Warrington MoneyBox The Gateway to Warrington Credit Unions
Warrington MoneyBox The Gateway to Warrington Credit Unions
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What is a Credit Union? Jargon? What else do you want to know about?  

What is a Credit Union?

Credit unions are "not for profit" financial organisations, which are owned and run by their members for their members. Membership is based on people having a 'common bond' such as living in a certain area.

Credit unions are businesses and must operate in accordance with sound business practices.  However, they are also social and mutual organisations that take into account their members’ needs, particularly those who are financially excluded.

Credit unions are founded on the values of self-help, responsibility and self-organisation.  Their top priority is to serve members' interests, so as a credit union you have a real say in how they operate as well as keeping the benefits in your community.

What can they do for you?

Credit Unions aim to help you take control of your money by encouraging you to save what you can, and borrow only what you can afford to pay back. Once you have a reliable record as a saver (which usually means saving for a few months), you can apply to borrow from the credit union, as your savings grow you can borrow more.

Advantages

  • A credit union can help you get your finances under control, they are much cheaper to borrow from than most loan companies and credit cards

  • Dividends (interest) on savings can be up to 8% a year (depending on profits)

  • Some credit unions have access to other services, such as money advice

  • When you borrow from a credit union you normally get free life assurance that will cover the loan

  • All money saved with a credit union is protected by the Financial Services Compensation Scheme

  • Repayments have a low interest rate and are set at a level you can afford - no more sky high charges!

 If you are thinking of joining a credit union CHECK...

  • How you can pay your money in and withdraw it, and that its right for you

  • How you can borrow money

  • What other services they offer, for example Christmas savings club or junior accounts

 What next?

  • Find your local credit union

  • Contact them to find out what services they provide and if they are right for you

  • Join the credit union if you are happy with the services on offer.

 Jargon Buster

Our quick and easy guide to explain some of the terms and initials you might come across.

APR

Annual percentage rate of charge - this shows the overall cost of a loan, taking into account the length of time you have agreed to have the loan for, the interest rate and any other costs.

Basic bank account

Allows you to receive money into an account and to pay bills.  Opening a basic bank account can be the first step towards opening a regular current account later on.  With a basic account you wont get a cheque book, but you can pay cheques in for free, take money out at cash machines and pay bills by Direct Debit or standing order.

BACS

Banks Automated Clearing System - an  automated payment system that bank use to transfer money from one account to another.

Common Bond

Credit unions require their members to have a common bond.  Each member needs to have something in common, such as living in the same area or working for the same employer. 

Dividend

An income paid to members out of profits.

Doorstep lenders

Licensed companies that lend small amounts of money over short periods to people on low incomes or with poor credit history.  A local agent calls at the borrower's home each week to collect repayments.  They often charge very high rates of interest.

Interest

Interest relates to both the charge on money you borrow and the amount earned on your savings.

Jam Jar Accounts

Jam jar accounts are specifically designed to meet the needs of people on low incomes or with poor financial management skills. 
They allow customers to split their account balance into different jars for spending, saving and bill payment and help improve budgeting through low balance alerts and automated transfers between jars.

Loan

The amount of money you want to borrow.

Loan Sharks

Unlicensed lenders.  They lend money to people on low incomes or with poor credit histories.  Their rates are very high and you may find it difficult to keep up repayments.  You may be forced to take a second loan to pay off the first, causing your debts to spiral out of control.  Loan sharks may also use violence or intimidation to collect debts.

Secured loan

A loan tied to one of your assets, such as your home or car.

Unsecured loan

A loan that is not linked to your home or any of your belongings, but you are still responsible to pay it.

 


While Warrington Credit Union make every effort to keep this website up to date we make no claims about completeness or accuracy. In certain places Warrington Credit Union provide links to other websites as a service to our visitors, but we do not accept any responsibility for the content or suitability of these sites. Warrington Credit Union do not guarantee that such sites, content, information, products, or services are devoid of viruses or other contamination