For years I’ve heard from some of my friends in the personal finance sphere that many of them use a Discover card as one of their main credit cards. For me I’ve always had a notion in my head that the Discover card was the read headed step child of credit cards that wasn’t accepted at very many places, and that had benefits that didn’t match some of the other cash back and rewards cards out there.
I’m now discovering that I was wrong. Discover has come a long way, and they’re now more widely accepted and used than I had even realized with over 54.4 million cards in circulation (source). They may still be smaller than Visa and Mastercard in terms of number cards out there, but they certainly have caught up terms of card benefits, no fees and importantly, customer loyalty. According to the 2012 Brand Keys Customer Loyalty Engagement Index Report, Discover has been ranked number 1 in customer loyalty for 16 years.
A short while ago Discover revamped their credit card lineup. In the past they had several cards available that you could sign up for, among them the Discover More Card and the Discover Miles Card. Those cards have all been retired and their entire lineup has been replaced by the Discover it® Card. Today I thought I’d do a brief Discover it® Card review.
Discover is a relative newcomer to the credit card scene, only having been introduced nationwide back in 1986. They were a part of Dean Witter and then Morgan Stanley until 2007, at which time Discover Financial Services became an independent company.
Discover also moved into the debit card arena in 2006 when they announced they would begin offering Discover debit cards to banks.
Discover has come a long way since 1986, and they’re now offering some of the most attractive credit card options out there.
Cash Back Rewards
Traditionally Discover has been known for a couple of different things, their great balance transfer offers and their great cash back rewards. First, let’s take a look at their cash back rewards.
- 5% Cashback Bonus in rotating categories. Save on things like gas, restaurants, and home improvement stores up to the quarterly maximum.
- 5% to 20% Cashback Bonus through our exclusive online shopping mall
- 1% Cashback Bonus on all purchases and there is no limit to how much you can earn.
For me the key here is the 1% cash back on all purchases, that’s a great deal and it’s actually cash back that you can use for a statement credit or direct deposit into your bank account. No points to worry about!
On the other hand, if you want to redeem your points in other ways you can use your cash back to get gift cards and other items. In some instances you can get gift cards that exceed your cash back balance. For example use $20 cash back to get a $25 gift card. That could come in handy if you were planning on buying something anyway!
For the 5% cash back categories mentioned above Apr-Jun this year will come in handy for us since we’re building a home right now and the current bonus category is at home improvement stores. We’re spending a lot of money at Home Depot right now, so that would be a good one to take advantage of. With gas prices going up substantially this week, the gas stations bonus category in July-September will be great as well!
0% Balance Transfer Offers
Another thing Discover is known for is their balance transfer offers, and they do have a couple of decent ones that you can take advantage of right now, among the best available right now.
As with most balance transfer offer deals there is a 3% balance transfer fee, so be aware of that. If you look around at other credit card issuers right now, the longest you’re likely to find is 0% for 18 months, although some in the past went as long as 24 months. If you’re looking to transfer a balance, Discover is among the best and should be at the top of your list.
Discover enjoys great customer loyalty, and one of the reasons is because they don’t charge a bunch of fees like some cards do.
- No annual fee
- No late fee for your first late payment
- No overlimit fee
- No foreign transaction fee
- Paying late won’t increase your APR
So no annual fee, first late payment fees waived, no overlimit fees and no foreign transaction fees.
Discover it – Other Card Benefits
Among other benefits you’ll enjoy with a Discover it Card:
- 100% U.S. based customer service available any time
- Discover ranks among the industry’s highest in identity fraud resolution1. And you’re never responsible for unauthorized purchases with our $0 Fraud Liability Guarantee.
- Pay for millions of items with your rewards at Amazon.com
- Pay your bill ’til midnight (ET) the day it’s due by phone or online
- Choose your payment due date online or by phone
- Lower rate, lower payment or other help after job loss
The card is flexible, has good customer service backing it up, and you’re protected in case of identity theft or other fraudulent charges.
Cons Of The Discover it Card
One of the few downsides i can find for the Discover it Card is that it doesn’t have an attractive signup bonus like some other cards on the market. While that’s a definite negative, for the most part the card’s positives make up for it.
With its cash back rewards, great balance transfer offers and no annual or overlimit fees, Discover has a solid credit card offering that should be in the running if you’re looking for a new card. Granted, it doesn’t have an attractive cash bonus offer at the outset like some cards do, but in the end the card’s benefits are equal to or better than most other cards out there.
For more information, or to apply for a card on their website, Check out the Discover it® Card Website
* See the online credit card application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the “Apply Now” button, you can review the credit card terms and conditions on the issuer’s website. Discover is a paid advertiser of this site.
- Credit Card Debt
The average American consumer receives their first credit card aged 20. For many, it’s an exciting time, further proof they have ascended into adulthood and are ready for financial independence.
The delinquency rate is high on these cards, but the credit is low, often between $1,500 and $2,000, and it gives the borrower a way to improve their credit score.
It also adds another cog to the massive US debt machine, one that creates more debt, more delinquencies, and more problems than any other. But why is this, why is the average credit card debt so high, and can anything be done about it?
State of American Credit Card Debt
The average US debtor has over $6,500 worth of credit card debt and in total the country owes more than $1 trillion. The average credit card APR is around 18%, and if we plug these two figures into a monthly repayment calculator and suppose that the debtor seeks to clear the balance in 5 years, then the average minimum monthly repayment is close to $120 and they’ll repay over $14,000 in total.
