Lisa just graduated, landed her first job, and is ready to start adulting. She knows she needs a bank account for her direct deposit, and she wants to save for a car, build her credit, and start an emergency fund. But like many of us, she's not sure whether to go with a bank or a credit union. If you’re in Lisa’s shoes, this guide will help you figure it out.

What’s the Difference? Credit Unions vs. Banks

Let’s break it down. Banks and credit unions both offer savings and checking accounts, loans, and other financial services. But there are some key differences that could make one a better fit for you.

Banks: These are for-profit institutions that serve the general public. They are owned by shareholders, and their main goal is to make money for those shareholders. This can sometimes mean higher fees and interest rates for customers. Banks are usually larger, with more branches and more cutting-edge technology, like fancy apps.

Credit Unions: These are not-for-profit institutions owned by their members. Credit unions exist to serve the financial needs of their members, not to make a profit. This often translates into lower fees, better interest rates on loans, and higher rates on savings accounts. Credit unions also tend to be more community-focused.

For Lisa, who’s just starting out and looking to build her financial foundation, a credit union might offer the better deal. Lower fees mean more of her hard-earned money stays in her pocket, and better interest rates can help her save faster.

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Why Credit Unions Might Be the Better Choice for Lisa

Imagine Lisa, ready to buy her first car. She’s found a reliable used car and needs a loan. At a credit union, she’s likely to get a lower interest rate on that auto loan compared to a bank. That means she’ll pay less in interest over time, making her car more affordable in the long run. In fact, at First Alliance Credit Union, auto loan rates are competitively priced to help members like Lisa save more.

Plus, credit unions often have more flexible lending criteria, so even if Lisa’s credit history is just getting started, she might find it easier to get approved for a loan. And when she’s ready to start her emergency fund, the higher interest rates on savings accounts at credit unions mean her money will grow a little faster.

But there’s more to the story. Credit unions are community-oriented, so they might offer financial education workshops or personalized advice, helping Lisa make  good money moves. And because credit unions are owned by their members, Lisa would have a say in how things are run—something she definitely wouldn’t get at a big bank.

How to Make the Switch: From Bank to Credit Union

So, Lisa decides to go with a credit union. But what if you’re already with a bank and want to make the switch? No problem—here’s how to do it without the hassle.

1. Open Your New Account: Start by opening an account at your chosen credit union. You’ll need to meet their membership requirements, which could be as simple as living in the right area or working for a certain company.

2. Set Up Direct Deposit: Contact your employer and update your direct deposit information. This might take a pay cycle to go through, so keep an eye on your accounts.

3. Transfer Your Funds: Move your money from your old bank account to your new credit union account. It’s a good idea to leave a little cushion in your old account until everything clears, just to avoid any overdraft fees.

4. Switch Your Payments: If you have automatic payments set up (like for Netflix or your phone bill), make sure to update them with your new account information.

5. Close Your Old Account: Once everything is switched over, you can go ahead and close your old bank account. Be sure to ask for written confirmation that the account is closed and that there are no outstanding fees.

For Lisa, this process might seem like a lot at first, but once she’s done, she’ll be set up with a financial institution that better suits her needs. And let’s be real—switching to save money and get better service is always worth the effort!

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Credit Unions and Auto Loans: What You Should Know

One of Lisa’s biggest goals is to buy that first car. Here’s where credit unions really shine. Because they’re focused on serving members rather than making a profit, credit unions often offer lower interest rates on auto loans than banks. 

Let’s say Lisa is looking at a $10,000 loan for her car. If she goes through a bank, she might get an interest rate of 8%. But at a credit union, that rate might drop to 6%. Over a five-year loan, that difference could save her hundreds of dollars—money she could put toward her emergency fund or paying off the car sooner.

And because credit unions are often more lenient with their lending criteria, Lisa might have a better shot at getting approved for a loan, even if she doesn’t have much of a credit history yet.

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Why Not Make the Switch Today?

If you’re like Lisa, trying to make smart financial choices while managing life’s challenges, a credit union could be just what you need. With lower fees, better rates, and a focus on community, credit unions offer a financial home that’s all about helping you succeed. So, why not make the switch today? Whether you’re saving for an emergency fund, building your credit, or getting ready for that first big purchase, a credit union can offer the support and services you need to reach your goals.

And remember, just like Lisa, you’re not just a customer at a credit union—you’re a member. That means you’ve got a say in how things are run and the confidence that your financial institution is looking out for your best interests. So, take a cue from Lisa and consider First Alliance Credit Union for your financial needs. 

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