Why College Students Should Join a Credit Union

Some years back I was working a good job in marketing, but having a frustrating day. So I picked up the paper (yes, it was that long ago–you could actually find jobs in the paper). I found an ad for a marketing job at a financial institution, applied and got the job. I was a bit anxious about going to the stuffy world of money, but figured I could stand to learn something about finances. I had no idea what I was in for.

The job was for a credit unit that was founded at a university and had grown to serve a wider community. My life completely changed. I know that sounds dramatic, but I had never paid any attention to credit unions before and I was surprised to learn that a financial institution could care so much about the people it served. Plus, on the job I learned a lot about money management and got my own finances on track as a result. My only wish is that I had learned all of this earlier.

During my time at that credit union I talked with quite a few students who asked “Why should I open an account at your local credit union when I can have an account at Wells Fargo, they are everywhere?”

Here’s my abbreviated answer to this question in bullet points:

  • Everybody learns the hard way: Most students don’t live away from home for the first time and perfectly manage their money. Most students bounce checks, pay bills late and forget to balance their checkbook. Most students sign up for online banking and forget to login for months. Wells Fargo isn’t likely to sit down with you and show you how to straighten out your mess. Most credit unions will. I’ve seen this at many credit unions, not just the one where I was working. Credit union staff will actually go through your account transaction by transaction, show you how to use online banking, ATMs, overdraft protection and other services to keep track. They also tell you exactly how to reduce your fees.
  • Lower Fees: We say this so much in the credit union industry that it seems like a cliche, but it’s not. Overdraft fees at credit unions are typically 1/3 lower than banks. And credit unions realize that you’re human. You can talk with a credit union. If you are having a rough time or just can’t do math they will help you out (see the previous bullet).
  • Resource: This again piggybacks off of the first bullet, but credit unions are bursting with information and eager to share.
  • Credit Unions Care: For the most part everyone I’ve ever met that works at a credit union has that not-for-profit spirit of wanting to help others. Credit unions do want you succeed at managing your money. I’m sure banking personnel are terrific people as well, but their business model isn’t about you, it’s about their shareholders, which leads me to…
  • Membership: A handful of people (the shareholders) stand to profit big, big money if the bank does well. Credit unions are not-for-profit cooperatives. Members pool their money together in order to help each other. When the credit union does well all the members benefit by keeping fees and lending rates low, which keeps more money in your pocket instead of fattening some shareholders wallet.
  • Volunteer Directors: So, as I’ve said there isn’t a small group of shareholder, however, there is a Board of Directors. This group isn’t paid. They are member volunteers who are elected by the membership. They bring guidance to the administration and assist with organizational health and growth. And it’s worth repeating that they are volunteers, they do not receive any compensation.

I’ve talked to countless numbers of parents who were concerned about their son or daughter being on their own. I always tell them, with confidence, that when a student joins a credit union (university based or not) they are not alone. Credit unions are the best place to learn money management.

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