Credit Unions: What are they? Why they may be the best option for you
When we want to buy some kind of new product, for example. From the simplest to the highest added value, it is normal to do that good old search for the best deals, or the ones that best meet our needs.
What many people have no idea – or at least not common sense – is that the same can and should be applied when it comes to financial services. Yes, that’s right: there are organizations other than banks, whether private or public, that perform this type of service.
But what are credit unions?
What may sound impossible in a world full of barbarity we live in today is a rapidly expanding movement; like-minded people who help each other to achieve a common goal.
A cooperative is an entity or institution set up by these people and managed by all of them in a democratic manner. Credit unions (or financial unions) are institutions formed in the form of companies. They provide members with the same services and products as commercial banks – checking accounts, credit and debit cards, savings and other applications, credit lines, etc.
So what’s the difference between them and the banks anyway?
The difference is that in credit unions the customer also owns the business (a partner). He can help elect leaders and seek, with all other associates, the most beneficial solutions for everyone. Voting power is independent of the size of the member. That is, everyone has the same decision power, no matter what value you apply.
Cooperatives are a society of people, not capital, so unlike banks, they are not aimed at profit but at meeting the needs of their members. This gives members access to lower rates and interest rates on financial transactions.
Do not believe me? On the Central Bank website you can compare all rates of banks and cooperatives in our country. You can go there, I dare you.
Are you too lazy? So what about an example?
With lower interest rates you pay less at the end of each loan!
In addition, clients participate in the institution’s economic results at the end of each year. That is, the positive results they present are distributed to the associates proportionally to their movement. That’s right you read, if the cooperative profits you profit too ! While in commercial banks this profit would be passed on to shareholders.