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  • FIRST POST
    • MatthewAinsworth
    • By MatthewAinsworth 16th Jun 17, 5:36 PM
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    MatthewAinsworth
    Advantages of credit union?
    • #1
    • 16th Jun 17, 5:36 PM
    Advantages of credit union? 16th Jun 17 at 5:36 PM
    A guy at work who I respect showed me his credit union cash card, and said how you could access cash from it, I was a little dubious because it didn't sound much better than a debit card on a basic bank. I look up my local ones (won't say which) and they offer no interest, but have a prize draw, and I've read that some charge for an account, am I missing something? I could understand less fines perhaps for people who perpetually fail transactions or go overdrawn, so I assume this is like the complete opposite of a high street bank's reward account?

    I look at the loan rates, one is 26%, the other is 40%, and you call the bank's money-grabbing, I'd be better off with credit cards - although maybe it's after the poor credit market, but it doesn't look like an organisation that "gives better rates because it's mutual". My colleague said how it's good that the interest was fixed, I suppose that's a bonus if you might take longer than contracted. If they are not for profit and charge that interest rate I assume that interest is to cover defaults and wages.

    And isn't mutuality a building society thing? They have the same selling point?
    I suppose their existence is a good thing because it offers extra competition and credit to those who might go payday, but advantages for the ordinary person? - I have poor credit (undeveloped) but I still managed to get a card and overdraft facility
Page 1
    • antrobus
    • By antrobus 16th Jun 17, 8:56 PM
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    antrobus
    • #2
    • 16th Jun 17, 8:56 PM
    • #2
    • 16th Jun 17, 8:56 PM
    See;
    http://www.moneysavingexpert.com/banking/credit-unions
    • Brewer20
    • By Brewer20 17th Jun 17, 12:46 AM
    • 23 Posts
    • 8 Thanks
    Brewer20
    • #3
    • 17th Jun 17, 12:46 AM
    • #3
    • 17th Jun 17, 12:46 AM
    I'm in a credit union, mine pay a dividend at the end of the year dependant on savings, loans given etc for members. It's a good rate, last payout was 2%, try getting that from a bank over 12 months.

    Also had an ISA with them although that was a little sketchy as to what the rate would be this term, I moved it, last payout on that also 2%
    • MatthewAinsworth
    • By MatthewAinsworth 17th Jun 17, 5:53 AM
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    MatthewAinsworth
    • #4
    • 17th Jun 17, 5:53 AM
    • #4
    • 17th Jun 17, 5:53 AM
    Sounds like a better offering than was available to me, I won't rule them out in case a better one comes along

    I think we need some indication of what the dividend rate is going to be to make a comparison - nationwide gives 5% in its regular saver

    Some of the loans I've seen only let you borrow up to the amount deposited, which to me seems pointless when you could use your own money, some offer more and some have unsecured loans but their rates are double digit where I've seen
    • jayII
    • By jayII 17th Jun 17, 6:20 AM
    • 39,899 Posts
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    jayII
    • #5
    • 17th Jun 17, 6:20 AM
    • #5
    • 17th Jun 17, 6:20 AM
    Several bank accounts give a much better interest rate than 2%. NW Flexdirect for example gives 5% on up to £2,500 for a year. TSB gives a switching bonus plus £10 a month for the first year plus 3% ongoing interest.

    See http://www.moneysavingexpert.com/banking/compare-best-bank-accounts

    Credit unions are a great idea from a philanthropic perspective, but I wouldn't put all, or even the majority, of my savings in one.
    15.9.17. Balance: £10360.87/Mortg: £174,906.67

    No spend on non-essentials year. To date: £





    • MatthewAinsworth
    • By MatthewAinsworth 17th Jun 17, 7:37 AM
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    MatthewAinsworth
    • #6
    • 17th Jun 17, 7:37 AM
    • #6
    • 17th Jun 17, 7:37 AM
    I can only see the philanthropy if it's rates are convincingly better, maybe it's better loan wise than savings wise

    Bank's are philanthropic since anyone can be a shareholder and shareholder profits get reinvested in economy
    • agrinnall
    • By agrinnall 17th Jun 17, 8:59 AM
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    agrinnall
    • #7
    • 17th Jun 17, 8:59 AM
    • #7
    • 17th Jun 17, 8:59 AM
    I can only see the philanthropy if it's rates are convincingly better, maybe it's better loan wise than savings wise

    Bank's are philanthropic since anyone can be a shareholder and shareholder profits get reinvested in economy
    Originally posted by MatthewAinsworth
    I think you have a misunderstanding of what philanthopy is.

    https://en.wikipedia.org/wiki/Philanthropy
    • Anthorn
    • By Anthorn 17th Jun 17, 9:36 AM
    • 3,097 Posts
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    Anthorn
    • #8
    • 17th Jun 17, 9:36 AM
    • #8
    • 17th Jun 17, 9:36 AM
    I'm in a credit union, mine pay a dividend at the end of the year dependant on savings, loans given etc for members. It's a good rate, last payout was 2%, try getting that from a bank over 12 months.

