Updated on Sept. 26, 2008

CREDIT UNIONS AREN'T just for a niche group of steel workers or teachers anymore. In fact, these nonprofit, member-run financial institutions are more accessible than ever before and they can be a much better place to stash your cash than traditional banks.

"Many consumers think they don't qualify to join a credit union. They're probably wrong," says Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group. While credit unions used to be based around a specific market say, a church or employer today many extend membership to residents of a specific city or town. And once you're in, you (and your family) are members for life. (To find a credit union in your area, start by checking out the National Credit Union Administration web site

Yet despite their increased availability, credit unions still only command 6% of the U.S. market, according to the National Credit Union Administration, a government regulator. The small size doesn't mean they should be overlooked as an option, however. Not only do credit unions tend to offer better interest rates and fewer fees, but their conservative nature (when it comes to the amount of money they lend) and not-for-profit status has helped buffer them against wider economic meltdowns such as the subprime lending mess. (Your deposits are also insured by the NCUA s National Credit Union Share Insurance Fund, which provides identical coverage to that of the FDIC for banks. For more, click here

For credit-union members, all of these factors add up to some worthwhile savings. If you're not quite sure whether a credit union is right for you, start by weighing these pros and cons:

Pro: Superior Interest Rates

The sales pitch is extremely convincing: "Historically, credit unions have better rates," says Curtis Arnold, founder of CardRatings.com. Because these nonprofits don't answer to shareholders, rates aren't padded for profit. That's true for everything from CDs and money-market accounts to credit cards, car loans and mortgages (see charts below). Plus, member-focused credit unions often go to great lengths to educate members and help them become creditworthy, Arnold says.

While not all credit unions are the same, there are some that offer preferential rates that can make a vast difference in one's financial situation. Consider this: A person that has a $5,000 balance on a bank-issued credit card that charges a 13.05% APR will have to pay $100 a month for 73 months in order to pay off their card. By the time they're done, they will pay $2,280 in interest. Meanwhile, a person with a credit union card that carries a 11.66% APR can dig out of the same amount of debt four months earlier, saving $382 in interest payments.

Here's a comparison of the rates offered by banks and credit unions:

Con: Smaller ATM Networks

The math doesn't quite work in favor of the credit unions when it comes to finding ATMs. "People are tied to the convenience of multiple ATMs," says Linda Sherry, a spokeswoman for Consumer Action. "The downsides of going with a credit union are pretty small; the only significant one is that convenience." Bank of America, for example, boasts more than 15,000 ATMs nationwide, while Alternatives Federal Credit Union in Ithaca, N.Y., has just five. Travel beyond your credit union's neighborhood, and you may need to rely on other financial institutions' networks as well as pay their hefty noncustomer access fees.

To limit your losses, look for a credit union that has expanded its network, advises Sherry. Boeing Wichita Credit Union, for example, has more than 35 ATMs in Walgreens drugstores across Kansas. The Co-Op Network, a group of more than 1,400 credit unions, provides surcharge-free ATM access at more than 25,000 locations nationwide.

Pro: Fewer Fees

Credit unions tend to have fewer fees overall than banks, and they charge less when a fee is assessed, says Mierzwinski. Chase, for example, charges your checking account $10 for each overdraft-triggered transfer from another account. At Stanford Federal Credit Union in Palo Alto, Calif., the first three such transfers each month are free, and $2 thereafter. And because credit unions aren't reliant on fee income, you can often talk your way out of the charges you incur.

That's not to say you can avoid fees entirely. Credit unions are not exempt from a few of the oddball fees that banks charge. "It's a reality of banking," says Sherry. Many charge for withdrawals (MIT Federal Credit Union in Boston allows one free savings withdrawal per month, and charges $25 each thereafter) and access to past statements ($1 each at multistate Addison Avenue Federal Credit Union).

Con: Limited Services

While the biggest credit unions are indistinguishable from banks in terms of the breadth of their offerings, many smaller branches don't have the resources to offer a wide range of products, says Amanda Walker, a senior editor at Consumer Reports. "Some don't offer mortgage loans, for example, or the ability to pay your bills online," she says. "If that's what you use your bank for, it makes a certain amount of sense not to switch." Others offer the services, but must pass along costs for the extra labor and resources. Cornerstone Community Financial in Auburn Hills, Mich., for example, charges $4.95 per month for online bill pay if you make fewer than four payments per month.