Why Everyone Should Join A Credit Union On 'How To Money'

On this episode of How To Money, Matt and Joel take a deep dive into why everyone should be a member of a credit union. Joel likens credit unions to the Utah Jazz basketball team: “They aren’t perfect, but they are underrated.” They explain all the pros and cons of a credit union and how to find the best one for you. Part of the appeal is the service and the low rates and fees compared to bigger banks, but they also point out that an enormous amount of wealth is concentrated in the biggest four banks in the United States – and since their job is to create a profit for shareholders, this often means that customers are getting hit with high fees and interest rates for borrowing, while receiving laughably small returns for savings. With a credit union, members are the owners, so they get offered the best rates for the best financial products available.

Credit unions are easily the best place to get a loan for a car or a home equity line of credit; they often offer the best possible interest rates, instead of trying to inflate your debt. Customer service is often superior, and many will offer things like credit builder loans to help borrowers fix their credit, savings accounts for kids that pay surprisingly high interest rates to get kids excited about saving, or free financial literacy classes for members. And while credit unions have had stringent membership requirements in the past, such as working for a particular employer, things have changed: Now, many serve members by geographical location (the state you live in, for instance), so there are at least one or two options available no matter where you live or work. 

Of course, there are downsides to everything: They both find credit unions to be less technologically savvy than big banks, with clunky websites and apps. This is because unlike banks, credit unions aren’t publicly traded with access to investor money, so they’re often slower to innovate. There are fewer physical locations, and since credit unions are community-oriented, you might not find a single one in another city or state – so if you travel and like to bank in person, that’s a consideration. But for the guys, joining a credit union is a no-brainer; the benefits simply outweigh the minor annoyances. Ultimately, they say, you want a good relationship with a credit union – to get those low borrowing rates – as well as a high-yield savings account at an online bank. That way you get the best of both worlds – and the big banks are left completely out of the picture. Get all this great information and so much more on this episode of How To Money.

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