Unless you work in finance (and sometimes even if you do), it can be difficult to understand all the ins and outs of banking. There are plenty of misconceptions surrounding banks and their services and it’s easy to be misled by false information. So, today I’m breaking down some of the biggest myths that revolve around banking.
Myth #1: Mobile/Online Banking puts your information at risk. Identity theft is a real thing and is rapidly expanding. Cyber thieves work hard to find new ways to make off with your personal information. But the belief that you’re more at risk for identity theft if you use online or mobile banking services simply isn’t true. Here at the credit union, we implement strict security measures to keep your personal information and your accounts safe. Any data you transmit through our mobile banking app or online banking is encrypted to prevent identity thieves from tampering with it. Rest assured, you can keep on checking your balance, transferring money and snap depositing your checks without the fear of someone taking your personal information.
Myth #2: Debit Cards are safer than credit cards. In terms of how they work, credit and debit cards are not created equally. Your 1st Financial Federal Credit Union credit card and VISA debit card are both covered under the Visa Zero Liability policy. In the case of fraud, you’ll be covered either way, but with a credit card, the funds don’t physically come out of your checking account when you have fraud like they do with debit cards. It can take up to 10 days to received fraud reimbursement so if you have an issue with your debit card you may be in more of a pinch overall if you need to get to your funds ASAP. While it’s technically just as safe to use your debit card when making purchases you’ll be in less of a financial pinch if you are a victim of fraud by using your credit card.
Myth #3: Big Banks are safer than Credit Unions. Big banks may look a little flashier, but it doesn’t necessarily make them any safer. The FDIC extends up to $250,000 per depositor to bank protect your funds at a bank. At the credit union, your savings are federally insured up to $250,000 by the National Credit Union Administration (NCUA), a U.S. government agency. In addition, your IRA funds are separately insured to $250,000 by the NCUA. The NCUA administers the National Credit Unions Share Insurance Fund (NCUSIF), which is similar to the banks’ FDIC. Credit Unions also tend to take a more personalized approach with their members, which is not something you’re guaranteed to get with a big bank.
Myth #4: Credit Unions don’t offer any advantages over traditional banks. Credit unions may be one of the greatest misunderstood types of financial institutions. Both have checking accounts, savings accounts, and loans, but there are major differences. For instance, instead of being controlled by shareholders like banks, credit unions are member-owned and operate on a not-for-profit basis. The cooperative nature of a credit union makes it possible for us to offer better interest rates and fewer fees. And credit unions have a greater focus on the community as we were built with a “People Helping People” philosophy.
The more you know about your banking options, the more peace of mind you’ll have about your financial choices. Being able to separate fact from fiction can help you avoid any major money mistakes.
Until next time,