January 2,2007
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Credit Unions 101
If you have shopped for financial services recently, you may have looked into the benefits of both banks and credit unions. Most consumers are at least partially aware of the services offered by a traditional bank. They may be surprised, however, that credit unions generally offer lower rates of interest on credit cards and loans. Knowing the basics about credit unions, and how they operate, is a good heads-up to the customer looking for options.
First of all, credit unions are non-profit. Unlike big corporate banks, credit unions are owned and operated by the consumers utilizing its services. Usually, these are groups like the employees of a big company or industry, or the students and faculty of a university. Credit unions rely on a financial reserve to cushion their accounts against loss from loan defaults or other setbacks. Consequently, they can boast lower rates and fees, and remain solvent.