The 5 Biggest Myths About Credit Unions

If a person was to tell you that there were financial institutions out there that provided great customer service, higher rates of returns, lower fees and lower interest charges on loans would that be something that might perk your interest?

These are all characteristics of a credit union. So why doesn’t everyone bank at a credit union? Because a lot of people don’t know what one is.

A credit union is a member-owned financial co-operative. These institutions are created and operated by their members and profits are shared among the consumers who actually use the credit union. With a credit union you are a member, or a stakeholder. With a bank you are simply a customer. Banks are for-profit institutions and their goal is to make money for the stockholders of the company, not you.

Let’s look at the biggest credit union myths.

1. Credit Unions strictly limit membership.

Unlike banks, credit unions serve a specific group or community, which means there are rules about who can join. In some cases, credit union exist to serve a particular profession, college alumni or even a religious institution, but finding an eligible credit union isn’t difficult.

Most of the time you just have to live in a certain coverage area, and you can also join a credit union through a family member who belongs. Once you’re a member, you’re always a member.

2. Credit Unions have fewer locations.

A lot of credit unions partner to offer a shared banking network with thousands of locations and ATMs across the country. That’s part of the cooperative nature of a credit union. Many credit unions will allow members of other credit unions to do their banking at their locations.

3. Lower fees at credit unions are rising.

Many credit unions have some flexibility in how much they charge for accounts, loans and other services, and they aim to keep costs low for their members. In some situations, credit unions may eliminate some products or services to cut costs rather than add fees.

That flexibility adds up to some big savings. The 2015 CUNA Membership Benefits Report estimates that credit union members across the country saved nearly $8.5 billion during the 12 months ending in September 2015 by doing business at a credit union instead of a bank.

4. Credit Unions do not offer reward programs.

Whether they’re offering airline miles, discounted hotels, cash-back rewards or other perks, credit unions make great use of loyalty programs. With banks, some consumers can become so focused on rewards programs that they miss the fact that the gains from those programs are less than the fees they’re paying to their bank. That’s not a problem with credit unions.

5. Credit unions can’t compete with the “big guys.”

The sole purpose for a credit union’s existence is to have your best interests at heart. Banks spend a lot of money on slick advertising campaigns in just about every medium. But when you look at the long list of great services a credit union provides, you will be glad they worry more about you than on advertising. What great services and deals do you get with a credit union?

a. Lower fees on banking products. Shop around for a loan or a checking account and you’ll find that credit unions usually offer lower fees on basic transactions. Most credit unions still offer truly free checking without strings attached.

b. Lower interest rates. Credit unions typically offer lower interest rates on mortgages and even credit cards.

c. Safety and Security. Just like the FDIC, deposits at a credit union are government-insured up to $250,000 through the National Credit Union Administration.

d. Outstanding Customer Service. Members will agree that the service that they receive at their local credit union is second to none. In the American Customer Satisfaction Index 2015 survey from CFI Group, credit unions beat banks, with customers rating their overall satisfaction at a score of 87 out of 100, 8 points greater than the banking average. That is a statistic that speaks volumes.

 

 

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Tap Your Home’s Equity

If you need cash to remodel your kitchen or bath, a home equity loan or home equity line of credit (HELOC) might be your best bet.

These loans let you borrow money using the equity in your home as collateral. Unlike almost any other consumer loan type, the interest on a home equity loan or HELOC of $100,000 or less is likely to be tax-deductible ($50,000 if married filing separately).

With a home equity loan, you borrow a lump sum of money repayable over a fixed term, usually 5 to 15 years, giving you the security of a locked-in rate and a consistent monthly payment.

A HELOC is much like a credit card or any other type of open-ended credit. You can borrow money as needed, up to the credit limit your lender assigns, by making a transfer into your checking account. A HELOC is usually a variable-rate loan, so your monthly payments will change based on your outstanding balance and fluctuations in the prime rate.

Talk to the home loan specialists at Hopewell Federal Credit Union today for more details about our home equity loan products. Stop by or call today at 740.522.8311.

Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

How to improve financial wellness

September is self-improvement month, and many Ohioans feel they could stand to improve their financial wellness.

In an Ohio Credit Union League 2018 consumer survey, respondents were asked to rate their financial wellness on a scale from one (lowest) to five (highest). The average response was 3.48. And a majority of respondents, 88.08 percent, admitted to having financial weak spots.

Ohio isn’t far from national trends. According to the U.S. Bureau of Consumer Financial Protection’s “Financial Well-Being in America” survey, U.S. adults on average rate their financial well-being as a 54 on a scale from zero to 100.

The study found Americans with less income reported lower levels of financial wellness. Scores of 50 or less tended to come from respondents with a high probability of experiencing material hardship, meaning they struggle to afford basic food and shelter. On the other hand, respondents who could easily afford the basics tended to give themselves financial wellness scores of 61 or more.

