Why Being a Member is Better Than Being a Customer

Arizona Federal Staff

If it looks like a bank and acts like a bank, it must be a bank, right? Not when it comes to credit unions. Many consumers are under the impression that credit unions and banks are just alike. They both offer financial products and services, so how different can they be?

It turns out, they’re very different. Yes, they both provide checking accounts, loans and credit cards. However, there’s an inherent difference to how credit unions and banks operate, to their goals, and to how they view those who keep accounts with them. Here are the main differences that make credit unions stand apart.


A credit union is a cooperative and owned by it’s members – that’s why they’re called member/owners. They vote to elect the Board of Directors, who are member/owners that have volunteered their time to oversee the credit union. This is an important cooperative principal called Democratic Member Control.


Credit unions are not-for-profit organizations, so they’re not out to maximize profits. They often work toward helping their members achieve their goals through financial services. Arizona Federal, a local Phoenix credit union, even offers financial coaching to help members understand their credit, set up spending plans, or help them take the steps they need to reach their life goals (like buying a house or retiring).

Excess Capital

Oftentimes excess capital is thought of as dividends returned to shareholders. Well, credit unions don’t have shareholders, they have member/owners. Credit unions can do two things with excess capital: invest it back into the credit union by offering lower rates on loans or higher rates on savings, and they can return it to the member/owners in the form of patronage payments. 

What are some of your favorite benefits of being a member/owner of a credit union? Tell us in the comments below!