Five (Mostly) Unknown Benefits of a Credit Union

Author:     Friday, August 29, 2014 12:00 AM

Credit unions are often misunderstood. Since most credit unions started in association with a business or industry, there are still many misconceptions about how they work and who can be a member. Today, just about everyone can become a member of a credit union. There are many benefits to becoming a member of a credit union, but some of these benefits are either not known or misunderstood. It is with that thought in mind we present Five (Mostly) Unknown Benefits of a Credit Union.

  • Your Funds are Protected. When you deposit money in a credit union, it is insured by the Federal National Credit Union Administration. The insurance covers deposit of up to $250,000. This is the same type of coverage that protects funds placed in a bank. So when you place money in your local credit union, it is as safe as it can be.
  • Credit Unions Offer Better Rates. Credit unions are non-profit entities that don’t have to use profits to pay stock holders. Instead, they use “profits” to provide better rates to its members. You will consistently find higher interest rates on the funds you have placed there. You will also find lower rates on loans you get from a credit union. To take advantage though, you must open an account and become a member. You will earn more money and spend less doing business with a credit union.
  • They Have Lower Fees. If you have ever been hit with what can be abusively high overdraft fees from a traditional bank, you’ll be glad to know that credit unions generally have much lower fees. In many cases, credit unions have no-fees. Most credit unions have no fee-ATM cards. Check with a local credit union near you to compare their specific fees with your bank.
  • Many Credit Union Offer Credit Cards. Just like banks, many of today’s credit unions offer credit cards to their members. Unlike the banks however, the interest rates offered on these credit cards are much more manageable. Many have interest rates in the single digits.
  • Credit Union Are More Personal. Many large banks have inflexible corporate policies and procedures. These can make it more difficult to get a loan if you don’t have good credit. Credit unions tend to be more flexible in working with members in helping them get needed funds.

If you are closely watching your budget but have not recently explored the benefits of a credit union, take another look. Credit unions can save you a substantial amount of money over the course of a year, and many have found them a pleasant alternative to large banking corporations. Make sure you ask your local credit union about their specific benefits.

Source: BFI