That’s not great, but it’s not that bad either, at least not at first glance. The problem is, it supposes that the debtor will stop using all credit card accounts, accumulate no more debt, and meet all monthly repayments. If not, their credit score will suffer, that 5-year term will almost certainly be prolonged, and there will be serious financial implications.
How Much Credit Card Debt Does the Average American Have?
The average credit card debt is said to be $6,506. According to data published by the Federal Reserve, store cards, which tend to have the highest rates, account for $1,901 of this total, while the average per account is $1,760. This data also tells us that the average amount spent on a card with no balance is $1,154, which means even individuals who clear their cards every month are spending in excess of $1,000 on them.
55% of Americans with credit cards have balances they don’t clear every month and credit card delinquency is increasingly common, accounting for around 2% of total credit accounts.
Which States Have the Highest Credit Card Debt?
You might expect the highest revolving credit card debt to be in New York or California, but it’s actually in Alaska. Connecticut follows closely behind. New Jersey, Virginia, Maryland, and Hawaii are next.
It’s no coincidence that these 6 states are all ranked in the top ten for the highest household income. The cost of living is also higher than the national average. The honor of the lowest average credit card debt goes to Iowa, Wisconsin, and Mississippi, where the cost of living is around 10% less than the national average.
Which Age Groups Have the Highest Debt?
Every few years the Federal Reserve conducts a survey that looks at debt across the age groups. Generational differences seem to have been in the news a lot lately, with Millennials and Baby Boomers often occupying opposing sides. It’s true that these generations have experienced life very differently with regards to opportunities, income, and debt, but they’ll both be happy to know that they have much less debt than other generations.
In fact, the last survey conducted by the Federal Reserve found that those aged 65 to 74 ($66,000) have a similar debt to those under the age of 35 ($67,400). Adults above the age of 75 have close to half that amount Gen Xers have the highest, nearly twice as much as Millennials and Baby Boomers.
Of course, we don’t need the Federal Reserve to tell us that debt is much less likely in those aged 75 and up. They’re often retired, have paid off the mortgage and are also more likely to have been in receipt of life insurance policies and inheritances. It will come as a surprise to many, however, to know that Millennials, on average, have half the debt of the generation that came before.
US Compared to Rest of World
Americans love credit, there’s no denying that. It’s very easy to acquire large amounts of debt in this country, and it’s just as easy to find a balance transfer card, personal loan, or debt consolidation loan to help you tackle it.
But why are things so different here when compared to the rest of the world?
Why is this Problem Worse in the United States?
American debtors have it much worse than debtors in other countries. Debt is more common, it tends to be much higher, and it’s widespread across all demographics.
It’s easy to understand some of the reasons behind this difference, but not all. As an example, take student loan debt, which accounts for a significant proportion of young adult debt. The average cost of education is just under $25,000 when accounting for all institutions (private schooling costs around $42,000 while public schooling is below $18,000).
Scholarships are available and many American families save money throughout the child’s lifetime so they can cover these fees when needed. The vast majority, however, are forced to acquire student loans, which can hang over their heads for years. In many European countries, college is free, and while there are some universities that charge, the fees tend to be significantly less, and the student loan systems are also more forgiving.
It’s the same with healthcare, which is cheap or free elsewhere, but hugely expensive in the US. However, it’s a different story with credit cards, so why is America’s average credit card debt so much higher than it is in other countries?
Why Average Credit Card Debt is Higher
There are many reasons America’s average credit card debt is higher than it is elsewhere, but the main reason is actually quite simple: American credit cards are better.
And we don’t mean that in a patriotic, “U. S. A!” way.
Take the UK as an example, as our cousins across the pond have a very similar financial system. They have balance transfer cards, reward cards, credit scores, credit reports—they even have many of the same credit card companies that we have.
But they don’t enjoy the same freedom that Americans have when it comes to choosing a credit card. Competition isn’t as high, and rewards average a mere 0.5% cashback. US credit cards, on the other hand, offer as much as 5% through introductory offers and 1% to 2% thereafter.
The average APR is also lower here in the US, clocking in at 24.7% in the UK and less than 18% in the US. What’s more, surveys in 2018 and 2019 suggest that Americans use cash for just 14% of purchases, while in the UK it’s closer to 40%, and we know that credit leads to more impulsive purchases.
Simply put, the US is more obsessed with credit and banks, card providers, and lenders are taking advantage of that. That’s why the average credit card debt is much higher.
Household Income vs Debt
The median household income in the US is over $62,000, but if you include student loans, credit cards, and mortgages, the average debt is close to $140,000. Take mortgages out of the equation and it drops below $40,000, but only just.
Discretionary income is over $1,700 a month on average, but once you consider interest repayments, unexpected bills, vacations, college funds, and additional living expenses, it doesn’t leave much to clear those household debts.
The Biggest US Credit Card Companies
The average credit card user has three cards. For most, their first card and their main card is provided by the same company that they bank with. The additional cards are reward cards and store cards as well as ones acquired solely for a balance transfer.
If you’re an average credit card user, there’s a high chance you will have at least one account with one of the following companies:
The first provider to offer a cashback scheme, Discover also has one of the best modern rewards cards. Known as the Discover It, this card rewards consumers with as much as 5% cashback.
Discover is mistakenly seen as a card that isn’t accepted in many retailer locations. However, while this may be true outside the United States, you shouldn’t have an issue using it domestically. A few years ago, a survey found that Visa and MasterCard were accepted in 9.5 million locations, while Discover was accepted in 9.3 million, just a fraction less.
