If everyone was a credit union member, would we be be toasting the new economic recovery instead of wallowing in the same malaise we've been mired in since 2009? A recent survey shows consumers who bank at credit unions have a more positive view of their personal finances than those who don't:
According to credit union data released from the (Discover U.S. Spending Monitor) in September, 38 percent of credit union members rate their personal finances as good or excellent, compared to 30 percent amongst noncredit union members surveyed. Just 17 percent of credit union members rate their finances as poor, while 29 percent of noncredit union members feel the same way.
Both groups also differ when it comes to whether their personal financial situation is getting better or worse; 48 percent of credit union members feel their finances are worsening compared to 51 percent of noncredit union members, a 3-point difference. Twenty-one percent of credit union members feel their finances are getting better compared to 19 percent of noncredit union members, a 2-point difference.
What's more, credit union members report an objectively better financial situation than their bank-only counterparts. More credit union members report having money left after paying monthly bills (52 percent vs. 44 percent) and more willingness to spend on discretionary items and home improvements (15 percent vs. 14 percent).
The correlation between doing well financially and belonging to a credit union is interesting, but it's hard to know if there's any causal relationship. In other words, does belonging to a credit union give members such a big financial advantage over nonmembers that they'll be that much better off financially, or are people who are better off financially just more likely to join credit unions?
Sure, credit unions typically offer more generous interest rates on both loans and savings accounts than their bank counterparts and to charge less in fees (NSF fees are about $5 less at credit unions than at banks). But I doubt those benefits are enough to explain such wide gaps in consumers' sense of financial well-being.
More likely, I'd say, is that because credit unions can't typically spend as much on marketing as their bank counterparts, those consumers who do belong to credit unions tend to have sought them out because of those more generous rates. Also, credit unions don't have the resources to put an ATM on every street corner and a branch on every street like some of the larger banks, forcing consumers to give up some measure of convenience to do their banking at a credit union.
It follows then, that credit unions are attracting a consumer who is more proactive and diligent when it comes to financial matters, and one who is willing to do a little more legwork and sacrifice some convenience to get credit unions' better deals.
Regardless, the upshot here is if you're a member of a credit union, you're in good company financially. Why do you think credit union members are doing so much better than nonmembers? Is belonging to a credit union that much more of an advantage?