Have you been a member of a credit union?

[Georgie]

Credit unions are becoming so popular in the USA nowadays. Have you ever been a member of it? Any mistakes to avoid?

[Yotamion]

A mechanism of work of the credit union is simple. It requires a common bond, which is combined of money, provided by those members, who borrow and save money.

Usually credit unions appear according to the certain organization, company or any other institution. There is a global organization, which is called Credit Union National Association and works for the complete organizing credit union’s work and processes as well.

[John]

I am a member of the credit union in Chicago.

Basically, it is created by volunteers and is considered to collect money from their accounts. Basically, these are deposits, which are used for crediting other people. The main difference of credit unions as well as financial institutions or banks is that these two organizations are funded by external investors and target mainly different people without any connection to a certain organization.

[John]

A bit to add.

The structure of this credit union is simple. First of all, a community should choose a director, which is a volunteer as well. It means that director does not have an aim to earn money during his work for the credit union. Each credit union has its own board of directors with a particular internal policy for the proper regulation. During a certain period of time, people vote for the future director by giving their unique votes.

When credit units all around the world do not earn money, they provide almost the full range of services for its members. Usually they can provide financial loans, different types of credits as well as savings and deposits.

[Georgie]

John, super cool! Now I understand how it works from the inside. Actually, it was a surprise for me that a credit union is created by volunteers.

[Philip D]

Check fees and interest rates. Let me go into details based on my experience

there are many opportunities about the working with credit union and make savings with the help of this particular institution. First of all, in most of cases credit unions provide the interest rates, which are much higher if to compare with banks or any other institutions. One of the reasons why credit unions pay more than traditional banks is about the community. As we admitted above, credit unions are about the community and members of a certain organization. Local commercial banks propose interest rates in amount of 10 times lower than if you decide to use a credit union. Of course, there are some competitors in the Internet, which provide much higher than those in credit unions.

The other thing is about the fees in credit unions. Because it is not-for-profit organization, it excludes high fees. Usually the size of the fees in credit loans is as low as it is in national bank of any country. Many credit loans do not charge for withdrawal of money in their offices as well as transactions from one card to another.

[Terence]

AND!! Credit unions charge for the overdrafts. Nevertheless, this fee is much lower if to compare with commercial banks or any other financial institutions. For example, when the local commercial bank charges for $20, credit union charge for $8. The difference is huge, is not it?

[Author]

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