Sound money management is an important part of a solid financial strategy. Youâll want to have some of your money set for retirement in a traditional or Roth IRA. Still, other money might be saved for your kidsâ college, a down payment on a house or other longer-term goals. And then you might have an emergency fund as well as a checking account that you use to pay your monthly bills and expenses. Each of these buckets of money can be in a different kind of account. In this article, weâll look at some of the best checking accounts.
What makes a good checking account
Before we look at some of the best checking accounts, itâs a good idea to talk about what makes for a good checking account. A checking account is an account that you would typically use to pay your ongoing monthly expenses. It is more and more rare to actually write paper checks, and instead, you would typically use a debit card or cashless payment account linked to your checking account.Â
With a checking account, some features to look for include no monthly or maintenance fees, a low minimum amount to open an account, the rate at which they pay interest, and any account opening bonus they might offer. The interest rate that checking and savings accounts pay is tied to the federal funds rate and usually varies over time. As of 2020, the interest rates are quite low, and many checking and savings accounts do not pay any interest at all. Also keep in mind that even if your account pays you 1% interest, youâre still losing money to inflation. So you wouldnât want to keep any long-term investment money in a checking or savings account.
With all that being said, letâs take a look at some of the top checking accounts available.
Discover Cashback Debit
Discoverâs checking account offers 1% cash back on up to $3,000 in debit card purchases each month, which is one of the few debit cards that offer a reward on ongoing purchases. The Discover Cashback Debit account also comes with no monthly maintenance or other fees, no fees to withdraw at over 60,000 ATMs worldwide and no fees for insufficient funds.
CapitalOne 360 Checking
The CapitalOne 360 Checking account has no account minimums or fees. It currently offers a 0.10% APY on balances, though you can also open a no-fee CapitalOne 360 Performance Savings account which offers 0.65% APY as of the time of this writing. CapitalOne also has thousands of branch offices nationwide, so you can do your banking online or in-person. The CapitalOne 360 Checking account offers three different options if you happen to overdraft your account – Auto-Decline, Next Day Grace and Free Savings Transfer.
Fidelity Cash Management Account
Fidelityâs Cash Management Account also offers no account fees or minimum balances. It also reimburses ATM fees nationwide, though only offers 0.01% APY on account balances. Fidelity makes it easy to transfer money between your checking account, savings accounts and any retirement accounts you have with Fidelity. Plus, the Fidelity Rewards Visa offers 2% cash back on all purchases, which you can redeem into your Fidelity Cash Management Account or any other Fidelity account.
Wealthfront Cash Account
Wealthfrontâs Cash Account offers a high-interest checking account (0.35% APY as of this writing) with no fees. And Wealthfrontâs convenient account dashboard lets you easily move money between your checking account and any investment or retirement accounts that you have with them. They also offer a service where you can get access to your paycheck up to two days early if you direct deposit into your Wealthfront Cash Account
HSBC Premier Checking
HSBCâs Premier Checking account also offers no fee on ATMs nationwide or for everyday banking transactions, but does charge a monthly maintenance fee if you donât have at least $75,000 in combined accounts or direct deposits of at least $5,000 monthly. They are currently offering a promotion where you can earn 3% as a welcome bonus, up to $600. Youâll get 3% on qualifying direct deposits, up to $100 per month, for the first six months of having your account.
Chase Total Checking
Chase Total Checking is currently offering a welcome bonus of $200 when you open a new account and have a direct deposit made to your account in the first 90 days. Chase Total Checking is currently paying an interest rate of only 0.01% APY. Also, there is a $12 monthly maintenance fee which can be avoided if you either:
Have direct deposits totaling $500 or more
Have a balance at the beginning of each day of $1,500 or more
Have an average beginning day balance of $5,000 or more in any combination of all of your Chase accounts
The post Best Checking Accounts 2020 appeared first on MintLife Blog.
Nobody wants to pay off student loans longer than they have to, yet far too many people are stuck in lengthy repayment plans that seem like theyâll never end. While income-driven repayment plans backed by the federal government ask you to pay down loans for 20 to 25 years before leading to loan forgiveness, even the âstandardâ repayment plan for federal loans lasts for a full ten years. No matter how you cut it, thatâs a long time!
With that in mind, you should know that itâs possible to pay off student loans faster if you are willing to think outside the box and forge your own path along the way. However, not all early repayment plans will work for every borrower, so itâs important to think through how to pay off student loans faster in a way that helps you reach your goals in a common sense way.
One strategy many borrowers use to pay off student loans faster is refinancing loans with a different lender. Not only do some student loan refinancing companies offer lower interest rates and flexible repayment terms, but you could even earn a cash bonus just for signing up.
Compare Refinance Rates
9 Ways to Pay Down Student Debt Faster
The sooner you can pay off all your student loans, the quicker you can move on with your life. Here are some strategies to consider that can help you pay off your student loans much faster than a traditional repayment plan allows.
What You’ll Learn
Make More Than the Minimum Monthly Payment
Try the Debt Snowball
Refinance with a Private Lender
Enroll in Autopay to Score a Lower Interest Rate
Make Payments While Youâre in School
Live Like a Poor Student
Earn Money On the Side
Throw All âFound Moneyâ Toward Your Student Loans
Ask Your Boss for Help
Make More Than the Minimum Monthly Payment
The minimum payment on your student loans is the absolute minimum amount youâre supposed to pay, but thereâs nobody stopping you from paying more. And, if you make extra payments the right way, you could easily pay down the principal of your student loans at a faster pace.
Unfortunately, many student loan servicing companies wonât automatically apply extra payments you make toward your loan principal. Instead, theyâll use any payment overages to âpay aheadâ on your loans and continue making the next monthâs payments as well as the prepaid interest for future months.
If you decide to pay extra toward your student loans, youâll need to specify that you want overage payments to go toward the principal of your balance. You can do this over the phone or by written message when you mail in your monthly student loan payment, but make sure you donât forget.
Try the Debt Snowball
The debt snowball method for getting out of debt is worth considering if you have several different student loan bills to juggle each month. This strategy requires you to make a list of your student loans and each of their balances. From there, youâll start the next month by paying the minimum amount on all your largest loan balances and as much as you can on the smallest balance you have. Over time, youâll continue paying as much as you can toward your smallest balances until theyâre gone, at which point youâll âsnowballâ all your extra payments toward the next smallest debt.
With the debt snowball, youâll slowly pay off your smallest loan balances until you only have the few largest balances left. Eventually, youâll only have one student loan left and youâll pay all the cumulative payments of all the others toward this debt until itâs gone, too.
The benefit of this strategy is the momentum youâll gain as you knock out small balances one at a time. Not only will your balances go down, but youâll have fewer loan payments to make each month as well.
Refinance with a Private Lender
You can also consider refinancing all your student loans into one new one, which has the potential to save you more money than any other strategy on this list. Many private student loan companies offer fixed interest rates as low as 3.50% right now, which is lower than any federal student loans offer. Of course, you do have to have an income and good credit or a cosigner to qualify.
How much can you save by refinancing your student loans? That really depends on how much debt you have, your current interest rate, and your current repayment timeline.
However, letâs say that you have $10,000 in student loans with an APR of 7% and you just started a 10-year repayment plan. In that case, you would pay $121.33 per month for ten years and a total of $4,559 in interest before your loan was paid off.
