Credit unions have remained a mystery in the finance world for so much of society. I have had the opportunity to work in the credit union industry as a member facing employee for many years and over the years it has been made very apparent to me that many people don’t fully understand what a credit union is and how to use it to their benefit.
Credit unions have been around for over 170 years. Franz Hermann Shulze – Delitzsch founded the first credit union back in 1850. It was established in the hopes of helping those who did not have access to financial services; the community pooled their money together and individuals would borrow from that pool of money when needed. Not much has changed all these years later, credit unions are still a pilar of the community, assisting those financially.
Unfortunately, in recent years credit unions have really struggled with their membership base. Many long-time credit union members are now at retirement age, and they are closing out their accounts for consolidation purposes. Whereas younger generations tend to gravitate towards big conglomerate banks to handle their finances due to the impactful brand image big banks present. Today, I am here to tell you that no matter how old you are you should have at least one account with a credit union, and I’ll even tell you why.
First and foremost, unlike most big banks most credit unions do not charge account fees such as minimum balance fees, account closing fees, and ATM fees; just to name a few. While banks are for profit financial institutions with a paid board of directors, credit unions are not for profit institutions with a volunteer board of directors. For this reason, many people tend to use their credit union accounts as savings accounts because they do have to worry about fees eating away at what they are saving. It is also good for high school/ college students who may not be making as much money and can’t support an account that encounters fees.
Credit unions are also a borrower’s best friend. Typically credit unions offer lower rates on loans and credit cards. When I was 19, I got my first credit card from my credit union, and it was at a fixed 12% APR* with no annual fee. Most people’s first credit cards are given to them at astronomical rates such as 25% and higher. No matter how old you are, securing a credit card with a low interest rate is ideal. It takes people years to pay back credit card debt, however the lower the interest rate, the less consumers must pay back.
As I have mentioned many times already, credit unions are pillars of many communities. I have seen credit unions raise money for those in need, Ridgedale FCU has a partnership with the local animal shelter; it is the credit union way to participate in the community as much as possible.
No matter where you are in life, having and maintaining an account with a credit union will only aid you in your financial journey. I am not trying to deter you from banks, I am only trying to broaden your knowledge of the benefits of credit unions. I belong to both credit unions and a bank. Diversifying where you keep your money is key in terms of being financially well rounded.
When you are ready to open your first credit union account with Ridgedale FCU^, you can download our membership application. Ridgedale FCU offers savings accounts, checking accounts, loans, Zelle, credit cards and more! If you would like more information, please call us at 973-947-1000 ext. 105.
Written by: Mikayla Thompson
*APR = Annual Percentage rate. All loans are subject to credit approval.
^Ridgedale Federal Credit Union is open to all. Member eligibility applies. A valid government issued ID, proof of address and a minimum deposit of $5.00 is required to establish membership.
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