As cooperatives, credit unions give consumers more favorable pricing

As cooperatives, credit unions provide unique advantages to the every-day consumer. One of them is more favorable pricing than can be found at for-profit financial institutions.

This means:

  • Lower loan rates
  • Higher rates on savings
  • Fewer and lower fees

All told, consumers who used Utah credit unions saved an estimated $500 million in 2023[1]. Nationally, consumers saved an estimated $28 billion[2] in 2023.

These national benefits translate into roughly $208 per consumer using a credit union. Importantly, that’s the average benefit. A consumer that uses credit unions more, gains more benefit.

For example, in Utah in 2023, a consumer could save:

  • $71 per year on a $25,000 car loan (larger car loans save a consumer more)
  • $210 on a mortgage loan closing
  • $4.37 on a non-sufficient funds fee
  • $9.62 on a credit card late fee

Credit union loan rates are almost always lower than bank loan rates. Here’s a sampling of recent rates:

Loan typeUtah bank rateUtah credit union rate
48-month used car7.46%6.84%
Home equity9.06%8.49%
Credit card – platinum17.56%12.13%

Why do credit unions offer more favorable pricing? Because they’re cooperatives. As cooperatives, credit unions are owned by the consumers who use their services. They answer to those consumers, and therefore give them more generous pricing.

In contrast, a bank is owned by and answerable to the stockholders, who aren’t necessarily the same people as customers. The bank exists for the purpose of earning a return for stockholders. They do this by extracting money from the customers and passing it on to the stockholder.

Credit unions don’t have a separate body of owners to provide a return to. They only need to provide a good return to those who use their services. They don’t have that extra cost of paying stockholders. So, naturally, prices are more favorable to the consumer.

Not every price on every product is superior to banks, but in general, the more consumers use a credit union, the more they save!