WASHINGTON — CUNA, NAFCU, and various credit unions were lauded in a recent Money Magazine article.
The story, 5 Reasons You Belong in a Credit Union, ran on page 107 of the December issue of Money Magazine, noting credit unions' superior savings and loan rates, in addition to free personal finance classes.
Credit union savings rates have stuck with the Federal Reserve increases in recent years and dipped only slightly following recent cuts, according to the article. It cited Space Age Federal Credit Union in Denver for its 16-month CD earning a return of 7% through the end of the year, then 5% after that. The best deal was found on a six-month CD from Sabine Federal Credit Union in Orange County, Texas at 5.43%, 200 basis points above the national bank average.
Credit union credit cards also feature lower rates, fees, and penalties than the average bank. The average APR is 153 basis points lower than bank cards, according to NAFCU, which was noted in the story. The report also noted that the Woodstock Institute in 2005 found no credit unions practicing "universal default" penalties. However, Money said to check the find print because credit union rewards programs tend to be lacking compared to banks.
"Car loans a credit unions are like french fries at McDonald's: the classic, reliable product," the story stated. "Last year the Government Accountability Office found that credit union auto loans, on average, carry rates one to two percentage points lower than those of similar-size banks." It also says that credit unions are more likely to work with those who have weak or damaged credit histories.
CUNA's Home Loan Payment Relief (HLPR) mortgage is also featured in the article. It also notes that Navy Federal Credit Union does not fee mortgagees for document preparation and other charges, saving borrowers about $1,000 on closing costs.
Finally, the story highlights other perks of a credit union, like free personal finance classes, furlough loans, or account aggregation.
The article also notes the basics of joining a credit union but recommended considering combining the services of a bank and credit union for optimal pricing, service, and offerings.
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