MADISON, Wis. (12/5/11)--Some credit unions are finding new value in an old product idea--Christmas club accounts.
Several Jacksonville, Fla., credit unions, including Jax FCU, 121 Financial CU and First Florida CU, have had Christmas club accounts for the past several decades (Jacksonville Business Journal
Christmas club accounts are one of the key services of the credit union industry going back 60 years, Brent Lister, First Florida president/CEO, told the Journal
"It's one of the best moves consumers can make when they think about budgeting for the holidays," Mike Schenk, vice president of economics and statistics with the Credit Union National Association (CUNA), told CreditCards.com
(Dec. 1). While CUNA doesn't have statistics on how many credit union members joined holiday clubs, more than 80% of credit union members nationwide have access to those accounts, he added.
However, to avoid overspending, consumers should think before they act and create a budget, sketching out how much they want to spend on each gift recipient before they open a Christmas Club account, Schenk added.
It also is important to be aware of the details on how Christmas club money can be disbursed, Schenk told the publication. As an example, Schenk said he failed to read the fine print on one of his Christmas club accounts, and didn't realize that the money earmarked for holiday gifts was deposited into his checking account in November. Therefore, he inadvertently used those funds to cover other expenses.
United Community CU in Galena Park, Texas, has offered a Christmas club account for years, said the Texas Credit Union League (LoneStar Leaguer
The account features:
- No minimum opening balance;
- No minimum balance to maintain;
- No monthly service charge; and
- A favorable interest rate that allows members to earn the same rate of interest as the credit union's primary savings account.
In 2011, United Community opened nearly 100 Christmas club accounts with an average balance of $1,490 per account, said the Texas league.