Credit Union 101: What's the Difference, and Why You Should Make the Switch!

We Americans are a tough lot. We've spent the past several years doggedly tugging at our bootstraps, determined to rally back from the Great Recession that cost so many so dearly. We became savers instead of borrowers. We postponed large purchases, eked out those last few iffy miles on our old balding tires, pinched pennies, or simply went without. As our economy continues to groan toward recovery and the white-knuckled grip on our wallets begins to relax, now is a really great time to think about the very basics. There is value in every single dollar we earn. We were all reminded of that in recent years. That value can be maximized or minimized depending on how we choose to invest it, save it, spend it, or borrow it. Credit unions are a way for Americans to maximize that value- not just for ourselves- but for our friends, neighbors, coworkers, families, and communities.

Those of you reading this have probably heard about or seen a credit union at one time or another. You might pass them on street corners, see commercials about membership, or know a friend or two who use one. If you're wondering what the deal is or why you should make the switch from your big bank, you're already halfway to making a very smart decision. Simply put, credit unions are your not-for-profit alternative to the big banks, and they can save you big bucks.

Here are the highlights, or Credit Union 101:

1) Credit unions are not-for-profit cooperatives. They're owned by their members (YOU), and earnings are returned to the members (YOU) in the form of lower interest rates on loans, better rates of return on deposits, and lower or no fees. America's credit unions are owned by over 100 million members.

2) Together, credit union members save about $7 BILLION per year by choosing credit unions over for-profit banks, and bank customers save an additional $2 billion per year just because credit unions are in the financial services marketplace as a not-for-profit competitor. That competition keeps bank rates and fees in check because, believe me, they'd charge more if they could get away with it.

3) Credit unions offer the same products and services banks do but, because credit unions are owned by their members, they focus on giving you the best service- not earning the biggest profits.

4) Credit unions are democratically directed. The board of a credit union is elected by the membership and for the membership, so all decisions made are for the best interest of the membership (YOU). Each credit union member has one vote in elections, no matter how much money he or she has deposited in the credit union. This is a huge difference from banks, which are governed by a small number of paid shareholders whose voting rights depend on the number of shares they hold.

5) Credit union deposits are insured by the NCUA for up to $250,000, so your money is protected just like it is with the FDIC in the bank world.

6) Because credit unions are cooperatives, they cooperate with one another as well, and many participate in the shared branching network. This means you can use other credit union branches and over 30,000 free ATMs anywhere in the country if you travel or move away from your own credit union.

7) Credit unions are deeply rooted in their communities and invest back into them with passion. They do small business loans for local people, just like you, who have often been turned away elsewhere. Credit unions perform various amazing outreach efforts, too, from school supply drives to supporting local children's hospitals to teaching prisoners how to manage their finances once they return to society. Credit union employees complete thousands and thousands of volunteer hours each and every year. That kind of investment is truly in the DNA of credit unions because, again, credit unions are owned by their members, and those members are who make up the community.

8) Virtually anyone can join a credit union, including you. For one-stop shopping, click here, pop in your address, and get a list of them nearby.

So, now that you know the scoop, now is the time to ask yourself how much value you're getting out of each dollar you work so hard to earn. Do you make your money count, or does your money simply get counted by the stockholders earning profits from it? The choice is up to you!

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