It’s a shame that more people don’t know more about credit unions. Banks, particularly the multinational Big Banks, have shown time and time again that their ultimate allegiance is to their shareholders, not their customers. From predatory lending practices to the kinds of high-risk derivatives trading and the bundled, toxic loans that precipitated the Great Recession (which those banks were then promptly bailed out from by the government without any real accountability or oversight), many banks simply do not deserve our trust or money.
On the other hand, federal credit unions are not profit-based and do not engage in risky financial machinations that leverage taxpayer dollars; their allegiance is to local communities, not shareholders or corporate benefactors.
You can get all the same federally insured financial services from a credit union, including checking accounts, credit cards, loans, equity lines, ATMs, and online banking, and usually with much better interest rates, terms, and conditions.
Consider a quick case study to drive the point home. Mission Fed, a credit union in San Diego County, offers 30-year fixed home loans and home equity lines of credit (HELOCs) with very low-interest rates. Their assets are funneled into community projects like a food bank that supports COVID-19 victims.
If you have a local credit union (and it’s almost a certainty that you do), you should consider divesting from whatever bank you use and reinvesting into your community and yourself. Here are six reasons for doing so:
The customers are stakeholders
When you use a bank, you’re a customer. When you use a credit union, you’re a member leveraging your money to support a community-minded institution. It’s a co-op (a financial cooperative), not a corporation. Credit unions are microcosms of representative democracy itself–member-owned and member-run vehicles of community growth.
ATMs and online services are just as plentiful
A lot of people have heard false information about credit unions, rumors about them having fewer ATMs and untrustworthy online portals. The reality is that the vast majority of credit unions have perfectly functioning online account services and plenty of ATMs. You’re not going to be stuck out of a town unable to access your money. Also, credit union ATMs have no fees, so you won’t ever get charged $5 just to withdraw a twenty.
Credit union loans and credit cards offer lower interest rates
Most credit union-issued credit cards have significantly lower APR interest rates than bank-issued cards and offer just many rewards points. Car loans, home equity loans, and pretty much every other loan you can get will also come with vastly lower rates. Conversely, savings accounts, checking accounts, money market portfolios, and CDs will bring you higher rates of return.
The reason for this is simple: the credit union’s board of directors isn’t beholden to corporate profits, so their surplus cash (aka, your money!) is redistributed back into the community via low fees, low interest, and higher deposit dividends.
Community investments into education and financial literacy
Credit unions usually feature a robust lineup of funds, projects, and classes intended to benefit the community. This can be in the form of scholarships, special education programs, low-interest student loans, and more. Credit unions also believe strongly in financial literacy and work to improve people’s misunderstandings about interest and loans, something banks regularly exploit.
Additional philanthropic efforts are common as well. Project 2025, for example, is investing considerable resources into initiatives meant to improve education for children, local causes, community-based technology, and credit union literacy. In 2019, this partnership sponsored an auction that donated its profits to eight area Children’s Miracle Network Hospitals.
Credit unions were developed in the 19th century with a specific goal in mind: counteracting the greed of banks by building local financial cooperatives that enrich community members, not bank executives. Even the smallest cities now contain multiple credit unions; bigger cities give you dozens of options. With the rise of online financial services, you can pretty much do anything with a credit union that you would do with a bank, except you will be benefiting yourself and your community.
While it can be a hassle to switch over all your credit lines, accounts, and cards and switch from a bank to a credit union (banks typically make it an aggravating process as they don’t want to lose customers), you’d be well-advised to do so.