5 Misconceptions About Credit Union

Most consumers are aware that credit unions exist but they have never really spent any time researching the benefits of a credit union. They know it is similar to a bank but are comfortable using their bank and have no reason to consider why credit unions are a good option.

Only when they are shopping for financing on a large item like a car or a home do they begin to get curious about what a credit union might be able to offer them.

It’s Not an Elite Club

Credit unions are known for serving a specific group or community unlike a bank who allows anyone to open an account. Credit union rules will dictate who is eligible to become a member such as a resident of a certain area or a member of a certain profession. In many instances, a credit union will also offer membership to immediate family members of its members. In addition, there are actually a very large number of credit unions and you can search CULookup.com to determine which one or ones you would be eligible to join.

Location, Location, Location

Another common misunderstanding about credit unions is that because there are not many physical locations, you must only access your accounts online. But the fact is that most credit unions offer a shared network with a major bank so you can access your account through the bank branch. They also work with multiple major national banks to provide you with access to cash at literally thousands of ATM’s across the country. So you will never need to worry that you won’t have access to your money that is deposited in a credit union. In some cases, your credit union will even reimburse you for ATM fees if you are in an area where they do not have an agreement in place with a local bank. The reason for the minimal number of physical locations is in an effort to reduce cost so that they can offer customers better interest rates.

It’s Easy to Switch

Most consumers will pick a bank and stick with them just because it is easier than moving their accounts. But as banks get bigger and customer service gets less and less personal, many consumers begin to reevaluate why they are still using a certain bank. It might be that the huge ad campaigns have you convinced that your bank offers so many free services that you couldn’t survive at a smaller bank or credit union or it could just be that going there is a habit. But sooner or later, many people reach a point where they are so dissatisfied with their bank that they decide to leave. It could be for excessive fees, lack of follow up on an issue or just lack of quality service at a branch, but finally they choose to leave. And what surprises customers the most is that changing to a credit union is actually very easy. Some credit unions even have free kits which provide step by step instructions on how to transfer everything to their system.

It’s the same as the Big Banks

Many customers are shocked to learn that credit unions offer pretty much the same services and perks as the huge banks as well as offering better interest rates on accounts and lower interest rates on loans. One of the most favored perks for most bank customers was the reward debit card. It was a great way to get reward points for using your own money.

But almost all of the big banks have discontinued that reward to try to encourage customers to use a bank credit card instead. Sadly, the banks were more interested in making customers pay them interest on the credit cards than they were about providing a service that customers liked, similar to title loans without a job. But many credit unions listened to customers concerns and have continued to offer rewards for use of their ATM cards.

In addition to offering customers all of the services of big banks and all of the rewards programs, including some that the banks have discontinued, credit union provide all of these services and find a way to charge much lower fees.

Accounts are Free at a Credit Union

Banks used to offer many options for different types of accounts and different ways to open a free account but that is not the case at most banks any longer. You need to deposit quite a large sum of money to get a free checking or savings account these days. And even then you will not earn as much interest on your deposit as you would at a credit union. But as a rule, when you become a member of a credit union you will have the opportunity to open a free checking and savings account. And any funds deposited in either account will earn you interest.

Many More Benefits

Normally it takes a major mistake on the part of a bank to get a customer to begin looking at the services offered by a credit union. Human nature is to resist change and keep life as simple as possible. But once a consumer learns that the credit unions offer all of the same services as the big banks, they are much more willing to consider moving their account.

In fact, many consumers find that credit unions offer even more services than banks such as working with a car dealership for special discount sales to credit union members or free investment seminars or consultations. Many also offer free currency exchange if you will be traveling outside the country and wish to have some local currency.

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