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Credit Unions: A Guide for Millennials and Generation Z

Last Updated

August 24, 2020

Written By

First Family Credit Union

Stepping into adulthood is no easy feat. There are many components to growing up, and one of the most important parts is financial literacy. According to a study conducted by Zogo Finance, a startup focused on Gen Z financial literacy, 75% of university students have very little knowledge of what credit unions are. Here’s how you can get started on your financial journey 

What is a Credit Union?   

There are some key differences between a credit union and a bank. Credit unions are not-for-profit organizations that accept deposits, make loans, and provide other financial services. A highlighting characteristic of credit unions is that they provide reasonable rates to save and borrow. The profits that credit unions obtain are usually returned to members through reduced fees, increased saving rates, and low loan rates, while maintaining exceptional customer service. 

Why Should I Choose to Use a Credit Union? 

1. Member-Owned vs. Stockholders  

Credit unions are not-for-profit operations owned by members rather than stockholders, many of whom volunteer to serve as board members, committee members or in other roles. The mission of these institutions is to facilitate financial wellness of its members, whereas big banks are looking to turn profits   

2. Return Rates and Fees  

Members are given a return in the form of lowered fees and a variety of products and services. For example, credit unions offer free checking accounts with no minimum balance requirements, whereas when using a bank, you may encounter fees if your funds fall below a certain criterion.  

3. Personalization  

Personalization is the foundation of credit unions. Loan procedures are streamlined, allowing more opportunities to secure personal and small business loans in your local area. According to the National Credit Union Association, as of June 2014, the interest rate on a 48-month new-car loan was 2.64 percent at the credit union, compared to 4.78 percent at major banks. 

4. Customer Satisfaction 

For over 20 years, credit unions have enjoyed a higher level of customer satisfaction than retail banks in the US. According to the American Customer Satisfaction Index (ACSI), the average customer satisfaction score when pertaining to credit unions averages around 85 out of 100 while banks lag with an average of 76 out of 100. Measured by the ACSI, customer satisfaction in each category indicates that credit unions score ahead other financial institutions. In each category of customer satisfaction measured by ACSI, credit unions score ahead of all other financial institutions that were measured in the survey. 

5. Ease of Membership 

Membership is open to everyone and members start reaping benefits immediately! As a member, you may be reimbursed for ATM fees incurred outside of the institution’s machines and complete transactions at other affiliate locations. The possibilities are endless.   

How Do I Get Started? 

Family First Credit Union is here to help when you’re ready. We offer different resources to meet your needs and can provide you with an expert from our team. Contact us today! 

 

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