Tag Archives: loans

On Credit Unions

I know, I know – I am spoiling you with three posts already this week, including the rather popular one on my total failure in the area of sleeping attire – however I just wanted to do a quick lunchtime post on something that almost passed me by.

Today is, drum roll please….International Credit Union Day! Do not adjust your sets, this aims to be a short and informative post, on something that can be a real benefit to YOU and the community you live in.

There are roughly 500 credit unions throughout the UK. There are some differences, but they all work along broadly similar lines – that is, they manage savings, and offer loans, to a group of people who have something in common. That something is usually, but not always a geographical area.

For the purposes of this article I’m going to talk about the geographically based credit unions, and why I believe people should consider them alongside banks when looking for loans,  current accounts and savings.



Credit Unions offer loans to their members, which do not have any hidden charges or secret costs, nor will they attempt to bamboozle you into taking expensive and useless loan protection. Interest rates are often lower than those advertised elsewhere, and credit unions will usually be happy to lend relatively small amounts, say £100,  whereas banks will often have a far higher minimum loan.

Credit Unions tend to be more ready to lend to those who are refused funds elsewhere. They will want to work closely with you to make sure you can afford to repay what you have borrowed, as well as meeting your other living costs, and they may ask that you save – even a very small amount – before being considered for a loan.

Current Accounts

Many credit unions offer basic current accounts, and again, these are available to those who are excluded from traditional bank facilities. These accounts will usually have far fewer bells and whistles than a bank account, for example debit cards may not be readily available. However, an account with a credit union may well offer other useful features, eg a ‘jam jar’ account to immediately ring fence the amounts needed for essential payments such as rent, when the account receives a credit. This can be a lifesaver for certain vulnerable groups of people, for example young people leaving care; adults with limited understanding of money management; or even just people who are having to manage their money for the first time due to the introduction of direct payments.


I am lucky at the moment in that I can afford to save a small amount every month. I choose to save with my credit union -the biggest selling point for me being that I know where my money is going – and more importantly where it’s NOT going. It’s not investing in the arms trade, being used to shore up dodgy food speculation practices, or buying some corporate fat cat a yacht. Instead, my savings are being used to make small loans to people in my local community. Probably to people who are excluded from traditional lending institutions, who are at risk of aggressive targeting by the frankly despicable payday loan companies.

So, there you have it. If you have been refused help or even not allowed to open an account at your bank, consider a credit union. If you need a loan, or know someone who does, please steer them away from payday lenders and get them to talk to a credit union. And if you are lucky enough to be a saver, please also think about saving with your local CU, because your money will be being used to help those in your local community.

You can find your local credit union here, and if you live in Cardiff, you can check out Cardiff and Vale Credit Union here.

Here endeth my speedy lunchtime post – back to work I go!

Disclaimer – I haven’t been asked to write this post, and I’m not receiving any incentives to do so.