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Why Are Millennials Driving Credit Union Growth?

August 4th, 2016 · No Comments · Banking

by Kristy Welsh

(Last Updated On: February 6, 2018)

Why Millennials Are Driving Credit Union GrowthAccording to a TransUnion study, credit membership through credit unions is growing at more than three times the rate of credit activity among consumers across other lender types. And that’s thanks largely to Millennials. But why? Well, on the one hand, credit unions are courting Millennials. But on the other hand, credit unions are an easy sell to a demographic that finds the credit union model a refreshing break from that of the big banks.

By the Numbers

In the first quarter of 2013, Millennials represented 20 percent of credit union members. Three years later, in the first quarter of 2016, that number grew to 25 percent. In fact, credit unions have seen Millennial membership grow every quarter since 2010.

Why Credit Unions Want Millennials

They have a lot of years of credit needs ahead of them.

“Millennials are likely candidates for new mortgages and other credit products as they age, offering credit unions a way to further their market share,” says Nidhi Verma, senior director of research and consulting in TransUnion’s financial services business unit.

Over the next 12 months, though, credit unions are mostly focused on catering to the auto lending needs of Millennials. That priority is followed by mortgages, share draft accounts (the credit union version of a checking account), and credit cards – in that order.

Why Millennials Want Credit Unions

The list is a long one. Every Millennial has his or her own reason for going with a credit union, but some of the most popular reasons include:

  • Lower rates
  • Lower fees
  • More lenient lending guidelines
  • Good way to build credit
  • Better customer service
  • Non-profit nature of credit unions
  • Membership vs. customer status
  • “People helping people” motto
  • Knowing their money is helping other people in the community
  • Online services and apps comparable to banks

Whether you’re a Millennial or not, those are some attractive benefits. Are you a member of a credit union? If not, are you considering joining one? Why or why not?

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