    Also had an ISA with them although that was a little sketchy as to what the rate would be this term, I moved it, last payout on that also 2%
    Originally posted by Brewer20
    But don't bank on a dividend, pun not intended. The credit union I'm in has never paid a dividend and the reason put forward at the AGM say it's because they get more incoming savings than they grant outgoing loans so profit from loan interest is limited. From what I understand that's a common problem with some Credit Unions.
    • TheGardener
    • By TheGardener 17th Jun 17, 6:10 PM
    • 2,121 Posts
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    TheGardener
    • #9
    • 17th Jun 17, 6:10 PM
    • #9
    • 17th Jun 17, 6:10 PM
    CUs are great if you can have a payroll deduction - I've used one for years for this and its my own 'Christmas' club money.
    But no dividend and no interest - really what I'm doing is saving money in an organisation that helps out people worse off than me by providing small loans to folk who would otherwise have gone to the loan sharks/payday lenders. The forfeit of any return I view as a sort of 'charity' donation.
    Last edited by TheGardener; 17-06-2017 at 9:30 PM.
    • MatthewAinsworth
    • By MatthewAinsworth 17th Jun 17, 6:33 PM
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    MatthewAinsworth
    I reckon some credit cards, ie vanquis are philanthropic in lending to poor credit history people...

    I don't take overall sympathy for adverse credit or debt generally - they could've lived within their means, they could've worked enough to pay it or would've found work if they really wanted it, they should've been reliable and they've betrayed their creditors trust. I respect my lenders for lending me money that I myself would value.

    People can improve their credit rating with time and effort, they can qualify for cheap loans by earning that trust - they haven't earned that trust if they're too risky to be profitable
    • agrinnall
    • By agrinnall 17th Jun 17, 8:14 PM
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    agrinnall
    I reckon some credit cards, ie vanquis are philanthropic in lending to poor credit history people...
    Originally posted by MatthewAinsworth
    You really don't understand philanthropy if you think that's why Vanquis allow sub-prime customers to have cards: it's actually because they know a proportion of those people will not pay off the full balance every month so they'll make a lot of money out of credit interest. Exactly as every other card issuer does, whoever their target market is.
    • MatthewAinsworth
    • By MatthewAinsworth 17th Jun 17, 9:01 PM
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    MatthewAinsworth
    Doesn't the same happen with a credit union loan/credit card? - vanquis make money because they are providing a service

    I think also the individual must take some responsibility if they know they can't afford something, people will wise up quickly if nobody has their back
    • Heng Leng
    • By Heng Leng 18th Jun 17, 2:15 AM
    • 4,100 Posts
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    Heng Leng
    Doesn't the same happen with a credit union loan/credit card? - vanquis make money because they are providing a service

    I think also the individual must take some responsibility if they know they can't afford something, people will wise up quickly if nobody has their back
    Originally posted by MatthewAinsworth
    There are lots of reasons people have a poor credit history.
    Just as there are many reasons people are homeless.

    Your view is rather simplistic.
    • MatthewAinsworth
    • By MatthewAinsworth 18th Jun 17, 5:23 AM
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    MatthewAinsworth
    Doesn't it boil down to not paying bills on time? So it's either forgetfulness (direct debit), lack of will, or not keeping employment - and basic work is easy to find if you're willing to work in an agency in a town, and benefits cover the bases where people can't work - if some people can survive on that income why can't everybody?
    • jayII
    • By jayII 18th Jun 17, 7:39 AM
    • 39,899 Posts
    • 106,346 Thanks
    jayII
    Doesn't it boil down to not paying bills on time? So it's either forgetfulness (direct debit), lack of will, or not keeping employment - and basic work is easy to find if you're willing to work in an agency in a town, and benefits cover the bases where people can't work - if some people can survive on that income why can't everybody?
    Originally posted by MatthewAinsworth
    Or illness (yours, partner's, parents', children's, etc) or disability, or living in an employment blackspot, or negative equity, or simply having no understanding of money, or....

    I could go on because there are so many reasons why people get into unmanageable debt and many of them really aren't their fault. I've been lucky enough to never be in that situation, but I understand that life has the potential to be extremely difficult, often through no fault of the people involved.

    You seem to understand real life problems and struggles as well as you understand concepts like philanthropy. Hopefully wisdom will come with time.
    15.9.17. Balance: £10360.87/Mortg: £174,906.67

    No spend on non-essentials year. To date: £





    • MatthewAinsworth
    • By MatthewAinsworth 18th Jun 17, 10:38 AM
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    MatthewAinsworth
    Those are insurable problems - so again responsibility falls on the worker?
    Not understanding money not an acceptable way for people to remain
    • bigadaj
    • By bigadaj 18th Jun 17, 7:19 PM
    • 9,923 Posts
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    bigadaj
    Those are insurable problems - so again responsibility falls on the worker?
    Not understanding money not an acceptable way for people to remain
    Originally posted by MatthewAinsworth
    Given your posting history this statement is surely ironic.
    • DigForVictory
    • By DigForVictory 18th Jun 17, 8:03 PM
    • 7,000 Posts
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    DigForVictory
    Having a disabled child is not something you can insure for. Not by the time you need it, anyway.
    Says she, counting her blessings.
    • MatthewAinsworth
    • By MatthewAinsworth 18th Jun 17, 8:54 PM
    • 2,841 Posts
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    MatthewAinsworth
    Dig - there are benefits for that?
    • DigForVictory
    • By DigForVictory 18th Jun 17, 10:02 PM
    • 7,000 Posts
    • 18,841 Thanks
    DigForVictory
    No.


    eta 10 characters
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