In these uncertain economic times, it’s essential to find a financial institution that prioritizes your best interests, provides stability for your hard-earned money and investments and offers some of the best lending rates available. Credit unions could be the answer. That could be especially true when it comes to your credit card debt.
According to the Credit Union Trends Report by TruStage (formerly the CUNA Mutual Group), credit union credit card loan balances rose 14.5% in the 12 months between March 2022 and March 2023. That figure is significantly higher than the cumulative 7% annual rise credit unions experienced in the past 30 years.
The sharp rise is due to more consumers relying on credit cards and credit card debt to manage these tough economic times. One of the advantages that credit unions can offer to their members, unlike traditional banks, is that credit union members will never pay more than 18% interest on their credit card debt. Traditional banking customers can pay over 20% interest on their credit card debt. This difference in interest rates allows members to keep more money in their pocket.
Beyond the sharp rise in confidence and investment from consumers, it’s important to understand why these institutions stand out as the best option for individuals right now. The characteristics of credit unions — including a member-focused approach, lower fees and better rates, community support and commitment to financial education — can help you make informed decisions and improve your financial well-being.
Member-focused approach: Tailored solutions for your financial needs
Credit unions are committed to their member-first approach. They put your best interests first, offering personalized assistance and tailored solutions to help you navigate financial challenges. Unlike banks that focus on maximizing profits for shareholders, credit unions are member-owned and prioritize the well-being of their members. This means they provide personalized guidance and support, allowing you to make informed decisions that align with your financial goals.
In uncertain times, having a trusted partner that understands your unique needs can make a significant difference when saving for emergencies, planning for retirement and securing loans.
Lower fees and better rates: Optimizing cost savings
One of the standout advantages of credit unions' cooperative structure is their commitment to offer lower fees and better rates compared to big banks. This translates into significant cost savings for you.
Credit unions typically have lower fees for services such as ATM withdrawals, overdrafts and account maintenance. Moreover, they generally provide more competitive interest rates on loans, credit cards and savings accounts.
Most also offer a range of options for repayment periods, allowing borrowers to choose terms that best fit their financial situations and budgets. The cost savings that can result from finding the right repayment solution can provide a sense of stability even in the face of economic challenges.
Community support: Harnessing local resilience
Credit unions tend to have deep roots in the communities they serve, often focusing on community development and reinvesting funds locally. Particularly in challenging economic environments, credit unions are attuned to the needs of their communities, providing additional support, programs and resources.
By banking with a credit union, you contribute to the stability and growth of your community, while also being able to take advantage of the targeted resources and programs. This collective effort helps individuals and small businesses weather financial hardships and foster resilience.
The sense of community support and shared responsibility can provide reassurance and a stronger sense of belonging during turbulent times.
Financial education: Empowering you to make informed decisions
Credit unions place a strong emphasis on financial education, offering a wealth of resources such as workshops and counseling services to help you make informed financial decisions.
By expanding your financial knowledge, you can navigate uncertain economic periods with confidence. The knowledge gained through education empowers you to take control of your financial situation and adapt to changing circumstances.
Overall, a credit union’s member-focused approach, competitive fees and rates on loans, impact on the community and commitment to education make it an ideal institution for strengthening your financial well-being. By leveraging the benefits of credit unions, you can receive tailored solutions, reduce costs, contribute to community development and empower yourself with financial knowledge.
Making the choice to partner with a credit union means you’ll have ample help to navigate these challenging times with confidence.