American Express is one of the best providers of airmile programs and other rewards programs. It also has some of the most sought-after premium credit cards, which are offered to big spenders.
AMEX is actually the card that is accepted the least of all major providers. The study mentioned above found just 6.9 million retailers had embraced AMEX. However, it is accepted in more international locations than Discover.
Although figures are constantly changing, the most recent estimates suggest that there are around 1 million more American Express cards than there are Discover cards in the United States.
The Chase Freedom card is the most popular credit card in the United States, offering consumers a reasonable APR as well as several perks. Chase also offers the Slate card and provides cards on behalf of several major airlines, including British Airways.
In most cases, these cards are offered only to consumers with above-average credit scores, but they are not necessarily considered premium or elite user cards.
Mastercard is not the most popular credit card in the United States. In fact, there are around 191 million users of this card and over 320 million users of the card in first place. However, it is a long way clear of the other providers on this list. If you combine all users of Chase, American Express, and Discover cards then the number you arrive at is only just higher than the number of Mastercard users.
These cards are accepted in locations across the United States and all over the world. It’s the second biggest in the US, but it’s also the second biggest pretty much everywhere else.
It’s probably no surprise to see that Visa is number 1, as this is the biggest provider not just in the United States, but all over the world. There are more Visa credit cards and debit cards in existence than any other type; it is accepted in more locations, and it’s a brand name that is as instantly recognizable as Coca Cola and Sony.
Pros and Cons of American Credit Cards
- Multiple types of cards
- Huge rewards
- Many companies to choose from
- Accepted in most outlets nationwide
- Competitive rates
- Options for no credit and poor credit
- Can be too convenient
- High-interest rates
- Few options and high fees for consumers with bad credit
If you have a good debt-to-income ratio, a solid payment history, and you can meet your minimum payment obligations without issue, the US is a great place to acquire credit. Reward cards give you an incentive to spend, balance transfer cards allow you to move your debt around, and you get the feeling that every bank and lender wants your business and will trip over themselves to get it.
If you have none of those things, like so many millions of Americans, then it becomes a nightmare. There are debt counseling, debt settlement, and debt management services to help, but if you can’t meet your monthly payments, and you find yourself prioritizing debt repayments over food, clothing, and family days out, it can become depressing very quickly.
What Does the Future Hold?
Now we’ve looked at the current state of credit card debt in the US and have established that things look pretty bleak, that begs one question: How does the US government plan on approaching this issue?
The truth is, they’ll probably do very little. The only way to prevent those figures from rising is for American consumers to stop spending so much, but that hurts the economy. If you change the mentality of the average American consumer, focusing more on frugality and less on consumerism, the GDP takes a nosedive, the country’s biggest companies suffer, and America’s position on the world stage is notably weakened.
The world is moving away from cash and towards a completely digital payment structure. Cash will soon become a thing of the past and everything, from bills to bus fares and grocery shopping, will be purchased with credit, whether you’re using a credit card, a smartphone app, or some other new-fangled device. Once this happens, the issues facing credit card users become more pronounced and the country’s $14 trillion worth of consumer debt grows ever larger.
In simple terms, the situation will likely get worse for debtors and better for lenders, but if we continue down this road then maybe we’ll start seeing fewer punishments for credit card delinquencies and more options for struggling debtors.
There are over 100 million Americans crossing their fingers and hoping for just that.
Direct link to offer
- Signup for the Bank of America Business Cash Rewards Mastercard and get $750 statement credit when you make at least $5,000 in purchases within 90 days of account opening.
- No annual fee
- 0% introductory APR on purchases for the first 7 billing cycles
- Card earns 3% on up to $50,000 per year in one of the following 6 categories:
- Gas stations (default)
- Office supply stores
- TV/telecom & wireless
- Computer services
- Business consulting services
- Card earns 2% on dining; that combines with the 3% for the $50,000 limit
- Card earns 1% everywhere else, unlimited
- Preferred Rewards Business members get up to 75% bonus on these earning rates (the 3% can be as high as 5.25%)
Previous best bonus we’ve seen on this card was $500, with the same spend requirement. This is an extra $250. Bank of America does not report business cards to the personal credit bureaus, useful for those worrying about their Chase 5/24 status. Before applying make sure to read these things everybody should know about Bank of America cards. This will be added to the best business credit card bonuses.
Hat tip to reader Yet Another Redditor (YAR)
Advertiser Disclosure: This post includes references to offers from our partners. We receive compensation when you click on links to those products. However, the opinions expressed here are ours alone and at no time has the editorial content been provided, reviewed, or approved by any issuer.
Learn more about this card and find out how you can apply here.
The Capital One® Walmart Rewards™ Card, also known as the Capital One Walmart Rewards Mastercard, is a cash-back credit card with no annual fee. It’s designed for regular Walmart shoppers, especially those who frequent Walmart.com, and backed by one of the most popular credit card issuers around (Capital One).
Purchases at Walmart.com and the Walmart app, including groceries and sales marked for in-store pickup, earn unlimited 5% cash back. You earn unlimited 2% back for purchases made inside Walmart stores, at eligible restaurants and travel merchants, and at Walmart and Murphy USA gas stations — making this a solid contender for one of the best gas credit cards as well. All other purchases, including purchases at Sam’s Club locations and SamsClub.com, earn unlimited 1% cash back.
