Using Credit Union “Backdoors” for Better Rates


Hey I’m Adam Jusko from ProudMoney.com and today I am talking about credit unions and how to use credit unions to
get the best rate — even if you think you don’t qualify for a credit union. There
are many ways to sort of get into credit unions and get those rates that you may
have heard about or that you might see online. There are sort of some “backdoor”
ways to do it with a lot of credit unions, and so we’re gonna talk a little
bit about that so that you can sort of add that into your mix when you’re
looking for the best rates on your mortgages, your auto loans, credit cards —
all those sorts of things. Now, just real quick, if you don’t know what a credit
union is, a credit union is… it’s basically… offers banking products but it is a
organization, a nonprofit organization, that sort of comes together out of,
usually, a company or government entity, and the people that are part of the
credit union are members, so they’re people that have something in
common. So if you are, you know, with a certain employer, or you worked for the
federal government or a local government, a teachers union — whatever it
might be, a credit union may be formed to offer financial products to the people
that are part of that group, whatever that group may be. Now many
times the credit union will start off being sort of a very specific group and
over time it will really grow in terms of who’s allowed to be a member. So it might start as an employee credit union and then it might be, you know,
everyone that lives or works within an X mile radius of wherever the corporation exists or whatever the situation is. But, anyway, the sort of idea
of the credit union is by having a nonprofit organization that is just for members, it’s not like a bank that has a profit motive. And so, you know, it sort of it gives the credit union the ability to give better rates because
they’re not just trying to get their loans out there so they can make
money, they’re really working in their members’
best interests — at least that is how credit unions work in theory, and that is
how oftentimes they do work — although you shouldn’t just take it for granted that
a credit union is, you know, across the board better than a bank. So, that being
said, a lot of people don’t pay attention to credit unions right now… they go sort
of to the big banks or a local bank because they don’t think that they might
qualify for a credit union. But these days, especially with the larger credit
unions, they are really trying to, you know, accommodate new members as much as possible. And oftentimes it’s good for them if they can get bigger because they
can actually offer more services as the credit union grows. So there is sort of a,
you know, what I call a “backdoor” to membership in a lot of credit unions. They may have a list of all these eligibility requirements but sort
of in the fine print or sort of in the, you know, the very bottom of the list
they’re going to tell you that there’s a way that you can sort of get around some
of these requirements and still become a member of that credit union. And the way
that often happens is you will join sort of a, you know, maybe a charitable
organization or some organization that is somehow related maybe to what the
credit union’s, you know, base membership is about and that’s how you will, you
know, manage to get your way in. I’ll give you three examples of that, that I
have pulled… PenFed, which is the Pentagon Federal Credit Union, you’d normally think that as a government employee/military that sort
of thing, those are the people that have eligibility. But if you want to be a PenFed member you can do so by getting a membership in the Voices for America’s
Troops, which is an organization that has a $17 membership — you join
that and then you can join PenFed. Alliant Credit Union — again, another
organization: Foster Care to Success a ten dollar membership or contribution to
that organization then means that you can get into Alliant Credit Union. Digital Credit Union, which actually is interesting because it is a credit union
that was developed as part of Digital Equipment Corporation, which no longer
even exists… but there is still a Digital Credit Union. You can get into that
credit union through an organization called Reach Out for Schools. And so a
lot of these… actually you don’t even have to, you know, sort of go off and join the other organization — they actually wrap it into the membership application when you want to get in the credit union. So say you
want to get in this particular credit union, it might be part of the
application — “go off here online and join that,” and then come back to your
application and finish it out or, you know, however they work the mechanism. It still is… they’re gonna do a lot of that work for you in terms of trying to, you
know, make you eligible. So if you are online or in whatever way that
you might find out they you can find better rates on a car loan or a mortgage
or credit cards or whatever financial product it is, you should always
look to see if there’s a way for you to join a certain credit union — even if on
the surface it seems like you can’t. Because not only do you have the “backdoors,” there also often are ways to do it if you are a relative of somebody
that’s in the credit union or you’re a relative of somebody that could be in
the credit union — you know, they try and widen the eligibility as much as
possible in a lot of these credit unions, especially the larger ones.
So that is it for this video. Please visit ProudMoney.com for all kinds of
financial “best of” lists and other financial stories and good stuff too. Thanks for watching. Bye.

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