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Best Credit Cards for Bad Credit
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.
The post Best Credit Cards for Bad Credit appeared first on Good Financial Cents®.
Source: goodfinancialcents.com
Best cards for food delivery and meal kit subscriptions
Credit cards for foodies are the latest trend, with more and more rewards programs and additional card benefits catering to both dining in and eating out. Restaurant and grocery bonus categories are becoming commonplace â letting cardholders rack up a few extra points or cash back on those purchases.
But what about those who prefer to order delivery? If you like to take advantage of popular food delivery services like DoorDash or Uber Eats or simplify cooking with a meal kit subscription, there are plenty of credit card rewards and benefits you can leverage to save a little money.
Finding the best card for your favorite services
Finding the best card for your favorite food delivery or meal kit service depends on a variety of factors, including the cardâs yearly credits, special perks or rewards rate. For example, many dining cards offer bonuses that are tailored to a specific delivery service, as a monthly Uber credit.
See Related: Food delivery perks on luxury travel cards
For meal kit services, matching rewards is a little more complicated. You could opt for a rewarding grocery card, as many meal kit brands are now partnered with major supermarkets â so you can buy them in the store.
merchant category code that qualifies for a point or cash back bonus. You can test it by making a small charge to your card and seeing what rewards you earn.
Online shopping rewards, on the other hand, are much more flexible. They apply to both web and app purchases, so whether your order from your phone or computer, you can rack up bonus points or cash back.
See Related: Make the most of an online shopping bonus category
Best cards by delivery service or meal kit subscription
With all this in mind, here are some of our favorite cards for some of the most popular food delivery and meal kit subscription services.
Delivery service | Card | Rewards rate | Why we like it |
DoorDash | Chase Sapphire Reserve |
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Uber Eats | The Platinum Card® from American Express |
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Instacart | Capital One Savor Cash Rewards Credit Card |
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Grubhub/Seamless/Boxed/Instacart | American Express® Gold Card |
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HelloFresh | Blue Cash Preferred® Card from American Express |
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Home Chef | Blue Cash Everyday® Card from American Express |
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Other delivery services | Bank of America® Cash Rewards credit card |
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If you donât have a delivery service you prefer â or if you like to switch back and forth based on restaurant availability â a card with rewards on online shopping is your best bet.
Bottom line
Ordering food can be expensive, but using the right rewards card can help you alleviate some of that cost by racking up points or cash back. With some cards, you might even get a few extras that cover your next couple of meals.
Source: creditcards.com
4 Questions to Ask Before Choosing a Checking Account
You’ve probably had a checking account for most of your life and never gave it much thought. It’s just there to store your everyday cash, right? Not necessarily.
If you’re considering questions about checking accounts as you take a closer look at your current setup and explore opening a new one, it’s important to note that checking accounts are designed with different and unique features. Some may even be more beneficial to you than you realize.
For starters, most checking accounts offer a host of conveniences, providing customers the ability to set up automatic payments for routine bills, schedule electronic transfers and make all deposits and transfers via a smartphone app. Some accounts even allow you to earn cash back on your debit card purchases.
âA checking account can have a long-term impact on your financial well-being, so it’s worth taking the time to figure everything out,” says Jeff Kreisler, money expert and author of the personal finance book “Dollars and Sense.”
At this point, you might be thinking, “What questions should I ask before opening a checking account?” To help you decide which account is right for you, here are four key questions to ask yourself:
1. What types of checking accounts should I consider?
Before you open a new checking account, do a little homework to learn about the different types of checking accounts offered by banks, Kreisler says. There’s the standard personal checking account that allows you to write checks and make payments with your debit card or electronically. But when thinking about questions to ask when opening a checking account, go beyond the basic features to find an account that best fits your lifestyle and financial goals. Here are some examples:
- Online checking account: Ready to bypass the teller lines with the benefits of an online bank? Then this is the checking account for you. Doing your banking from any computer or mobile device is sweetâand since online banks don’t have brick-and-mortar locations, they can often pass their savings from overhead down to you. Just verify that the online bank or credit union supplying the checking account is backed by the FDIC or the National Credit Union Administration.