If you were able to refinance your loans into a new private loan with the same repayment plan at 3.50%, however, you could pay just $96.56 per month for ten years and only $1,587 in interest during that time. Better yet, you could refinance into a new 7-year loan, pay $132.13 per month, fork over only $1,099 in interest during that time, and shave three full years off your repayment timeline.
Compare Refinance Rates
Enroll in Autopay to Score a Lower Interest Rate
Some student loan companies offer discounts to customers who are willing to sign up for automatic payments. This discount is usually around .25% off, but all you have to do is allow your student loan payment to be debited from your checking account automatically each month.
These programs make it easy to stay on track with your student loan payments, and they also ensure you are never late. All you have to do is make sure you have the cash in your account before the date your payment is automatically debited each month.
Make Payments While Youâre in School
If you havenât graduated from college yet, itâs not too early to start preparing for the inevitability of that first student loan payment. Further, it can be extremely smart to make payments while youâre still in school if some of your student loans are unsubsidized.
Whatâs the difference between subsidized and unsubsidized student loans? By and large, the biggest difference is the fact that the federal government pays the interest on subsidized loans while youâre still in college, but they do not extend this benefit to unsubsidized student loans. By making payments on unsubsidized loans while youâre still in school, you can keep student loan interest at bay and keep your loan balances from ballooning until you have a job and can attack your student loan debt with all your might.
Live Like a Poor Student
Itâs tempting to inflate your lifestyle once you graduate from college and start bringing in a paycheck, but this is the opposite of what you should do if your goal is getting out of debt faster. The longer you can live at home with your parents or share an apartment with roommates, the more money you can continue throwing toward your student loans. And, if you can hold off on buying a house or financing a new car, youâll be in even better shape when it comes to destroying your student loan debt at a record pace.
Finance guru Dave Ramsey frequently gives the following advice, which I absolutely agree with:
âLive like no one else now so you can live like no one else later.â
Living the poor student lifestyle for as long as possible is a smart way to pay down debt when youâre first starting out.
If you have roommates, keep them.
If youâre managing to get by on Ramen, keep it up.
Once your student loans are paid off and in your rearview mirror, you can start using your income to pay for the lifestyle you really want.
Earn Money On the Side
If you want to pay your debts down even faster, earning more money is one approach that always works. The key here is making sure you use the extra money you earn to pay off your student loans instead of paying for stuff you donât need.
Weâve shared myriad side hustles here on Good Financial Cents in the past, from 65 side hustles you can do from your kitchen table to ideas on starting an online business. Some of the easiest ways to earn money include driving for Uber or Lyft, starting a blog, or learning an online skill people will pay you for. You could become an online freelance writer or sell your design or data entry skills with a website like Fiverr.com. Heck, you could walk dogs in your spare time or mow peopleâs yards in your neighborhood.
The basic principle is the same no matter what side hustle suits your fancy. Pour as much time or effort into your side hustle as you can, and use all the extra money you earn to pay off your student loans.
Throw All âFound Moneyâ Toward Your Student Loans
If you get any extra money during the course of the year, you should absolutely throw your âfoundâ cash toward your student loans. This can include your tax refund each year, any Christmas bonuses you get from employment, and money you get from working over time. Heck, you can even throw your birthday money at your student loans.
Any extra money you pay toward your loans can be used to reduce the balances of your debts, which in turn lowers the amount of interest you pay over the life of your loan.
Remember that, when it comes to paying off debt, even small amounts of money can add up in a big way. By throwing all found money you come across toward your loans each year, you can expedite your debt payoff process even more.
Ask Your Boss for Help
While asking your boss for help with student loans is a fairly novel concept, it isnât unheard of. Actually, nearly anything is on the table when youâre negotiating your salary or benefits â and sometimes, the key to getting what you really want is just asking for it.
Further, some industries and government agencies have already thought of this option. For example, some government employees can receive up to $10,000 a year towards student debt repayment by accessing the federal governmentâs Student Loan Repayment Program.
Similar programs are also available for nurses and teachers through the Nursing Education Loan Repayment Program and Teach for America, which is part of AmeriCorps.
Students who find work in the public sector can also get help with student loans by applying for the Public Service Loan Forgiveness Program.
With this option, the federal government will forgive the remaining balance on your Direct Loans provided you have made 120 qualifying payments and remained employed with a qualified employer in the public service sector.
Which strategy made the difference? 3 financial experts weigh in
Plenty of people have used these tips and others to pay off their student loans once and for all. We reached out to several people who have paid off their loans for good to find out how they did it and which strategies they suggest. Hereâs what they said:
Paying Off Student Loans with a Side Hustle
âIn my early 20âs, I was paying a very affordable $160 per month on my $25,000 of student loan debt. It wasnât much to pay and it seemed my balance never decreased. Thatâs one of the reasons I decided to start blogging at 28 years old. After about six months, I started earning extra income from my blog and began sending extra payments toward my student loan.
As my blog income grew, I was able to send chunks of $1,000 to $2,000 pretty regularly in my 30âs and I finally began making a dent in my balance. I made my final student loan payment at 38 years old and it was glorious. Had I not been able to send in extra money, I probably would have been paying student loans into my 50âs.â â Chris Huntley, co-founder of Credit Knocks
Living the Poor Student Lifestyle
âMy wife graduated with over $80,000 of student loan debt, but we managed to pay it all off in just under three years. We had to make sacrifices to pay that much debt off quickly, but we also had other things going for us that made it easier. My wife is a registered nurse and I was an accountant at the time so we earned a reasonable income.
We didn’t have anyone else relying on us so our spending decisions only impacted ourselves. We kept our expenses to the minimum and continued to live like college students to put as much money toward the debt as we could. We bought a small townhouse that resulted in a monthly mortgage payment of only $500.
We had a very limited fun budget and didn’t go on traditional vacations. We refused to buy new furniture (except for much-needed mattress) or go out to eat multiple times per week. Instead, we cooked at home and relied on hand-me-downs or used furniture to get by until the debt was paid off. We also put off decorating and renovating our home unless the cost was minimal and we could do the work ourselves.â â Lance Cothern, founder of Money Manifesto
Earning Money On the Side to Pay Down Debt
âI paid off almost $43,000 in student loan debt in three years. First, I worked full-time during college and that helped minimize expenses. After graduation, I was promoted at my same company, and earned a starting salary of $45,000 per year.
However, while working, I was also side hustling and earning extra money. My main side gig was buying things to resell on eBay. At my peak, I was making a profit of about $2,000 per month. I would also do off jobs, and I started my blog, The College Investor.
Between my day job and side hustle earnings, I was able to knock out my student loans in a short amount of time.â â Robert Farrington, co-founder of The College Investor
The Bottom Line
Thereâs no reason to pay off your student loans any longer than you have to. Any of the tips on this list could help you get out of debt faster, and itâs even possible to use more than one of these tips to annihilate your debts at lightning fast speed.
As the nationâs total student loan debt levels continue to rise, we all have to take responsibility for ourselves. Let the numbers fall where they may; itâs up to us to find ways to get our finances straight â and if that process includes paying off student loans the hard way, so be it.
Just remember, youâve got a wealth of tools at your disposal.
Using everything from debt calculators to budgeting tools, you can dream up dozens of ways to get out of debt faster, and most importantly, smarter.
With student loan debt levels at an all-time high, youâre going to need all the help you can get.
The post How To Pay Off Student Loans Faster Than Ever appeared first on Good Financial Cents®.
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Take a moment. Think about being your best self â living your best life.
What do you really want to do with your life? Raise a happy family? Travel the world? Buy a nice house? Start your own business?
