This blog is written by Hilary Sams, CEO, Churches’ Mutual credit Union - www.cmcu.org.uk
Credit Unions are financial co-operatives formed when a group of people with something in common band together as a Mutual Society to provide a safe place to save and an ethical place to borrow. The common bond between the members can be based on where they live and work (postcode) or by occupation or association (e.g. police officers, pilots and taxi drivers). In the case of Churches’ Mutual, the common bond is employees and trustees associated with seven denominational churches in Great Britain.
Credit Unions have been active in this country for over fifty years but until recently they might have been described as the financial sector’s best keep secret. Not any more, the Bank of England this year (2018) reported that credit union membership has grown to over 2 million across the UK, as more and more people discover the benefits of membership.
So here are my top five reasons why opening a credit union account is a great idea:
- It’s always good to have some rainy-day money put away, with a credit union you can save as much or as little as you can afford every month. The number of employers offering deduction straight from salary is increasing but if this isn’t an option you can save through your bank and some credit unions have collection points in their local area. Many Credit Unions offer accounts for specific events like Christmas and Holidays and will often offer a discounted loan rate for regular savers.
- A credit union loan is often one of the best deals around. Most Credit Unions will offer a variety of loans for particular needs and always aim to treat borrowers ethically and fairly. They will always tell you what the interest rate will be BEFORE you apply and there are no penalties for repaying a loan from a credit union early and borrowers only pay interest for the amount of time they’ve had the money.
- If your bank still has a local branch you may feel you know the staff and they know you, but it’s a different story when you have to call the bank's customer service number to get a problem resolved and you end up speaking to a call centre anywhere in the country or possibly the world. Credit Unions tend to be smaller and built around relationships, in both saving and borrowing your individual relationship and history with the credit union is always taken into consideration, you’re never just a number.
- Although they are not as big and impersonal as banks Credit Unions are authorised by the same regulators and your savings are protected by the Financial Services Compensation Scheme for complete peace of mind.
- Credit Unions are owned and run by their members, they exist to benefit the community they serve, that is, the people who live or work alongside. Savers allow the Credit Union to make affordable loans to members and borrowers allow the Credit Union to share the profits with the members in the form of a dividend – so everybody wins.
What to find out more, or find the best credit union for you? Visit www.findyourcreditunion.co.uk