- Rewards checking account: One question to ask before choosing a checking account is if you can earn rewards or incentives for certain activity. Discover Cashback Debit, for example, lets you earn 1% cash back on up to $3,000 in debit card purchases each month.1 That means your monthly cashback earnings could yield $360 in total rewards each year (finally, dinner and drinks at that new French bistro in town!). Some banks may also offer a checking account bonus just for opening a new account, while others have a variety of reward options based on certain qualifying purchases. A rewards checking account works for almost anyone looking to maximize their debit spend or a balance they regularly hold in their checking account.
Say hello to
cash back on debit
card purchases.
No monthly fees.
No balance requirements.
No, really.
See Details
Discover Bank, Member FDIC
- Joint checking account: Most checking accounts can be opened as a joint checking account, which is an account held by two or more people. This can be a convenient solution for couples, minors and their parents and even seniors and their caregivers who are trying to manage a household budget. It does require good record keeping and communication, so make sure you understand the ins and outs of joint accounts before choosing this option.
The above checking accounts are the most standard and usually have appealing benefits. But if you have more questions about checking accounts, there are options that can cater to more specific needs. However, they often have less flexibility. For instance:
- Interest-bearing checking accounts are available for those who want to earn some money while their cash is parked in the account. The rate of return is usually low and minimum balance requirements high.
- Student checking accounts are often low-cost, but they could come with limitations. Whether or not a student account is available may be a good question to ask before choosing a checking account if you’re looking for a starter account for yourself or your child.
- Second-chance checking accounts could be a fit for those who may not be able to get a standard checking account due to their banking or credit history; however, they often have higher fees.
“A checking account can have a long-term impact on your financial well-being, so it’s worth taking the time to figure everything out.”
2. Are there fees associated with the checking account?
This is one of the most commonly asked questions about checking accounts. Before choosing a checking account, be sure to research its fees, says Marc Bernstein, financial planner and strategist for MWealth Advisors. Types of fees and fee amounts can vary greatly from bank to bank, and even among accounts at the same bank.
A question to ask when opening a checking account is if the account charges fees for ATM use, automatic bill pay, monthly maintenance, ordering checks, replacing a debit card or ordering official bank checks. Banks may charge any combination of these feesâor none. Discover Cashback Debit comes with no fees. Period.2 That means you won’t be charged a fee for any of these services.
Along with including the fee topic on your list of questions to ask before choosing a checking account, you should also consider obtaining “a document outlining the fees you’ll be paying, in case you have any questions, and check the fine print,” Bernstein says. You can also typically find a list of fees (if any) on the bank’s website or in the account agreement.
3. Is there a minimum balance requirement?
According to Bernstein, among the questions to ask when opening a checking account is if it requires an initial minimum balance to open. You’ll also want to know if a minimum balance needs to be maintained to avoid a fee.
Bernstein suggests looking for an account with no minimum balance requirement if you tend to keep less than $1,000 in your account or like to have flexibility when making large withdrawals.
If you’ve asked this question about checking accounts and are still comparing accounts that have a minimum balance requirement, realistically determine how much you can keep in your account per month and what you will be charged if you can’t keep that balance.
Even if your account falls below a minimum requirement, there could be a way to save on fees. If you have multiple accounts at one bank, the bank may allow you to combine the balances to waive checking fees.
The total average cost of withdrawing cash from an out-of-network ATM is $4.68. That’s 36 percent higher than it was 10 years prior, with no signs of decreasing.
4. What ATM fees could I incur?
If you frequent the ATM to take out cash, a good question to ask before choosing a checking account is: Where are the bank’s ATMs located in relation to your home and work?
Availability of ATMs is an important question to ask when opening a checking account that can really affect your wallet. For instance, if you decide to withdraw money from an ATM that’s not in your bank’s network, you can get hit with two separate charges: a surcharge from the ATM owner (since you’re not a customer) and a fee from your own bank.
