Did you know that as of the second quarter of 2025, there are over 4,370 federally-insured credit unions in the US? And that those credit unions have a cumulative total of more than 140 million members?  

That means more than one in every three Americans is a member of a credit union. If you’re not one of those Americans, you may be wondering what the pros and cons of credit unions are, and if you should join one. 

Deciding where to do your banking is a big financial decision. As a savvy consumer, if you’re considering credit union membership, it’s important to do your research. You need to decide for yourself if there’s truly a compelling case to be made for you to choose a credit union over a traditional bank. 

In this post, we’ll examine different aspects of credit union pros and cons. We’ll provide you with the information you need to make a sensible decision for your personal circumstances.

Credit Union Pros and Cons

Before we get into our comprehensive breakdown, here’s what you need to know:

• Pros:  Credit unions offer better rates, more favorable terms, superior service, and fewer fees.
• Cons: Credit unions may have more limited accessibility, stricter eligibility, and a narrower product and service portfolio.

Understanding Credit Unions & Banks

When evaluating credit unions vs banks, it’s helpful to have some foundational knowledge on each. Here’s a quick overview of what they are and how they compare:

Banks vs Credit Unions

	Credit Unions	Banks
Ownership	Members	Shareholders
# in the US (Federally insured)	4,370 (21+K branches)	4,400+ (68+K branches)
# of US Customers	140M+ people	96% of US households
Assets Under Management	$2.30 trillion	$24.5 trillion (50 largest US banks)
Economic Model	Nonprofit	For profit
Regulation & Oversight	National Credit Union Administration & state regulators	Federal Reserve & the Office of the Comptroller of the Currency
Eligible for Federal Insurance	Yes (NCUSIF)	Yes (FDIC)
Geographic Reach	Usually local or regional, sometimes national	Can be local, regional, national, or international
Customers	Members (restricted by eligibility)	Public or private clients
Known For	Being trusted and secure financial institutions Offering better customer service Community participation & support	Supporting & shaping the economy Ability to provide liquidity and a broad range of offerings Safeguarding depositors’ money

As you can see, banks and credit unions are similar in some ways and different in others.

Both are subject to national and state laws and supervision. Both can federally insured deposits. Both can serve the towns and cities they’re located in.

However, it’s clear that conventional banks occupy more of the financial landscape in terms of the number of businesses, locations, and money in their vaults. Meanwhile, credit unions are more associated with forging deeper personal connections and being organizations that members can count on. This is because credit unions are owned by, and operate for, their members. Banks, on the other hand, need to please their shareholders.

Pros of Joining a Credit Union You’re Bound to Love

Credit unions are popular and for good reason.

But are they right for you? Should you join a credit union this year? Let’s take a look at some of the benefits of joining a credit union. 

Lower Interest Rates & Fees

Credit unions are nonprofits. They’re member owned and operated. They aren’t incentivized to crank up their rates and fees to borrow or deposit money, since it wouldn’t be in the interest of their members. Credit unions don’t have external shareholders to whom they must show and pay out profits.

Credit unions are willing and able to slash the interest rates on loans and ask for fewer and smaller fees for things like applications. In certain situations, some credit unions will even waive fees.

Higher Savings Rates & Dividends

This is the other side of the same coin. With no outside investors with their hands in the pot, credit unions are able to reward their own members. 

They do so by offering higher interest rates on deposits in savings, checking, and investment accounts. Plus, some credit unions, like Valley Credit Union, pay regular periodic dividends to account-holding members.

More Favorable Terms

Credit unions are known for being more flexible and accommodating. For example, credit unions have been known to:

• Modify the repayment schedules for loans (e.g., changing the number or frequency of installments)
• Be more willing to accept members or loan applicants than traditional banks, making financial services and products more accessible to more people

Customer Service & Community Focus

Year after year, customer satisfaction surveys show that credit union members tend to be happier with their financial institutions than bank customers.

This could be thanks to the personalized attention and genuine support many credit unions offer. As community organizations, credit union staff are active members of their communities. Helping members can feel more like helping family, friends, acquaintances, and local small businesses, than serving customers.

Safety & Security

In customer polls, credit unions are routinely touted for their trustworthiness and the sense of security their members feel.

• This could be because members enjoy an elevated level of service.
• It could also be because, for various reasons, credit unions are relatively stable organizations. They’re less likely to go bankrupt and more likely to weather economic turbulence. 
• On top of this, eligible deposits at credit unions are federally insured.

Cons of a Credit Union

We’ve covered the first part of the credit union pros and cons, but you can’t make a sound decision without being aware of some of their potential shortcomings.

