How a Credit Union Shows Loyalty to its Members
Loyalty: a strong feeling of support or allegiance
You often hear the term loyalty thrown around in high-drama situations (think Game of Thrones and soap operas) but the truth is, loyalty is an important concept in our society – just look at all of the rewards and points programs that exist for loyal customers. And we know that credit unions need to be a part of that.
Sixty percent of Millennials express the desire for their banking institution to be a partner or friend – and the #1 way they say their bank can be a valued partner? By rewarding their loyalty. Financial institutions could demonstrate their empathy and loyalty by waiving some fees in certain circumstances, offering a credit card with an interest rate that decreases over time or a savings account with an interest rate that increases over time (all things that credit unions do!). At a credit union, loyalty is a part of our DNA. Below are a few ways we show that loyalty to our members.
Not for Profit
Credit unions are non-profit organizations under the ownership and control of their members. This allows us to provide products and services for a fair price and offer fewer and lower fees, lower rates on loans, and higher rates on savings than a bank (on average, they are one-half to one percentage points lower than conventional bank rates, which can add up to a lot of savings over the lifetime of a loan!) As a financial cooperative, our funding comes from the pooled accounts of our members. We use those funds and fee income to provide members with interest on their savings, new and improved services, and a wide range of loans. Above all else, our mission is to improve the financial lives of our members, NOT to line the pockets of our board members.
Opportunity for Input
Speaking of board members…. YOU have a say in how your credit union operates. You and other members elect a volunteer board of directors to oversee the credit union, as well as many other leadership positions open to elections at the annual membership meeting. The credit union CEO reports to this board. By contrast, banks are owned by investment stockholders. The directors of a bank are paid and are legally bound to make decisions that benefit the stockholders. The stockholders expect the bank to make money for them – not for the bank’s customers. Simply put: a bank’s loyalty is to its shareholders.
Loyalty is all about making sure you’re getting as much as you possibly can from the place where you put your financial future. Most credit unions offer some sort of rewards program to ensure just that. You can often earn points for valuable merchandise and travel with every dollar you spend using your debit or credit card. At American Heritage for example, we offer a program where for every $2 you spend on your debit card or every $1 on your credit card, you earn a reward point. You can combine the points from both cards and with points from your family’s accounts. They never expire and you can use them for that spring break vacation you’ve been saving for!
Every dollar counts as far as we’re concerned. We know that for many young people, saving money is a top priority. When you’re just starting out, it can be hard to find the room in your budget for saving, but credit unions look for every opportunity to put a dollar back in your pocket. Be sure to see what discounts your local credit union may offer – often times there are reduced rates on everything from your cell phone, cable bill, tax filing, home, auto and life insurance to cash back from retailers and discounted tickets to sporting events.
Being loyal to our members is one thing, but another way credit unions show loyalty is by being fully committed to bettering the whole community. It is part of every credit union’s core mission to give back, educate and provide opportunities for the people of their area to come together. Employees and members of credit unions are encouraged to adopt families during the holidays, donate small amounts to help buy books for hospitals or schools and to participate in local events that benefit the community. At American Heritage, we’ve taken it a step farther – we’re the first credit union in the country to form our own charitable foundation, raising money for The Children’s Hospital of Philadelphia.
According to a 2015 survey, 83% of Americans say they cannot afford the expense of a college education. We want to make sure that we’re offering not just financial education, but helping to provide the opportunity for our younger members to attend college. Many credit unions offer a limited number of scholarships each year to make the prospect of paying for college a little more attainable. Additionally, credit unions have financial counselors who will help you create a plan for how to pay for your education.
Credit unions, unlike other financial institutions, treat their members like family. That means not just focusing on how to get the most money out of each member, but ensuring lifelong financial success. We put a heavy focus on making sure that families have the opportunity to help their little ones start saving right away. At American Heritage, we offer youth accounts tailored to different age groups. For our youngest members, we help families open the account by covering $10 of the $15 necessary to open an account. Additionally, credit unions are often involved in local high schools and middle schools, proving financial education to students who may not be getting that information elsewhere. Our hope is that by the time our little ones are out on their own, they not only have savings but are comfortable and familiar with their finances.