A credit union is a not-for-profit financial institution chartered by the state or federal government and owned by its members. Credit unions may be formed by any group with a common bond, such as teachers or farmers. It is governed by a board of volunteers who are elected by their fellow members, and can be formed by any group with a common bond. Because credit unions are nonprofit organizations, they don’t pay taxes on their profits the way banks do. This means they can provide low-cost financial services such as loans, checking and savings accounts, CDs, debit cards, and even credit cards. Most credit unions protect their accounts for up to $100,000 through the National Credit Union Share Insurance Fund but check with the individual credit union before you become a member.

Thanks to the Credit Union Membership Access Act, signed by President Clinton in 1998, more people are now eligible to join credit unions through associations, churches, schools, civic groups, and even members of communities. Members of these organizations are allowed to sign up immediate family members. This definition has been broad ened to include spouses, children, siblings, parents, grandparents, grandchildren, stepparents, stepchildren, and step-siblings, as well as “household members,”which includes people living in the same residence as a single economic unit. Over to 10,000 new groups have joined credit unions since 1998.

Credit unions are a great concept. At this writing, there are nearly 13,000 credit unions in the United States. While credit unions may offer higher rates for consumers on deposits (such as CDs and savings accounts) and lower rates on loan products (such as mortgages) than traditional banks, they may not compare with the rates that online banks now offer consumers.

Credit unions started through work groups where the facilities were generally located onsite. Unlike banks, credit unions are owned by the members who elect their own board of directors and have voting rights (because they are actually stockholders). If you can’t find a financial institution that will allow you to become a customer or a member due to your past financial difficulties, ask what you need to do to become financially stable in their eyes. Then work toward that goal and reapply. Talk to one of the officers of the bank or credit union when you want to initiate this conversation. Of course, ask whether they are FDIC- or NCUSIF-insured before you go further.

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Debit cards, as you know, look just like credit cards. The difference is the payment comes directly out of your checking account instead of increasing your credit card balance.

When debit cards hit the scene, Cena was one of the first to trade in her old ATM card for the new, more convenient card. Her boyfriend was concerned about the safety of the debit card and was slower to get one. His concerns were shared by many who were concerned that using the card would enable someone to steal the card numbers and empty your checking account.

Most banks now have protection on their debit cards similar to that used by credit card companies. You will want to check with your bank to find out the protection your card carries.

Actually, debit cards have some real advantages to helping you be a smart spender.

• You can use the debit card instead of cash, reducing the amount of cash you need to carry and perhaps lose track of.
• Using the card means you don’t have to use the ATM machine, which saves you ATM fees.
• When you use your debit card, you are given an option to get cash back. This again saves you from having to pay ATM fees.
• Using your debit card instead of your credit card keeps you from reckless spending on things you don’t really need, because you know it will come directly out of your checking account.
• Using a debit card rather than a credit card will do wonderful things for your credit card balance. You will see the number of purchases decrease, making it possible to pay down your balance more quickly.

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