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.

Happy International Credit Day!

Today is International Credit Union Day! Credit unions have been serving communities with financial services for over a hundred years. Despite their long presence, many people still do not know what a credit union is. With all of the turmoil in the financial sector, credit unions are a good alternative to the “Too Big to Fail Banks.”

This morning I read a guest post from our friends over at Budgets are Sexy about a terrible customer service experience at Bank of America. T. Penny tried to refinance his home with Bank of America and they gave him the run around. They also screwed him out of $863.33. Towards the end of his post, he said, “Nurture me, big banks!” I have some news for you T. Penny. It ain’t gonna happen! Big banks are only in business for themselves and to make money. That is why they engaged in risky lending practices and lead us into this deep recession. However, you will get the tender, love, and care you need at a credit union.

Since credit unions are not for profit institutions, they are there to help you. You are not just a number at a credit union, but you are a member. This means you have a say in how your credit union operates. You get to vote for the Board of Directors and serve on committees. There is not a small group of people waiting to receive an enormous bonus at the end of the year.  You also can receive lower rates on loans, higher rates on deposits (savings), lower fees, and personable service. Many credit unions also offer financial counseling to help you get your finances straight.

If you are tired of being taken advantage of by your bank, it’s time to boycott your bank. Credit unions will welcome you with open arms. On this International Credit Union Day, stop by your local credit union and ask them how they can help you. Many credit unions across the country are having celebrations for this special day and would love to talk you. Happy International Credit Union Day!

For MD, D.C., VA residents, visit whatsinitforme.org to find a local credit union.

Banks vs. Credit Unions

For those of you who don't know the difference between credit unions and banks, our friends over at FoolProff made a great video that explains credit unions. Check it out!

It's Time to Evaluate Your Finances and Your Bank.

Hello world. My name is Lauren Gill  and I am an intern at Johns Hopkins Federal Credit Union. I'm here to help you get your finances straight. As a young adult, you experience a lot of “firsts”- first full time job, first car, first house, first marriage (hopefully your only one) and first kid. All of these “firsts” require good money management skills. During my short time working in financial services, I discovered that many young adults do not know how to manage their finances. You struggle to pay bills and you do not know where your money is going. Good news… you can take control of your financial life by starting to make good decisions.

One of the most important financial decisions you make is where to bank. This may not seem like a big deal, but it does make a difference. During this recession, we have had to bail out the big banks. What have we got in return? Nothing! Banks have paid their executives large bonuses, cut back on lending, charged us more fees, and have taken away services. There is a better way to bank.

One of the banking sector’s best kept secrets is credit unions. Credit unions offer the same products and services as banks. For those of you who don't how credit unions are different than banks, let me break it down for you.

• Credit unions are not for profit, cooperative institutions that are owned by its members. That means any profits a credit union earns is returned to its members with higher interest rates, lower rates on loans, and lower fees.
• At credit unions, you are not a number or a customer. You are a valued member. As a member, you receive quality customer service. You also get to vote for the Board of Directors which is a group of volunteers.
• Credit unions’ philosophy is “people helping people.” Credit unions offer their members financial counseling and they give back to their communities through charity work.

Although credit unions have membership requirements, anybody can join a credit union. To learn more about credit unions and find a credit union you can join go to http://www.whatsinitforme.org/. You can also enter to win one of three iPads.

To help you to get your financial life on track, my first series  will be on budgeting and saving. If there is anything about budgeting you would like me to discuss, feel free to send me an email at whatsinitformecu@gmail.com

Here’s to being financially free!