And those fees can really add up. According to Bankrate’s 2018 checking account and ATM fee study, the total average cost of withdrawing cash from an out-of-network ATM is $4.68. That’s 36 percent higher than it was 10 years prior, with no signs of decreasing.
One way to get cash without paying an ATM fee is to use your own bank’s ATMs. The more ATM locations that your bank offers that are conveniently located, the less likely you are to use one that’s out-of-network and rack up unnecessary charges. If you can’t always use your own bank’s ATM, one of the questions to ask when opening a checking account is whether your bank allows you to use a broader ATM network for no-fee transactions.
Find the best checking account for you
Opening a new checking account is an important step toward establishing, or rebuilding, your financial foundation.
Now that you can ask the right questions about checking accounts, you’re one step closer to choosing an account that fits your individual needs. And that feels like money in the bank.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal, which also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
2 Outgoing wire transfers are subject to a service charge. You may be charged a fee by a non-Discover ATM if it is not part of the 60,000+ ATMs in our no-fee network.
The post 4 Questions to Ask Before Choosing a Checking Account appeared first on Discover Bank – Banking Topics Blog.
Source: discover.com
Can you send money with a credit card?
Sending cash to friends and family? Before you reach for that credit card, grab a calculator. It’s time to do a little math.
With most everything you purchase online or through apps, credit cards have the edge. With plastic, you have chargeback rights. If you’re overcharged or receive the wrong item, broken merchandise or nothing at all, your card issuer will make it right. And if you use a rewards card, you collect points or miles, too. Win-win.
But it’s different story when you’re sending money through peer-to-peer platforms. Many of them (like Google Pay, Popmoney and Zelle), don’t allow consumers to use a credit card to send cash.
Others (like Cash App, PayPal and Venmo), allow credit cards but also charge a fee for the privilege – often about 3%.
See related: How to choose a P2P payment service
The hidden costs of using credit cards to send money
Choose a credit card to send money and you might also end up paying additional fees to your card issuer. That’s because the combination of some peer-to-peer apps with certain cards are coded as cash advances, rather than purchases.
For many cards, that cash advance code triggers a higher interest rate that kicks in the moment you make the transaction, as well as a separate cash advance fee that’s often $10 or 5% of the transaction – whichever is higher. (Currently, the average interest rate for cash advances is 24.8%, while the average APR for purchases is 16.05%.)
So the combination of peer-to-peer service fees, credit card cash advance fees and that higher interest rate (with no grace period) could make sending a few hundred dollars a bit more costly than you’d planned.
No chargeback rights with credit cards
The real kicker: Unlike other venues, you don’t have chargeback rights when you use credit cards to make peer-to-peer money transfers.
When you present your credit card in an online or brick-and-mortar store, there’s a merchant involved – and the law provides chargeback rights for your protection in case you don’t get what you were promised in the deal. But in a peer-to-peer money transfer, there’s no merchant, so currently the laws don’t give consumers any chargeback rights, says Christina Tetreault, manager of financial policy for Consumer Reports.
“The chargeback right requires a merchant,” says Tetreault. “One of the hoops a consumer has to jump through is to try and work it out with the merchant.”
If you use a peer-to-peer service and send the wrong amount or send the money to the wrong person, most platforms advise that the only way to get it back is to contact the recipient and ask them to return it. And that’s often the same whether you use a credit card, debit card, bank account or funded account on the platform.
“Be doubly sure when you’re sending the money that you’re putting in the correct information,” says John Breyault, vice president of public policy, telecommunications and fraud for the National Consumers League. “It’s still a buyer beware world when it comes to peer-to-peer.”
The solution
If you’re sending money and want to use a credit card, it pays to do a little sleuthing first. Check out the peer-to-peer site. Does it allow users to send money with a credit card? If so what, if any, fees does it charge?
On some platforms (PayPal is one), you could see similar fees for using a debit card – while sending from a bank account or funded account on the platform is free.
The good news is that many peer-to-peer platforms clearly disclose it when there’s an extra charge to use a credit card, says Tetreault. With Venmo, for example, you’ll get a pop-up message.