Experiences with credit also contribute to a person’s sense of financial wellness, according to the same study. Someone who has been denied credit or who had been contacted by a debt collector will likely score themselves as having a lower level of financial well-being.

Unfortunately, feeling financially unwell can affect more than consumers’ wallets. In a study from the American Psychological Association, nearly 72 percent of American adults reported feeling stressed about money at least some of the time and nearly a quarter said they experienced “extreme stress” about their financial situation in the past month.

Stress at that level isn’t healthy. Chronic stress can cause headaches, weight gain, and even heart disease, according to the Mayo Clinic. The American Psychological Association also pointed out research that shows stress associated with financial problems strains cognitive abilities, meaning the person feeling financially unwell is more likely to make decisions that continue to lead them into unfavorable financial situations.

But there’s a silver lining. Regardless of income or credit score, the Bureau Consumer Financial Protection’s study found people who seek training and become financially literate tend to give themselves higher financial well-being scores. Here are some tips to help improve your financial wellness score.

  • Create a plan. Decide where you want your finances to take you and compare that to your current financial situation. Write down all the steps to reach your financial goal and assign a time period to achieve each one. Reward yourself periodically as you come closer to your goal.
  • Automate savings. It’s a lot easier to resist spending money if you never see it hit your checking account. Set up an automatic transfer each paycheck from your checking account to savings. Experts suggest aiming to set away six months’ worth of income for emergencies. It’s also wise to put about 10 percent of your income toward retirement.
  • Carry cash. Swiping a credit or debit card can make spending money feel a little too easy. Pulling out dollars for each purchase forces you to be more aware of how much you’re spending. Take out only a set amount of money each week to help stay within your budget and cut down on impulsive spending.
  • Improve your credit score. A poor credit score will hold you back financially, even if you’ve cultivated healthy budgeting and spending skills. Pay off lingering debts and be sure to pay off all new expenses promptly to improve your credit score. You may want to consider setting up automated bill pay, so you don’t accidentally miss payment dates.
  • Build financial literacy. You can’t be financially well if you don’t know how to be. Consider utilizing podcasts, books, articles, and shows that teach financial concepts. For a more hands-on approach, research financial literacy events or classes hosted by credit unions or other financial institutions in your area. Several credit unions in Ohio have certified financial counselors who are trained specifically to help improve financial wellness.

Credit unions exist to help their members reach financial wellness. For more information and to find a credit union near you, visit asmarterchoice.org.

The Best Time to Buy Your Favorite Products

Stores and manufacturers like to offer deep discounts on certain popular products at specific times of the year. If you love a good sale (and who doesn’t?), time your purchases so you can take full advantage of these traditions. The following list shows the best month to find the best prices on popular items:

January – Sales revolve around New Year’s resolutions about getting in shape, or people looking for items to keep their home’s interior cozy during the cold winter.
Fitness products, TVs, electronics, bedding and linens

February – Comfy interiors continue to be high priorities on everyone’s To-Do list. People in the Northern states also need to deal with ice and snow.
Mattresses, humidifiers, interior paint, snow blowers, winter apparel and sporting equipment

March – Many are planning kitchen renovations. It’s also time to introduce new models for digital cameras.
Countertops, space heaters, digital cameras

April – Spring cleaning is on everyone’s mind, for the interiors and exteriors of their homes.
Vacuum cleaners, lawn mowers, tractors, air purifiers

May – Time to begin sprucing up the exterior of homes and after a hard-day’s work, enjoy a good barbeque!
Roofing, siding, and decking materials, gas grills

June – Summer begins, and many people can now really work on the exterior of their homes.
Pressure washers, cordless drills, string trimmers, smartwatches

July – Hot and humid, so you’ll find appliances to keep yourself dry, cool, and clean.
Dehumidifiers, laundry machines, dish washers, refrigerators

August – It’s Back-to-School season, so you’ll find the best prices for pricier school supplies.
Laptops, headphones, printers

September – You’ll find items to help to clean up your house, inside and out.
Leaf blowers, washers, dryers

October – Time to check or replace smoke detectors and get ready for winter.
Smoke detectors, snow blowers, interior paint

November – A favorite month for Shopaholics because the biggest discounts are offered, starting with Veteran’s Day and ending with Black Friday and Cyber Monday.
Blenders, coffee makers, fitness trackers, TVs, refrigerators

December – The biggest gift-giving season heralds multiple sales on nearly everything through the entire month. It’s also when car dealerships try to meet their end-of-year sales quotas.
Headphones, wireless speakers, fitness trackers, cordless drills, smartwatches, automobiles

Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.