Beyond the rewards program, this card’s benefits are nothing to write home about, and the interest rates are on the high side. But the underwriting requirements are relatively loose, so this is an ideal first credit card for Walmart enthusiasts looking to build or improve their credit. With no annual fee and a rewards program that’s quite generous for Walmart and Murphy USA shoppers, the Walmart Rewards Card is worth keeping in your wallet.
Here’s how to get the most out of this card.
These are the most important features and perks of this popular retailer credit card.
For a limited time, get $50 when you spend $300 in purchases in the first 3 months. Plus, earn an additional 3% back when you use Walmart Pay for purchases made at Walmart stores for the first 12 months from account opening, for a total of 5% cash back on in-store Walmart purchases during the first 12 months.
Earning & Redeeming Cash-Back Rewards
The Walmart Rewards Card has a three-tiered cash-back program:
- Online purchases made at Walmart.com and through the Walmart app, including grocery pickup purchases and other purchases marked for in-store pickup at any physical Walmart location, earn unlimited 5% cash back (rewards rate).
- Purchases made at Walmart and Murphy USA gas stations (fuel stations), inside Walmart stores (store purchases completed at checkout), and with eligible restaurant and travel merchants earn unlimited 2% cash back.
- All other purchases, including those made at Sam’s Club locations, earn unlimited 1% cash back.
Cash back is automatically delivered at the end of the billing cycle and does not expire as long as your account remains open and in good standing. Your best redemption option is to redeem accumulated cash back for statement credits against eligible purchases made during the prior 90-day period.
Possibility of Promotional Interest-Free Period
The Walmart Rewards Card does not advertise a continuous introductory interest-free or low APR purchase or balance transfer promotion. However, its terms do include mention of special promotional periods that can eliminate interest charges for as long as 24 months at a stretch.
The interest-free period may apply to specific purchases or any purchases made while the promotion is active, depending on the terms of the promotion and Walmart’s discretion. It doesn’t necessarily apply only at sign-up, making it more versatile than standard introductory interest-free promotions.
This card has no annual fee or foreign transaction fee.
This card requires an average or better credit score. Although serious credit blemishes such as recent personal bankruptcies are likely to disqualify your application, more minor issues may not. It’s therefore an ideal credit card for consumers in the process of mending their credit.
These are the most important advantages of the Capital One Walmart Rewards Mastercard.
- No Annual Fee. The Walmart Rewards Card doesn’t charge an annual fee. This is great news for frugal cardholders and occasional Walmart shoppers who want to keep this card in their wallets without paying for the privilege.
- 5% Cash Back at Walmart.com. Frequent Walmart.com shoppers will love this card’s unlimited 5% cash back on the retail giant’s website. The same rate applies to grocery purchases and purchases marked for in-store pickup, so it’s perfect for bulky or heavy items for which shipping is costly or impractical.
- Potential for a Long Introductory APR Period. Although it doesn’t have a regular interest-free or low APR introductory promotion, this card does have periodic promotions that eliminate interest across the board or on specific purchases for as long as 24 months at a time. That’s great news for cardholders planning big-ticket purchases that they can’t afford to pay off right away.
- Loose Underwriting Requirements. This card is available to applicants with average or better credit. Although your approval is never guaranteed, you stand a better chance of making it through the application process with this card than with better-known cash-back cards that require excellent credit.
- Bonus Cash Back on Restaurant and Travel Purchases. This card earns 2% cash back on restaurant and travel purchases, making it a solid companion for diners and travelers without more generous travel rewards credit cards in their wallets.
- No Penalty APR. The Walmart Rewards Card doesn’t charge penalty interest on past-due payments. If you occasionally miss your statement due date due to irregular cash flow or unexpected expenses, you don’t have to worry about getting locked into a sky-high rate indefinitely.
Consider these drawbacks before applying for a Capital One Walmart Rewards Mastercard.
- Only 90 Days to Redeem Cash Back for Account Credits. When redeeming cash back for account credits, you’re only allowed to offset purchases going back 90 days. If you haven’t used your card for longer than that, you’ll need to make a purchase just to redeem your cash back.
- No Bonus Cash Back on Purchases Made at Sam’s Club Stores. This card earns just 1% cash back on purchases made at physical Sam’s Club stores. If you prefer to shop in person at the country’s second most popular warehouse store, you won’t get any more out of this card than any other standard-issue cash-back credit card — and possibly less. Several higher-earning cards such as the Capital One Quicksilver Cash Rewards Credit Card offer unlimited 1.5% cash back on all eligible purchases.
The Capital One® Walmart Rewards™ Card is a great entry-level cash back credit card for regular Walmart shoppers and drivers who encounter Walmart and Murphy USA stations in their daily travels.
Despite its relatively loose underwriting standards, the Walmart Rewards Card isn’t for everyone. If you don’t qualify for this card, look instead to the Walmart Credit Card, a store credit card with a similar rewards scheme.
The Walmart Credit Card isn’t backed by Mastercard or any other credit card payment network, so you can’t use it at merchants other than Walmart, but it’s nevertheless a great rewards-bearing vehicle for folks looking to build credit. And, considering you can buy pretty much anything at Walmart or Walmart.com, it’s versatile enough.
The average American is not saving enough for retirement, and this can easily lead to financial stress and even a scarcity mindset. Life expectancy rates are increasing and many retirees are finding that they under-saved and are running out of money. There are creative ways out there to fund your retirement account.
