AJ stands for Andrew Jackson, our 7th president. His reputation for toughness earned him the nickname "Old Hickory." A hero of the War of 1812, Jackson has appeared on the $20 bill since 1928.

Credit unions offer the best loan interest rates.Why the Best Interest Rates?

The members of a credit union's board of directors are volunteers. Banks, on the other hand, are beholden to their stockholders, who are not volunteers and need to be paid.

That's why you can usually find the best loan interest rate at a credit union.

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When you borrow stuff from your friends, they want to make sure you'll return it.

That's exactly how it works in the world of credit. And it's the same for every kind of loan, including a credit card loan.

When you borrow money, you have to pay back more than you borrow. That's because your credit union (the lender) needs to earn interest on the loan.

Your first loan will likely be for a car or school, and it's probably a few years away. But it's never too early to learn what it takes to be a good borrower.

Where will you get money?

You have lots of choices. But not all lenders charge the same interest, and you could end up paying too much.

Make your first stop be at your credit union. Credit unions are in business to help you and other members make the most of your money.

Your credit union pays you dividends to use the money in your savings account. It charges you interest when you borrow other members' money.

Credit unions have to charge a little more interest than they pay out in dividends, so they can make enough money to stay in business.

The Credit Business

Credit unions charge members interest to use the money other members have saved.

Example: Your credit union might pay you a 2.5% dividend on the $1,000 you have in savings. It might then lend your $1,000 to another member at an interest rate of 11.5%. (These rates change all the time,  depending on the demand for loans and the supply of savings.)

After paying you the dividend in this example, your credit union makes 9% on the loan. Of course, there are other costs involved, so it's not a full 9%, but you get the picture.

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When you ask your credit union for money, you'll need to show that you're a good credit risk...

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