Credit Union Myths Debunked + 4 Reasons To Bank at a Credit Union

 

Credit Union Myths Debunked

When Melanie from the blog Dear Debt reached out and invited me to the 2017 Co-op Think Influencer kickoff event that she and Tonya Rapley of My Fab Finance were hosting back in May, I was ecstatic. The Co-op Think Conference is an event bringing professionals in the Credit Union industry together. Not only would I get the chance to network with fellow bloggers in the personal finance space, I’d get to learn about something I knew very little about, Credit Unions.

In the past, I’ve only banked with Traditional Banks. While I was aware that Credit Unions existed, I didn’t know much about them.

A few weeks after the event, I got the chance to speak with Samira Rajan, CEO of Brooklyn Cooperative FCU & CO-OP Financial Services Member. Through our conversation and in doing more research, I was able to “debunk” some of my own Credit Union myths and learn the benefits of banking with Credit Unions. 

Essentially, Credit Unions are at home personal banking institutions. They differ from Traditional Banks because they are not for profit organizations, run by a volunteer board. Those that bank with a Credit Union are members and owners who elect their board. Credit Unions see themselves as different from mainstream banks, with a mission to be “community-oriented” and “serve people, not profit. (wikepedia)

Here are some of my previous Credit Union myths, debunked:

Credit Unions are hard to join

I always assumed that to become a member of a Credit Union, you had to work for the government or be under a certain income threshold. In reality, not all Credit Unions require you to be affiliated with the government or have an income limit. In some cases, if you live in the same household with someone who directly qualifies for a particular Credit Union account, then you are eligible for an account too. While all Credit Union have some type of requirement to join, each Credit Union is different. Sometimes all you need to do is live, work, worship or volunteer in the neighborhood that the Credit Union serves.

Money at a Credit Union is more at risk

I thought my money would be safer at a Traditional Bank versus a Credit Union. I’ve come to find out that my money is no more safe at a big bank than it is at a local Credit Union.  Just like the FDIC insures deposits up to $250,000 at a Traditional Bank,  deposits up to $250,000 at a Credit Union are insured by NCUA (the FDIC and NCUA are both federally backed agencies).

Credit Unions are behind on technology

The Credit Union industry has come a long way from the antiquated style of banking that they were once known for. Nowadays, the technology that Credit Unions use is just as advanced as that of Traditional Banks. Most Credit Unions have online banking options and features such as mobile check deposits, smart chip readers on cards and apps for cell phones.

Limited access to money through ATM’s

I like banking at the Traditional Banks knowing that I can access my money at any ATM at any time. I assumed you could only get money from a Credit Union’s ATM. In fact, most Credit Unions have a large participating network of ATM’s that are free of charge to use.

Now that I have debunked some of my own Credit Union myths, let’s explore the real benefits to banking at a Credit Union:

  1. Personalized Customer service

    Because Credit Unions are banks for the people by the people and have smaller memberships than the typical banks, you are able to get customized personal service. It’s much more of an intimate relationship than you would have at a Traditional Bank. The Credit Union employees actually know you and are invested in your success as a member.

  2. Better returns

    Credit Unions tend to offer better returns than those at Traditional Banks. For example, the typical Traditional Bank’s rate on a savings account is .01% and the savings rate at my local Credit Union ranges from .05% to .3%.

  3. Supporting your local community and members

    The money you deposit at your local Credit Union directly supports your fellow members and community. Samira Rajan, CEO of Brooklyn Cooperative FCU, a Credit Union that serves local communities in Brooklyn says that “Members deposits are turned into loans given back to members to help them build business, buy homes and improve their lives”.  According to Samira, a significant part of their Credit Union membership is made up of local small business owners whose businesses directly serve their community.

  4. For the underbanked, underserved and underprivileged

    Credit Unions serve people that would usually be locked out of the banking system. For example at the Brooklyn Cooperative FCU, members are allowed to join without a social security number. This is especially important for the large amount of immigrants in the community who would otherwise not have access to important Financial Services.

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Overall, I’m now looking into moving some of my money from a Traditional Bank to one of my local Credit Unions. I’d encourage you to look into your  local Credit Unions to see what they have to offer. Check out asmartershoce.org to find your nearest Credit Union.

Do you currently bank with a Credit Union? If so, please share your experience below

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