While retirement is a long time away for me and this may be the case for you as well, it’s important to contribute something for your financial future and aim to increase contributions each year. This can be challenging when you’re facing everyday expenses like housing and food as well as debt payments.
Luckily, you can fund your retirement account well without thinking about it all the time. I actually prefer to save for retirement automatically and just let my account grow in the background. Here are some of the easiest and most creative ways to fund your retirement over the years without overworking and obsessing about it.
Increase Your 401(k) Contributions By Your Annual Raise Amount
Contributing to your 401(k) offered through your job can be an excellent way to fund your retirement account. Contributions are automatic and pre-tax so you won’t even notice the money coming out. Plus, some employers even offer to match your contributions which is extremely helpful.
If you start off contributing a small percentage of your income to your 401(k), see if you can increase that amount each year if you get a raise. Create a budget that allows you to live comfortably on your existing salary. Then, take the difference from your raise and use it to increase your retirement contributions. For example, if you get a 5% raise one year, you may want to increase your retirement savings by up to 5% of your paycheck. That way, you’re automatically saving more and you won’t miss the money you didn’t have.
RELATED: 6 Financial Moves to Make During COVID-19 for Overall Financial Health
Earn Cash Back on Your Spending With EvoShare
EvoShare is a program that helps you earn cashback for purchases you make at popular retailers. The money you earn can be automatically added to your retirement account or put toward another financial goal. How it works is you’ll connect your Visa or Mastercard so purchases can be tracked. EvoShare partners with over 10,000 online and local merchants ad well as 700,000+ hotels worldwide.
When you spend money with a partnering retailer or hotel for travel, you’ll get cashback that will go directly toward your investments. EvoShare can be offered through your employer so be sure to ask them to sign up. Your entire team could likely benefit from an extra way to generate income to invest for retirement.
Easy and most creative ways to fund your retirement accounts over the years. Click To Tweet
Invest the Change With Acorns
Acorns is a free app that has put a whole new spin the saying ‘keep the change’. Instead of disregarding the change leftover from your purchases, Acorns will invest it on your behalf. Of course, Acorns works with your debit and credit cards so it won’t invest your physical change. Rather, your purchases will get rounded up to the nearest dollar so the difference can be invested.
For example, say you go through the drive-through and spend $4.50 at Starbucks. Acorns will round up the purchase to the nearest dollar and invest $0.50 for you. You can even set Acorns to round up your purchases to the nearest $2 or $3 to save at a more aggressive rate and you can also make regular contributions.
I’ve been adding an extra $5 per week to my Acorns account but you can do more or less depending on your preferences. The best part is that it’s small amounts of money that you likely won’t even miss. Yes, your balance can really add up over time.
RELATED: Acorns Review: Why It’s one of my Favorite Investment Strategies
Fund Your Retirement With Rebates
Sell Things Online and Invest the Profit
Do you have anything lying around your house that you can sell? I try to sell old stuff all the time online. We try to declutter as much as possible, but there are still items I could find around my home to sell all year round if I wanted to. You can also look into creating things that you can sell online. Consider selling crafts on Etsy or selling printables or e-books online.
This is something can could potentially become a passive stream of income for you. Plus, you can use all the profits you receive and add them to your retirement savings account. Imagine if you are able to earn $300/month by selling various items online. This is $3,600 per year that can be used to fund your retirement in an IRA or other type of account.
Do you feel like you’re saving enough for retirement? What are some of your favorite creative alternative ways to fund your retirement?
It’s many people’s least favorite time of year: tax season.
Between frantically searching for your tax forms, organizing your receipts, figuring out how much it’ll cost you to file and trying to remember the most recent updates to the tax code, tax season can be stressful … to say the least.
Thankfully, some smart software companies have made the process way easier — and, in some cases, even free.
Even the tax pros themselves are getting on board.
“I actually informally started my own tax practice using TurboTax to prepare people’s returns from my kitchen table,” said Ben Rugg, CPA.
So you can rest assured your taxes are in good hands with online tax filing services — and save yourself a boatload of money and stress.
Best Tax Software 2021: At a Glance
The three best online tax programs with paid plans are undoubtedly TurboTax, H&R Block and TaxAct. Here’s a quick look at how they stack up.
Note: The prices below are accurate as of Jan. 27, 2021 but may fluctuate throughout tax season.
Each of these three tax prep services offers a similar suite of options that are split among their free and paid tiers. The details and prices vary among them, so take a look at the features that are important to you to see which product is the right fit.
Tax Software Features, Compared
Each tax preparation service includes a free option for basic filers. What each covers varies, so which is best for you depends on how complex your tax situation is.
- H&R Block: H&R Block’s most basic online version covers earners whose wages come entirely from W-2 income, and also includes deductions for student loan interest and child tax credits.
- TurboTax: The TurboTax Free Edition covers W-2 income, the Earned Income Tax Credit (EIC) and child tax credits.
- TaxAct: This tier covers W-2 income; and tax breaks for dependent deductions, Earned Income Tax Credit (EITC) and other child tax credits, student loans and education expenses for current students, and retirement income.
Support for Complicated Returns
Each service offers almost identical paid tiers for more complicated tax returns: a “Deluxe” and a “Premier” or “Premium” tier.
These tiers help you prepare your taxes when you have additional deductions and credits to claim, or you have income from anywhere other than an employer.
- H&R Block: Deluxe covers additional deductions related to things like home ownership, charitable donations and Health Savings Accounts (HSAs). You’ll need Premium to cover income from freelancing, contract work, investments or real estate.
