When you walk into the credit union lobby, or call a loan officer, what makes a credit union different from a bank is not immediately apparent. The two financial institutions may offer similar products and services. But there the similarities stop. Crucial differences exist -- in ownership, in cost of borrowing money, and in use of services.

You Own Your Credit Union

Credit unions are member-owned nonprofit financial cooperatives dedicate to improving members' lives. Nearly 67 million members own 12,733 U.S. credit unions with combined assets of $ 307 billion. Stockholders own banks (with combined assets of $3,684 trillion). Banks make money for stockholders, not for customers.

Credit Unions are the only democratically controlled financial institutions in the United States. You and other members elect a volunteer board of directors to oversee the credit union. The manager or president/chief executive officer reports to the board. Bank directors, however, are paid and legally bound to make decisions that benefit stockholders, not customers.

Credit Unions Have Best Rates

Credit Unions price loans, pay interest on funds you've deposited, and charge fees to provide you with high-quality, low cost services. Banks price products and services to make a profit.

Credit Union loan rates are also better. Credit auto loans average one percent point less than banks' auto loan rates. Credit Unions make consumer loans. Banks offer consumer loans, but really emphasize business loans.

Credit Unions Educate Members About Money Matters

Credit Unions routinely inform and counsel members about financial matters. They provide publications such as newsletters to keep you advised of rates, loan sales, and financial trends that affect you. Credit Unions stress education by providing materials for car and home buying to help you make informed buying decisions. Many banks simply advertise their rates and sell their services.

Because you're an owner, you have a say in how a credit union does business.