Reality check: To accomplish any of those things, youâre going to need to know how to save money.
Unfortunately, Americans are bad at saving money, and weâre getting worse. Thanks to rising costs, stagnant salaries and student loan debt, weâre saving less than ever.
Table of ContentsÂ
Step 1: Develop Savings Goals and Strategies
Step 2: Pick Budgeting and Debt Repayment Methods
Step 3: Choose a Financial Institution and Accounts
Step 4: Automate Your Finances
Step 5: Establish a Budget-Conscious Lifestyle
Step 6: Make More Money
Here Are Our Best Tips to Save Money
Are you ready to actually start saving money? What youâre reading is a step-by-step guide on how to do it â how to come up with savings strategies, choose a budgeting method, pick the right financial institution, automate your finances and live a budget-conscious lifestyle.
Pour yourself a cup of coffee and buckle up. Itâs time to get serious about this.
Step 1: Develop Savings Goals and Strategies
Youâre probably asking yourself, âHow much should I save?â
Your first move is to set specific savings goals for yourself â emphasis on specific. Naming your goals will make them more real to you. Itâll help you resist the temptation to spend your money on other stuff.
Think Long Term and Short Term
What exactly do you want to save money for? How much will you need to save? And what do you need to save for first? Think short- and long-term:
Short-term: Save for a real vacation or nice holiday gifts. But first, save enough to have a decent emergency fund â three to six monthsâ worth of living expenses, in case you run into an unexpected car-repair bill or lose your job, for example.
Long-term: This involves big-picture thinking. Here, youâre saving money for things like your childrenâs college fund or for your retirement plan.
Analyze Your Income
How much can you realistically save for these goals, now that youâre making them a priority?
Write down your income and expenses â all of your expenses, from utility bills to your Netflix subscription. There are probably more ways to save money than you realize. Donât forget your student loans or credit card debt. Make sure you know what youâre spending in every budget category. Pay special attention to what youâre spending on non-essentials, such as eating out.
An easy way to automate this process is to use Trim, a little bot thatâll keep track of all your transactions.
Connect your checking account, credit card and savings account for a big-picture look at your spending habits. Then, take a closer look by checking out each of your transactions. Set alerts thatâll let you know when bills are due, when youâve hit a spending cap or when youâve (hopefully not) overdrafted. This will help you stick with your savings plan.
Check in on Your Credit
Do your own credit check. Keeping tabs on your credit score and your credit reports can help guide you to a financially healthier life â especially if you use a free credit-monitoring service like Credit Sesame. It gives you personalized suggestions for improving your credit.
The better your credit, the better off youâll be when youâre getting a home or car loan. Credit Sesame can estimate how big a mortgage you might qualify for, for example.
Hereâs our ultimate guide to using Credit Sesame.
Step 2: Pick Budgeting and Debt Repayment Methods
Itâs time to start making a monthly budget and sticking to it â especially if you have debt.
This way, you can put savings right into your budget. Itâs never an afterthought.
Here are five different budgeting methods. We canât tell you which one to choose. Be honest with yourself, and choose the one you think is most likely to work for you. This is how to save money on a tight budget.
The 50/30/20 Rule
This one was popularized by U.S. Sen. Elizabeth Warren, a bankruptcy expert, and her business-executive daughter Amelia Warren Tyagi.
Split your income into three spending categories: 50% goes to essential bills and monthly expenses, 20% toward financial goals and 30% to personal spending (all the stuff you like to spend money on but donât really need). Put the money earmarked for your financial goals into a separate savings account.
Good for: People who worry they wonât have a life if theyâre on a budget. Hereâs our complete guide to 50/30/20 budgeting.
Envelope Budgeting
So-called envelope budgeting is traditionally a cash-only budget. Every month, you use cash for different categories of spending, and you keep that cash for each category in separate envelopes â labeled for groceries, housing, phone, etc.
Prefer plastic? Hereâs our review of Mvelopes, an app that lets you digitize this method.
Good for: People who know they need help with self-control. If thereâs nothing left in one envelope toward the end of the month, thereâs no more money to spend on that category, period.
Zero-Based Budget
Hereâs how you draw up this budget: Your income minus your expenses (including savings) equals zero. This way, you have to justify every expense.
Good for: People who need a simple, straightforward method that accounts for every dollar. Hereâs our guide to the zero-based budget.
Debt Avalanche
This debt-repayment method helps you budget when you have debt. Pay off your debts with the highest interest rates first â most likely your credit cards. Doing that can save you a lot of money over time.
Good for: People with a lot of credit card debt. Credit cards generally charge you higher interest than other lenders do. Learn more about the debt avalanche method here.
Debt Snowball
Money management guru Dave Ramsey champions the debt snowball method of debt repayment. Pay off your debts with the smallest balances first. This allows you to eliminate debts from your list faster, which can motivate you to keep going.
Good for: People who owe a lot of different kinds of debts â credit cards, student loans, etc. â and who need motivation. Hereâs how to use the debt snowball method to eliminate debt.
FROM THE DEBT FORUM
Eviction on credit report
Helping Covid-19 Victims
Struggling to pay debt or going bankrupt
Can’t afford car loan
See more in Debt or ask a money question
Step 3: Choose a Financial Institution and Accounts
You might be thinking, I already have a bank. And of course you do. If youâre like most of us, youâve had the same bank for years.
Most people donât give this a second thought. They figure itâs too inconvenient to switch. But itâs worth shopping around for a better option, because where you bank can make a real difference in how much you save.
What to Look for in a Bank Account
Does your checking account pay you interest? What are the fees like? What other perks does it offer?
Did you know the biggest U.S. banks are collecting more than $6 billion a year in overdraft and ATM fees?
Maybe itâs time to try another financial institution. Weâve found some great online bank accounts to help you avoid fees and get features you wonât find with the brick-and-mortar banks.
Hereâs one example: Thereâs a mobile baking app called Varo Money.
The FDIC reports that the average savings account pays a paltry .08% APY*, but when you open an online checking and savings account with Varo, it will pay you more than 20 times that amount on your savings account.Â
We know opening a new bank account isnât exactly everyoneâs idea of fun, but Varo makes it easy. You can open an account with just a penny, and more than 750,000 people have already signed up.
Oh, and there are no monthly fees.Â
Want more options? Hereâs our ultimate guide to help you choose the right account.
To free up more money for savings, try to spend less paying interest on your debts â especially if you have high-interest credit card debt.
These days, credit card interest rates often climb north of 20%. How can you avoid paying all that interest? Your best bet is to cut back on your expenses and pay off your balance as soon as you realistically can.
Start by using the right credit card for you, based on your situation and needs. Would you prefer a card that gives you cash back or travel incentives, a balance-transfer card, or a card thatâll help you build credit?
Also consider paying off your high-interest debt with a low-interest personal loan. Itâs easier than you might think. Go window-shopping at an online marketplace for personal loans. Here are some weâve test-driven for you:
AmOne allows you to compare rates side-by-side from multiple lenders who are competing against each other for your business. Itâs best for borrowers who have good credit scores and just want to consolidate their debt.
Fiona is also a marketplace but allows you to borrow more money and borrow it for a longer period of time â if thatâs what you want to do.
Upstart tends to be helpful for recent grads, who have a young credit history and a mound of student debt. It can help you find a loan without relying on only your conventional credit score.
Step 4: Automate Your Finances
Thatâs right. Weâre deep into the 21st century, here, so make technology do the work for you.
