Why Use a Credit Union?

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diGJamaica.com has you covered with all the burning questions you need answered.

October 20 marks International World Credit Union Day. As defined in the Oxford English Dictionarycredit unions are non-profit-making money cooperatives whose members can borrow from pooled deposits at low interest rates. Jamaica has a long, rich history when it comes to credit unions. Check out a list of credit unions in Jamaica here.  Some services offered by the credit union include savings accounts and insurance.

Although credit unions offer the same types services as other financial institutions, they are different in principle.  For more information, read The Difference Between Credit Unions and Banks.

So the question really is: why use a credit union?

Better Rates

Credit unions conventionally pass on savings to their customers because of their status of being member-owned and being not-for-profit. This is done through their entire product line, which offers customers higher rates on savings accounts and lower rates on loans and credit cards. Profits to stakeholders is not the goal of credit unions, so credit unions are free to pass surplus money on to members, including  lower interest on loans and higher dividends on deposits.

Lower Fees

Lower fees are a feature of credit unions due to the range of flexibility in how much the union can charge, which leads many to keep costs low for their members. Some credit unions may even eliminate products or services to cut costs rather than add fees.

Shared ATM & Branch Locations

Credit unions have ATMS available and cards associated with credit unions can oftentimes be used at commercial bank ATMS. There are also quite a number of branch locations accessible in almost every major commercial centre in Jamaica.

Beyond-Banking Perks

Some credit unions offer other products, such as individual health insurance and financial advisory services. A number of credit unions often focus on community enrichment, financial education, scholarships and other corporate social responsibility elements, with many offering free classes or other educational services to the community. Services provided by a credit union are meant to benefit the local community and its members.

Governance

As stated above, credit unions are member-owned and member-run which allows them to make decisions to benefit their members, rather than seeking to please a removed group of stakeholders who sometimes have more power in decision-making than account holders. Credit union members elect a volunteer board of directors from their membership. Members each have one vote in board elections, regardless of their amount of savings or shares in the credit union.

Better Customer Service

Credit unions are known for putting the customer first in comparison to banks. Superior customer service is usually received at credit unions due to their smaller size, again in comparison to big banks. This allows credit unions to know their members and focus on their needs.

Whether you decide to join a credit union or a commercial bank, or both, it is always important to get your facts first.

 ‘An investment in knowledge pays the best interest.’- Benjamin Franklin

Sources:

 http://www.bankrate.com/finance/credit-unions/pros-cons-credit-unions-1.aspx#ixzz4NdqIAqC3
http://www.investopedia.com/financial-edge/1211/6-benefits-of-using-a-credit-union.aspx#ixzz4NdrNj0qC
http://www.woccu.org/about/creditunion?