How do they pull this off? By pooling buying power.
Because credit unions are not-for-profits owned by their members, they return savings to their membership. For example, auto loan rates are usually 2 percent lower than they are at banks, says Anne Legg, senior vice president of business strategies and innovation at Third Degree Advertising in Oklahoma City.
“We have everything that big banks have and more,” says Todd Pietzsch, spokesman at BECU, a credit union based in Tukwila, Washington. “But a lot of people don’t understand the benefits.”
To be sure, credit unions come in all shapes and sizes. Some are community-based; others cater to specialized groups, such as police officers or teachers. Many Fortune 500 companies and universities also are affiliated with credit unions. Perks can be equally generous at all of them, says Legg.
Here’s a sampling of the perks being offered at credit unions near you.
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Attend free financial workshops
Most credit unions take financial literacy very seriously, so they offer free workshops and financial counseling.
“Everyone should have a budgeting tool,” Legg says. “And credit unions do assessments, including full financial ones.”
For example, Landmark Credit Union in New Berlin, Wisconsin, holds seminars on budgeting and homebuying. Retirement planning and managing credit are other topics the credit union covers.
“We’ve always looked out for the little guy,” says Patricia Ransom, a vice president at Landmark. “People don’t get financial education in schools.”
And The Golden 1 Credit Union in Sacramento, California, with more than 700,000 members, offers a slew of online seminars covering everything from asset allocation to Roth IRA conversions. It also offers advice on what to do if you lose a job and how to recognize elder financial abuse.
But what about renegotiating loans if you fall behind? At credit unions, the process is usually simple. “You can do it in one phone call,” Legg says. “We look at each independent loan to see opportunities.”
Still, there may be restrictions, such as paying down part of your loan. And one downside is that renegotiating a loan can tarnish your credit score.
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Find discounts on services, entertainment
With a large membership, credit unions can dish out lots of useful, fun discounts. BECU offers discounts on sports tickets, tax preparation software and amusement parks, among other perks.
“We keep offering more every year,” Pietzsch says. “It’s got to be a quality product, though, that appeals to a broad base.”
Based in Richmond, Virginia, Virginia Credit Union, which currently offers discounts on amusement parks, tax preparation and even travel, also offers a mortgage rebate of up to $2,500.
Also, Landmark Credit Union has services aimed at its Hispanic clients, including money transfer services to Mexico for people to send money back home, Ransom says.
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Incentives for banking at a credit union
Banks aren’t the only ones dishing out incentives.
Credit unions offer some juicy ones, too. For example, OMNI Community Credit Union in Battle Creek, Michigan, offers cash-back rebates on checking accounts, savings and car loans.
Other credit unions offer cash incentives. BECU has a membership program where you can get a higher interest rate on your first $500 in a checking or savings account by signing up for various services, such as online bill pay.
“Just because you don’t have $100,000, we don’t treat you differently,” says Pietzsch.
Some credit unions also offer generous rewards programs. At Security Service Federal Credit Union in San Antonio, you can use its rewards debit and credit card program for merchandise, charitable contributions, travel or gift cards.
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Advantages for family members
Credit unions are usually family oriented.
“You’ll find a product for every lifestyle, from the first checking account to retirement products,” says Legg.
For example, there’s a bevy of kid-friendly accounts. Chicago-based Alliant Credit Union has a Kidz Klub savings account that pays high dividends, includes a newsletter and comes with a special ID card. Many credit unions also offer college scholarships to members.
Credit union programs aimed at seniors can go beyond just retirement plans. Summit Credit Union in North Carolina has a senior club with free perks like traveler’s checks and ID theft recovery services.
Many credit unions also offer wide-ranging financial services, including brokerage accounts, life insurance and health insurance. “We want to make the entire relationship the best it can be,” says Legg.