The best ways to save include automation. Youâll save time, and time is money. Here are a few money-management steps you can take today to ensure you wonât have to think about money for more than a few minutes every month.Â
Automate Bill Pay
Most bills are paid online now, reports the Credit Union Times. But you can take it a step further. Set it up so youâll receive and pay all of your bills online through your bank. That simplifies things so youâll never miss a payment.
Hereâs how: Go to your bankâs online bill-pay feature. Enter all the companies that bill you, and the account numbers for each. Arrange to receive e-bills from whichever billers will do that.
You can also have your bank send digital payments to individuals (like a landlord).
Automate Savings
Whatever you need done financially, thereâs an app for that. Weâve put several to the test.
Digit is an automated savings platform that calculates how much money you can save. Hereâs our review of Digit.
Long Game Savings combines online games and saving money.
Also, see whether your bank offers automatic savings transfers that will move money from your checking account to your savings account each month.
Automate Investing
You donât have to be Warren Buffett to be an investor. You donât even have to follow the stock market, read The Wall Street Journal or watch CNBC.
You can take advantage of these apps offering easy, automatic ways to start investing â the âset it and forget itâ method. Theyâre useful for tricking your brain into saving more. Youâll do it without even realizing youâre doing it.
Stash lets you start investing with as little as $5 and for just a $1 monthly fee for balances under $5,000. Bonus: Penny Hoarders get $5 just for signing up!
Acorns connects to your checking account, credit and debit cards to save your digital change. It automatically rounds up purchases with your connected cards and invests the digital change into your chosen portfolio. Bonus: Penny Hoarders get $5 just for signing up! Read our full review of Acorns here.
Blooom is a company that offers a free âhealth check-upâ for your 401(k). Then, for only $10 a month (Penny Hoarders get the first month free!), itâll optimize and manage your retirement savings for you. See how Blooom helped one Penny Hoarder make the most of her 401(k).
Automate Budgeting
You can automate your budget, too. Thereâs an app for that. Actually, weâve found several.
Charlie is a money-saving penguin who lives in your SMS text messages or Facebook Messenger (your choice, though Charlie is more fun and reliable on Messenger). He helps you save money through things like making sure youâre getting the best deals around (ahem, overpaying $24 a month on that cell phone bill?).
Mint lets you see all your accounts, cards, bills and investments in one place.
Medean for iOS ranks your finances based on how they stack up to those of people of similar age, income, location and gender. It calls itself a âhealth index for your finances,â and helps assess your situation and find ways to save money.
MoneyLion offers rewards to help you develop healthy financial habits and will literally pay you for logging onto the app. You can earn points in the rewards program by paying bills on time, connecting your bank account or downloading the mobile app.
Step 5: Establish a Budget-Conscious Lifestyle
Hereâs the harsh reality: To save more money, youâll need to spend less money. (Or make more money, but weâll get to that next.)
That doesnât mean you have to live like a monk. Nor do you have to survive on ramen noodles and the dollar menu, wear scuffed shoes and patchy clothes, or cut your own hair with hedge clippers.
You just have to be smart and strategic. Here are some of our best tips to help you spend less:
Save Money Around the House
Your home is your castle. But castles are so, like, expensive. Fortunately, there are lots of ways to save money around the house.
Your priciest purchases â like appliances and furniture â are a natural place to look for savings. Try repairing your appliances instead of replacing them. And hereâs a good list of other tricks for saving on furniture and appliances.
The cost of cooling, heating and lighting your home is massive. Try installing thermal curtains and a programmable thermostat. Or check out these creative, energy-saving ways to slash your utility bills.
Find Free Entertainment
Entertainment can cost an arm and a leg. But hey, we have to live, right? So do it for free! Next time youâre planning a night out, take advantage of one of these free date nights or group outings.
If youâre going to stay in, cut the cord. More and more people are doing this, because their cable bill has gotten so expensive.
If youâre thinking of switching to an online streaming service and youâre wondering which would be best, weâve got you covered with our comparison of Netflix, Prime Video and Hulu. We compared costs, type of content, number of available titles and more.
You also should reconsider that gym membership if youâre not really using it.
Cut Your Food Budget
Groceries are a huge part of everyoneâs budget, so theyâre a big target for savings. Next time youâre putting together your shopping list, make sure to check out our favorite tricks to save money at the grocery store:
Look for free printable coupons.
Compare your local grocery prices using this worksheet.
Ibotta pays you cash back on purchases if you take pictures of your grocery store receipts. Plus, youâll get a $10 bonus for signing up!
Scan grocery storesâ websites for deals and hit more than one store.
Not loving the supermarket? Nearly 70% of us say we spend too much on take-out or going out to eat. Hereâs how to save money at restaurants, too.
Find out If Youâre Wasting Money on Insurance
Buying insurance can be confusing and overwhelming, because there are so many options.
Hereâs how to find affordable insurance:
For Your Car: Auto Insurance
Here are the blunt facts about how to get lower car insurance premiums: Have fewer accidents, get fewer traffic tickets and boost your credit score.
Automotive experts also gave us the following tips:
Buy a used car.
Participate in your insurerâs safe-driving program.
Shop around for better rates. One easy way is The Zebra, a car insurance search engine that compares your options from more than 200 providers in less than 60 seconds. Hereâs how one guy is saving $360 this year on car insurance because of The Zebra.
For Yourself: Health Insurance
Letâs face it: Health insurance can be confusing and intimidating.
If youâre buying insurance for yourself, start with the federal health insurance marketplace at Healthcare.gov to see whether you qualify for any discounts or assistance.
Finding affordable health care coverage is a huge challenge for freelancers. Hereâs how to get covered if youâre self-employed.
For Your Family: Life Insurance
Life insurance pays your dependents a set amount of money if you die. Whether to buy it is a judgment call.
Life insurance is considered more important if youâre married or have children. You might also want a basic policy that would pay off your funeral, mortgage or other debt.
Youâll probably be asked to choose between two options: term or universal life insurance. If youâre like most of us, youâll choose term â the simplest, cheapest and most popular kind of life insurance policy.
To help you save money and navigate this complicated industry, modern companies are updating the old model:
Policygenius is an online-only platform that offers instant quotes from top carriers to help you make a quicker decision. Once you choose a life insurance company, you can apply right online, and a Policygenius rep will give you a quick call to ask a few follow-up questions.
Haven Life can insure you quickly based just on the health information you provide online.
Ethos can get you term life insurance in less than 10 minutes â with no medical exam â for coverage up to $1 million. Ethos offers a digital application, and customer service is available if you have questions.
Step 6: Make More Money
How can you increase your income? Itâs easier to save money if youâre bringing in more money to begin with.
Here are a couple of simple ways to make extra cash at home:
Share Your Opinion
You wonât get rich taking surveys, but if youâre just vegging out on the couch, why not click a couple buttons and earn a few bucks? Weâve tried a lot of paid survey sites, and two of the best weâve found are My Points and InboxDollars.
Clear Your Closets
Sell your old stuff! Use the Decluttr app to get paid for your old DVDs, Blu-Rays, CDs, video games, gaming consoles and phones.
You can also sell nearly anything through the Letgo app. Just snap a photo of your item and set up a listing in about 30 seconds. If you have more free time, try selling items on Craigslist or eBay.
Find a Side Gig
For our best ideas to boost your bottom line, check out the following:
Unique ways to make money at home.
How to make extra money online.
How to earn passive income.
The Penny Hoarderâs continually updated page on open work-from-home jobs.
Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. Heâs slowly getting better about saving money.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
While you can use a debit card to pay for almost all the things you would use a credit card for, these cards aren’t the same type of thing. A debit card is tied to existing money, either prepaid on the card itself or in your savings or checking account. A credit card lets you make purchases on credit, and you won’t be able to do this with a debit card.
Can You Use Your Debit Card as Credit?
When you pay at the register, you’re often asked whether you’re making a debit or credit payment. This isn’t a question about whether you’re paying with existing checking account funds or if you’ll be borrowing the money from a credit card lender. It’s a question about how you want the payment processed. And most of the time, yes, you can use your debit card as credit at check out.
What Happens When You Use a Debit Card as Credit?
When make a purchase and select to process your payment as credit, it’s an offline transaction. “The funds for offline transactions are deducted after the merchant settles the purchase with the credit card processor and typically take 2-3 days to be reflected in your account balance,” MasterCard says.
According to MasterCard, when you use a debit card and your PIN (personal identification number), the transaction is completed in real time. That’s also known as an online transactionâ you authorize the purchase with your PIN, and the money is immediately transferred from your bank account to the merchant. These are debit card transactions.
But in reality, the difference between debit and credit transactions have little real impact on your bottom line. There may be some differences in fees paid by the retailer or processor, but those fees are rarely passed on to the consumer directly.
Some individuals choose to use their debit cards as credit at the register to avoid having to enter their PIN. Itâs commonly believed that this creates some additional security against someone learning that number and having one more piece of information to support credit card fraud.
While you certainly want to protect your PIN, simply being aware of who is around you and keeping the keypad covered during debit transactions can help keep you secure if you do decide to pay this way. It may seem like an unnecessary precaution, but you can never be too careful when it comes to debit card fraud.
Can I Use My Debit Card if I Have No Money?
One thing that’s important to note is that you can’t usually use your debit card for credit. If you are short on cash, your credit card still works if you have available credit on it. If there’s no money in your bank account, your debit card may get declined when you attempt to pay. So make sure there’s cash in your bank account anytime you use your debit card.
There’s one exception to this rule. Some banks offer overdraft protection. If you qualify for this protection, the bank covers your charges up to a certain amount and you simply rectify the situation later. That way, you avoid potentially embarrassing declines â for a cost in overdraft fees, which can be $15 to $30 per overdraft.
Can I Use My Debit Card as Credit at Walmart?
Whether or not you can choose to pay as credit with a debit card depends on each retailer and payment system setup. Many Walmart payment systems are set up to allow this, but they default to debit. When this happens, tell the cashier you want to pay as credit or select the option for changing payment method and choose to pay as credit and sign for your purchases instead of entering your PIN.
Does Using My Debit Card Build Credit?
Paying with your debit card doesn’t really impact your credit score, regardless of the payment type you select. That’s because your debit card is simply a stand-in for money you actually have on hand (or in the bank). It’s not credit and doesn’t provide any type of illustration of your likelihood of making payments in a timely manner or using credit responsibly. Therefore, it won’t impact your credit history.
If you use your debit card to overdraw your bank account on a regular basis or do so and leave the negative balance long-term, it could negatively impact your credit score. Banks do report checking and savings details like this to the credit bureaus.
The Bottom Line on Debit Cards as Credit Cards
Whether you use your debit card as credit or debit, the funds will still be withdrawn from your checking account. You can use your debit card to make a payment processed as credit, but you can’t use your debit card for credit in most cases. And even when you can, it’s via the limited fail-safe of overdraft protection, which is not meant for regular use and can be quite expensive.
Debit cards are wonderful money-management tools that provide a lot of modern convenience. But for many people, it’s a good idea to have at least one credit card in your wallet too for those times when debit just doesn’t quite cut it. Just make sure to check your credit score, understand how credit cards work and apply for the card that provides you the best perks at the lowest cost.
The post Using Debit Card as Credit appeared first on Credit.com.
Picture newlywed and honeymoon-bound George Bailey walking into the Bailey Building and Loan with his picture-perfect wife Mary, hard-earned $2,000 in hand. Now see him lending his friends and neighbors all of those dollars to keep the good old Bailey Building and Loan afloat when there was a run on the bank.
Fortunately, George and Mary had a community of loving neighbors to help them out of a financial crisis. If they needed help today, however, theyâd soon realize that modern financial institutions no longer see you as a human with feelings and needs. Instead, you are really just a number to them â an easily packaged number known as your credit score.
If you want a wonderful life but find your credit score not properly representing your current financial reliability, there are some credit impacting tools you should know about: Experian Boost and UltraFICO. In this article, we are going to discuss their similarities and differences, as well as help you understand which is best for you.
Similarities
Credit building is hard. Whether you are doing it for the first time or you are rebuilding, itâs still a struggle.
âLuckily,” says Ivan Chong, Founder of Lazy Finances, “new methods are being introduced such as Experian Boost which gives you credit for paying your utility bills and UltraFICOÂ which looks at your bank account transactions and balances. These both give positive boosts to people with no credit or bad credit, enabling them to start building their credit responsibly.”
Helps with borderline credit
Both of these products are aimed at these two groups: consumers with subprime scores and consumers without enough credit to be scored. They are especially helpful to borderline credit consumers in the 500s and 600s. Experian Boost is a way to boost your credit score and UltraFico is a new scoring model. Despite their differences, they are both helpful tools that consumers with thin credit files should look into.
Costs nothing
Another similarity is that theyâre both free. Consumers will have the opportunity to opt-in to each program, for free. We are talking a free boost to your score.
Incentivizes responsible credit behavior
Both products aim to help fringe consumers. They take into account responsible bill payments, as well as spending and saving behaviors. It’s about time someone incentivizes good behavior that shows you are more than just a number. You just have to sign up to get extra credit.
Differences
Experian Boost and UltraFICO should be helpful to the fringe customers, but they are clearly not the same thing. Most notably, they differ in their application and usage.
Application
The first difference between Experian Boost and Ultra Fico is in their application. One is a boost to your existing FICO score and the other is a separate brand new scoring model, administered by Experian.
Experian Boost is an opt-in program from this top CRA that can use on-time utility and telecom payments, as saved and reported in your existing online banking account, to boost your existing score. Signup is free, and it only takes about five minutes. It’s really an opportunity for people with borderline scores to become scorable or have an increase to the next bracket. Seventy-five percent of consumers with scores of less than 680 saw an improvement. Additionally, 10% of unscorable or thin-file customers established enough data points to become scorable. FICO has lots of scoring models. However, in some cases, they tend to overlook fiscally responsible consumers without much credit history.
UltraFICO is an opt-in scoring model that uses bank transaction data, in partnership with FICO, Finicity and Experian, from a checking account, savings account, or money-market account to your advantage. It uses data that isn’t normally reported to CRAs to give an opportunity to have a better score. It considers higher average account age, consistent account use, positive consistent cash on hand balances, without overdrafts, evidence of savings and regular, timely and non-debt bill payments. In a study, 70% of people with $400+ in savings and zero overdrafts for three months saw an improvement.
Accessibility
Another difference between these two programs is their accessibility. While both aim to help fringe customers get better access to credit and require consumers to verify their bank account data, they aren’t accessed in the same way.
Experian Boost is live and available for signup online. Users will be able to verify which payments get counted in the Boost process and which don’t. You have to sign up for Experian membership, but it’s free and not just a free trial. No credit card is needed.
