I never knew what a credit union was until I was a young adult with a tight paycheck wanting to buy my first new car. I was probably about 24 at the time as I thought about how in the heck do I actually buy a car. How does that work? How do I pay for that?
I was investigating car loans, and my brother-in-law suggested that I join his credit union. Oh, well that sounds interesting, but ummm … what is a credit union?
What is a credit union, really?
A credit union is a financial cooperative, which means all of the members support each other. Your savings deposited help fund my new little car. The profits from my car loan may help fund your credit card balance transfer.
A credit union is owned by the members for the benefit of the members. Any profits made go back to the members in the form of reasonable loan rates and lower fees. Profits do not go back to shareholders because there are no shareholders as there are in a bank.
Why switch from my big bank to a community credit union?
Well, I haven’t belonged to a bank in so long, I can’t give any first-person stories about any personal big bank experiences. What I can tell you is when I look at the fees I see on big bank websites, I am astonished. I get it, all financial institutions have to earn money, but the question is what is reasonable and what is not.
When I see the published fees and rates on big bank websites, I know my credit union, First Castle, is working for me. First Castle is my support system when I have questions about how to best finance a car or how to best consolidate my store credit card balances into one low interest rate card. I know First Castle is looking out for me and my financial well-being.
Is your bank looking our for YOU?
So, if someone were to ask me why should they switch from a big bank to a community credit union, I would have to ask, “Is your bank looking out for YOU? Or is your bank’s priority to support their shareholders?”