What you need to know before joining a credit union

Struggling to get a loan from a mainstream organization? Tired of your hard-earned cash lining the pockets of banks whose annual profits run into billions? Joining your local credit union might be the solution— here's what you need to know before you sign up.

• Credit unions are non-profit making organizations owned by their members, which offer basic savings and loan services, usually serving a local community such as church, trade union or workers in the same industry.

• The Internet is a great resource— search for a list of credit unions in your area to get started.

Chequing and savings accounts at credit unions generally have low minimum balances and service fees and often offer higher interest rates.

• Credit unions may also be your cheapest source of mortgage financing. It's worth exploring what's available.

Funds are often safer in credit unions than in conventional banks.

• Funds held in credit unions are guaranteed by provincial guarantee corporations.
• The amount varies from province to province, but in Nova Scotia for example the limit is $250,000, while in Ontario, Manitoba and Saskatchewan they're 100 percent guaranteed.

These cards are often cheaper than those from the conventional financial institutions.

• They can be a great advantage because most do not charge an annual fee, as well most have substantially lower interest rates.
• They make up the difference by charging interest from the date of purchase.
• If you pay off your purchases relatively soon after the transaction has occurred, this may be a consideration worth investigating.

Whereas a bad credit rating can cost you dearly, having no credit rating at all (because you've never borrowed money) can be just as detrimental.

• You are most likely to be granted a loan if you have a proven record of paying back credit and debt responsibly.
• Whatever your financial institution, consider taking out a small loan that you can easily repay, in order to establish a credit rating.

Ultimately, joining a credit union can help you make your money go further. Before you sign up, make sure you do your research and pick a plan that will work for you.