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'Credit unions are for the poor' - this and 5 other myths busted on International Credit Union Day

18 October 2018

They've been going for more than a century yet credit unions are still surrounded by myths of the most unhelpful variety.

Image of the International credit union

Today (October 18), International Credit Union Day, Tees Credit Union is launching a fightback to set the record well and truly straight.

Before we get to those myths, we might as well start with the basics...

What is a credit union?

A credit union is a financial co-operative that offers local people safe savings and affordable loans.

The credit union in Stockton-on-Tees is called Tees Credit Union, which is part of Moneywise Credit Union Limited.

What are these myths then?

We're getting there...

MYTH 1: Credit unions are for the poor and struggling, not me!

Wrong! Credit unions cater to a wide audience of people, from those with low incomes to those with high incomes.

MYTH 2: My money isn't safe in a credit union

The fact is, credit unions are covered by the Financial Services Compensation Scheme just like any high street bank. That means your eligible deposits are protected up to a total of £85,000.

MYTH 3: Credit unions are outdated

Rubbish! Credit unions are keeping up with the pace of banks. Many have online banking and some also have mobile apps.

MYTH 4: Credit unions are for people with a bad credit history

No they're not; credit union loans are for everyone and everything! Some loans are competitive with the rates the banks offer and they're far cheaper than doorstep lenders.

MYTH 5: Credit Unions aren't regulated - what if something goes wrong?

Sigh. Credit unions are regulated by the Prudential Regulation Authority and regulated by the Financial Conduct Authority. The same people who regulate banks.

MYTH 6: Opening an account is difficult and takes a long time

It's surprisingly easy to open a credit union account, ID verification will be done online (in most cases) and your account will be open within three working days.

How is Tees Credit Union getting on?

Pretty well so far. In the last 12 months, Tees Credit Union has seen membership numbers surge from 2,200 to more than 3,000.

It has issued almost 1,000 loans totalling almost £550,000 in the same period.

And it has opened a new office on the corner of Stockton town centre's Dovecot Street and Prince Regent Street.

What do its leaders and council leaders think?

Symon Agnew, Chief Executive Officer at Moneywise, said: "We're delighted with the inroads we're making but we believe we can do even more, which is why we're so keen to take this opportunity to debunk these myths.

"One of the things we're really keen to get across is that we're cheaper than doorstep lenders and the likes of Brighthouse. We're here to help local people apply for cash loans that are affordable and to encourage folks to save a little money for a rainy day.

"You don't need to save before you apply for a loan and there is no longer a membership fee to join."

Councillor Steve Nelson, Stockton-on-Tees Borough Council's Cabinet Member for Access, Communities and Community Safety, added: "Credit unions are a great place to save a bit of money on a regular basis for things like Christmas or holidays.

"All you need to do is get in touch with Tees Credit Union and they will do all they can to help. They've got a great range of products for all kinds of budget and they're based right in the heart of Stockton town centre, or you could call or visit their website.

"Unlike high cost lenders, they don't charge things like early repayment fees on their instant cash loans either."

Where can I find out more?

Tees Credit Union's office is at 38/40 Dovecot Street in Stockton town centre, and is open from 10am to 4.30pm, Monday to Friday.

Alternatively, call 01642 941911 during opening hours.