- TurboTax: Deluxe covers mortgage and property tax deductions, charitable donations, student loan interest, education expenses and 1099-MISC income from freelancing or contract work. Premier covers investment and rental property income, and refinancing deductions.
- TaxAct: TaxAct Deluxe is more comprehensive than the others; it covers itemized deductions, mortgage interest, real estate taxes, student loan interest, Health Savings Accounts (HSAs) and adoption credits. Premier adds options for investors, people earning royalties or K-1 income, rental property owners and foreign bank account holders.
Each service includes support for self-employment income in less expensive tiers.
But if the majority of your income comes from self-employment of any kind — as a freelancer, independent contractor or small business owner — you’ll benefit from tax prep support specifically tailored for self-employment and small business owners.
These versions are the most expensive of the basic online filing options, but they cost significantly less than paying an individual accountant to prepare your taxes. They’re a budget-friendly way to tackle your complicated paperwork and ensure you don’t miss out on vital tax breaks.
All three services provide the same basic support for self-employed filers, but here are some highlights that could help you choose:
- H&R Block: An interview-style process walks you through industry-specific expenses and deductions you might miss on your own, and you’ll have access to tools covering asset depreciation.
- TurboTax: Get a host of perks designed specifically for freelancers, including deductions for your line of work, ability to import your 1099-MISC with a photo, free access to Quickbooks Self Employed and access to a year-round tax estimator after filing.
- TaxAct: Gain the ability to calculate personalized business deductions, calculate depreciation and access year-round planning resources.
Live Tax Assistance
All three companies offer tax help from real, live tax professionals — and this option is where they differ the most. Pay attention to these options if live tax support is important to you!
- H&R Block: This is the only of the three that runs brick-and-mortar locations, where you can meet with a tax pro face-to-face. It also lets you upload documents online or drop off paperwork to let them prepare everything for you. Like the others, H&R Block also offers online assistance; you can pay an additional fee to get on-demand access from a tax professional while you prepare your returns through the DIY software.
- TurboTax: In place of the DIY products, you can purchase TurboTax Live in similar tiers for on-demand answers to your questions and a line-by-line review of your returns by a CPA or EA.
- TaxAct: TaxAct builds live assistance into its tiers. You can’t get it with the free version. Deluxe includes live phone support. Premier and Self-Employed include live phone support plus screen sharing.
H&R Block or TurboTax should be your go-to services if you’re concerned about a complicated tax audit. TaxAct doesn’t provide audit support for most customers.
- H&R Block: The company’s Peace of Mind Extended Service Plan lets you take in any notification from the IRS to figure out what it means and get access to representation by an H&R Block enrolled agent if you need it.
- TurboTax: Through its Audit Support Center, TurboTax customers get access to live, one-on-one guidance online in case of an audit.
- TaxAct: TaxAct does NOT provide audit support itself. It gives TaxAct Professional users (tax pros filing taxes for clients) access to third-party service Protection Plus Audit Defense.
H&R Block, TurboTax and TaxAct all have mobile apps available for both iOS and Android. All three offer comparable functionality, though TaxAct’s apps are rated a little lower in their respective app stores than the other two.
Need money now? H&R Block and TurboTax both offer a tax refund advance, while TaxAct does not. An advance from H&R Block will cost you a lot more than one from TurboTax.
- H&R Block: The Emerald Advance line of advance credit to put up to $1,000 of your tax refund in your pocket before you file through a Mastercard debit card with a $45 annual fee and 36% interest rate.
- TurboTax: The service offers an advance up to $3,000 (typically around 50%) of your expected federal tax refund with 0% interest and $0 loan fees. Eligible customers get access to funds within a few hours via Visa debit card.
- TaxAct: TaxAct doesn’t offer a tax refund advance.
Pay with Your Refund
All three services let you use your tax refund to pay for product and filing fees, so you never see an out-of-pocket cost for your tax preparation. The competition is in the fees.
- H&R Block: $39.
- TurboTax: $39.99.
- TaxAct: $17.99 if you’re receiving your refund by direct deposit or $9.99 if you’re receiving it on a PayPower reloadable debit card.
The companies offer different levels of peace of mind for using their products.
- H&R Block: If there’s an error in your tax return, H&R Block will reimburse you for up to $6,000 in additional taxes owed due to its mistake.
- TurboTax: If you tally up a larger refund (or similar tax liability) with another tax preparation service, TurboTax will refund your fee (or pay you $30 if you used the Free edition).
- TaxAct: If there’s an error on your tax return, TaxAct will reimburse you for up to $100,000 in additional taxes owed dues to its mistake, plus refund your TaxAct fees. If you’re not totally satisfied with TaxAct for any reason, you can discontinue using it before completing your return and paying the fee.
To prepare and file your taxes online with each service, you’ll pay a product fee, filing fees for state returns, and — depending on the company — fees for live tax professional assistance.
Here’s how they compare.
Alternatively, you can download tax preparation software from each company, so you can save your tax information on your own computer. Software products are tiered similar to online tiers and include a one-time download fee and filing fees.
H&R Block vs. TurboTax vs. TaxAct: Which Is Best for You?
Any of these popular, tested tax preparation services are a good fit for you if you want to DIY your tax returns this year and file online — with added assurance from software or tax pros that you’re doing everything right.
Here are a few standout differences among H&R Block, TurboTax and TaxAct that might help you pick the best product for your situation.
H&R Block is best for you if…
- You want access to in-person tax pros. H&R Block is the only of these three services that runs brick-and-mortar offices where you can work with tax pros face-to-face.
