Why Join a Credit Union? Here Are 10 Reasons

Why join a credit union? Local, member-owned financial institutions have deep roots in many American communities and provide a flexible, more accessible alternative to large commercial banks. We take a look at what credit unions are, how they work, and the key reasons many consumers still prefer them to larger for-profit banks.

What Is a Credit Union?

Credit unions are cooperative financial organizations owned jointly by their members. Everyone with an account has a share in the ownership of the credit union. As a member, you are both an owner and an investor in the credit union’s success. 

Credit unions typically have roots deep in local communities and were often started when employees at a company, government office, or school pooled their financial resources in order to access affordable banking services and credit. Since then, many credit unions have banded together or extended their reach, but the feel of community remains core to their identity.

How Do Banks and Credit Unions Differ?

Credit unions are not-for-profit organizations, meaning that they are run on behalf of their members, not shareholders, and any excess funds are reinvested in the credit union. Services are provided more or less at costs, rather than seeking to maximize returns from every transaction.

Banks, on the other hand, are “for-profit” organizations that sell services to their customers to benefit their owners, or shareholders. Shareholders also control the board that decides how the bank is run. While most started as locally owned companies, almost all banks are now part of big regional or national corporations with few connections to any individual communities.

Credit unions are also regulated differently than banks. They need to keep more of their reserves on hand, rather than in “at risk” investments and they also need to maintain a stake in the loans they grant, rather than being able to repackage and resell loans, as banks do. This means that more credit unions’ assets remain in the hands of their members.

Why Are Credit Unions Important?

Credit unions provide crucial access to safe, well-regulated financial services in many communities, especially for people just starting out on their financial journey or those in service professions including teachers and local government staffers, as well as healthcare and utility workers. 

True to their roots, credit unions also provide services in places commercial banks do not.

Today, almost 5,000 credit unions across the U.S. together manage $2.17 trillion in member assets. According to the National Credit Union Administration (NCUA), the sector now extends loans on family residential properties worth almost $660 billion and $486 billion worth of auto loans on both new and used cars, accounting for almost 1 in 3 auto loans extended in the U.S.

Why Should You Join a Credit Union?

Let’s take a look at what member ownership, not-for-profit status, and local connections mean in practice. Here are 10 good reasons why you should join a credit union.

1. Low Fees

With no incentive to maximize profits at every stage of the banking process, credit unions offer many services at cost or are able to eliminate many fees commonly charged by banks. Expect to pay low or no monthly and annual service charges as well as fewer checking, cash advance, and overdraft fees. Loan application and processing fees are also less common.

2. Lower Minimum Balances

Similarly, with less need to support investments on the open markets, credit unions often require members to keep less money in their deposit accounts. That means more checking, savings, and money market accounts with no or very low minimum balance requirements.

3. Higher Interest Yields 

Unlike banks, credit unions do not need to maximize the difference in rates between the interest they charge on commercial loans and the money they borrow from you to make profits for themselves. That means money in your savings, money market, and share certificate accounts will earn a higher annual percentage yield (APY).

4. Lower Interest Rates

It also means credit unions do not need to charge as much on the money they lend to members in the form of annual percentage rates (APRs) on personal, auto, and home loans, credit cards, lines of credit, home equity financing, and even business loans. Members win on both ends!

5. More Flexible Terms

Without the need to maximize profits, credit unions are also able to be more flexible on the terms they offer when making loans. Depending on your circumstances, credit unions may be willing to lend money for longer or allow you to borrow against more of the value of your home or car.

6. Fully Insured Deposits

All this flexibility comes with the same built-in safety that deposits at commercial banks enjoy because the federally-backed NCUA insures individual deposits in every credit union up to $250,000. 

7. Great Local Service

Credit unions continue to serve the communities that created them. While they might have fewer locations than big banks, they are more likely to maintain branches in places where commercial banks no longer offer in-person service. Their smaller size also means you are more likely to be able to talk directly to a senior manager or the loan officer administering your loan.

8. Long-Term Relationships

Credit unions know they are more likely to succeed when their members thrive. The staff at your local credit union has an interest in getting to know you better and understanding your financial goals. At a credit union, you’re more likely to be recognized when you walk in the door, rather than having to start from scratch at every visit.

