I recently walked in my first credit union. I have always been a big bank kind of girl. I had to hop in there before it is the closet ING ABM to my house. To be honest, I didn’t know what a credit union was and decided to do some research. Since I stopped being a student my banking fees have continued to rise. I hate having to pay to access my own money and this was part of the reason that switched over to ING. Although ING has been great, I sometimes want to talk to a person and I think a credit union will allow me that opportunity, A credit union is financial cooperative institution that is managed and owned by the members. It is also very closely regulated just like all other financial institutions such as banks. The main purpose of a credit union is to provide credit to its members at competitive rates. They also provide additional financial services to its members such as banking.
The main difference in credit unions between banks is that those with accounts at the credit union are technically owners of the credit union, they are even in involved in electing the members of the board of directors, and this usually involves a democratic process. Members of a credit union feel they are a bit higher than banks as they are owned by the community and serve their people and not profit from them.
The credit union’s policies and interests rates are decided by the board of directors which we discussed above are elected by the members of the credit unions. Credit unions offer a lot of the same services that banks offer but using different terms. Their most common services include savings accounts, checking accounts, online banking, and credit cards.
For all purposes including tax purposes a credit union is considered nonprofit. This means since the nonprofit status exempts credit unions from state and federal taxes which means that they can provide competitive rates and products.
The credit unions you know and love today started back in 1852 when Franz Deiltzsch put together two projects into what is recognized as today’s credit unions. If it wasn’t for the hard work and dedication of this man, the world would not have the credit unions that we have today. Credit unions were originally created to provide a convenient place where its members can save money and also get loans at reasonable rates and prices.
Credit unions differ from today’s traditional banks this main difference is that banks are owned and regulated by stockholders whose biggest goal is to benefit from its shareholders. The existence of credit unions is to look out for the welfare of its members and all profits that are made can then be reinvested which allows the credit union to offer even lower interest rates on loans.
You may be thinking that this sounds too good to be true and how can you become a member of a credit union. Well good news is we can show you exactly what you need to become a member.
Some credit unions may have specific requirements such as only catering to people in the military; however once you join you are allowed to stay a member even if you no longer qualify based on that role. The best thing you can do is to following these steps to inquire about credit unions.
- Talk to your state credit union and see if they can give you information about various local credit unions in your area.
- Talk to your employer to find out if the company you work for participates or sponsors a particular credit union.
In all a credit union is the best bet for many over a bank if you meet all the requirements needed to participate in a membership. You will not be disappointed with your decision to join one.
Credit unions where actually created by people who were frustrated by the banks because they couldn’t get mortgages and other loans on their incomes. They banded together, all invested money in the pot, and borrowed from each other. Cool, huh? I love credit unions. The one thing I don’t love about them is that they are local – meaning if I’m travelling or in another city, they usually aren’t available to me.
That’s okay though. They put money back into the municipality or area within which they operate 🙂
I think I’ll use ING for the times that I am out of town. Thanks for the info. Definitely learned something new today.
We belong to a credit union, they have been good to us and offer great rates.
I actually love my bank. I am sure CU’s are great but one day I went to my bank and told them about money I paid a company that but never received the service. They actually put a stop on the money and I was reimbursed in full. The kicker of the story is that I gave the money to the company 2 months prior.
Which bank? HSBC.
I switched to a credit union a few years ago and love it. I get such better service than a bank and I pay less fees too. I also love the community feel.
Thats what everyone is saying. I’ve always been on the road so I needed access to a bigger bank, but I think a combination of ING and credit union will be the best route.
I’ve used a credit union before, but I still like my bank. It’s a regional bank and they’ve always treated me well. My next account will be at a Credit Union if I decide to move.
I am not because the nearest one requires employment with a certain company. And my employer do not have one.
I always recommend credit unions to people who are trying to improve or rebuild credit, as they are much more likely to give customers with pre-existing relationships credit cards. With a regular bank, they could care less regardless of whether or not you have a relationship for banking. They tend to only look at credit score numbers.
Hello! Thanks for this post.
All credit unions are charged with these same values, not all manage them with the same level of importance. When thinking about joining a credit union or when you evaluate your current credit union, understand that management has a significant impact on these values. You should get to know the manager of your local credit union, if they are aloof and inaccessible you may consider a different credit union.