December 06, 2017
10 Myths About Credit Unions
Credit unions have more than their fair share of common myths and misconceptions. If you were to ask someone who has never had a credit union account, ‘what is a credit union?‘ you would probably get the following responses: It’s like a bank, OR it has something to do with banking, OR they help you with your credit/loans. Well, none of these answers are necessarily incorrect, but none of them give you the full picture.
So how much do you know about credit unions? Test yourself on these 10 myths: How many did you believe until today?
Myth #1: You must meet strict eligibility requirements.
Fact: While credit unions do require that members meet certain requirements to satisfy a common bond, many of these are broad, and few of them truly limit membership. Review a full list of Interior Federal Credit Union eligibility.
Myth #2: Getting to the ATM is difficult because my branch isn’t nearby.
Fact: With up to 65,000 ATMs available through various networks, availability is not an issue. Find an ATM or branch near you.
Myth #3: Changing my banking from a traditional bank to a credit union will be a hassle.
Fact: Credit unions offer the same services as banks, including automatic bill payments and direct deposit. Most services will transition easily and go uninterrupted. Our switch kit will help you transition quickly and easily.
Myth #4: With all the fancy advertising, banks must have more money than credit unions.
Fact: While this may be true, it’s because credit unions are not-for-profit organizations. Rather than spend money on advertising and marketing, credit unions rely on the community for marketing. The money saved is rolled back into services for members or distributed back to members as dividends.
Myth #5: Credit unions don’t offer reward programs.
Fact: Many credit unions do offer reward programs on credit and debit cards. For those that don’t, take a look at the fees that are associated with the various accounts. At a credit union, you’ll save on fees. Do your bank rewards outweigh the fees you’re paying on each account?
Myth #6: Credit unions aren’t very tech-savvy.
Fact: Credit unions don’t promote mobile options as aggressively as banks, but that doesn’t mean they don’t offer them. According to a study by CFI Group, bank customers rated their satisfaction at 86 out of 100 in online and mobile banking versus 90 out of 100 among credit union members.
Myth #7: Credit unions are just like banks.
Fact: Credit unions are not just like banks. Members own a piece of the organization and own a vote in determining how the credit union is managed. Credit unions also return all earnings back to members with their low fees and great dividend rates.
Before the arrival of the Credit Union, people who were from the poor background or a working class background couldn’t borrow from banks.
Myth #8: Credit unions have an unfair advantage over banks because they don’t pay taxes.
Fact: Actually, credit unions do pay taxes. As a not-for-profit, member-owned financial cooperative, there are some taxes that credit unions don’t pay. Those “unfair advantages,” of course, are passed on to members.
Myth #9: Credit unions are not regulated.
Fact: Credit unions are held to the same laws and regulations as banks. In fact, credit unions face more restrictions on the investments and loans they make.
Myth #10: Credit unions are good places to save money, but that’s about it.
Fact: Credit unions offer consumer loans, debit and credit card services, online banking and bill pay, checking accounts, retirement investments, mortgages, car loans and more. They are a great place to take care of all your banking needs.
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