It's hard to know if you should join a credit union if you don't know what they're all about. Here's what you need to know to help you make a decision:
What is a credit union?
A credit union is a financial institution that offers many of the same services as a bank. However, credit unions are not-for-profit cooperatives and member-owned.
Members (typically those with a common affiliation, such as members of a labor union or area of residency) pool their savings and lend to one another. Credit unions typically offer services at much lower interest rates than banks, but also are subject to stringent national and state regulations.
How to join
The law places some limits on who can join a credit union. If you are interested in joining one, here are some steps to take to promote your eligibility:
- Contact the state league representative. Visit the website for the Credit Union National Association to find out about credit unions you may be eligible to join. CUNA also offers a toll-free number, posted on its website, that provides that information.
- Talk to your boss. Your industry or employer may sponsor a credit union, which is one of the most common ways people join.
- Check with your family. Most credit unions allow members' families to join, but each credit union may define "family" differently. It doesn't hurt to ask around, because if even a distant relative belongs to one, you may be able to become a member as well.