Ways Credit Unions Give Back to the Community

Author: BankFeeInsider.com     Friday, August 22, 2014 12:00 AM

Credit unions offer many of the same benefits as banking institutions. They offer safe havens for money via checking and savings accounts, and they give loans and credit cards to people who need them. Unlike traditional banks, however, credit unions are non-profit, so their activities are not profit-driven. Instead of big-wig executives benefiting from the policies and investments of credit unions, the people in the communities reap the rewards.

No-fees on accounts. Traditional banks charge check-cashing, ATM, checking account and monthly statement fees. If it counts as a service, you’re probably being charged for it. In addition, some bank customers pay penalties when their accounts dip below the monthly minimum balance requirement. Credit unions are not-for-profit, so they have nothing to gain by charging monthly fees. In fact, most of their basic services are free. This is good news for struggling families who get to use the money they save to pay their bills and keep food on the table.

Scholarship programs. Many credit unions do their part to support education by offering scholarships and grants to deserving students at local colleges. The youngsters have a fair chance at landing the grants and scholarships because the programs are limited to kids in their own communities.

Business microloans. Small businesses struggle to secure funds to finance their business needs. Many of them don’t qualify for loans from traditional banking institutions because their needs are too small. Many credit unions offer microloans tailored to meet the needs of small business owners. The terms of these loans are often flexible and the interest rates are reasonable.

Credit cards with low APR. Getting a credit card with a decent APR is almost impossible when you have bad credit. Credit unions have a cap on how much interest they can charge, so the APR and fees on their credit cards are typically lower. This gives people an affordable way to build their credit so they can position themselves for future mortgage or business loans.

Financial literacy resources. Good money management skills are essential for people who want to make smart financial decisions. Since money management isn’t something that’s often taught at home or in school, many credit unions make financial literacy resources available to those who want it.

Credit unions offer people a safe place to put their money and carry out other banking needs. However, because these institutions are not-for-profit, they are not driven by monetary gains. Instead, credit unions focus their policies, services and resources on the communities they serve.

Source: BFI