Top 5 misconceptions about credit unions
There are lots of myths out there about credit unions. Some that, if they were true, wouldn’t make you look twice. Wouldn’t you agree? The truth is that credit unions offer the same—and often better—service, options, and conveniences than your traditional bank. So we dug deep to find the answers to all the half-truths and ugly rumors being spread in the financial schoolyard. If you need to make a choice for your financial future, you won’t want to miss this:
1. To join a credit union, you have to be employed by a particular company
You may remember that, at one time, credit unions were only offered to those working for the federal government or a particular employer. That was way back when and now credit union membership is available to a lot more people. Credit Unions now serve tons of customers including those in a specific county, community, company, profession, religious institution, school, university, labor union, and many more. With the number of credit unions available today, there’s no reason you should have any difficulty finding one—or more– that you’re eligible to join. Really, it’s not that hard.
2. Wait, there’s a fee to join?
To join a credit union, they generally require new members to purchase a “share” that’s usually priced between $5 and $25. Don’t worry, it won’t set you back too far. It actually serves as a deposit and grants you all the rights to the credit union. Good news–interest is paid like that on a savings account and unlike a fee, when your account is closed, the initial deposit, or cost of the share, is refunded back to you. How can you lose?
3. There are too few ATMs and branches available
This is probably the most ridiculous of all the complaints we’ve heard. Honestly, it’s more about education than numbers. Most credit unions participate in a co-op shared banking network, which allows their members to use the services of 3,500 sister credit unions. If you’re away from home and need to make a deposit, withdrawal, purchase a money order, or transfer money, you’re able to visit one of 5,000 branches worldwide. You’ll also have access to nearly 85,000 surcharge-free ATMs. That’s right–you won’t have to worry about losing a cent to unnecessary fees. We think 3,500 credit unions, 5,000 branches and 85,000 ATMs is pretty sufficient, but to each his own.
4. Credit unions are technologically behind the times
When it comes to credit union spending and investing their profits back into benefits for their members, technology is a priority. The fact is, many credit unions are on par, and some have even technologically surpassed many banks with the services they offer. With mobile deposits, imaging ATMs, and person-to-person payments, they’re continually evaluating their services and looking for improvements that will help their members not only make better banking decisions, but also make them with easier and more efficient transactions. Banks, on the other hand, are much better at strategically bragging on themselves, which may be one of the reasons for the common misconception. Credit unions understand the critical need of upgrading their technology and importance of being able to compete with those on the same level.
5. My money isn’t “safe” in a credit union
How many people do you think would deposit money in a credit union if their money wasn’t safe? Banks are insured by the Federal Deposit Insurance Corporation (FDIC), which means if the bank defaults, your account is covered up to $250,000. Similarly, credit unions are insured by the National Credit Union Administration (NCUA) for the same amount – $250,000. The NCUA is a self-funded, but federally guaranteed deposit insurance, so you can rest easy. Your money is as safe as it would be in a bank.