UltraFICO is newer. It is currently in a limited pilot program phase. Lenders may soon offer consumers the option to opt-in to the scoring model as a part of their account access. This score comes into play if your FICO score gets denied. In that event, you can ask the financial institution where you are applying for your UltraFico score to be pulled. This score, according to your extra information that has been added, allows you to score higher and get easier access to credit.
Significantly, both of these products aim to help out the same customer group. While Experian Boost can give you a real-time boost to your FICO score, UltraFICO can be your second in a duel for a new loan. Itâs got your back, just in case your standard FICO score pulled during an application process isn’t quite up to snuff. You can ask that your UF score be pulled, as long as you have opted-in.
Which one is right for me?
Clearly, Experian Boost and UltraFICO are both meant for consumers with less-than-ideal credit. However, they are different products with different applications. In some ways, the differences can limit how effective they can be and which is in your best interest. To help understand which is best to help you build a wonderful life, here are a few things to think about:
First, what’s your credit score?
Experian Boost is best for anybody on the fringe who has automatically recurring payments coming out of their bank accounts to phone companies or utility companies. Since these are the factors that the program is looking for, you might want to start setting up recurring payments and then sign up.
UltraFICO is best for people with a history of consistent savings or cash-on-hand in their bank accounts of $400, going back several months. If you don’t have that, or you have a history of overdrafts on your account, this may not help you at all. It is more geared towards the fiscally responsible consumer who manages money wisely, but for lack of need or availability, hasn’t got fully established credit within the last six months.
And while it may not contribute to the angel population, every time an autopay alert rings, your credit could be on the upswing.
Anne-Marie Hays is interested in personal finance, for her own benefit and for helping others. She loves reading, traveling, and watching The Office. She writes for BestCompany.com, where she manages loan and personal finance content.Â
The post Experian Boost vs. UltraFICO: Which is Best for You? appeared first on Credit.com.
When it comes to excuses consumers give for their poor credit scores, banks and lenders have heard it all.Â
Maybe you lost your job and couldnât pay your student loan payment for a few months. Or perhaps you thought youâd gotten a deferment but were too busy job hunting to find out for sure.Â
Maybe you thought you paid your credit card bill but itâs actually sitting on your kitchen counter waiting for the mail.
Whatever the reason for your low credit score, one thing is for certain â lenders donât care.
In fact, banks and other lenders lean on your credit score and other factors to determine whether they should approve you for a credit card or a loan â and thatâs about it. Your personal situation is never considered, nor should it be.
It would be wonderful if credit card companies understood that âlife happensâ and made special exceptions to help people out, but that’s not the world we live in. As most of us already know, thatâs not typically how credit works. Credit cards are backed by banks, and banks have rules for a reason.
Now, hereâs the good news: Credit cards can help rebuild your credit, earn cash back for each dollar you spend, make travel easier, and serve as an emergency fund if youâre stuck paying a huge bill at the last minute. This is true even if you have poor credit, although the selection of credit cards you can qualify for may be somewhat limited.Â
Keep reading to learn about the best credit cards for bad credit, how they work, and how you can get approved.
Best Cards for Bad Credit This Year
Before you give up on building credit, you should check out all the credit cards that are available to consumers who need some help. Our list of the best credit cards for bad credit includes some of the top offers with the lowest fees and fair terms.
Total Visa®
Discover it® Secured
Credit One Bank® Visa® Credit Card
Secured Mastercard® from Capital One®
Milestone® Gold Mastercard®
Credit One Bank® Unsecured Visa® with Cash Back Rewards
#1: Total Visa®
The Total Visa® is one of the easiest credit cards to get approved for in today’s market, and itâs easy to use all over the world since itâs a true Visa credit card. However, this card does come with high rates and fees since itâs available to consumers with poor credit or a limited credit history.
Processing your application will cost $89, which is extremely high when you consider the fact that most credit cards donât charge an application fee. Youâll also pay an initial annual fee of $75 and a $48 annual fee for each year thereafter.
Once you sign up, youâll be able to pick your preferred card design and your credit card payments will be reported to all three credit reporting agencies â Experian, Equifax, and TransUnion. This is the main benefit of this card since your on-time payments can easily help boost your credit score over time.Â
For the most part, the Total Visa® is best for consumers who donât mind paying a few fees to access an unsecured line of credit. Since this card doesnât dole out rewards, however, there are few cardholder perks to look forward to.Â
APR: 35.99% APR
Fees: Application fee and annual fee
Minimum Credit Score: Not specified
Rewards: No
#2: Discover it® Secured
While secured cards donât offer an unsecured line of credit like unsecured credit cards do, they are extremely easy to qualify for. The Discover it® Secured may not be ideal for everyone, but it does offer a simple online application process and the ability to get approved with little to no credit history.
Keep in mind, however, that secured cards do work differently than traditional credit cards. With a secured credit card, youâre required to put down a cash deposit upfront as collateral. However, you will get your cash deposit back when you close your account in good standing.
Amazingly, the Discover it® Secured lets you earn rewards with no annual fee. Youâll start by earning 2% back on up to $1,000 spent each quarter in dining and gas. Youâll also earn an unlimited 1% back on everything else you buy.
The Discover it® Secured doesnât charge an application fee or an annual fee, although youâll need to come up with the cash for your initial deposit upfront. For the most part, this card is best for consumers who have little to no credit and want to build their credit history while earning rewards.
APR: 24.74%
Fees: No annual fee or monthly fees
Minimum Credit Score: Not specified
Rewards: Yes
#3: Credit One Bank® Visa® Credit Card
The Credit One Bank® Visa® Credit Card is another credit card for bad credit that lets you earn rewards on your everyday spending. Youâll earn a flat 1% cash back for every dollar you spend with this credit card, and since itâs unsecured, you donât have to put down a cash deposit to get started.
Other benefits include the fact you can get pre-qualified for this card online without a hard inquiry on your credit report â and that you get a free copy of your Experian credit score on your online account management page.
You may be required to pay an annual fee up to $95 for this card for the first year, but it depends on your creditworthiness. After that, your annual fee could be between $0 and $99.
APR: 19.99% to 25.99%
Fees: Annual fee up to $95 the first year depending on creditworthiness; after that $0 to $99
Minimum Credit Score: Not specified
Rewards: Yes
#4: Secured Mastercard® from Capital One®
The Secured Mastercard® from Capital One® is another secured credit card that extends a line of credit to consumers who can put down a cash deposit as collateral. This card is geared to people with bad credit or no credit history, so itâs easy to get approved for. One downside, however, is that your initial line of credit will likely be just $200 â and that doesn’t give you much to work with.Â
On the upside, this card doesnât charge an annual fee or any application fees. That makes it a good option if you donât want to pay any fees you wonât get back.
Youâll also get access to 24/7 customer service, $0 fraud liability, and other cardholder perks.
APR: 26.49%
Fees: No ongoing fees
Minimum Credit Score: Not specified
Rewards: No
#5: Milestone® Gold Mastercard®
The Milestone® Gold Mastercard® is an unsecured credit card that lets you get pre-qualified online without a hard inquiry on your credit report. You wonât earn any rewards on your purchases, but you do get benefits like the ability to select your cardâs design, chip and pin technology, and easy online account access.
You will have to pay a one-time fee of $25 to open your account, and thereâs an annual fee of $50 the first year and $99 for each year after that.
