Educating People on Credit Unions: Missed Opportunities and Misconceptions


Until I started working for a CUSO, credit unions were a mystery to me. I was once told that they were “like banks, but not really.” Clearly, this was not a very helpful response, but at that time, I had very little incentive or encouragement in my life to reach out and do more research. My money followed my parents, and as they had accounts at the large banks, so did I. Having been a bank customer my whole life, and never truly having understood credit unions, I never considered moving my finances.

Now, I’m not saying I never got a flyer in the mail addressed to “current resident” telling me about the credit card I could open or the great loan rates I could get, but that hardly counts. I didn’t know anything about credit unions, I was not about go open a credit card or take out a loan at a financial institution I didn’t belong to or know anything about. It wasn’t until I began working for my CUSO that I truly understood credit unions and discovered a lot of what I thought I knew was wrong.

Thankfully, I now know the truth about credit unions, but the same can’t be said for the majority of people. A 2017 survey done by CUNA found that 64% of non-members are not familiar with credit unions (that number bumps to 71% for millennials). Consumers have many misconceptions and misunderstandings of credit unions regarding what they offer, who can join them, and how they work. As someone who believed in a lot of these false claims for most of her life and never felt compelled to educate herself, here’s my take on those misconceptions and where I think credit unions are missing opportunities for education.


Lack of Technology

One huge misconception regarding credit unions is the idea that somehow, they are behind on the times in terms of technology. Bank customers desperately cling to their online banking and P2P payment services, thinking that if they switch to a credit union, they’ll be forced to say goodbye to such conveniences. As credit union and CUSO employees, we know this is not the case, but consumers do not.

In fact, according to the Financial Brand, 55% of consumers think that credit unions don’t even offer online banking, let alone more complex and recent technologies. Considering how essential such services have become, it’s easy to see why people would be hesitant to join credit unions if they truly believe such things.

In addition to lacking modern technology, many non-members seem to think credit unions lack basic banking services. Three out of every five non-members think credit unions don’t offer mortgages. Thus, credit unions seem to be fighting a more difficult battle. Aside from convincing potential members that their rates and offers hold up to the competition, they also must overcome incorrect assumptions and prove they can provide basic banking necessities.

I admit, I’ve fallen victim to this belief as well. Right when P2P services started to gain traction, my friends and I began to rapidly send money back and forth as we took turns covering Uber fares, pizza bills, and bar tabs. However, one friend did not have P2P service through her credit union yet and refused to download a third-party app. As such, we were forced to find cash for her or settle the bill some other way. That, for me, instilled the belief that credit unions were not quite as tech-savvy. Thankfully, I know better now, but it can be small situations like this that form opinions for years to come.

Membership Exclusivity

We like to think it’s easy to become a credit union member, and maybe in reality it is. However, most people don’t share that view and it all comes down to our terminology. “Member” is a harder word for people to swallow than “consumer” or “customer.” The latter implies simply paying for a service, while the former suggests commitment, exclusivity, and barriers to entry. Therefore, a large number of consumers don’t think they are eligible to join a credit union. That uncertainty can lead people away, and many will just assume they don’t meet the qualifications; few people will take the initiative to research the credit union’s field of membership to see if they fit the criteria.

Additionally, many people don’t understand why they are a “member.” What makes them a member and not just another customer? Given how little people understand about credit unions, chances are they don’t know that by joining a credit union, they take ownership.

It was reported in that same CUNA survey that 64% of consumers are unaware that credit unions are not-for-profit, and most likely don’t understand the cooperative principles. How can we expect people to join us if they don’t understand the foundation on which credit unions are built?

Shortage of Locations

The Financial Brand also noted that consumers find the biggest obstacle to joining a credit union to be inconvenient branch locations, followed closely by the belief that there aren’t enough branches or ATMs. Considering modern technology, this fear seems a little silly to me (I can count the number of times I’ve entered a physical brick and mortar branch in the last few years on one hand), but let’s discuss it nonetheless.

While it’s true that no credit union is going to have the same number of branches as the large banks, this generally feels nonessential, as credit unions operate in the community they serve, meaning if you are in fact a member, you should never have to travel too far for a branch. However, those few things bank customers can’t do with their mobile technology and online banking, they depend on branches and ATMs for. The idea of quickly needing an ATM or having an issue they need to go into a branch for and not being able to access one is stressful and can prevent them from making a switch.

