Financial Education

The Benefits of a Credit Union
About the time of the Great Depression, when people found it difficult to get loans from banks, they combined their funds together to lend to one another. This idea of “people helping people” still guides credit unions today.

A common misunderstanding is in the word “union.” Don’t confuse a credit union with a “labor union.” Credit unions are made up of people who deposit funds so that other people who also have accounts—including themselves—can borrow to finance cars, homes, and more, at competitive rates.

Primary differences between credit unions and banks include:

Credit Unionsvs.Banks
Service focused with competitive rates, value-added productsFor profit financial institution
Account holders are equal shareholders of the organization, each with an Individual voteControlled by stockholders and paid officials, customers have no voice
Volunteer Board of Directors represent account holders; elected by account holdersPaid Board of Directors represent the stockholders; no voting privileges for customers
Account holders are a collective group, representative of where they work, worship or liveCustomers are the general public
Collaboration is common between credit unionsOther financial institutions are competition
Driven by the collective benefits of account holdersDriven by profits
Profits returned to account holders as lower loan rates, higher savings rates, and lower feesProfits are returned primarily to stockholders

Choosing Credit Vs. Debit
When making a purchase using your debit card, you’re often given the option to choose “credit” or “debit.” Either will enable you to make a purchase (transactions are automatically deducted from your Checking Account), but there are some key behind-the-scenes differences that will help you make your decision.

Credit Option

1.   You must sign for your purchase
2.  You cannot receive cash back
3.  Gives you all the security protections of a Visa® transaction for disputes and fraud
4.  Visa® pays NHFCU a small portion of each transaction amount when you choose “credit”

Debit Option

1.   You can receive cash back, up to the established limits
2.  You must enter in your Personal Identification Number (PIN)
3.  The credit union pays a fee each time you choose the “debit” option
4.  You may pay a merchant fee to use the “debit” option

If you have any questions regarding your NHFCU Visa® Debit Card, contact us. We’re happy to help.