banks, allowing them to stand out as appealing alternatives. With their not-for-profit orientation, community focus, personalized service, and customer satisfaction, credit unions offer unique advantages worth considering when evaluating financial institutions. Whether they are better than big banks ultimately depends on the individual’s specific needs, but credit unions deserve serious consideration due to the benefits they provide to their members and the communities they serve.
As someone who has always banked with a Credit Union with zero fees only a $5 deposit in a savings account for the first year.
I can say I find it hard to believe how “Big Banks” are so frustrating!!!
I easily was able to open an account when I was 16 and have had amazing deals and experience since.
I despise big banks. Credit unions aren’t perfect, but they are way better than most name brand banks today
Just found out about credit unions. Opened my account at my local one, I am in love with it so far!
No, credit unions are not better than Banks. Banks have to comply with banking regulations and credit unions don't. Do not get a car loan from Suncoast credit Union. The way their system is setup you have to open a mandatory checking account so they can take automatic payments from that account. During covid-19, my sons debit card was shut off due to a scam alert and he couldn't get a replacement because all their branches were closed. He paid off the loan 6 months early but they hit him with a late payment on his credit report and since I was a cosigner it cost both of us over a hundred points off of our credit scores. Do business with this company at your own risk.
Credit unions are not Banks. There is a legal distinction between them and they have much more authority to structure their loans and anything they want their own way. Be real careful with loans at add credit Unions because they aren't regulated by the bank regulators and they can do things they want to do when they want to do them and you have no legal recourse.
Stop looking at banks. Stop depositing in banks.
Middle class
Americans are better off using Credit Unions.
Credit Unions are
owned by their depositors. Interest paid exceeds your local bank,
insured for the same amount as the bank.
Normally interest charged is lower than banks.
Use bank reward cards, carry no monthly balance.
Let corporations
and the rich fiancé your rewards.
I moved to Colorado from Indiana 2 years ago, and I've still been able to keep my local Indiana credit union checking because of the credit union Co-Op, and the great online banking system they have. I also opened up an online credit union account with Allliant. They have pretty fantastic interest rates and allow you to join with a one-time donation to a foster care charity 🙂 And they have the best simple 2.5% cashback Visa card I've been able to find anywhere.
No fees no minimum
Switching to credit union as my brick n mortar
nice video. thank you
Not all credit union do shared branching. C level management has to pay a percentage of the budget. Some are on even military bases which restrict who can visit those credit unions…
I've been dealing with credit unions for 22 years bought my house two cars thru a credit union paid off both cars and house early. My checking and savings accounts are with a credit union
Lol, this didn't age well…
Dumb
DesjardIns in Canada is a nice mix of both. It is actually a whole bunch of credit unions, but they all use the same credit cards, online banking etc. so you get your local small group,.but benefits of a large bank. They also pay members dividends including a youth dividend which give those under 18 extra money if they save money in their savings account.
I love usaa and my local credit union. They made getting a car loan easy
Things have changed since this video has come out. Regional banks are now in trouble, and credit unions don't have a high enough security to stop people from clearing out your bank account.Don't keep all of your money in one bank or credit union. Yes, the FDIC will pay you back a certain amount (maybe) but, when? You really think the government can print enough money quick enough to cover a couple of banks going under all at the same time? With a stroke of a pen Credit Suess Sweden wiped out all if it's investors' money, You don't think that the U.S government will do it to us? Guys they faked the attack just to start the war with Vietnam.
Switched from a big bank to UFCU here in Texas and have never looked back once!
my parents left the big bank because they had no interest in helping my parents get out of debt, the local credit union said that they would lower the interest, and cut their debt in half if they joined so my parents did (they dropped my parents debt from 30,000 to 15,000, and lowered the interest from 22% to 8%), The credit union helped my parents get out of debt in five years.. the big bank wanted to keep them in debt and they offered no solution to help them. The only solution they offered was to pay the 30,000 with the 22% interest
i would never go to a bank or a credit union !!!!!
Interesting how he used the word Schmaltz when talking about big bankers hahaha oof
Chime is not a bank.
I sure miss Phil's moustache.
Watch out!!! pacific credit union uses a george sanatos clone for their ads. deep fake!
Big ups to everyone working effortlessly trying to earn a living while building wealth. I’m 50 and my wife 44 we are both retired with over $3 million in net worth and no debts. Currently living smart and frugal with our money. Saving and investing lifestyle made it possible for us this early even till now we earn monthly through passive income.
Yes they are
After nearly ten years with Bank of America. I asked for a credit line to build credit. They came back with $300 credit. I told the person that's all you can give. 10 years with thousands in the bank and can't even match it with credit. You needed more? The associate replied. I said yes for an emergency to at least cover rent. I took my money and left opened up a credit union account. They started me off with 1,500 in credit. There return is a 30 times better than bank of America's 0.00001 percent interest. I was getting a penny in interest a month but charged a 25 dollar fee to have an account with them. No I am not joking. Anyways I get about 30 cents a month average back in interest. The credit score is extremely good. I use the card to pay the utilities in my house that's it. No shopping ,gas for the car or groceries. Just house utilities.
If the government didn't require my employer to pay me via direct deposit to a financial institution, I'd have zero issue just not paying taxes and keeping my money at home.
W Credit union
I dont really trust a dude who looks exactly like Littlefinger to give me financial advice.
Well, you guys deserve more, I'll give you two ❤❤ as well. Thank you for explaining this confusion business to us, to me
If I don’t have parents or someone to help co sign or teach me how to start building credit what would u guys recommend? What should I watch or read? Please help
tldr: credit unions are better, no reason you should pad another bank ceos wallet
I just wanted to learn. Didn't come here for a narrative to be pushed on me the first minute of the video.