A credit union is a cooperative financial association that is controlled by its members. The difference between a credit union and other financial institutions, such as bank, is that members who hold accounts share ownership of that particular credit union. A volunteer Board of Directors is elected by members to govern interest rate policies and other matters of the credit union. Only members of a credit union are allowed to deposit or borrow money from the institution.

Credit unions, which can be nonprofit organizations or for-profit corporate enterprises, offer several benefits, including higher dividends, or interest rates on share deposits. They generally charge lower interest rates on loans than most banks. In order for a credit union to remain afloat, however, revenues from loans and investments must exceed operating expenses and dividends. Like banks, credit unions offer savings (or share) accounts, checking (share draft) accounts, credit cards, share item certificates (or certificates of deposit)and online banking. Credit unions can vary in size from a small group of volunteers to a billion-dollar institution with 1,000+ members. Most U.S. credit unions are affiliated with the Credit Union National Association (CUNA)of Madison, Wisconsin, or the National Association of Federal Credit Unions (NAFCU).

There are many ways to join a credit union. One way is to contact CUNA either by phone or by visiting its Web site to assist in finding a credit union. Another more common way to join is to ask a family member. Most credit unions extend membership privileges to spouses, children or grandchildren, etc. They are also either association-, community- or occupation-based. For example, some churches and organizations are affiliated with a credit union, meaning that membership is open to those who belong to those groups. If you live in a certain geographical area, community credit unions are available to those residents in that area. Certain employers even sponsor credit unions, allowing employees and their family members to join.

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