To be clear, every credit union is different. Not all the disadvantages listed below apply across the board. 

Limited Availability & Accessibility

While credit unions are in many communities, there may not be any in your area. Or, the credit unions in your neighborhood aren’t a proper fit for you. In this situation, you may want to expand your search further out or consider an online credit union.

You may also think that being a member of a local credit union means you’re restricted to its branches alone. But that’s not always the case. Many credit unions belong to geographically dispersed consortiums, allowing members to access shared services across the entire network. Valley Credit Union is part of a credit union co-op so our members can use over 5,400 branches and 30,000 ATMs around the world.

Accessibility can also be a challenge. Some credit unions may not be equipped to serve certain populations, including differently-abled or underserved people. For example, maybe a credit union doesn’t have a website that meets current accessibility guidelines so that folks with visual impairments can use online banking features. Or perhaps the local branch isn’t on a bus line.

Membership Restrictions

Credit Unions are membership-based organizations. Membership is limited to people who meet specific eligibility criteria, such as occupation, employer, region, or faith. For example, the nation’s largest credit union, Navy Federal, serves military members, veterans, and their families.

That said, the odds that there’s a credit union you could join are very high. 99% of all Americans qualify. The key is to find a credit union that aligns with you and your particular profile.

Fewer Offerings

Mainstream banks may have more products and services or bells and whistles. They have the scale and capacity to build out offerings that smaller financial institutions can’t.

That said, credit unions often choose to specialize and only offer products and services that they know meet the demands of their members. For example, a credit union that serves a lot of families may have more options for home, auto, and student loans. A credit union whose membership is largely entrepreneurs and start-ups might feature more corporate credit cards and business loans.

Technology & Services

Most credit unions are rather small financial institutions, whereas banks are often much bigger. For very large banks, that size comes with some advantages.

Banks can often allocate a greater budget to things like online support, online banking, and digital apps. This doesn’t mean that credit unions won’t have good tech and services, though. Most credit unions are keeping pace with modern norms when it comes to encryption, online and mobile banking, online bill pay, teleservices, and so on. It’s worth investigating what the credit unions you’re considering offer and the standards they meet for data security and privacy.

What to Know about Credit Unions in Oregon

When you’re weighing credit union pros and cons in Oregon, a few local factors make a meaningful difference. Oregon’s credit unions are deeply rooted in their communities. That makes for very personalized service. 

Another key advantage is the stability and accessibility of Oregon’s credit unions. Most offer modern digital tools, like mobile apps, and secure remote services, that make day-to-day banking simple. 

Combined with oversight from both federal regulators and the Oregon Division of Financial Regulation, members can expect a reliable, community-focused experience.

FAQs About Credit Union Pros and Cons

Are credit unions as safe as banks?

Yes. Credit unions that participate in the National Credit Union Share Insurance Fund (NCUSIF) insure eligible deposits up to the same limits as banks backed by the FDIC. This coverage comes with strong federal oversight, so your money is protected.

Do I need to meet specific criteria to join a credit union?

Yes, you need to meet membership requirements. Membership rules can be based on different things, like where you live or work, or your employer or community group. Nearly all Americans qualify for at least one credit union.

Will I be limited to only a few branches or ATMs?

Not necessarily. Many credit unions participate in shared branching networks that allow you to handle routine banking needs at thousands of locations nationwide. Access to fee-free ATM networks is also common.

What makes credit unions feel more personal than banks?

Because credit unions are member-owned nonprofits, the experience tends to be more relationship driven. Staff and members often live in the same communities as their members, which makes for a greater sense of trust and shared investment. 

Can I join more than one credit union?

Yes. Membership is not exclusive. You can belong to multiple credit unions if you qualify and want access to different products, locations, or benefits.

The Value of Joining Valley Credit Union

Picking the right banking partner is not a choice to be taken lightly. Understanding the pros and cons of credit unions can help you make a well-informed decision for your needs and preferences.

There are so many benefits of being a member of a credit union. For most people, the pros far outweigh the potential cons of a credit union.

We encourage you to take an even deeper look into what makes VCU special. If you have any additional questions, our talented team is ready to help you. Otherwise, we hope you join the ranks of VCU’s many delighted members.

About the Author

 Pat Force, President and CEO

Pat Force has been President and CEO of Valley Credit Union since 2016. He has worked in banking for over 30 years and has an MBA. Pat is passionate about credit unions and their “people helping people” philosophy. He enjoys collaborating with others to arrive at a result that works for the common good. Away from the office, Pat likes to spend time with family, travel, read and go for a nice, long hike.