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Choosing A Safe Credit Union

Updated on September 25, 2011

Provided you select a safe credit union switching to a credit union for your personal finance requirements may be the wisest choice in today’s economic climate.

In anticipation of the full implementation of the new Credit Card Accountability, Responsibility and Disclosure Act (Credit CARD Act of 2009) in February 2010 most of the major banks in the country have slashed credit limits and increased their monthly fees and penalty charges in recent months. Now may be the perfect time to start looking for a more beneficial means of managing your personal finances

Credit Unions In The Past

Joining a credit union was previously an option only available to a select minority of the general population. Changes that have taken place through the years have now made it possible for almost anybody to qualify for membership of  a credit union.

Initially the sole purpose of credit unions was to assist people who were not being served by banks. Nowadays  with nearly 10,000 credit unions in the United States there is bound to be a credit union whose membership is based on either your place of residence, who your employer is or what association you belong to. If necessary it might be a good option to join an association if that is what it takes to join a safe credit union.

Difference between Banks and Credit Unions

Lower Interest Rates

Credit unions are non-profit organizations and are able to offer lower interest rates and fees in almost all types of credit facilities and higher interest rates on savings accounts.

To check the difference between average Credit Unions and Bank interest rates visit the following link:

Regulation of Credit Unions

Federal or state-chartered credit unions throughout the United States are regulated by The National Credit Union Administration (NCUA) , an agency of the federal government. These credit unions must adhere to strict guidelines as set out by the NCUA who also administrates  

The National Credit Union Share Insurance Fund . All monies invested in both federal and the majority of state-chartered credit unions are insured by the NCUSIF. It is for this reason that these are considered safe credit unions and worth considering when looking to invest your hard-earned money.

Credit Unions are Non-Profit

Unlike banks and other financial institutions the sole purpose of credit unions is not to maximize their profit. Being  a non-profit organization with its members as shareholders the only people they have to keep happy is you, the member. Should the credit union make a profit the members benefit as any profit is paid out in the form of  dividends to the members.

Banks and other for-profit financial institutions need to ensure that they make a reasonable return on investment when providing loans to consumers. Credit unions only need to ensure that they remain a sustainable business and keep their members happy.  

Bank vs Credit Unions

Credit Unions Less Expensive Option

Credit cards issued by most credit unions do not attract annual card fees and their interest rates are substantially lower than those charged by banks. Credit unions are not out to pounce on you as soon as you make a late payment and are much more understanding of their members financial predicament. Banks on the other hand charge annual fees on their credit card accounts and have no scruples about hiking your interest rate as soon as you are late making a payment.

If you have a bank checking account then you are probably paying exorbitant overdraft fees. Changing to a safe credit union would enable you to save almost half of the fees should you exceed your overdraft.

Most credit unions do not charge ATM fees or refund a certain amount of the fees paid during the month. Those that do charge ATM fees do so at a much lower rate. If you are in the habit of using an ATM with your current bank account you will realize what a huge saving this can mean to you.

Credit Unions More Accomodating

Credit unions generally tend to give more personal attention to their members than mega-banks do.

This is partly due to their smaller size and fewer members or clients that they need to service. In many instances this can mean the difference between a loan being granted or declined.

Disadvantages of Credit Unions

Typically credit unions have a limited number of branches and this could prove to be inconvenient if the credit union of your choice does not have a branch in close proximity to either your home or place of work.

The growth of credit unions over the past few years has improved the situation and as credit unions continue to grow or merge finding a suitable credit union that is conveniently situated will be easier in the not too distant future


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    • Laura du Toit profile imageAUTHOR

      Laura du Toit 

      10 years ago from South Africa

      Hi Habee - glad to hear that you use a safe credit union - means you must be saving a reasonable amount on interest and other charges every month.

    • habee profile image

      Holle Abee 

      10 years ago from Georgia

      I use a teachers' credit union and have been very pleased with it!

    • RNMSN profile image

      Barbara Bethard 

      10 years ago from Tucson, Az

      my bank just started charging us for using their bank!! I was so upset!! And this is exactly what hubby and I are doing soon as possible! thank you for your extensive information! barbara b

    • Laura du Toit profile imageAUTHOR

      Laura du Toit 

      11 years ago from South Africa

      Thanks for the comment Sweetie. Hope you will have learned about the value of choosing a safe credit union

    • sweetie1 profile image


      11 years ago from India

      Thanks for the nice hub.. i dont have loans right now but when time would come for me to get married and look for my own home then i might need them

    • Laura du Toit profile imageAUTHOR

      Laura du Toit 

      11 years ago from South Africa

      Thank you Niteriter, not only for dropping by but for the confirmation of the contents of the hub.

      Merry Christmas to you and your family!

    • Niteriter profile image


      11 years ago from Canada

      I have been a credit union member for many years and I can verify first hand that your information here is accurate. I don't need to fish around for my account number when I visit the branch because the staff, who recognize me when I walk in, have my account already pulled up on the computer by the time I reach the counter!

      (I was delighted to see the Canadian reference in your links.)

      Merry Christmas.

    • Laura du Toit profile imageAUTHOR

      Laura du Toit 

      11 years ago from South Africa

      Thanks Bearclawmedia

      Thanks for dropping in and for the well wishes. May you too have a wonderful Christmas.

    • bearclawmedia profile image


      11 years ago from Mining Planet Earth

      Sound advice, there is not a lot of that here on the pages. Don't get me wrong Hub Pages has better content than most blog sites, what I meant was this is financial information that would help to educate someone with out the motivation of selling someone something. Good on you!. May the creator shine on you this holiday season.

    • Laura du Toit profile imageAUTHOR

      Laura du Toit 

      11 years ago from South Africa

      Thanks Paradise

      Glad this info on safe credit unions could persuade you to consider making the switch.

    • Paradise7 profile image


      11 years ago from Upstate New York

      Very interesting, well-researched as always. I'm going to share this info with my mom; we, like Dohn, are getting fed up with Bank of America.

      Thank you Laura. You do such good work!

    • Laura du Toit profile imageAUTHOR

      Laura du Toit 

      11 years ago from South Africa

      Thanks for commenting Dohn.

      Glad to hear that you are happy with your change to a Credit Union and that my research into credit unions was thorough!

    • dohn121 profile image


      11 years ago from Hudson Valley, New York

      I actually belong to a credit union now after being fed up with Bank of America's shenanigans. I don't think you left anything out as you outline all the benefits of using a credit union. Thanks for sharing this!


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