It is common for people to open up a bank account early in their life, usually after they get their first job. There is little thought given to using a credit union instead of a commercial bank. One reason for this is that they don't know the advantages, but many people are not even sure what a credit union is. The following information explains what a credit union is and the reasons why they are a better alternative to using a commercial bank.

They work for your benefit

Commercial banks operate to make money; they are corporations that are owned by the shareholders. This is no different than any other business. Credit unions, on the other hand, are owned by the people who have money deposited in the institution. For this reason, the profits that are realized are put right back into the business. Because of their business model being so different from a commercial bank, they offer discounted services.

Credit unions are focused on working people

Unlike commercial banks, working peoples are not treated as a nuisance. This is why many credit unions exist for specific professions. They have the same services as a commercial bank, but often at a lower cost. You can have both a checking and a savings account, retirement accounts, a debit card, affordable money orders, money market accounts, and even safety deposit boxes. Because of the focus on working people, as well as their non-commercial business model, you will find the cost of their banking services to be lower.

Interest rates for loans are lower

Once you have an account at a credit union, you will find the cost of borrowing money to be lower than commercial banks. Credit unions have a good reputation being among the best places to get a car loan. In addition, many of these financial institutions offer mortgages, home equity loans, and issue credit cards to their account holders. Most of these lending services will be available to account holders at reduced cost relative to commercial banks.

You are eligible

This is an excellent reason to open an account. If there is a drawback to credit unions, it is finding one where you meet the eligibility requirements. Many credit unions are associated with certain professional unions or government work. Private sector companies often have credit unions for their employees. Some credit unions are open to people living in a certain geographical area, such as a city or county. There is likely one you can join.

If you find a credit union you are eligible for, you can start by asking about their credit union checking account services. However, from that point, the more you learn about their services, the more you will likely take advantage of them.