Harder to decipher: Will credit card transactions on the platform be treated as a cash advance? If your preferred platform doesn’t post this information, you might need to contact customer service. (And how quickly and easily you get an answer can tell you a lot, too.)
Ask your card issuer the same question: Are peer-to-peer money transfers on the platform you’ve chosen treated as a cash advance? If they are, what’s the interest rate, and what’s the cash advance fee?
“What I would suggest is to ask that question, via email, of your financial institution,” says Tetreault. “It may be in their FAQs. And you want to save that email. If you have it in writing, if there’s an issue later, you’re better positioned to contest that fee.”
But “the hard truth is you may not be able to find out ahead of time,” she says.
Another solution: Opt to use a credit card issued by a credit union.
“With credit unions, the APR is usually the same” for purchases and cash advances, says John Bratsakis, president and CEO of the Maryland and District of Columbia Credit Union Association.
Likewise, with American Express cards you pay your regular interest rate and no cash advance fees on peer-to-peer transfers, says Elizabeth Crosta, vice president of public affairs for American Express.
And credit cards from U.S. Bank register peer-to-peer money transfers as regular purchases – with no cash advance fees or cash advance APRs, says Rick Rothacker, spokesperson for the bank.
See related: How do credit card APRs work?
What’s your reason for using a credit card?
Take a good look at the reason you’re using a credit card, too. If you want chargeback rights, that’s not an option. If you’re doing it for the rewards, will the value of those points or miles be eaten up by extra fees or a higher interest rate you have to pay to use the card?
And if you’re using a card because you don’t have the cash, that might be a good reason to rethink the idea of sending money in the first place.
That’s a huge red flag, says Bruce McClary, vice president of public relations at the National Foundation for Credit Counseling.
“The need to convert credit into cash is what really gets my attention – because that hints at a lack of savings,” he said. “It’s a reality a lot of people are facing, especially now.”
Cash advances aren’t as expensive or risky as payday loans and car title loans, but they should be among your last resorts. If you’re looking for short-term relief, you could ask your credit card issuer for help, or find out if you qualify for a personal loan. You could also borrow from a family member or trusted friend, but be wary of the potential relationship toll if you can’t pay them back.
Getting cash from credit cards
Fifty-two percent of Americans report that the pandemic has damaged their finances, according to a recent survey by the NFCC. More than a fifth of those had to tap savings for everyday expenses, while 16% increased their credit card spending.
And that’s a sign of financial stress, says McClary. “It means that, in some situations, they have run out of savings.”
There are ways you can use your card to get cash, though.
Cashing in rewards
Some rewards cards from issuers such as Chase, Bank of America and US Bank let you deposit cash-back rewards directly to your bank account.
And Wells Fargo also will let you deposit its Go Far Rewards directly into another Wells Fargo customer’s account, says Sarah DuBois, spokesperson for the bank.
Gift cards
Many credit cards let you convert rewards into retail gift cards. So a pile of points can help a friend or family member buy much-needed groceries or a few holiday presents.
Or simply “buy a gift card for someone,” says Bratsakis.
Retailer-specific gift cards and gift cards issued through local and regional retail associations and malls often come with no fees – meaning every dollar you spend goes toward your gift.
Convenience checks
While you can get a cash advance or use convenience checks from your card issuer, both those options often come with fees and higher interest rates. Not a smart money move, especially in the current economy.
While some lenders may offer convenience checks with deferred interest, that’s not the same as “no interest,” says Bratsakis. Also, if you don’t pay the loan in full, will you owe the full interest retroactively?
“That’s where consumers have to be careful,” he says. With a convenience check or even a cash advance, “that’s usually where consumers can get themselves into trouble if they can’t pay it off and get hit with deferred interest.”
See related: What is deferred interest?
Bottom line
When it comes to peer-to-peer payments, cash really is king. You can then put it into a funded account with the money transfer platform or your bank account. And most peer-to-peer platforms let you do this for free.
“The safest way to use these services is to send money person-to-person and be diligent about getting all the details correct so it doesn’t go to the wrong person,” says Tetreault.
