The numbers don’t lie: a side-by-side comparison of credit unions and banks

Simply put, credit unions are better than banks—assuming that you want to keep more of your money.  You’ve heard me say it, but I haven’t provided comprehensive, empirical data that proves it until now. 

This morning, I received a press release by the Georgia Credit Union Affiliates that highlights the major differences between credit unions and banks as reported in a recent comparison index.  For example, in Georgia, the average interest rate for credit cards in 2008 was 11.53 percent for credit unions, compared to 12.41 for banking institutions. Furthermore, a Georgia credit union member who finances a new $25,000 car through a 60-month loan will likely save almost $400 in interest the first years as compared to a bank. 

If you are a die-hard numbers person, read the cogent excerpts from the report below, proving that credit unions in Georgia are better options for consumers: 

Among the report’s findings:

• Credit unions approved more than 360,000 loans to Georgians in 2008, compared to 348,000 in 2007.
• Loans totaled more than $4.0 billion in 2008, compared to $4.1 billion in 2007.
• While the number of loans increased in 2008, the average loan amount was slightly less in 2008 than in 2007--$11,029 compared to $11,874.
• The majority of loans generated by credit unions were for consumer purchases, including new and used vehicle loans, home mortgages, home equity lines of credit and credit cards.
• Lower average interest rates on loans issued by Georgia credit unions in 2008 saved members a total of $70,037,847 compared to bank rates.
• Higher interest rates on savings products yielded $49,987,453 to credit union members’ accounts compared to banks.
• Fewer and lower fees for credit union members totaled $32,994,305 in savings benefits compared to banks.

Using data compiled from the more than 170 credit unions throughout Georgia and banking institution statistics from Datatrac, the nation’s leading rate survey firm, the index found that, in 2008:

• The average rate for a 60-month new car loan was 5.79 percent for credit unions in Georgia, compared to 7.38 percent for banking institutions.
• The average rate for a 48-month used car loan was 5.97 for credit unions in Georgia, compared to 8.05 for banking institutions.
• The average rate for a personal, or “unsecured,” loan was slightly lower for credit unions in Georgia, at 11.44 percent compared to 11.49 percent for banking institutions.
• The average rates for 15- and 30-year mortgages were slightly higher for credit unions in Georgia, at 3.09 and 5.73 percent, respectively, compared to 3.04 and 5.26 percent for banking institutions.
• The average rate for home equity lines of credit and second mortgages was 6.17 percent for credit unions in Georgia, compared to 6.55 percent for banking institutions.
• The average rate for credit cards was 11.53 percent for credit unions in Georgia, compared to 12.41 for banking institutions.

Savings data compared to banking institutions also showed rates favorable to credit union members in Georgia. According to the index, in 2008:

• The average rate paid on a savings account with a $1,000 balance was .84 percent for credit unions, compared to .63 percent for banking institutions.
• The average rate paid on a share draft checking account with a $5,000 balance was .70 percent at a credit union, compared to .58 percent for banking institutions.
• The average rate paid on money market accounts was 2.28 percent for credit unions, compared to 1.41 percent for banking institutions.
• The average rate paid on an IRA retirement accounts was 3.09 percent for credit unions, compared to 2.33 percent for banking institutions.

[ Read the entire report. ]

Comments

[Wonga]

The rules about the credit is beneficial to all because it will help to know more about the credit policy , and this will contribute to all the people.

[Same day payday loans]

The number serioulsy don’t lie and we have to trust them as they are the results of the originalaties

[Sharon Barlow]

We have several local banks in our area that seem to be more customer oriented than the bigger national banks we have. Remember when piggy banks were small and we kept them in our bedroom? Now they are big and charge us through the nose.