Your Community Credit Union
In many ways, credit unions are just like regular banks. They offer checking and savings accounts, loans, credit cards, and all the other financial products you’d expect, but there’s one characteristic that really sets them apart: the people who profit. Credit unions are not-for-profit, and every member is also an owner. Consequently, it’s the members, not bank executives or shareholders, who reap the benefits of a credit union’s investments.
Those benefits can most clearly be seen in credit unions’ lower loan rates, higher savings rates, and lower fees. But the credit union difference isn’t limited to monetary savings. In addition to providing excellent customer service, many credit unions give back to their local communities in a variety of creative and generous ways. Some work to promote economic and social justice by reaching out to low-income, rural and at-risk populations. Others provide free financial education services to adults and children. And that’s just the tip of the iceberg. Here are some of the amazing ways that credit unions support community development.
No-fee checking and savings accounts. Everyone deserves a safe and affordable place to keep their money. However, many low-income people avoid banks because they don’t believe they can afford them. Many big banks require a minimum balance to avoid monthly fees, and if you opt for overdraft protection, that adds an extra $30 or more for each underfunded payment transaction. Although most monthly account fees cost less than alternative financial services, like check-cashing, they’re still less than ideal for people with a limited income. For this reason, many credit unions offer some of the best checking accounts with no fees, and the highest-yield savings accounts, providing a secure and affordable for people to keep their hard-earned cash.
Save to Win
On January 1st, several credit unions across the state of Nebraska launched a new program called Save to Win. For every $25 dollars that members deposit into special share certificates at their local credit union, they are entered into a drawing to win $25,000.
The Save to Win program first started in 2009 in Michigan. The program started out small, but after time members began to see why saving their money was so beneficial. The credit unions in Michigan saw such a great increase in the amount of money being placed in savings certificates that they decided to continue the program into 2010. And now, in 2012 it has finally made its way into Nebraska.
Members can stop inside one of the participating credit unions in Nebraska and open a special share certificate to begin saving and participation in the program. For every $25 dollars deposited over the next 12 months, that member will earn an entry into the drawing for the $25,000 grand prize.
Drive Away Advantage
If you haven’t joined a credit union and are planning to buy a car, now is that time to climb on board. Credit unions have historically been one of the top spots for auto loans--offering lower than market rates and flexible terms.
Apparently members have been spreading the word about credit union auto loans as Callahan & Associates reported that consumer loan originations increased by 10% during the first six months of 2011--long before Bank Transfer Day hit. Additionally Callahan states that credit unions own 16.2% of the auto loan market share, which is the highest level in the past 12 months.
The proof is in the pudding as more and more credit unions are emerging as winners in the lending market. For example, market analysis provider Cross-Sell, Inc. recently named Heritage Federal Credit Union ($407 million, Newburgh, IN) as being the number one vehicle financer in the region. Cross-Sell reported that Heritage FCU claimed 16.2% of the market, trumping 19 other financial institutions.
Gift Wrapped Money Tips
Maybe you’ve been too busy to notice, but the year’s almost over. So in between shopping trips, holiday preparations, and the rest of the daily grind, it’s time to take a breather and focus on some small things now that might make a big difference after year-end.
Maybe you’ve been putting off these tasks, or maybe they haven’t occurred to you. But with 30 days left in the year, you can take out this whole list doing just one thing every couple of days. And most of these jobs won’t take an hour.
Review your credit history. Time required: less than one hour. At AnnualCreditReport.com you can get a free copy of your credit history -- everything the three major reporting agencies have in your file. Your credit history doesn’t include your credit score, but this is the information used to tabulate your score, so you really need to check it for accuracy. Take 10 minutes to download it, then a half-hour looking it over to make sure all’s well.
Bank Transfer Success
Credit unions were the beneficiaries of a completely organic outgrowth of support through the Facebook-promoted Bank Transfer Day, which encouraged people to transfer their money to credit unions on Nov. 5. The genesis of this movement was consumer frustration with rising bank fees.
Ultimately, the banks withdrew their plans to charge a debit fee; but it was too little, too late. This was the straw that broke the camel’s back, and consumers, who already were frustrated because of the fallout from the financial crisis, voted with their money and chose Main Street over Wall Street.
