Not-for-profit status fosters member-first mentality
Pro: Credit unions have superior service.
"Credit unions are cooperatives owned by their members," says Pat Keefe, a spokesman for CUNA. "Their mission is to provide their members with affordable financial services -- not to gouge them as profit centers."
That mission leads to very satisfied members, too. In the most recent Prime Performance Bank and Credit Union Customer Satisfaction Survey, credit unions beat banks in all categories, with customers rating their overall satisfaction at a new score of 89 percent, seven points greater than the industry average.
Con: There's limited eligibility.
Becoming a member has its hurdles.
Unlike banks, consumers cannot open an account at any credit union they choose. Keefe says consumers must meet certain fields of membership such as employee groups, associations, religious or fraternal affiliations, and residential areas.
However, Greg McBride, CFA, Bankrate.com chief senior financial analyst, says joining a credit union has gotten much easier.
"Credit union fields of membership have been expanded in recent years," McBride says. "Increasingly, it's no longer a requirement to be an employee of one specific company, but there may be dozens that are eligible through the same credit union. Also, community credit unions are eligible to anyone who lives, works or worships in a particular community."