Why Should I Use a Credit Union

Credit Unions - Why Should I Use Them?

When driving around town you will see both credit unions and banks in your neighborhood. People sometimes do not know or understand how a credit union works. Plus everybody is different especially when you are talking about their money and savings, some people may prefer to open an account with a large commercial bank while others may prefer to go with a small credit union where they get more personal attention. Here are some advantages and and a couple of disadvantages of credit unions.

Credit unions are similar to banks but are owned and operated by its members. A credit union is a not-for-profit, cooperative financial institution that is owned and controlled by its members. A credit union is obligated to take the money it makes and invest it back into the operation or uses the profits to better the institution. 

Once you open an account with a credit union you automatically become a member. A credit unions goal is to deliver great customer service and please their members. At credit unions you the members are the owners. At some credit unions they even allow members to vote on policies concerning the operation of the facility. At banking institutions especially the larger one’s their main focus is to make a profit and making their stock holders happy. This is why there are so many fees for every little transaction you make. Anything they can do to increase the revenue of the bank they will do. At credit unions if there are any fees they are much less than regular banking institution. The lower the fee’s the more money you can keep in your pocket.

Credit union employees you usually will see time after time, this is nice because you can build a relationship with the person that you deal with and gain their trust.  This can come in handy when you have questions about your account or need a loan. At a regular bank you hardly ever get a chance to build a relationship with your banker, so when you have a question or need a loan you may not feel as comfortable as you would at a credit union. Credit unions are here to help you but a bank is only here to make money.

ATM's at credit unions is service that you usually don’t get charged for if you use the credit union ATM, the disadvantage is that the ATM’s can be hard to find because there are very few of them. They usually will only be located at the credit union location. You can save money on ATM fees but the con is you will have to travel out of the way to use the ATM or pay a service fee for using a ATM that is not connected to your credit union.

Credit unions like to offer its members lower interest on their loans, such as lines of credit, credit cards, auto loans and other types of small loans. Credit unions usually don’t like to do home loans because it ties up the credit unions money for a long period of time. Credit unions usually don’t have strong stipulations on their loans and offer lower interest rate which makes their loans look more appealing than the larger banking institutions. If a member has poor or weak credit most credit unions are willing to sit and work with you to obtain a loan that fits your needs.  Most of the time they will be able to help you get the loan that you need.

Disadvantages to belonging to a credit union are few, one of the minor disadvantages is that not everyone qualifies to be a member.  Unlike banks that are open to anyone, laws require credit unions to have a defined field of membership, which means you'll have to be a member of that group to access the credit union and its services. 

The field of membership can be broad, including an employer, church, school, community and employee group.

Gaining access through an employer is the easiest way to become a member, but community-based credit unions are also widely available in many cities and towns across the country. The vast majority of consumers, especially in large communities and cities have an opportunity to join a credit union.

As you can see the pros do heavily outweigh the cons for belonging to a credit union. Look around in your community to find a local credit union to see if you qualify to be one of their members. If you don’t check out others in your area, you will probably find one that you can meet their qualification’s.

Once you do find one that you can belong to make sure you sit down with one of the credit union advisers to find out all the services that they offer.

10 Ways to Get Out of Debt Without Ruining Your Future Credit

10 Ways to Get Out of Debt Without Ruining Your Future Credit
By Steve M Williams

Are you sick of spending large portions of your monthly income on repaying loans, credit cards and hire purchases?  Do you wish you had made better financial choices when you were younger?  Or are you still feeling the financial pinch following a personal crisis?

Whatever it is that got you into debt, you're not alone.  Literally millions of people are repaying money they wish they had never spent, or being penalized month after month for a time when they were forced to rely on credit.

There is hope.  You can get out of debt and take control of your financial future.

These ten simple steps show how you can get started:


Work out where you are financially - it sounds obvious, but so many people begin to bury their heads in the sand when finances are hard.  Be brave and confront your debt.  Make a record of exactly how much you owe, to whom.  Include the repayment period, the monthly installments, and the interest rates for each, as well as the dates each of these payments are required each month.

