Understanding Credit Unions and the Benefits They Offer

Author: BankFeeInsider.com     Saturday, August 16, 2014 12:00 AM

Over the past several years, banks have really tightened their standards on handing out loans. And while this is a good thing in terms of saving themselves from lending to those who can't afford to pay back the funds that they borrow, for those who do have good income, it makes it quite hard to secure a loan. Is there an answer to this issue? Yes. And the answer is joining a credit union.

Credit unions are not like banks. Sure, they provide loans, debit cards, checking accounts, etc., but they are governed by their own members. The real question, however, is, "how does a person join a credit union and what are the real advantages?" Let's take a quick look at the answers.

How to Join a Credit Union?

Most consumers are unaware that they can qualify to join a credit union. Some credit unions base their membership on a person belonging to a certain church or community, but this isn't always the case. With a bit of effort, almost anyone can find a credit union that they qualify for membership through. There are several ways to find a credit union, which include:

  • Doing an online search
  • Talking with an employer
  • Talking with a spouse's employer

Are Interest Rates Better Through Credit Unions?

Most of the time, yes. Not only do interest rates tend to be lower on loans through credit unions, but they also provide higher rates of return on savings accounts.

Will a Financial Crisis Affect a Credit Union?

Yes. Credit unions lend out money, meaning any type of financial crisis does affect them. But, on the bright side, credit unions aren't affected as negatively as banks are when things get rough in the economy because members tend to feel obligated to pay back money that they owe to their credit unions before meeting their other responsibilities.

Is Money Protected the Same Way Through Credit Unions?

Yes. The National Credit Union Association insures credit unions the same way that banks are insured by the FDIC.

What Type of Financial Counseling is Available through Credit Unions?

The absolute best! In fact, credit unions are well known for being a top source in terms of providing top-notch financial advice and information to their members. There are many credit unions that offer seminars, counseling and more to their members, all of which help these members get the most from the credit unions that they are members of.

 

Source: http://money.usnews.com/money/articles/2008/10/21/the-benefits-of-credit-unions