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Understanding the Basics of Credit Union Membership

Rebuilding your credit can feel like a 25-kilometer marathon rather than a 50-yard wind sprint, and to help that process, you may want to join a credit union.

No matter where on the credit-problem scale you may find yourself (overextended, late payments, repossession or bankruptcy), cleaning up the mess requires commitment, a plan and time. One potential element of a solid recovery plan that many credit-challenged people overlook is joining a credit union.

Credit Unions vs. Banks

Most credit unions today offer the same array of products and services as a bank. Both are structured to make a profit from their customers. If you’re an account holder at either, you are a source of revenue and profit, and that’s not a bad thing. Every successful business makes a profit from its customers.

The primary difference between the two, however, is that bank profits are funneled to shareholders, while a credit union’s profits are returned to account holders in the form of higher yields on savings and lower interest rates on loan balances.

Credit unions aren’t charities; they must generate enough revenue to pay employees and keep the lights on. However, any profit they make is returned to account holders as higher returns on savings and lower rates on credit cards, mortgages, car loans and so forth. That’s because when you open an account, you join as a member. And as a member, you share in whatever profits are generated. It’s a co-operative of sorts.

Other Benefits of Credit-Union Membership

Credit unions are serious about protecting their members and, therefore, follow similar guidelines to banks when extending credit. Members must be creditworthy to secure a loan or credit card. The application process, however, is usually quicker and less intrusive than a bank’s. Moreover, these institutions tend to work a little harder to find solutions for a member struggling to repay a loan than a bank.

Financial advantages for members don’t end with savings and credit. Being a member entitles you to an ever-changing range of discounts on consumer products and services. GM, for example, currently offers discounts on selected models to members. Members can also take advantage of special offers from Sprint, Direct TV and others. Go to Love My Credit Union Rewards to check out all the current offers.

What’s the Downside of a Membership?

The only possible downside for some members may be less-convenient access to branches and ATMs. Most unions, though, belong to an ATM network that offers access to its ATMs. Visiting a branch may not be as convenient as visiting a national bank, but in today’s digital world, most members never need to set foot inside a branch anyway.

How to Join

Some credit unions still require members to work in a particular industry or company to join, but many offer membership to anyone in a specific geographical area. Go to for a list of credit unions in your area. Joining is as simple as opening a checking or savings account.

What it means to you: You should take any advantage you can on the long road to rebuilding your credit, and credit-union membership can be a big one.


Russ Heaps
Russ Heaps
Russ Heaps is an author specializing in automotive, financial and travel news. For nearly 35 years he has covered the automotive industry for newspapers, magazines and internet websites. His resume includes The Palm Beach Post, Miami Herald, The Washington Times and numerous other daily newspapers through syndication. He edited Auto World magazine, and helped create and edit NOPI Street... Read More about Russ Heaps

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