What is a Credit Union? I’m Spilling the Tea!

Dear Wealth and Health Seeker, Have you ever wondered “What is a credit union?” Have you ever heard of one? You should definitely become acquainted with them. They offer an excellent alternative when it comes to handling your money.

Before I start talking about the topic of today, I want to say, thanks for reading. My goal is to help as many young people as possible. So, I really appreciate your attention.

Now, on to today’s topic!

What is a credit union?

A credit union is a financial institution that provides banking services. They offer many of the services that banks offer. Typical services that are provided include: savings accounts, checking accounts, personal loans, mortgage loans, and credit cards. People who use credit unions can make deposits, withdrawals, and take out loans.

It may sound like credit unions are very similar to banks. However, banks are for-profit organizations that are designed to make profit for their shareholders. Credit unions, on the other hand, are not-for-profit organizations. They are owned by its members. They are run as cooperatives. A cooperative is a type of business structure in which those who use the business own and operate the business. Because of that, they are tax-exempt.  

Who Is a Credit Union For?

Who is a credit union for? Participants of a given institution are often called members.  To do any banking there, you must be a member. Most members of a specific credit union have something in common. For example, they may work for the same company. Or, they may live in the same community.

 

Who Owns a Credit Union?

Credit unions are owned by its members. In fact, they operate to benefit the members. Then profits are returned to their members in the forms of lower rates for loans and higher interest rates on deposits. They also have fewer fees. The purpose of a credit union is to offer products to its members at better rates and fees. Also, note that these institutions can be used for both personal use and for small businesses. 

You may be wondering…

Where could I join a credit union? 

When could you start a membership in a credit union? You can start one anytime you become a member of a community that has one.

For instance, when I lived overseas managing properties for the United States Air Force, there was a credit union located there that was available to air force members and employees. So, I joined that one.

 I also lived in a community that had a credit union that had been set up by a now defunct computer company. Although the computer company no longer exists, the credit union still serves its former employees, and members of the community where the credit union offices are located. So, in theory, I could have become a member since I lived in the community.

My mother once worked somewhere that was affiliated with a Catholic Church. Amazingly, that church had a credit union. So, through my mother’s affiliation, though not a member of that church, she was able to start an account. 

So, if you are looking for a credit union to join, I suggest checking your job to see if they have one, checking your community to see if they have one, and checking your house of worship. 

Key Takeaways Regarding Credit Unions

• When you are looking for basic financial services, there are other options other than local banks. One such option is a credit union. 
• They are usually available to people through a connection that they have via a local community or a place of employment. 
• Credit unions are owned by their members, and they exist to service their members. Because of this, you may find a higher quality of service there. 

Do you use a credit union? Let me know! 

And don’t forget to subscribe to Rich Mom, Poor Kid to continue to build your financial literacy!

Hugs,

Rich Mom

Do you want to learn more about credit unions? Check out:

What is a Credit Union? Rich Mom Answers

Wondering About Rich Mom? 

If you stumbled upon this post and you are wondering who Rich Mom is: I am former military wife and a mother to a young adult. My vast educational background includes majors in business and economics, and I am passionate about personal finance. I am worried about the future of young adults who are often being burdened by massive student loan debt, but at the same time have never been taught about financial literacy. 

Too many people work forever. 

Too many people work, forever living just paycheck to paycheck, never understanding the pattern that would make their lives easier. My goal with my blog is to inspire those ages 30 and under to become more financially literate, and to become financially independent.

But remember, my blog is intended to inspire, but not as investment advice. 

I am not an investment advisor. Always do your own due diligence and research before investing. Check with your own investment advisor. 

Also, remember that past performance is not a guarantee of future performance.The information shared here is not intended as financial advice. I’m just sharing my story and encouragement.