Credit unions are more consumer-friendly than banks are, according to the July Credit Power Index released by TheStreet.
The index, produced by TheStreet's Rate-Watch and MainStreet divisions, shows the difference between interest rates paid on deposits versus interest rates charged on loans — referred to by the firm as the "squeeze" — is 5.5 percentage points less at credit unions than at banks.
According to the CPI, credit unions offer an average rate of 0.73 percent on 12-month certificates of deposit, which is more than 55 percent higher than the national rate banks offer.
The CPI for credit unions finished July with a reading of 17.55, and the overall index ended the month at 22.44 — a modest improvement from June, and an indication consumer interest rates may start trending down.
"Interest rates haven't found a bottom yet, but improvements are definitely starting to slow," said Rachelle Zorn, Rate-Watch general manager. "Anyone looking to borrow money will be able to lock in some very low rates right now."
Though interest rates are dropping, some consumers may still have difficulties securing loans due to errors on their credit report. Speaking with a professional credit repair company may help them obtain a loan.