Credit unions: myths and misconceptions about membership


Many credit unions now offer memberships to just about anyone as they try to stay competitive with banks.

David Contreras of Riverside has been a member of a credit union for four years. He has a car loan along with savings and checking accounts with Alta Vista and couldn't be happier.

"The ease, the convenience, the lack of fees, and just the way they make me feel as a member," said Contreras. "It's a clear distinction between the traditional bank route and credit union membership."

Not to mention he doesn't get hit with high bank fees while being with a credit union.

"With a credit union, we're member-owned, and so we don't have investors, we don't have that high overhead to pay, and so when you're member-owned, you look at where you're going to spend your money, and it's on our members," said Brenda Heusterberg, branch manager of Alta Vista Credit Union. "So if we could have lesser fees that money goes back, what we call dividends, goes back to our members."

A lot of customers are not sure that credit unions are for them, usually due to misconceptions or myths about credit unions.

With the help of Jay Kister, editor-in-chief of, a website to help consumers find the right credit union for them, we look at the myths and truths of credit unions.

MYTH: You have to be an employee of a special business or agency to join a credit union.

"For some of them, yes, but for most of them no," said Kister. "And a lot of them have really opened up to be able to serve the community."

MYTH: Credit unions don't have all the banking services I need.

"You may bank at one credit union, but you could go to any credit union and withdraw, deposit, do all the banking functions you would," said Kister. "They have all the online banking services, with direct deposit, depositing with your phone."

MYTH: Credit unions don't offer as many loan choices.

"They can offer more, because they work for the members," said Kister. "So they can be flexible in helping the members, whatever their situation is."

MYTH: My money is better protected in a large national bank.

"All credit unions are secured by the NCUA [National Credit Union Administration], which is a government agency just like the FDIC, has all the same insurance that protects your deposits just like a big bank would," said Kister.

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