Credit Union Myths are Confusing to Consumers

There’s nothing new about consumers being angry with the way big banks have performed the last few years. So it comes as little surprise to see public outcry over the announcement of bank fees and such spread virally over the internet and social media.

Normally credit unions have received a great deal of attention as an alternative to the big banks; however, this publicity has also exposed a number of false but commonly held beliefs about credit unions.

Because the movement has changed enormously over the past few decades, some of these myths refer to days gone by, while others are simply misconceptions. Regardless of their sources, such misconceptions often lead consumers to overlook credit unions as a viable option.

Let's take a look at some of these myths and clarify the realities of credit unions as steadfast and reliable.

Myth # 1 - Only employees of certain companies are eligible to join credit unions.

When credit unions first got their start, this was true. Membership in a credit union was legally restricted to people with a common bond such as work or school.  At that time, credit unions usually consisted of a few hundred to a few thousand members who all might work at the same company, attend the same church, or belong to the same club.

Thankfully, over time, such restrictive requirements have been gradually relaxed at both the state and federal level. As a result, many credit unions have extended membership privileges to anyone who lives, works, worships, or goes to school within a specific geographic area. This means that virtually everyone in the United States is eligible for membership in one or more credit unions.

Myth #2 - Credit unions are great places for saving your money but have fewer services and locations than banks.

In the early days of credit unions there were limited hours of operation and few services other than deposits, withdrawals, and small consumer loans; although credit unions did pioneer the now common practice of direct deposit. But nowadays credit unions are comparable to banks in many positive ways when it comes to services.

Modern day credit unions provide checking accounts, debit and credit cards, online banking and bill pay, IRAs, mortgages, car loans and more. They have ATMs, specialized savings accounts for kids, vacations, Christmas and more. They even have mobile apps, eStatements and most have multiple locations for customer convenience.

Credit unions reached a new milestone in 2014 when membership topped 100 million, according to the Credit Union National Association*.

Watch for more news about Credit Union Myths in our next few blogs.