9. Financial Resources and Tools

That natural interest in members’ well-being means credit unions often also provide a host of financial resources and tools for their members from helpful blog posts and online mortgage calculators to webinars on home purchasing or investments. Many credit unions are also advocates for financial literacy, often supporting classes and programs in their communities.

10. Voting Rights

All this talk about member ownership means something. Being a member and owner means you get to vote on who sits on the volunteer board that oversees the operations of the credit union. You can even run for election to the board or various committees yourself!

Argent Credit Union: We’re Here for You, Richmond 

Argent Credit Union is a full-service not-for-profit financial cooperative owned and operated by its members. At Argent Credit Union, we return earnings to our members in the form of lower loan rates, higher savings rates, and fewer to no fees.

Created in 1956 to serve DuPont employees in Chesterfield, VA, the Argent Credit Union now serves more than 26,500 members throughout the Richmond metro area. Membership is open to anyone who lives, works, attends school, worships, or volunteers in Chesterfield, Henrico, or Hanover counties or the City of Richmond.

If you are looking for a Richmond credit union, please come talk with us. We’d love to get to know how we can serve your financial needs. 

Belonging at Argent

How to Get Pre-Approved for a Mortgage

So you’re ready to start house hunting and you’re thinking about the home loan you’ll need. But which should you do first: find your dream home or apply for a mortgage? 

Neither—the first thing you should do is figure out how to get your home loan pre-approved! Pre-approval means you’ll have a clear idea of your budget and realtors and sellers will take you seriously as a buyer. Read on to find out how to get pre-approved for a mortgage. 

Why You Need to Get Pre-Approved for Your Mortgage

Mortgage pre-approval is essential in a competitive housing market because it means you have financing ready to go, therefore sellers are more likely to pick you. Once your mortgage is pre-approved, you’re in a strong position to approach a realtor and start shopping for a home! 

Plus, the pre-approval process is a chance to learn key information that can help you on your home buying journey:

• Find out if you can qualify right away for a mortgage or if you need to wait until your finances are in better shape.
• Determine what annual percentage rate (APR) you’re likely to get based on your credit score, debt-to-income (DTI) ratio, and income.
• If needed, you can take steps to improve your credit before you officially apply for your mortgage.
• Find out the home price range you should consider to get an affordable monthly payment.
• Determine what type of mortgage best suits your situation and goals. For example, a fixed-rate vs. adjustable-rate mortgage (ARM) or a jumbo loan.

How to Get Pre-Approved for a Mortgage in Simple Steps

Here’s what to do when you’re ready to seek mortgage pre-approval:

• Find out your credit score and, if needed, take steps to improve it.
• Gather up all your personal and financial documents.
• Choose a lender you trust and can build a relationship with. 
• Hit the apply button and wait for a response from a mortgage originator!
• If pre-approved, you can discuss your loan type, amount, term, and likely rate.

Once you find a home and your offer is accepted, you can submit your final mortgage application. Your lender will take some time to check your credentials in the underwriting process. If all goes well, you’ll sign the loan contract and get the funds to buy your home.

FAQs About Mortgage Pre-Approval

You probably still have a few questions about how to get pre-approved for a mortgage, so here are the most common queries we get from people just like you.

How Is Getting Pre-Approved Different From Pre-Qualifying?

Pre-qualifying involves just a soft credit pull to take a quick look at your financial background, and you get ballpark figures only. Pre-approval uses a hard credit pull to assess in greater detail whether you can get a mortgage, the amount, and your likely rate.

Does Getting Pre-Approved for a Mortgage Hurt My Credit?

Your credit will drop a few points when a lender runs a hard credit check. The good news is, If you get pre-approved from multiple lenders within about 45 days, it counts as a single hard credit pull so your credit score will dip only once. 

Plus, your credit will recover once you start making timely payments on your home loan. 

How Long Does Mortgage Pre-Approval Take?

Depending on your lender, you may get a pre-approval response within one to three business days. Some lenders may take up to 10 days. 

Note that pre-approval is different from your final mortgage application, which begins the closing process on your home purchase. The closing process may take 30 to 60 days.

How Far Ahead of House Shopping Should You Get Pre-Approved? 

A mortgage pre-approval offer may be good for about 60 to 90 days so you want to aim to find your home within that window. Pre-approval is valid for a limited time because your finances and interest rates may change over a longer period. 

