Young Wrexham

Credit Unions

Credit unions are a cross between a co-operative and a bank.

They are set up by people with a common interest, such as where they live or work, and offer low-interest loans, savings and sometimes bank accounts. They’ve been around since the 1940s but in recent years have become increasingly popular among savers and borrowers.

• Credit unions have a 'common bond' that determines who can join. For example, it could be for people working at a certain company, people who live in the same area or belong to the same organisation, like a church or club
• Once you are a member of a credit union, you can start on its savings scheme. You can save as much or as little as you like as often as you like. This can usually be paid in at a local shop or collection point, or directly from your wages
• Credit unions will usually pay a dividend on savings once a year to all its members
• Life savings insurance is usually included at no cost to the member
• They can also offer cash-based Child Trust Funds to their members
• You can also borrow from a credit union. Credit unions act in the interests of all members and so try to ensure they don’t let their members take out loans they cannot pay back by assessing their income and, in some cases, how much they’ve been able to save. There’s also a cap on the amount of interest they can charge on their loans of 3% a month or 42.6% a year APR, which is a lot cheaper than doorstep or payday lenders
• Life insurance is also built into the loan at no extra cost
• When you borrow from a credit union, you can also carry on saving. This means that by the time you have finished paying off the loan, your savings will have grown
• Talk to your local credit union about what is on offer to you
• You do not need a bank account to be a member of a credit union. In fact, a bill-payment facility is offered by a number of credit unions to enable individuals without bank accounts to benefit from purchasing their utilities cost effectively. Your credit union can also accept payment of your benefits on your behalf if you want. You can then withdraw the cash from the credit union for everyday spending
• If you are interested in joining a credit union, find out if the company you work for operates one or ask your local authority for a list of community-based credit unions in your area. The Association of British Credit Unions will also have a list or you can click here to find your nearest credit union

The Money Advice Service has a couple of sections on credit unions including:

• Borrowing from a credit union
• Credit union savings accounts
• Credit union current accounts

You can contact the Money Advice Service on 0300 500 5000 (or 0300 500 5555 for Welsh) Mon - Fri 8am-8pm, Sat 9am-1pm. There’s also an online chat function on their site.

You can contact Meic for free via online chat, text (84001) or phone (080880 23456).