Credit Unions

Credit Unions allow groups of friends to get together and raise a pot of money, which they can then lend to any person who needs cash - say to purchase a new car. Assuming the arrangement is non profit making, it would mean members of the 'credit union' would benefit from cheap loans.

As a mutual society the credit union is a financial co-operative, just like the original building societies and friendly societies. It is owned and controlled by its members and run for their benefit.

These days building and friendly societies are hardly ever chummy, local affairs and members don't necessarily have anything in common. Not so with a credit union where every member will tend to have a 'common bond' with other members of the union. Perhaps everyone lives in the same village or everyone works for the local factory.

There are currently over 600 credit unions with the average having 400 members. Leeds City Credit Union, on the other hand has managed to attract 8,500. See Also: Loans & Cards Centre Credit Card Comparison Service

Last Updated: May 2007 © Moneyextra.com

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