What they’re failing to understand is how our cooperative system works and that many credit unions will have a shared banking network, meaning members will have access to not only their credit union’s ATMs, but others as well. I don’t need to tell you this though – hopefully you’re already educated on the power of the network – you need to start telling non-members. Start advertising the benefits of that shared network and help people get over this unnecessary fear.

Effective and not-so-effective education

Maybe none of this is new to you. If you’ve been in the industry a while, maybe you’ve heard these misconceptions and you’ve done your best to educate people. However, the message is clearly not reaching the majority of people. So, it might be time to consider new approaches.

Step away from the radio ads and the marketing that brags about your great rates. If you want to gain and engage non-members, people who may not even know what a credit union is, your rates will do little for them. They are not going to sign up for something they don’t understand, not when their money is involved.

Realistically, odds are you’re not going to convince a life-long bank member to up and switch their financial life around with a radio ad or a mail offer. The people who aren’t already part of a credit union either don’t want to be or don’t understand why they should be. There’s a degree of education that needs to occur here before you can bombard them with ads and offers.

We ARE like banks

Bear with me, I know this sounds bad, but it has a purpose. It can be easy to argue how credit unions are better than banks or how they offer better rates and more community engagement – and that’s all great and nifty – but what may just entice people is knowing how we are similar to banks.

We’ve already shown that consumers know pretty much nothing about credit unions (remember, the majority of people don’t even think we have online banking), and as someone who uses her mobile banking app for 95% of her transactions, you could hand me the best customer service in the world tied up in a bow of community engagement and I still wouldn’t take it over my app.

People need to know that we are similar to banks in that we offer the same services they do and can help them succeed financially. Change scares people, especially in regards to their money. If what they have now is working for them, making the switch may feel daunting and unnecessary. What if they don’t like it? What if something goes wrong? Show them the benefits of a switch, while comforting them with the knowledge that some things will stay the same. Once they understand that they’re not sacrificing conveniences and jumping into the unknown, the improved rates, customer service, and community involvement bonuses will speak for themselves.

Engage the younger generations

If a good portion of Generation X and millennials don’t know what credit unions are, what are the odds Generation Z will know, or even Generation Alpha? It’s time to start educating people before they are tainted with misconceptions or are overwhelmed by their options. Go to high schools and middle schools to educate them on financial options. While it may feel like they aren’t that engaged or excited to learn about credit unions, you’d be surprised what they will retain and remember even years down the road when these discussions come back up.

Speak in finance classes (and no, not about your rates). Teach them about how to handle their money properly, and how they can save for college, a car, or a new video game console with your credit union. Advertise your lack of fees – to a high school student making little money off a part-time job, those bank fees might feel even heftier, making your credit union a more attractive option. Show them how your credit union supports Apple Pay or similar services, so they can still send their friends money. You could even educate them on student loans and how to make smart decisions for college, while subtly adding in how useful credit unions are in this process.

Partner with a local school to start a student-run credit union. This will help them understand their own finances while educating the younger generation about the positives of credit unions, so when it’s time to open their new account as an adult, they feel comfortable choosing a credit union over a bank. Community Financial has an impressive student-run credit union program that reaches over 20,000 students in Michigan. Look into how you could start one in your own state or get involved in something similar.

College students are not too old

Even college students could stand to be educated on this. Honestly, you’d be surprised at how many still have little working knowledge of personal finances. Reach incoming freshman and let them know where the branch closest to their school is along with providing helpful finance information for starting college. My school specifically offered its own credit union, and yet I never joined because I had little working knowledge of credit unions and no one from the credit union ever reached out to me. If I had been sat down as a freshman and been educated, I might have made that switch.

Talk to graduating students. They’ll be facing a wave of student loans soon, along with hopefully getting new jobs and looking for apartments (ones which require good credit scores). Set up classes on campus to walk them through their loans, how to get good credit, and what 401k plans they should look for, while also adding in how credit unions can help them succeed financially. Many might not fully understand these concepts, and they’ll be appreciative of the help as they prepare to enter the “adult world.”

It will take time

So long as credit union members and employees continue to reach out and educate others on what makes credit unions special, those misconceptions will become less and less common and may even disappear altogether. These methods may not get you new accounts or members instantaneously, but you’re setting the future of the industry up to have not just more members, but more informed and financially educated members.


  • Connie#1

    March 13, 2020

    Great article. Love the ideas of reaching the youth, high school and even college graduates.

  • Joanna#2

    March 13, 2020

    Awesome article! Millennial outreach has been one of my passions since joining the credit union industry, and you provided some great suggestions. I think a lot more millennials would be open to joining credit unions if there was more public education as you suggested.


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