As consumers aim to simplify their lives by cutting back on spending and building savings, credit unions are out front helping to make it happen, according to one CUSO.
The Rancho Cucamonga, Calif.-based CO-OP Financial Services highlighted several trends where CUs are meeting the frugal needs of members including the industry having the fastest growth since 2003. Consumers are more willing to switch banks than they were before the financial crisis, the technology and ATM solution CUSO said, citing a J.D. Power & Associates survey.
Credit unions also have nearly 10% of the household savings in the country, their biggest share of the market ever. More than 1.2 million new members joined in 2009, CUNA data showed. Free checking, lower penalties for overdrawn accounts, no minimum balance requirements and unlimited monthly transactions may be among the reasons for the increase in membership. CO-OP, citing CUNA data, said consumers saved $7.3 billion by doing business at CUs rather than banks last year. Business loans were also up 14.4% as of June 2009, the CUSO said. Interest rates on CU credit cards are 20% lower than bank cards, according to a Pew Charitable Trusts study.
"Frugality offers the opportunity to simplify one's life. Credit unions are one way for battered consumers to find some relief," CO-OP said. "As the saying goes, 'It's not how much we make, but how much we save that makes the difference between being rich and living rich.'"