Credit Union vs Bank: Why Credit Unions Are A Top Banking Choice

by The Smarter Wallet on June 21, 2010

Did you know that when it comes to internet banking, credit unions are winning the race hands down? According to a study published by ForeSee Results, a whopping majority of folks who bank with credit unions are happier with their online experience than with more traditional banks. Plus, the top 5 big banks rate the worst. Here’s why:

Customers of credit unions trust their financial institutions more than any other customer / banking relationship.

Credit Union vs Bank: Why Credit Unions Are A Top Banking Choice

First and foremost, credit unions fly under the radar when it comes to negative publicity. Because most are very small and are community-oriented, they dodge the ball when it comes to scandal. Banks are perceived as untrustworthy when they are represented negatively in the press, and let’s face it, when it comes to brand identification, perception is everything. And the numbers don’t lie. Big banks have experienced a 40% increase in bad publicity this year, which directly relates to a 15% decrease in customer trust compared to a 2% increase in negative publicity for credit unions and a 5% increase in lack of trust.

Plus, because credit unions have a more local presence, the experience of working with them is generally perceived as more personal. Who doesn’t like it when they enter their bank and the teller already knows your name, the name of your children and asks about your dog that was sick last week? All of this breeds trust in a relationship, which leads to increased customer satisfaction and ultimately, increased business for the credit union. There are several reasons why joining a credit union makes sense.

Credit unions communicate better with their customers.
I know, it’s hard to believe with all the emails and junk mail you get from your bank, but credit unions simply do a better job when it comes to reaching out to their clients and letting them know about pretty much everything that’s going on. They also do it in the way that 65% of the customer base wants it done, via email. Why go through the expense of mailing out a bunch of stuff people don’t want or interrupting personal or work time via meaningless text messages?

Credit union websites are easy to use.
Easily, one of the biggest drivers of credit union success in the online world is the sheer simplicity of their websites and intuitive functionality. We’ve all been to those big bank websites and spent up to 15 minutes just simply looking for the login boxes. Then you have to find the bill pay function, or the account summary page or the place to change your mailing address. Most credit union sites understand that you are on their website to perform a necessary function and put these front and center on their sites, leaving all the bells and whistles to the big dogs. I’m not saying that having these bells and whistles on your site isn’t nice, but most of the time, it’s unnecessary. What is necessary is the ability of your customers to find what they need and be able to use it. Credit unions have this aspect down to a science.

The reason that I bring all of this information to the table is this. People like you and me are creatures of habit. We bank where our parents banked, where their parents banked, or where our jobs bank. Even if we are unsatisfied, we continue to bank in the same way, at the same place. Many of us are stuck in unsatisfying relationships with traditional banks and never realize that there are other options. So if you’re looking for a place to open an online savings account, credit unions offer a highly satisfactory alternative to traditional banking. They have all the same services and are generally much less expensive than traditional banks, perhaps including online banking. Take time out and take a look at your local credit union and see what they can do for you!

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{ 1 comment… read it below or add one }

1 joe July 5, 2010 at 6:58 pm

Unfortunately, local credit union interest on savings or CD is dismal. Just as bad as the ‘big bank’ next door. So my money is at an internet bank, much higher interest.

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