APR: 24.90%
Fees: Account opening fee and annual fees
Minimum Credit Score: Not specified
Rewards: No
#6: Credit One Bank® Unsecured Visa® with Cash Back Rewards
The Credit One Bank® Unsecured Visa® with Cash Back Rewards lets you earn 1% back on every purchase you make with no limits or exclusions. Thereâs no annual fee or application fee either, which makes this card a winner for consumers who donât want to get hit with a lot of out-of-pocket costs.
As a cardholder, youâll get free access to your Experian credit score, zero fraud liability, and access to a mobile app that makes tracking your purchases and rewards a breeze. You can also get pre-qualified online without a hard inquiry on your credit report.
APR: 25.99%
Fees: No annual fee or application fee
Minimum Credit Score: Not specified
Rewards: Yes
The Downside of Credit Cards with Bad Credit
While your odds of getting approved for one of the credit cards for bad credit listed above are high, you should be aware that there are plenty of pitfalls to be aware of. Here are the major downsides youâll find with these credit cards for bad credit and others comparable cards:
Higher fees: While someone with excellent credit can shop around for credit cards without any fees, this isnât the case of you have bad credit. If your credit score is poor or you have a thin credit profile, you should expect to pay higher fees and more of them.
Higher interest rates: While some credit cards come with 0% interest for a limited time or lower interest rates overall, consumers with poor credit typically have to pay the highest interest rates available today. Some credit cards for bad credit even come with APRs as high as 35%.
No perks: Looking for cardholder benefits like cash back on purchases or points toward airfare or movie tickets? Youâll need to wait until your credit score climbs back into âgoodâ or âgreatâ territory. Even if you can find a card for applicants with bad credit that offers cash back, your rewards may not make up for the higher fees.
No balance transfers: If youâre looking for relief from other out-of-control credit card balances, look elsewhere. Credit cards for bad credit typically donât offer balance transfers. If they do, the terms make them cost-prohibitive.
Low credit limits: Credit cards for bad credit tend to offer initial credit limits in the $300 to $500 range with the possibility of increasing to $2,000 after a year of on-time monthly payments. If you need to borrow a lot more than that, youâll have to consider other options.
Security deposit requirement: Secured credit cards require you to put down a cash deposit to secure your line of credit. While this shouldnât necessarily be a deal-breaker â and it may be required if you canât get approved for an unsecured credit card â youâll need to come up with a few hundred dollars before you apply.
Checking account requirement: Most new credit card accounts now require cardholders to pay bills online, which means youâll need a checking account. If youâre mostly âunbanked,â you may need to open a traditional bank account before you apply.
Benefits of Improving Your Credit Score
People with bad credit often consider their personal finances a lost cause. The road to better credit can seem long and stressful, and itâs sometimes easier to give up then it is to try to fix credit mistakes youâve made in the past.
But, there are some real advantages that come with having at least âgoodâ credit, which typically means any FICO score of 670 or above. Here are some of the real-life benefits better credit can mean for your life and your lifestyle:
Higher credit limits: The higher your credit score goes, the more money banks are typically willing to lend. With good credit, youâll have a better chance at qualifying for a car loan, taking out a personal loan, or getting a credit card with a reasonable limit.
Lower interest rates: A higher credit score tells lenders youâre not as risky as a borrower âa sign that typically translates into lower interest rates. When you pay a lower APR each time you borrow, you can save huge amounts of money on interest over time.
Lower payments: Borrowing money with a lower interest rate typically means you can usually get lower payments all your loans, including a home loan or a car loan.
Ability to shop around: When youâre an ideal candidate for a loan, you can shop around to get the best deals on credit cards, mortgages, personal loans, and more.
Ability to help others: If your kid wants to buy a car but doesnât have any credit history, better credit puts you in the position to help him or her out. If your credit is poor, you wonât be in the position to help anyone.
More options in life: Your credit score can also impact your ability to open a bank account or rent a new apartment. Since employers can request to see a modified version of your credit report before they hire you, excellent credit can also give you a leg up when it comes to beating out other candidates for a job.Â
In addition to the benefits listed above, most insurance companies now consider your credit score when you apply for coverage. For that reason, life, auto, and home insurance rates tend to be lower for people with higher credit scores.
This may seem unfair, but you have to remember that research has shown people with high credit scores tend to file fewer insurance claims.
How to Improve Your Credit: Slow and Steady
When you have a low credit score, there are two ways to handle it. If you don’t mind the consequences of poor credit enough to do anything about it, you can wait a decade until the bad marks age off your credit report. Depending on when your creditors give up and write off your debt, you may not even need to wait that long.
If you donât like the idea of letting your credit decay while you wait it out, you can also try to fix your past credit mistakes. This typically means paying off debt â and especially delinquent debts â but it can also mean applying for new loan products that are geared to people who need to repair their credit.
If you decide to take actionable steps to build credit fast, the credit cards on this page can help. Theyâll give you an opportunity to show the credit bureaus that youâve changed your ways.
Before you take steps to improve your credit score, however, keep in mind all the different factors used to determine your standing in the first place. The FICO scoring method considers the following factors when assigning your score:
On-time payments: Paying all your bills on time, including credit cards, makes up 35% of your FICO score. For that reason, paying all your bills early or on time is absolutely essential.
Outstanding debts: How much you owe matters, which is why paying off your credit cards each month or as often as possible helps your score. According to myFICO.com, the amounts you owe in relation to your credit limits make up another 30% of your FICO score.
New credit: Apply for too many new cards or accounts at once can impact your score in a negative way. In fact, this determinant makes up another 10% of your FICO score.
Credit mix: Having a variety of open accounts impresses the credit bureau algorithm Gods. If all you have are personal loans right now, mixing in a credit card can help. If you already have four or five credit cards, it may be wise to back off a little.
Length of credit history: The length of your credit history also plays a role in your score. The longer your credit history, the better off you are.
If you want to improve your credit score, consider all the factors above and how you can change your behavior to score higher in each category. Itâs pretty easy to see how paying all your bills early or on time and paying off debt could make a big positive impact on your credit score when you consider that these two factors alone make up 65% of your FICO score.
If you want a way to track your progress, also look into an app like Credit Karma, one of my favorite tools. This app lets you monitor your credit progress over time and even receive notifications when your score has changed. Best of all, itâs free.
Should You Use a Credit Card to Rebuild Your Credit Score?
If youâre on the fence about picking up a credit card for bad credit, your first step should be thinking over your goals. What exactly are you trying to accomplish?
If youâre looking for spending power, the cards on this list probably wonât help. Some are secured cards, meaning you need a cash deposit to put down as collateral. Others offer low credit limits and high fees and interest rates, making them costly to use over the long-term.
If you really want to start over from scratch and repair credit mistakes made in the past, on the other hand, one of these cards may be exactly what you need. If youâre determined to improve your score, they can speed things along.
You may pay higher fees and interest rates along the way, but itâs important to remember that none of the cards on this list need to be your top card forever. Ideally, youâll use a credit card for poor credit to rebuild your credit and boost your score. Once youâve reached your goal, you can upgrade to a new card with better benefits and terms.
For Americans seeking a more affordable and less crowded alternative to the bustle of a big city but not interested in very small towns, a mid-sized city might be the best place to put down roots. But not all of them are equally suited to meet the needs of their inhabitants. Thatâs why SmartAsset crunched the numbers on a variety of financial factors to find the mid-sized cities that are the most livable.
To do so, SmartAsset considered data for 227 cities across the following eight metrics: Gini coefficient, four-year home value change, median monthly housing costs, poverty rate, median household income, July 2020 unemployment rate, percentage of residents without health insurance and average commute time. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.
