Looking to save or borrow? Why a credit union is a good alternative to a bank

Anyone who has looked into taking out credit or opening a savings account will know the vast number of banks and other organisations out there offering these types of financial services.

But one option that is often overlooked is credit unions.

Unlike traditional banks, credit unions are member-owned, not-for-profit organisations, run by their members.

Because of this, they can be a good choice for both savers and borrowers – usually offering better interest rates and a more personalised service.

The structure of credit unions means they can be a good choice for people who may not be able to access other forms of credit from reputable banks and lenders, and may otherwise resort to using high-interest payday loans or doorstep lenders.

They operate by pooling the money people have put into savings, to be loaned out to other members – a bit like a community piggy bank.

Because they are typically smaller and locally focused – usually linked to a geographic area, employer, place of worship or another organisation – credit unions often have a deeper understanding of their members’ needs.

Members are more than just customers, they are stakeholders with a say in how the credit union operates. And because credit unions care about their members, they are careful not let you borrow more than you can afford to repay.

Another significant advantage of credit unions is their commitment to financial education and empowering individuals to take control of their financial futures, fostering a sense of independence and stability. Credit unions also tend to offer lower fees and higher savings rates compared to traditional banks, as they are not under pressure to generate profits for shareholders. This means any surplus is often returned to members in the form of lower fees, better interest rates and sometimes even dividends.

There are a number of credit unions serving the west Midlands. For example, anyone who lives or works in Shropshire or Telford & Wrekin can apply to join Just Credit Union, while FAIRshare Credit Union also covers the regin as well as South Staffordshire. Fusion Credit Union also covers parts of Staffordshire. You can find out more information directly from the credit unions mentioned, or through Citizens Advice.

Wrekin Housing Group customers can always contact our Money Matters team for support and advice.