- You’re concerned about a complicated audit. Both TurboTax and H&R Block provide audit assistance, but H&R Block’s service offers a better user experience and is available in-person — which could be comforting in a stressful situation.
- You own a small business. All three services provide ample support for self-employed filers, but H&R Block has the most robust suite of services for year-round tax support.
TurboTax is best for you if…
- You want live, online help. TurboTax offers online assistance with tax pros comparable to H&R Block’s service at a lower price, and Free filers get free online assistance.
- You want to guarantee the biggest refund. TurboTax’s Maximum Refund Guarantee promises to refund your fees if you find a better refund with a different service.
- You’re a freelancer. TurboTax’s self-employed editions offers some of the most user-friendly and robust assistance specifically designed for freelancers and independent contractors.
- You need a refund advance. Eligible customers get access to a larger advance at no added cost, compared with a smaller advance for an annual fee and interest charges at H&R Block.
TaxAct is best for you if…
- You’re shopping for the lowest cost. TaxAct beats its competitors significantly on price at every tier and provides live assistance from a tax professional at no additional cost.
- You’re concerned about accuracy. Every tax service comes with an accuracy guarantee, but TaxAct offers one of the highest reimbursement levels at $100,000.
6 Ways to Get Free Tax Filing & Prep Assistance
In addition to these top options for affordable online filing, you can find tons of free ways to file simple returns online for free.
1. IRS Free File
You can always file your federal taxes for free-free, if you’re eligible, through the IRS Free File portal. This service is available to filers who earned $72,000 or less (in 2020), and the page also links to free fillable forms for earners at all levels.
The IRS doesn’t directly provide this service, but it partners with 13 tax preparation companies — like H&R Block and Jackson Hewitt — to facilitate your process.
2. United Way MyFreeTaxes
If you made less than $66,000 in 2019*, take advantage of United Way’s MyFreeTaxes program to file federal and state taxes online for free.
The site notes that 100 million Americans qualify for this free filing option, powered by H&R Block.
*Information for tax year 2020 wasn’t available as of this writing, but we suspect it’ll continue to be in line with the IRS Free File requirement of $72,000.
If a 1040EZ is all you need to file, TaxSlayer will help you do it online for free. The Simply Free edition offers a deduction finder, and you can add your state returns at no charge.
Active duty military members can file a federal return for free, regardless of your tax situation.
EFile offers free basic federal filing and advises this option if you’re single or married and filing jointly with no dependents. You can get 50% off the state filing fee with the promo code “50eFile.com.”
5. Volunteer Income Tax Assistance Program (VITA)
Get help with basic tax prep from an IRS volunteer through the Volunteer Tax Assistance Program (VITA) and Tax Counseling for the Elderly (TCE) programs. VITA assistance is available to:
- People who “generally make $57,000 or less” (for tax year 2020).
- People with disabilities.
- Limited English-speaking filers.
TCE assistance is available for filers over age 60, and volunteers specialize in questions about pensions and retirement-related issues.
All volunteers are certified by the IRS and many have professional backgrounds in accounting and finance.
6. Credit Karma Tax
Credit Karma provides free federal and state tax filing for the most common tax forms, including those for more complex tax situations, like business income (Schedule C) and itemizing deductions (Schedule A).
Plus, when you create an account to use Credit Karma Tax, you’ll also get access to Credit Karma’s other free services, including a look at your credit scores from TransUnion and Equifax, details from your credit reports and credit score monitoring.
Should You Do Your Own Taxes or Hire a Tax Pro?
So you can file your own taxes from the comfort of your home… but should you?
Rugg told us that some circumstances add new levels of tax considerations you might miss if you don’t bring in a professional eye.
“There are five situations where taxpayers should consider using a professional — when they get married, when they buy a home, when they have a child, when they have investments and/or when they are self-employed,” he said.
One of these events might trigger you to work with a tax pro every year after. Or you might just want to bring in help for the tax year when the change happens so you can get a better understanding of your situation, the forms you’ll need; and the deductions, credits and additional tax liabilities you should know about.
You probably don’t need to work with a tax expert if you’re a single W-2 employee with no dependents or property. You should be able to easily find free a tax software/platform, instead of paying for guidance from a real person or pricy software.
We hope with the best online tax preparation software at hand, April 15 doesn’t seem so ominous anymore.
Just don’t wait until April 14 to file your taxes, and you’ll be fine.
Dana Sitar (@danasitar) has been writing and editing since 2011, covering personal finance, careers and digital media.
Savvy savers know that a warehouse club membership can easily pay for itself — and then some — over the course of a year. The key to saving money at these stores is to know how to shop wisely.
Sam’s Club is among the most popular of warehouse clubs. And with a little schooling, you can learn how to use your membership to save even more.
Sam’s Club benefits are based on your membership level:
- Plus: $100
- Club: $45
Following are some great ways members can save a little more at Sam’s Club. If you’re not ready to become a Sam’s Club member yet, check out “How to Shop at Sam’s Club Without Being a Member.”
Shop through a cash-back site
You can save even more at Sam’s Club when you shop through a cash-back website. For example, Rakuten members recently could get up to 8% in cash back on Sam’s Club purchases simply by shopping through Rakuten.
Earn rewards for shopping
Plus members at Sam’s Club get 2% back on qualifying purchases — up to $500 annually.
Your rewards are loaded onto the Sam’s Club Plus Member account about two months before the end of the membership year, the retailer says.
