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Credit vs. Banks: Which is Best?

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Since the financial crisis in 2008, many consumers feel a traditional large bank can no longer be the best place to keep their money. Credit unions are an alternative solution, with over 6,000 available in the United States.

Most Americans still belong to one of the major banking companies such as Good Finance & Company (NYSE: WFC) or Bank of America (NYSE: BAC). However, this trend is changing rapidly; According to the Credit Union National Association, over 3.7 million people joined a credit union in 2015.

The layout of this manual reflects that structure

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A big difference between a bank and a credit union is the business structure. The major banks, such as Good Finance or JPMorgan Chase & Company (NYSE: JPM), are some of the largest companies in the world and are staples of the financial sector. The banks have incredible reach, with thousands of branch sites across the country. For example, Good Finance has over 8800 offices and 13,000 ATMs across the country.

Credit boxes are considerably smaller in size and are designed to serve a particular region or city. For example, the Navy Federal Credit Union (NFCU) has only 300 branches, with many near military bases. But just because most credit companies have smaller branches doesn’t mean they can’t have a similar range as the big banks. Many credit unions connect a network that aims to extend the scope of credit union ATMs. Navy Federal Credit Union members have access to over 52,000 ATMs across the country, over four times as many Good Finance ATMs.

The banks are in the business sector making profits for their shareholders

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shareholders’ voting rights are based on how many shares; Therefore, the largest shareholders have the most power.

Credit unions are nonprofit units and customers are considered members. A member’s voting ability is not based on how much money is deposited. Each member receives an equal vote, which can directly influence the management of the credit union. Some credit companies are also very specific about who can apply for membership. NFCU is only available to active and veteran military personnel and their families.

Due to the larger size of deposits, a bank is governed by several federal agencies such as the Federal Reserve and the Office of the Comptroller of the currency. The banks are also required to have a certain amount of capital reserve requirements, determined by the Basel Committee.

Credit unions are governed by the National Credit Union Administration (NCUA) at federal level and government agencies at state level.

When comparing the two structures, most consumers are under the impression that credit unions cannot serve the public as a bank. The banks have more places, which is good for customers who want to in-service staff by visiting some branch site in the country. Credit companies have considerably fewer places than most banks, but branches are in close proximity to most members. Some credit companies have also responded to the large banks’ reach by creating a network of ATMs. However, not all Credit Union members are in a larger ATM network.

Offers and features

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Banks and credit institutions offer basic control and savings accounts to customers. Both also offer customers the typical checkbook, bank card and other basic banking functions such as internet banking and bill payment. But smaller credit companies usually do not have the same technology budget as a bank, so the website and security features are much less advanced.

Banks offer their customers a wide range of credit card options. Bank of America has 21 different credit card options, ranging from rewards cards to student cards. The BankAmericard Cash Rewards card gives users a $ 100 online cash rewards bonus offer as well as 1% cash back on purchases, 2% at grocery stores and 3% at gas stations.

Credit companies can also offer credit cards but have less availability. NFCU is the largest credit union of assets in the country and only offers six different credit cards to its members. The second largest credit union is state-owned “credit union (SECU) and offers only one credit card.

Banks offer many other financial services to members, such as mortgages, bank certificates (CDs), insurance, wealth management and investing. Good Finance provides home, student, auto, home equity and personal loans. The company also offers various insurance branches, such as life, auto, home and umbrella insurance. Customers can open a broker or retirement account through their online WellsTrade brokers or full service Good Finance Advisors.

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