Credit unions are not collection agencies or payday lenders

By Nicole Lewis, Sr. Digital Communications Advisor


Have you heard that credit unions are collection agencies or payday lenders? We have! Well, the truth is credit unions are nothing like collection agencies or payday lenders. 
Here's what you need to know...


What is a credit union anyway?

A credit union is a cooperative financial institution. We are just like the banks, except we are owned and controlled by our members aka our customers. For more on what it means to be a member, check out the blog here.
 

When you join a credit union, you not only have a voice in determining its direction, you also get money back in your pocket through profit-sharing. Credit unions are dedicated to the communities they serve and accountable to their members, not to Bay Street shareholders, so we don’t have to sacrifice customer service excellence for the bottom line. And we have the awards to prove it.

What’s the difference between a credit union and a collection agency or payday lender?

We may have the word “credit” in our name, but credit unions are nothing like a collection agency or a payday lender.

A collection agency is a company hired by lenders to recover funds that are past due – for example, a credit card or electricity bill that isn’t paid on time.
 

A payday lender is a company that lends people sums of money at extremely high interest rates, often for short periods of time – for example, until the borrower receives their next paycheque. Payday lenders sometimes take advantage of people who are in desperate need of cash due to an emergency or who don’t understand the terms of the loan, resulting in even more in financial problems for the borrower when they are unable to repay the loan and the high interest charges that go with it.

What should I do if I face unexpected expenses?
If you’re really in a pinch, First Calgary, Chinook Financial and Servus Credit Union all offer fair and flexible alternatives to payday loans. These socially responsible products help provide cash quickly but at a lower cost of borrowing than from a payday lender, with the goal to help people become financially fit.

So if you have a collection agency hounding you, or you need emergency funds, forget the payday lender and talk to a credit union instead about your options.

When you bank with a credit union, we work hard to get to know you as a person, understand your financial goals and work with you to help you get there. All it takes is $1 to join your local credit union and benefit from everything membership has to offer. Visit your local credit union today to learn more.

 
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