Credit unions better than banks for college grads?
(ARA) - Recent graduates should be proud of their accomplishment, but there is still a lot to learn - like how to get the most from their money, how to establish credit and how to ensure convenient, safe access to their savings and checking accounts. While today's tough economic times can make setting up these building blocks of personal finance even more worrisome, credit unions offer many solutions.
Virtually everyone in the U.S. can belong to a credit union through either their employer or affiliation with a group like a place of worship. A third option is many credit unions have "community" charters and serve a region defined by geography rather than by association. Because they are cooperatives where each member is an owner, credit unions operate as nonprofits and return earnings back their members in the form of better rates on savings and lower fees for services. That's great for everyone, but credit unions have other benefits that are particularly important to those just starting out.
Many young people have difficulty obtaining credit because their incomes are low and they have little or no credit history. And the current credit crunch has caused many banks to tighten their lending standards. But because credit unions are chartered to serve their members' needs and are less likely to be forced by the marketplace to change their underwriting standards, they are making loans others will not - and with comparatively lower rates and fees.
"Higher savings rates, lower fees and access to credit are benefits everyone can appreciate, but younger tech-savvy people are also interested in services like plentiful, no-fee ATMs, online and mobile banking, and image deposits. Credits unions offer these too," says Stan Hollen, president and CEO of CO-OP Financial Services, a provider of personal finance tools to credit unions, and itself owned by its members. "Today's credit unions offer their members, young and old, the latest financial technologies so they can access their accounts anywhere, anytime, nationwide."
Credit unions are, by design, regional, but provide their members nationwide services through CO-OP. Among the services offered is CO-OP Network, the largest ATM network in the country with more than 28,000 surcharge-free locations. That's more than any bank. CO-OP member credit unions also provide next-generation personal finance tools like mobile banking that can interface with iPhones, Web-based deposits, tap-and-go payment processing and reloadable prepaid cards.
Some young people might lean toward choosing a bank over a credit union because they want their deposits insured, not knowing that credit union member deposits are insured up to $250,000. Credit union-issued credit cards also tend not to have an annual fee.
"The increasing cost of gas, groceries and other expenses eat away at the starting salaries of recent graduates," says Hollen. "These can be offset somewhat by choosing to make a credit union their primary financial institution. Young people are looking for speed, convenient financial transactions and quality. Today's credit unions offer all of this, along with their well-known, hometown friendly service."
Courtesy of ARAcontent
Photo courtesy of Creative Commons