If your situation or the markets change, you may qualify for different loan amounts and rates.

What Documents Do You Need for Mortgage Pre-Approval?

Before you apply to get pre-approved, you should spend some time gathering these documents:

• State-issued ID and proof of address
• Bank statements 
• Tax returns from the previous two years
• W-2s, 1099s, and other proof of income from the previous two years
• Information about any other assets you have

Should You Shop Around Different Lenders?

Yes, it’s a good idea to shop around different lenders to find the most competitive rates, flexible terms, and friendly local service. Credit unions frequently offer affordable home loans because they are not-for-profit organizations that pass revenue back to members through lower rates.

Next Steps: Choosing the Right Mortgage for Your Needs

Now that you’ve learned how to get pre-approved for a mortgage, you’ll be better equipped when it comes to choosing a home loan. Keep in mind that a 30-year fixed-rate mortgage is the most popular. This is because it offers affordable payments that stay the same every month over a generous term. That said, it’s not the only kind of mortgage. 

If you have a higher income and a large down payment, you could choose a shorter term to save on interest. Or if you want an extra-low payment at the start of your loan term, an adjustable-rate mortgage could be right for you. Click below for details!

Home Loans

The Differences Between Credit Unions and Banks

Choosing between a bank or a credit union is an important decision that will allow you to manage your money better. While both institutions offer similar financial products such as checking and savings accounts, loans, and mortgages—there are fundamental differences between the two.

Read on to learn more about the differences between a credit union and a bank to determine which one is right for you.

Commercial and Non-Commercial

One of the primary differences between a bank and a credit union is their structure and ownership. A bank is a for-profit institution typically owned by shareholders or private investors. The primary goal of a bank is to maximize profits for the owners.

Credit unions are cooperative, not-for-profit financial institutions that are member-owned and operated. This structure can lead to a more member-centric approach to offering financial services and products. In contrast, the profit-driven focus of a bank can potentially affect product offerings and customer service.

A credit union is often formed around a shared connection, such as a place of employment, city or state of residence, or an affiliation with another organization like a place of worship. Credit union members can take advantage of lower loan rates, higher savings dividends, and lower fees than bank members.

Insured by the FDIC or the NCUA 

Bank deposits are insured for up to $250,000 through the Federal Deposit Insurance Corporation (FDIC). Similarly, money deposited in a credit union account is also guaranteed, but through the National Credit Union Administration (NCUA).

NCUA coverage protects members if the credit union were to shut down or go into conservatorship by providing federal deposit insurance of up to $250,000 per account holder. This insurance coverage ensures the stability and safety of credit unions, protecting members’ deposits from potential losses.

Fees vs. Low or No Fees

Banks often charge higher fees due to their profit-driven nature, while credit unions prioritize members’ needs and offer low or no fees for the same services. 

Examples include:

Account maintenance fees—Credit unions typically have low or no monthly maintenance fees for checking and savings accounts, while banks often charge a monthly fee if a certain balance or transaction requirements aren’t met.

Overdraft fees—Banks tend to have higher overdraft fees than credit unions, making them a more expensive option for members who accidentally overdraw their accounts. 

Credit unions sometimes offer overdraft protection for ACH, recurring debit card transactions, and checks, in which overdraft payments may be covered up to a set limit.

ATM fees—Banks frequently charge fees for withdrawing money from non-affiliated ATMs. Credit unions often participate in large ATM networks or offer reimbursements for out-of-network ATM fees.

Wire transfers and other financial instruments—Credit unions may provide low to no-cost wire transfers, cashier’s checks, and money orders, whereas banks often charge higher fees for these basic services.

Foreign transaction fees—When you use credit or debit cards abroad, banks often charge higher foreign transaction fees than credit unions.

Early account closure fees—Banks may impose an early account closure fee, while credit unions are less likely to do so.

Loan origination fees—Credit unions often charge lower loan origination fees than banks, making it more affordable for members to borrow money.

Credit unions aim to return profits to their members through better rates and lower fees, making them an attractive option for people looking to minimize banking costs. Furthermore, their member-centric approach fosters a sense of community, ensuring that customers’ financial well-being is at the forefront of the decision-making process.