Credit unions across the country gained attention for their consumer-centered focus and for holding the line on fees. At a credit union, profits go back to the members in the form of lower fees, competitive interest rates, increased dividends and excellent member service. The member is the boss at a credit union.
Free Guarantee
In yet another article in the media storm drawing attention to credit unions in the backlash over Bank of America’s announcement of new debit card fees, the Moneyland section of TIME Magazine’s Web site points to small banks, online banks, and credit unions as an alternative.
The article titled “Credit Union Guarantees Free Checking and No Debit Card Fees—Forever” says that one reason people give for sticking with their bank even as it adds absurd debit card fees is that soon, all financial institutions are likely to charge for these services. Not so, says the article.
Small banks and credit unions are going out of their way to seize this opportunity to draw more consumers to their door by promising no-fee debit card usage and free checking, services that are becoming a thing of the past at big banks.
New Members, No Fees
Something is wrong when keeping cash in the kitchen cookie jar seems a reasonable substitute for your bank. It may feel rebellious -- your own little Occupy Wall Street act of defiance -- and even a bit savvy, given those checking-account fees, ATM fees, and monthly debit-account fees. That little depository institution atop your kitchen counter has big drawbacks, however, including a lack of federal deposit insurance, zero interest, and ease of access that could prove dangerous to your financial health.
There is a way to fire up both your rebellious spirit and your savings. On Nov. 5 -- the day Occupy Wall Street has already targeted for supporters to leave banks en masse -- consider one of the nation's 7,000-plus credit unions. Thanks to their structure as not-for-profits, they are typically fee-friendlier than banks, and becoming a member is usually much easier than you may think.
Consumers are taking notice. The Navy Federal Credit Union, the nation’s largest, says it is on pace to see a 23% increase in checking accounts this year, compared to more typical annual growth rate of about 7%. “The past few months have been the highest in terms of new account openings we’ve ever seen,” says NFCU spokesperson Aisha Rasul. Rethinking Debit Fees
Credit Union Interest on the Rise
Credit unions across the country are seeing an explosion in new members since Bank of America announced its monthly $5 debit fee last month, according to an ABC World News report that aired Monday night. A growing number of bank customers are withdrawing money, closing accounts, and taking their money elsewhere, said ABC’s Diane Sawyer.
Where is that, she asks? Credit unions, answers ABC World News reporter Matt Gutman in his story that points out that community banks and credit unions across the country are seeing a mass migration to their doors.
In a story on ABCNews.com, “Bye-Bye, Banks: 9 Tips Before You Switch to a Credit Union”, Gutman lists nine tips from CUNA consumers switching to a credit union should consider, including compare credit union rates and fees to those of banks, ask about free checking and debit, and ask for a “switch kit”. In the article, CUNA pointed consumers to www.aSmarterChoice.org and www.CULookup.com, where they can enter their zip code to search for credit unions in their area.
Banking early
“Cut it! Cut it! Cut it!” This was the line that the Hartley Elementary students were chanting before the ribbon was cut on Monday afternoon during the grand opening of the Hartley Branch of Liberty First Credit Union.
The new branch opened for the students at Hartley Elementary School to help teach the students the importance of saving money. 3rd to 5th grade students can open their first savings account with Liberty First Credit Union with five dollars starting November 2, 2011 with 2nd graders being able to open an account second semester. Liberty First will match the first $5 of each student’s initial deposit.
Students wishing to start a savings account will work with 12 Hartley students who were selected to be the tellers at the Hartley Branch of Liberty First Credit Union. The student tellers, and the students opening their new savings account, will receive invaluable hands on experience with the importance of saving money.
Quickcash Loans
There is a new option to get cash fast other than payday loan services. Six credit unions in Lincoln are offering 60-day $500 loans with a low interest rate of just 18%.
This new payday loan option offers users more flexibility in the event of an unforeseen expense. Car repairs, broken phones and damaged furnaces can all be covered quickly and easily in the case of an emergency with the Quick Cash loans. The credit unions are also offering educational seminars with a focus on how to stay out of debt.
The new program was launched to help its users stay out of debt with a quick loan that has lower interest than going to another payday loan service. Financial counseling is also available to its applicants if they are in need of more support.
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