Tuesday, October 26, 2010

5 Myths about Credit Unions

Since the stock market crashed in 2008, many people have been angry at the “Too Big to Fail Banks.”  Arianna Huffington, Co-founder and Editor-in-Chief of the Huffington Post, even started the “Move Your Money” campaign to encourage people to move their money from big banks into local banks and credit unions. While some people may be tired of their bank, they continue to bank with them. I don’t understand it.  Credit unions are a great alternative to big banks, but there are many myths about credit unions. Well it’s time for me to debunk these myths and give you the truth.

Myth #1: Your Money is Not Safe.
Fact: Credit Unions are just as safe as banks. Deposits in credit unions are insured by the National Credit Union Association up to $250,000. Many credit unions also pay a fee to the National Credit Union Share Insurance Fund to insure your deposits.

Myth #2: Credit Unions are Just like Banks.
Fact: While credit unions offer many of the same services as banks, their mission is different. Banks work to make a profit, but credit unions work to serve their members. As a credit union member, you are part owner and you have a say in how the credit union operates.

Myth #3: They’re not convenient.
Fact: Many credit unions are a part of cooperative networks that give their members access to thousands of ATMs and branches around the country.  With these cooperative networks, you can walk into any credit union to complete your transaction like you were at your credit union.

Myth #4: You can’t belong to a Credit Union unless you work for a certain employer or join a union.
Fact: It’s true that credit unions have membership qualifications, but most people can join credit unions. There are many credit unions that allow you join if you live, work, worship, or go to school in a certain area. You also may able to join a credit union through a family member or by being a member of an organization.

Myth 5: You have to pay a fee to join a credit union
Fact: The "membership fee" is actualy a small minimum balance you must maintain in a savings account. This balance makes you a member of the credit union. It usually is $5 to $25. You can get this money back if you decide to leave the credit union.

Now that you know the truth, may be you should consider joining the "Move Your Money" campaign. You'll be happy that you did.

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