Get free and discount prescriptions
Millions of us take prescription drugs on an ongoing basis. Sam’s Club can help you save a bundle on these medications Five drugs are free for Plus members at a 30-day supply. They are:
- Vitamin D 50,000 IU
In addition, Plus members can get more than 600 generics for $10 or less. They can also save on many brand-name drugs.
This program is not available in every state. So, check with your Sam’s Club to see if you are eligible.
Save on your next pair of eyeglasses
Warehouse club memberships can be a great way to save on eyewear. Plus members get 20% off a complete pair of eyeglasses and free shipping on contact lenses.
Earn cash back with a Sam’s Club credit card
If you are looking for more rewards, consider opening a Sam’s Club Mastercard account. It’s available to both Plus and Club members.
You’ll receive cash back on the following purchases up to $5,000 annually:
- 5% cash back on gasoline (on the first $6,000; then 1% after)
- 3% cash back on dining
- 1% cash back on all other purchases
If you are looking for other types of rewards — or simply want a credit card that offers other benefits, like a lower interest rate — go to the Money Talks News Solutions Center and find the right card for you.
Enjoy instant savings
As a Sam’s Club member, you’ll be able to take advantage of Instant Savings — which are discounts on top of the warehouse club’s already low prices.
This benefit is available to both Plus and Club members.
Pick up perks at the Tire & Battery Center
Sam’s Club members get free flat repairs. That’s true even if you purchase your tires elsewhere. Other benefits include free battery testing and free wiper-blade installation.
This is available to both Plus and Club members.
Grab discounted gift cards for your favorite retailers and restaurants
Sam’s Club members can choose from an array of retailer gift cards that the warehouse club sells at a discount.
For example, we recently saw the following deals:
- $50 of Spa Week gift cards for $37.50
- $50 in Steak ‘N Shake gift cards for $37.50
- $100 in Chili’s gift cards for $85.98
Get email alerts and check out Shocking Values
Sign up for email alerts from Sam’s Club, and you’ll learn about ways to save when shopping online every day.
In addition, visit the Sam’s Club website’s Shocking Values page to find out about the latest deals. We recently saw a Honeywell 5000 Lumen LED utility light — normally priced at $159.98– for $64.98.
Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.
Not all co-branded hotel credit cards come with the most attractive features — such as travel credits or lounge perks — but that doesn’t mean they offer no value at all.
The Best Western Rewards® Premium Mastercard® is particularly useful in conjunction with the Best Western Rewards program, but it’s no secret that this program’s points aren’t worth the most among the available choices (0.7 cent a piece). The program doesn’t offer the most innovative perks, but its rewards earning rate on stays is quite high.
Overall, the card gets the job done for guests who often stay at Best Western properties, whether it’s for work, for leisure or both. Here’s how to get the most from the Best Western Rewards® Premium Mastercard®.
Ways to maximize the Best Western Rewards® Premium Mastercard®
Use your card at Best Western locations
As a Best Western Rewards member, you can choose a lodging option from more than 4,200 properties in over 100 countries and territories. Using the Best Western Rewards® Premium Mastercard® to book your stay allows you to maximize your rewards earning capability.
As a card member, you’ll earn 20 points per dollar spent at Best Western locations when you book directly with the chain: 10 base points for being a Best Western Rewards program member, and another 10 points for using your Best Western Rewards® Premium Mastercard®. Earning double rewards helps you get to free nights faster.
Book rooms online
If the bonus points aren’t enough to entice you to book directly with Best Western, your stay will also be cheaper if you book it at a special rate available to cardholders.
Best Western Rewards® Premium Mastercard® members receive a 10% discount on flexible-rate rooms booked online at Best Western’s site. Every bit of savings adds up, and the discount is worthwhile for brand loyalists who regularly spend money on nights with the chain.
Book free nights using the welcome bonus
The card also comes with a nice welcome bonus: 80,000 points when you spend $3,000 in the first 3 billing cycles after the account is opened, plus 40,000 points when you spend $5,000 every 12 billing cycles.
Free award nights within the Best Western Rewards program start at 5,000 points, which means that you can book several free nights with no blackout dates using your welcome offer.
Nerd tip: The more expensive your award nights are, the fewer free nights you’ll be able to book. It all depends on the property you wish to visit.
Take advantage of Platinum Rewards status
Best Western Rewards® Premium Mastercard® customers earn automatic Platinum Rewards status. This membership tier comes with a few extra perks, such as 15% bonus points on an eligible stay and complimentary water on arrival.
Although it’s not a huge rewards boost, it’ll help you earn free nights a little quicker than you would without any elite status.
Meet the annual spending threshold to earn bonus points
To earn even more bonus Best Western Rewards points, make sure to keep using your Best Western Rewards® Premium Mastercard® on everyday purchases. Once you spend $5,000 on the card during each membership year, you’ll earn another trove of bonus points to pad your point balance.
Whether you visit family in another city or go on a long weekend road trip, the extra points could come in handy.
The bottom line
The Best Western Rewards® Premium Mastercard® comes with a $89 annual fee, which means you have to consider its benefits and whether they outweigh the fee in your situation.
One easy calculation to determine its potential value is to multiply the annual fee by 10. If you spend this amount on stays at a flexible rate every year, and get the 10% discount back on every stay, your out-of-pocket cost will be $0. Everything you save beyond that will be an added bonus.
How to Maximize Your Rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2021, including those best for:
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Editorial Note: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.