Created to protect people from unscrupulous lenders, credit unions have a long-standing history of loaning money at reasonable rates. But the low rates are just one reason why people turn to credit unions for their lending needs.

Combine greed with intelligence, and you get a dangerous result. Our society is filled with extremely bright people who don't think twice about raking someone over the coals for a few extra bucks. Lenders intent on making heavy profits have loaned money at extremely high rates, and the consumer has suffered as a result.

Fortunately, the free market provides a method for dealing with such individuals: it's called competition. This has allowed credit unions to become the preferred financial institution for millions of consumers.

Credit unions allow people to pool their money and lend it to each other at reasonable rates. They're also exempt from federal taxes, which give credit unions the financial flexibility to offer these five distinctive advantages:

1. Easy entry

Most credit unions require only a $5 deposit for a lifetime membership. The membership is permanent, even if, at some point, you no longer meet the membership requirements. Thanks to a 1998 federal law, membership parameters are no longer as stringent. They're often based on broad geographical or work-related guidelines.

2. Plenty of products

In the past, credit unions might have been considered for a checking account or a short-term loan only. Today, they offer a wide range of products. Many of them are full-service and offer the same financial options found in other institutions.

3. Higher savings rates

The federal tax exemption status allows credit unions to provide excellent rates on their savings products. It also gives the credit union the freedom to require lower minimum balances and charge smaller fees.

4. Insuring your assets

Banking customers have always enjoyed the fact that their deposits are protected by the Federal Deposit Insurance Corporation. Credit unions enjoy similar protection through the federal National Credit Union Administration, which insures deposits up to $100,000.

5. Lower lending rates

It stands to reason that if a credit union can provide higher returns on deposit, they can also provide lower rates on loans. Thanks to their federal tax exemption, credit unions offer extremely competitive rates on auto loans and home mortgages. They also tend to offer low fees and closings costs.

Remember that not all credit unions are created equal; the rates and fees offered differ based on size and overall assets. On the whole, you can count on credit unions to provide competitive rates and exceptional service.

Credit unions have become a welcome fixture on the financial landscape. Created as an alternative to the high rates of overzealous banks, many have evolved into full-service operations. They're a perfect example of how a little competition can go a long way toward helping consumers.