What Is a Credit Union //Credit Union vs Big Banks- Head to Head

What is a not-for-profit credit union is it better than a regular Bank we’re you gonna have a matchup today with big banks and credit unions we’re gonna have eight rounds of head-to-head comparisons and we’re gonna have you decide down in the comment section which one wins we will be covering pros and cons of both big banks and credit unions topics don’t forget to smash that subscribe button down below so that you don’t miss out on any future content what is a credit unit and why is it so different we’ll understand exactly how a bank works you go in you give them your information you give them your money and you’re guaranteed to have a safe secure place for your money big banks pride themselves at being a one-stop shop for everything finance and you can guarantee that they will be coming back to you for to provide more services down the line after you sign on that dotted line so what makes a credit union so special in order to take a better look at exactly what a credit union is we’re gonna roll it clock back to 1850s Germany in much the same way that the Mafia stepped in to the void filled by banks no longer giving out small consumer loans credit unions begin to provide services for low-income and rural area communities that were no longer serviced by larger banks unlike the loan sharks in payday loans it was later replaced some credit unions would fill the financial gap in a much more benevolent manner in the early days they were set up much like a commune with the risk being distributed among the farmers themselves as there’s little collateral for many of them these credit unions would provide services to low-income middle class and small businesses because they’re such smaller operations they had to rely on good business practices to stay over they focus more on customer service and community involvement sometime is it laughs and now we’re in the 21st century credit unions are like mini banks now both are nationally insured and offer very similar services to include checking savings loans credit cards and more we’re gonna have eight head comparisons and I want you to decide exactly which one is the winner by the end of it and throw it down the comment section in the first round of banks first nonprofit credit unions we have exactly why they are created your big banks are designed to create profits for shareholders while your obvious nonprofit credit unions are designed on customer service big banks are designed to actually funnel money to their shareholders and are very focused on turning a profit on the other hand you’re not for profit credit unions are obvious as in the title not for profit big banks are required to turn a profit for their shareholders this leads to much more and pushing of products to new customers and old customers alike you can tell the difference between the average fees which are $14 for a big bank and $6.00 on average monthly for a credit union these fees can include but are not limited to overdraft fees checking fees minimum balance fees hardcopy fees ATM fees lost card fees inactive fees and account closure fees now some of these fees do occur inside a credit union but some of them often times are waived like ATM fees on to round to board of directors and CEOs the board of directors are voted on by the shareholders of the bank they are usually directed towards profit seeking and usually incentivize employees within the company to further financial gains this has recently got Wells Fargo into a lot of hot water in fact 185 million dollars of hot water with fraudulent account openings as their employees were incentivized to open new accounts so what they would do is they would take money that was already in an account and create a new account with that person Social Security and move the money into it so they could have a new account open 5,000 employees were let off and no manage on the other hand a credit unions board is usually made of volunteers that are voted on by the actual members so people who are depositors of the credit unit if you would like to try and change something within your credit union you very well can round number 3 ATM accessibility big banks can operate countrywide and sometimes globally with ATMs on multiple continents credit unions on the other hand have fewer locations and are usually requiring networks of other credit unions to provide services however the fees are usually waived when you go into a credit union they will look into your financials much more in-depth to make sure that you are a good fit for qualifying for this loan credit unions also focus on working with low-income areas and medium income areas much more than big banks credit unions will focus more in on catering things towards you and customer service big banks would prefer to work with large sums of debt rather than small consumer loans the more debt you were going into these big banks and the higher their profits the better your customer service will be they’re the big banks could they would only work with large sums of money as it takes the exact same amount of manpower to process a ten thousand dollar loan as it does a 1 million dollar loan when you walk into a big bank you were just another number with a credit score and everything is cold hard calculations number five rates of return because credit unions are not for profit they’re not worried about the bottom line your money sinking account will receive much better returns as well you’ll get better interest rates for loans and lower fees overall bigger banks are focused on giving the customer as much debt and as many products as possible to maximize profits rates will be higher across the board and returns much lower rad number six most credit unions are self financing this means that they keep your mortgage there at the bank rather than selling it off as a security this means that they also have to be much more careful about who they alone – because at the end of the day it will be on them big banks are notorious for selling off liabilities such as mortgages in the form of securities this is actually what created the subprime crisis that triggered the financial recession baek’s would make as many loans as possible so they could sell them to the investors waiting to take on the risk so how is your scoreboard looking which one do you think is winning at this point let us know down in the comment section below so during the last recession how did these two institutions fare well let’s cue the graphic regular banks failed at five times the rate of a regular credit union as they say the proof is in the pudding round number seven big banks pride themselves on being a one-stop shop for customers not only are they able to take in more customers from a more broad area but they also have more up-to-date technology and more cutting-edge financial services where as a credit union is typically very small required by law to have a common association between all members such as location job or other focus groups credit unions tend to trail a little bit behind the big banks in things like online banking and other financial services round number eight so we a little bit prior credit unions face the problem that it takes the exact same amount of effort to process a ten thousand dollar loan as it does a ten million dollar loan this makes the return on time significantly less for credit unions in comparison to the big banks so as a general roundup let’s go back over what we have covered credit unions are more focused on small focus groups and providing customer service to smaller individuals in low-income and medium income areas along with small businesses they are not-for-profit like the big banks and corporations and their business practices help them fare much better during the last recession big banks are a one-stop shop for all your financial needs and they are designed to hit a broad spectrum of customers big banks use large scale operations to funnel profits back to these shareholders so down in comment section below let us know which one you thought won this head-to-head match if you liked this video don’t forget to smash that like and subscribe so you never miss out in any of our upcoming content and as always have a great day unlike the loan sharks can later payday loans easier the credit unions build a much more 11 car keys we built