May 11, 2011
Money just seems to be getting tighter and tighter these days, and for most people, there’s no choice but to live on a strict budget. Whether your money is in a savings account or locked in a time deposit, you’re really not seeing any more than chump change added to what you’ve got in the bank.
Credit unions offer a viable alternative to the for-profit model of banking institutions, and are able to offer a number of benefits to students based on their strucure:
1. Credit unions are not-for-profit institutions
The main difference between banks and credit unions is that banks are for-profit institutions, while credit unions are not-for-profit institutions. This means that they are tax exempt and are there to serve the needs of members of the community.
Unlike banks, where customers don’t have a say in who runs the institution, credit unions are governed by a board of directors elected by their members. Board members are volunteers who don’t get paid.
2. At a credit union, you’re considered a shareholder
“When you open an account, technically you become a shareholder of the credit union,” Stuart Perlitsh, CEO of the Glendale Area Schools Federal Credit Union (GASFCU), said. “You then own a share of the credit union.”
As a shareholder you have a voice in who sits on the board of directors, and you even have the right to run for a position on board if you’d like.
3. You’ll get better rates
Since the goal of credit unions isn’t to profit, members reap the benefits if there’s any extra income.
“The more members we have, the stronger we become,” Carolynn Lyons, business development director of the Glendale City Federal Credit Union (GCFCU), said.
Benefits may come in the form of higher dividends on savings accounts and/or time deposits, and reduced interest rates on credit cards.
4. More than 28,000 ATMs
One common myth about credit unions is that there is a lack of accessible ATMs, but there are actually thousands available throughout the United States. Both the area schools and city federal credit unions are part of an ATM network consisting of more than 28,000 fee-free ATMs. This outnumbers the roughly 18,000 Bank of America ATMs and 12,000 Wells Fargo ATMs throughout the nation. An added convenience, Perlitsh said, is that there is no fee for withdrawing cash at any 7-Eleven.
Credit unions also typically provide locators on their websites so it’s easier to find an ATM close to you.
5. Your money is insured
Similarly to how money in a bank is insured by the Federal Deposit Insurance Corporation (FDIC), funds at credit unions are also secure. Federal agencies like the National Credit Union Administration and the National Credit Union Share Insurance Fund typically cover $250,000 per account, just like the FDIC does for banks.
6. It’s easy to join!
If you live in a certain city, chances are you’ll be eligible for membership at a credit union. For instance, Burbank Community Federal Credit Union simply requires that a person lives, works, attends school, volunteers, worships, or belongs to an association in Burbank for membership eligibility. Similarly, the GASFCU only requires that a member is a student, faculty, or staff at GCC to open an account.
Most membership requirements can be found on the websites of the credit unions and by calling the institutions.
Other credit unions, like the GCFCU, have more specific requirements, such as being employed by the City of Glendale.
Even if you fall short of these requirements, the Glendale Area Schools credit union has partnered up with the city’s parent teacher association, while the Glendale City union has partnered up with and Friends of the Library. The unions will pay the fee for your membership in these city organizations, so that you are eligible to become part of the credit union.
Money might be getting tighter these days but there are credit unions around to genuinely help you make the most of what you’ve got.
Glendale Area Schools Federal Credit Union
1800 Broadview Drive
Glendale, CA 91208
(818) 248-7425 or (800) 844-5363
Glendale City Employees Federal Credit Union
517 E. Wilson Ave., Suite 102
Glendale, CA 91206