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Are credit unions better than banks? Pros and cons for the discriminating retiree

Mar 14, 2012, 11:17 a.m.

The advantages of credit unions are many, while the downsides are few. AARP reports that over 400,000 people moved their accounts from banks to enjoy the benefits of credit unions in October and November 2011 alone.

Should you ask members (customers) or consumer advocates about the advantages of credit unions, you'll hear a long list of pros, and few, cons. Even bank insiders, if they are honest, will express the benefits of credit unions. What are some of these benefits?

Higher interest returns on savings. Most credit unions offer accounts with higher interest rates than banks. Lower cost loans. One of the common advantages of credit unions is their lower interest rates on most loans.

Low or no fees for most accounts and services. Unlike most banks, credit unions are not "fee junkies." The benefits of credit unions includes low fees. The industry says it saved its members over $6 billion in fees in 2011 compared to average bank fees.

Potential downsides?

Fewer branches. Members will not find a credit union branch "on every corner." The popularity of online and mobile banking greatly minimizes this issue.

Shorter working hours with smaller credit unions. This con should not affect most retirees if their schedules are more flexible and have more availability during business hours.

Membership rules. Always check to see if you are eligible to join, as many credit unions have territorial restrictions.

Fewer proprietary ATMs. This has often become one of the advantages of credit unions, as many have agreements with other institutions to allow members access to other ATMs -- without fees.

The benefits of credit unions far outweigh the downsides. Learn more about the advantages of credit unions, by visiting impartial websites.

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