Budget yourself - now you know exactly where you are in terms of debt, you need to consider this in terms of your total income and other outgoings.  Make a record of all sources of income you receive as a family, together with all outgoings.  Are there some luxuries you can temporarily sacrifice to overpay your loans and get out of debt faster?  By having one take-away less each month, how much can you overpay your mortgage or credit cards by?  Be careful to examine your direct debits - these are often forgotten about instead of canceled.  Do you need and make use of all of the services and products you are charged for?  If you have a newspaper or magazine subscription, consider reading this free online instead - it's surprising how much daily newspapers especially add up to each month.

Using this information, create a sensible plan to overpay the debts with the highest interest rates. Include the whole family in this process so they understand why they are sacrificing the takeaway or newspaper - this is a great financial education for children and something the school won't teach them, so don't feel bad for involving them.

Be disciplined in your spending - when you feel the financial pinch, it's tempting to resort to getting further in debt.  Previously, this has been an option for almost everyone, but as the economic climate changes, more and more people will be refused further debts.  Get out of the habit of relying on additional credit right away.  If you need additional money, firstly question whether you do really need it, and then brainstorm ways of raising that amount without going further into debt.  Websites like eBay and CraigsList make it easy to sell anything you no longer use, and a pre-Christmas clear out can usually raise a surprising amount of money for Christmas gifts.  (I mention Christmas as it is the most popular time for new applications for loans and credit cards - don't do it.  Plan ahead.)

Track daily spending habits - often, when completing step two (budgeting), people will not understand how they spend all of their income.  In other words, the numbers don't add up.  To obtain a clear view of your finances, it's essential to track daily spending.  Each family member should do this, and honesty is key.  If you are spending £5 on lunch each day and your spouse is having a Starbucks coffee each day, you are spending a sizable chunk of money every single month on things that are not necessary.  Using these examples, you're spending around £158 each month!  What a difference that could make if it was used to overpay your highest-interest debts.  To lower this spending, only take your debit and credit cards out when necessary (often we fool ourselves that we need them 'in case of an emergency') and take just as much cash as you will definitely need for vital outgoings like bus fairs, parking expenses, etc.

 Bond with your bills - most service providers will offer you a discount for paying by direct debit.  Give them a call today and arrange this, taking note of the amount saved each month.  Use this extra cash to overpay your highest-interest debt.

Shop around - it's very likely that you are not being charged the lowest price possible for your utilities.  Using a quick Google search you can find impartial comparison sites for everything from telephone to electricity and internet providers.  Find one of these sites for your country and switch to a cheaper provider.  You guessed it; use the amount you save by doing this to over-pay your highest-interest debt.

Transfer debt - repeat step 6 but in terms of your credit cards and loans.  Shop around for ones that charge lower interest rates than your current ones, but don't get fooled into topping up loans or taking on extra sums and extending the period of the loan.

No more store credit cards - these usually charge by far the highest interest rates and see you paying well over the odds for the original items bought.  Cut up any existing store cards and don't be tempted into getting new ones.  Despite the great initial discounts they may offer, the danger of getting into more high-interest debt is too great.  Get used to paying for things with cash, which forces you to recognize the amount you are spending and often makes you realize you don't want the item in question that badly!

Bye bye bank - repeat step 6 but this time, for your bank account.  Look at online banks particularly, as these are often much more favorable than the larger high-street banks.

Review your mortgage - for most people, the mortgage is the biggest expense each month.  Spend some time ensuring you are getting the best deal.  Speak to an independent financial advisor to see whether you can save money by changing, but remember to take into account any transfer fees and other penalties.

Using just these ten steps you can monitor your outgoings, allowing you to overpay your debts.  This will get you free from debt quicker and will also give you a sense of achievement from saving money, instead of the happiness many people get from spending it.  As your highest-interest debt is repaid in full, you can then apply that complete sum to the next-highest, and so on.

With discipline, you can set your family free from financial debt.

Steve Williams is a renowned Wealth Coach, helping people around the world get out of debt and create wealth. He is currently offering a FREE special report entitled '15 Secrets of Wealth That Will Transform Your Finances & Lifestyle'