Only send to people you trust and know in real life, she says. “And before sending money make sure you understand what, if any, fees you might incur.”
Source: creditcards.com
Best Checking Accounts 2020
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. 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.
Source: mint.intuit.com
Chase Freedom Flex vs. Chase Freedom Unlimited
The Chase Freedom Flexâ , or the Chase Freedom Unlimited®? The card names sound the same, and at a glance the rewards are similar.
Not so fast: Though the cards have a lot in common, there are a few key differences to keep in mind when deciding which is the best fit for you.
Both the Chase Freedom Flex and Chase Freedom Unlimited offer hefty sign-up bonuses, along with bonus cash back on dining and drugstore purchases, as well as travel purchased through Chase Ultimate Rewards. The difference is their rewards structures: The Freedom Flex card offers 5% cash back on rotating quarterly categories, while the Chase Freedom Unlimited offers a flat-rate 1.5% cash back on everything.
Read on to get a rundown on the pros and cons of each card, as well as which card is best suited for you, based on your spending habits.
Chase Freedom Flex versus Chase Freedom Unlimited
![]() Chase Freedom Flexâ |
![]() Chase Freedom Unlimited® |
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Rewards rate |
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Sign-up bonus | $200 if you spend $500 in first 3 months |
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Annual fee | $0 | $0 |
Estimated yearly rewards value ($1,325 monthly spend, including sign-up bonus) | $532 | $405 |
Pros |
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Cons |
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Who should get this card? |
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Chase Freedom Flex overview
The Chase Freedom Flex card offers a combination of year-round and quarterly-rotating bonus cash back categories. Each quarter, you can enroll in a new bonus category from the Chase cash back calendar and earn 5% back on the first $1,500 you spend in that category (then 1% back after you reach the $1,500 threshold). Throughout the year, you’ll also get 5% back on all travel booked through the Chase Ultimate Rewards portal, 3% back on dining and drugstore purchases and 1% back on all other purchases.
Upsides:Â The opportunity to earn bonus cash back in select categories year-round and in a variety of categories each quarter.
Downsides:Â The complex rewards program. To get the most out of the card, cardholders must track their spending, since the 5% rate only applies to certain categories that rotate frequently and is limited to $1,500 per quarter.
Furthermore, cardholders must log in to their Chase account and activate their rewards category by the deadline each quarter to earn the 5% rate. For example, to earn 5% cash back during the first quarter of 2021 (on select streaming services, phone, cable and internet services and at wholesale clubs), you must activate the category by March 14, 2021.
Chase 5% cash back calendar 2021
Winter | Spring | Summer | Holiday |
January â March | April â June | July â September | October â December |
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TBA | TBA | TBA |
Chase Freedom Unlimited overview
Like the Freedom Flex, the Freedom Unlimited earns bonus cash back on Ultimate Rewards travel (5% back) and dining and drugstore purchases (3% back). However, instead of rotating cash back categories, the Freedom Unlimited offers 1.5% cash back on general purchases. Thereâs also no annual fee, and no interest on purchases for 15 months from account opening (after which a variable APR of 14.99% to 23.74% applies). The card is currently offering a $200 bonus for spending $500 in the first three months.
Upsides:Â The Freedom Unlimited card offers a straightforward rewards program that allows cardholders to earn at least 1.5% on every purchase they make â with no earning caps or rotating categories.
Downsides:Â Although 1.5% cash back is a substantial amount to earn on general purchases, it’s not the highest rate out there.
trio of Ultimate Rewards cards.
See related: Chase Ultimate Rewards guide: The best ways to earn and use Ultimate Rewards points
*All information about the Chase Sapphire Preferred Card has been collected independently by CreditCards.com and has not been reviewed by the issuer.Â
The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we do receive compensation when you click on links to products from our partners. Learn more about our advertising policy
See related: Chase Ultimate Rewards guide: The best ways to earn and use Ultimate Rewards points
*All information about the Chase Sapphire Preferred Card has been collected independently by CreditCards.com and has not been reviewed by the issuer.Â
The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we do receive compensation when you click on links to products from our partners. Learn more about our advertising policy