This is SmartAssetâs fourth study on the most livable mid-sized cities. Check out the 2019 edition here.
Key Findings
Unemployment is on par with the national average. The average unemployment rate for the mid-sized cities in our study was 10.7% in July 2020, just slightly higher than the national unemployment rate of 10.2%. A few cities we analyzed, though, have significantly lower unemployment rates. In Meridian, Idaho, the unemployment rate was just 5.0%, part of the reason it ranks fourth overall. The lowest unemployment rate we found was 3.6% in Provo, Utah.
Some consistency in the most livable mid-sized cities year over year. Exactly half of the cities in the top 10 of this yearâs study were also in the top 10 last year: Rochester, Minnesota; Overland Park, Kansas; Meridian, Idaho; Centennial, Colorado and Arvada, Colorado. This suggests that while there is some consistency, some of the numbers that varied widely year-to-year, like unemployment and poverty rate, may have had a big impact in the reordering of this list.
1. Rochester, MN
Rochester, Minnesota has an average commute time of just 16.2 minutes â the fifth-lowest in the study â so you donât need to worry about adding on an extra few hours to your work day that youâll have to spend in the car. The city had an unemployment rate of 7.0% in July 2020, the 31st-lowest of the total 227 cities we studied. It also ranked 42nd for its relatively low poverty rate, which comes in at 7.4%.
2. Olathe, KS
Olathe, Kansas ranks 12th-best for the Gini coefficient, a metric that measures income inequality. Olathe has a poverty rate of 6.3%, 24th-best among the 227 cities we analyzed. The cityâs July 2020 unemployment rate is tied for 19th-lowest, at 6.6%. Median household income in Olathe ranks 34th overall and is third-highest in the top 10, at almost $94,300.
3. Overland Park, KS
Overland Park, Kansas ranks within the top 20% of study for four of the eight metrics we considered. The poverty rate in the city is 3.8%, eighth-lowest in the study. Overland Park is tied for 19th in terms of July 2020 unemployment rate, coming in at 6.6%. The city also places 31st for the percentage of residents without health insurance, at 5.2%. Furthermore, the median household income in Overland Park is 39th-highest out of 227, at $91,518.
4. Meridian, ID
Meridian, Idaho saw home values increase by 55.61% from 2015 to 2019, the ninth-highest jump in the study and the highest in the top 10. The July 2020 unemployment rate in the city was a low 5.0%, the second-best rate of all 227 cities that qualified for this study. Meridianâs Gini coefficient is the 14th-best, implying relatively low levels of income inequality.
5. Centennial, CO
Centennial, Colorado is the first of two cities in the Rocky Mountain State to crack the top 10. Centennialâs poverty rate is 3.0%, the second-lowest in the study. Centennial also has the 14th-highest median household income of all 227 cities we analyzed, $111,257. The city ranks 11th in terms of the percentage of residents without health insurance, with just 3.9% of people in Centennial being uninsured.
6. Arvada, CO
The second Colorado city in the top 10 of this study is Arvada, where home values have risen 46.18% over the four-year period from 2015 to 2019 â the 25th-highest jump in the study and third-highest in the top 10. While Arvada doesnât fare as well in terms of commute, coming in 155th out of 227 with an average commute time of 29 minutes, the cityâs unemployment rate in July 2020 was a relatively low 7.2%, ranking 32nd out of 227.
7. Hillsboro, OR
Hillsboro, Oregon has the 17th-best Gini coefficient in this study, indicating relatively low levels of inequality. Hillsboro ranks within the top 50 of the study for median household income ($86,038) and the percentage of residents without health insurance (5.6%). It also ranks within the top 60, or roughly the top quartile of the study, for its relatively high 2015-2019 change in home value and its relatively low poverty rate.
8. Santa Clara, CA
Santa Clara, California has a median household income of $147,507, the third-highest in the study and highest in the top 10. That said, it ranks near the bottom of the study for its relatively high median monthly housing costs, at $2,629. Home values have gone up quickly in Santa Clara, increasing by 47.65% over the past four years, the 18th-highest jump across all 227 the cities we analyzed. The city also ranks 10th out of 227 for its relatively low poverty rate and 14th of 227 for its relatively low percentage of residents without health insurance.
9. Round Rock, TX
Round Rock, Texas has the 15th-lowest July 2020 unemployment rate in the study, at 6.2%. It also has the 23rd-best Gini coefficient and the 20th-lowest poverty rate, at 6.0%. Round Rock does rank in the bottom half of the study for its fairly high percentage of residents who are without health insurance, at 10.4%, but it ranks within the top 50 of the total 227 cities for median household income ($86,145) and 2015-2019 change in home value (40.76%).
10. Sparks, NV
The final city in the top 10 is Sparks, Nevada, where home value increased by 44.85% from 2015 to 2019, the 30th-highest increase for this metric in the study. Sparks ranks 50th-best for its July 2020 unemployment rate overall, 8.1%. While Sparks ranks within the bottom half of the study for median monthly housing costs, which amount to $1,354, the city has a Gini coefficient of approximately 0.39, indicating relatively low income inequality.
Data and Methodology
To find the most livable mid-sized cities, SmartAsset first compiled a list of all the cities with at least 100,000 residents, excluding the 100 most populous cities. Note: Some cities that have appeared in past studies may not be in this yearâs version because of shifting population totals. We compared all of the cities across the following eight metrics:
Gini coefficient. This is a statistical measurement of income inequality. A Gini coefficient of zero indicates total equality of wealth distribution, while a coefficient of one indicates total inequality of wealth distribution across groups. Data comes from the U.S. Census Bureauâs 2019 1-Year American Community Survey.
Median home value change. This is the percentage change in median home values from 2015 through 2019. Data comes from the U.S. Census Bureauâs 2015 and 2019 1-year American Community Surveys.
Median monthly housing costs. Data comes from the U.S. Census Bureauâs 2019 1-year American Community Survey.
Percentage of residents below the poverty line. Data comes from the U.S. Census Bureauâs 2019 1-year American Community Survey.
Median household income. Data comes from the U.S. Census Bureauâs 2019 1-year American Community Survey.
Unemployment rate. Data comes from the Bureau of Labor Statistics and is for July 2020.
Percentage of residents without health insurance. Data comes from the U.S. Census Bureauâs 2019 1-year American Community Survey.
Average commute time. Data comes from the U.S. Census Bureauâs 2019 1-year American Community Survey.
First, we ranked each city in every metric. We then found each cityâs average ranking, giving each metric an equal weighting. We used this average ranking to determine a final score. The city with the best average ranking received a score of 100, and the city with the worst average ranking received a score of 0.
Tips for Managing Your Money
Seek professional financial advice. Regardless of where you live, if you want to make your money work harder for you, consider finding a financial advisor. Finding a financial advisor doesnât have to be hard. SmartAssetâs free tool connects you with financial advisors in your area in five minutes. If youâre ready to be matched with local advisors, get started now.
Look into the future of your mortgage payments. If youâre considering moving to one of these mid-sized cities, use SmartAssetâs mortgage calculator to see what youâll be paying each month before your deal is even finalized.
Take every advantage that helps you save more towards retirement. Some people move to smaller cities to relax after theyâve retired. To make sure youâre able to afford that, start thinking about retirement early, and use a 401(k) or other workplace retirement plan if that is available to you.
Questions about our study? Contact press@smartasset.com.