Community Commitment

Credit unions consistently provide exceptional local service and demonstrate a strong commitment to the communities they serve. For example, Argent Credit Union supports several important local Virginia charities. Members also gain access to unique benefits, such as scholarships and fun perks like tickets to Busch Gardens and Water Country USA.

Being member-owned and operated allows Argent Credit Union to focus on building long-term relationships. As a result, Argent offers more attentive and personalized customer service than larger banks. Our smaller scale and local presence enable us to tailor our services and products to meet the needs of our members better.

Make the Right Choice for Your Financial Future

Now that you understand the key differences between banks and credit unions, it’s time to make an informed decision that best fits your financial needs. Explore the exceptional services, personalized attention, and lowered rates/fees offered by Argent Credit Union. 

Click below to learn more about the value and benefits of making Argent Credit Union your financial institution of choice!

The Credit Union Difference

Protect Yourself from Ransomware

Malware – There’s been a lot in the news lately regarding Malware attacks.  What exactly is it?  Simply put, Malware is “malicious software” designed to damage and destroy computers and computer systems. Cybercriminals typically use it to extract data they can leverage over victims for financial gain.

Ransomware is a type of malware that accesses a victim’s files, then locks and encrypts them, and demands the victim pay a ransom in order to get the files back. Cybercriminals use these attacks to try to get users to click on attachments or links that appear legitimate but actually contain malicious code.  Ransomware is like the “digital kidnapping” of valuable data – from personal photos and memories to client information, financial records, and intellectual property. Any individual or organization could be a potential ransomware target.

Here are some tips to help protect yourself:

• Keep the software on all of your Internet-connected devices up to date. Make sure you are running the most current versions of your security software as well as other frequently used programs and apps.
• Turn on two-step authentication – also known as two-step verification or multi-factor authentication – on accounts where available. Two-factor authentication can use anything from a text message to your phone to a token to a biometric like your fingerprint to provide enhanced account security.
• Protect your valuable work, music, photos, and other digital information by regularly making an electronic copy and storing it safely.
• Make sure to use a strong password with at least 12 characters. Focus on phrases that are easy for YOU to remember.
• If you doubt a link in an email, social media posts, and online advertising, don’t click on it.  This is often how cybercriminals try to steal your personal information. Even if you know the source, if something looks suspicious, delete it.
• USBs and other external devices can be infected by viruses and malware. Use your security software to scan them before saving anything.

Information provided by StopThinkConnect.org. #stopthinkconnect

Practical Steps to Help Prevent Identity Theft

Identity thieves are constantly looking for new ways to obtain personal and financial information such as credit cards or Social Security numbers. There is no perfect way to completely protect yourself against identity theft, but here are 10 practical steps you can take to make it harder for identity thieves.

1. Guard your social security number and don’t carry your card with you. If you are asked for your number, ask why it is needed and how it will be protected.  If possible, only provide the last four digits instead of the entire number.
2. Freeze your credit with all three major credit bureaus — Equifax, Experian, and TransUnion. This will restrict access to your records so new credit accounts cannot be opened without your permission.
3. Be wary of phone calls that appear to come from government agencies or businesses, and emails that look legitimate. Instead of providing information, call the agency back or email them directly using the information found on their official website.
4. Review your financial statements and credit reports Make sure every transaction listed is accurate on your financial and bank account statements. The same is true for your credit reports. The three major credit reporting bureaus are giving consumers access to a free credit report weekly until April 20, 2022.
5. Use strong passwords and add an authentication step. Don’t reuse old passwords and don’t rely on security questions to keep your accounts safe. Your mother’s maiden name and your pet’s name are easy passwords to figure out. Create passwords that include lower and upper case letters, numbers, and symbols.
6. Use alerts to receive a text or email when transactions are made on your accounts. Argent has a great service called CardValet that provides alerts on transaction amount, location, and merchant type when your debit card is used.
7. Protect your mobile devices by keeping them locked, password-protected, and your antivirus software current and updated. Be wary of connecting to public Wi-Fi networks.  Even though a network requires a password, doesn’t mean it’s secure.
8. Use a banking app rather than a mobile browser. To download the Argent App, visit the App Store or Google Play.
9. Shred your credit card, bank, or investment statements! Shred any document containing personal or sensitive information as well as any junk mail with a pre-approved offer for credit.
10. Don’t overshare on social media. Use privacy controls so information like your birth date, your employer or your family members isn’t publicly accessible.