Credit unions have long been a popular alternative to traditional banks, offering their members various financial services and products. However, several myths surrounding credit unions may deter potential members from joining. Credit unions are equal to banks in many ways and are often the better option. In this article, we debunk five common misconceptions about credit unions and explain why you should consider membership.
- Credit Unions Aren’t as Secure as a Bank
One common myth is that credit unions are less secure than banks. However, this is untrue, as they are afforded the same financial protections. Like banks, which the FDIC federally insures, credit unions are insured by the National Credit Union Administration (NCUA), making them as safe as banks to house your money.
The NCUA is a U.S. government agency that regulates and supervises credit unions, ensuring members’ deposits are federally insured up to $250,000 per depositor. The agency was created to protect members of credit unions, so there should be no issues in comparing the security between the two types of institutions.
- Credit Unions Aren’t Real Banks
Another misconception is that credit unions aren’t real banks. While it’s true that credit unions are not-for-profit institutions, they still offer many of the same financial services as banks. These services include accepting deposits, making loans, issuing credit cards, and funding small businesses. The two main differences between the two are the governing agency and that banks are typically for-profit institutions. At the same time, credit unions are not-for-profit and distribute their profits among their members. If anything, that’s a bonus for you if you belong to a credit union.
- Credit Unions Aren’t as Accessible as a Bank
Some people believe that credit unions are less accessible than banks due to having fewer branches or less access to ATMs. While it’s true that credit unions tend to have fewer branches than traditional banks, many credit unions are part of large ATM networks like MoneyPass. This allows members to access their accounts and conduct transactions at thousands of locations nationwide, making credit unions just as accessible as banks. In fact, as a member of Empeople, you have access to over 80,000 ATMs.
Credit unions offer Digital Banking, making many services accessible no matter where you are located or how many branches are close to you. Technology continues to shorten any gaps where for-profit banks may have dominated or been ahead of credit unions in the past.
- Credit Unions Don’t Offer Rewards Programs
Another myth is that credit unions don’t offer rewards programs like banks. In reality, many credit unions offer competitive rewards to new and existing members, such as cashback on credit card purchases or higher interest rates on savings accounts. These rewards programs are better than those offered by banks, as credit unions typically have lower fees and can pass on their profits to members in the form of better rates and rewards.
Determining what rewards are available is an essential part of the process when becoming a member of a credit union. You should know what benefits are available to you at all times, and many members miss out because of this huge misconception.
- Credit Unions Offer Fewer Products Than Banks
Finally, some believe credit unions offer fewer products and services than banks. While it’s true that smaller credit unions may have a more limited product lineup compared to larger banks, many large credit unions offer a wide variety of financial products and services. These products include checking and savings accounts, various loans, and credit cards.
Credit unions often provide their members with more personalized customer service and financial education resources. This is another benefit of the credit union not needing to grow its profits year-over-year, as all profit is either distributed or pumped back into the products and services to improve the financial lives of its members.
Hopefully, these five myths about credit unions should encourage you to consider membership since they are often untrue. Credit unions are secure and accessible and offer a range of financial products and services that rival traditional banks. By joining a credit union, you can enjoy the benefits of lower fees, better rates, and a more personalized banking experience.