The cost of carrying gold in your wallet is about to get more expensive.
As of July 25, 2024, the annual fee on the American Express® Gold Card is increasing to $325, up from $250. Terms apply; see rates and fees. Existing cardholders will see the annual fee increase starting Oct. 1, 2024.
Accompanying the higher annual fee are new dining-based perks; an annual cap on qualifying bonus spending at restaurants; the ability to select a limited-edition card design; and a shake-up of the merchants where the card’s monthly dining credit can be used.
Through Nov. 6, 2024, new cardholders can also grab an enhanced welcome offer.
Here’s what you should know.
What’s new with the American Express® Gold Card?
The American Express® Gold Card hasn’t had an overhaul this significant since 2018, when it increased its annual fee to $250 (from $195) and added more rewards and goodies. Here’s what’s changing this time:
Annual fee: Increase to $325 (up from $250).
Increased welcome bonus: From July 25 to Nov. 6, 2024, new cardholders can earn 60,000 Membership Rewards points, plus 20% back on restaurant spending worldwide (up to $100) after spending $6,000 on eligible purchases on your new card in your first 6 months of card membership
New cap on bonus rewards at restaurants: Cardholders will receive 4x points on dining purchases worldwide (including takeout and delivery) on up to $50,000 in annual spending. Purchases above the cap will earn 1x point. Previously, there was no spending cap in this category.
New $50 semiannual Resy credit: Get $100 in annual statement credits, issued as two $50 semiannual credits, after enrolling and using your card on eligible purchases at U.S. restaurants on the Resy app or on Resy.com.
New $7-per-month Dunkin’ credit: Receive $7 per month in statement credits after enrolling and using your card at Dunkin’ Donuts locations in the U.S.
Updated $10-per-month dining credit: Five Guys is now an eligible restaurant for the $10-per-month ($120 annual) dining credit, adding to the existing list of Grubhub, The Cheesecake Factory, Wine.com and Goldbelly. Milk Bar and Shake Shack have been removed as eligible restaurants for the dining credit.
New card design: New cardholders can select a limited-edition white-gold card design (while supplies last), in addition to the existing gold and rose gold design options.
Terms apply.
What’s staying the same?
New and current cardholders will continue to enjoy the card’s existing credits and benefits, including:
$10 per month in Uber Cash credits (up to $120 annually) toward Uber Eats or Uber rideshares.
4x points at restaurants worldwide (now with the $50,000 annual cap).
4x points at U.S. supermarkets on up to $25,000 in purchases per year.
3x points on flights booked directly with airlines or AmEx Travel.
Terms apply.
What it means for cardholders
The new $325 annual fee represents a 30% increase over the previous fee of $250. (The fee increase in 2018 represented a 28% hike.) Whether these new changes are worth that much will depend on your spending habits and how well you actively manage your card to take advantage of the recurring credits. The new perks follow the coupon-book model American Express is using to offer more perceived value at a higher cost for their premium cards, like the American Express® Gold Card and the The Platinum Card® from American Express. However, adding more benefits for specific merchants makes the card more complex to optimize for some.
That said, the new welcome offer should suit many people well. Maximizing the 20% cash back on restaurant spending (up to $100) would require only $500 eligible dining expenses, and 60,000 points could take you far. NerdWallet values American Express Membership Rewards points at between 1 cent and 2.8 cents each (depending on how you redeem them). Between the points and the dining incentive, you could easily cover the annual fee for the first year before accounting for any additional monthly or semiannual credits.
If you work hard amassing miles and points, it’s worthwhile to know that while some credit card rewards die with you, there are issuers who allow redemptions or transfers after death.
Here’s a closer look at what happens to credit card rewards when you die, as well as what steps you can take to avoid forfeiting your rewards.
What Are Credit Card Rewards?
Credit card rewards are a type of currency that can come in the form of credit card points, miles, or cash back rewards. They’re designed to incentivize cardholders to make eligible purchases on their rewards credit card.
As you make purchases and earn various credit card rewards, you can choose to hold onto the rewards in your account until you have enough to redeem toward a high-value purpose. Each rewards program lets cardholders redeem rewards in different ways, depending on its rules. Common redemption options include statement credits, travel bookings and reservations, special experiences, merchandise, gift cards, and more.
Recommended: Tips for Using a Credit Card Responsibly
What Happens to Your Credit Card Rewards Upon Death?
Having a stockpile of credit card rewards after death might lead to a sticky situation for your surviving family. Akin to your credit card debt after death not passing on to your survivors in some states, some credit card rewards “die with you” and can’t be redeemed or transferred to your family or estate.
Conversely, some credit card issuers, like American Express, offer a limited period during which authorized trustees of your estate can redeem unused rewards. Certain programs that permit reward redemptions or transfers after death might require the outstanding account balance to be paid in full.
In other words, what happens to your credit card rewards after you pass on depends on the terms laid out in your rewards program agreement. Some rewards terms specifically state that rewards aren’t the property of the cardholder and can’t be transferred through inheritance.
Recommended: What Is the Average Credit Card Limit
What To Do With Credit Card Rewards if the Account Holder Dies
If you know that your deceased loved one amassed credit card points, miles, or cash back rewards, there are a few steps you can take to address it:
1. Check on accounts and rewards balances. If your deceased loved one gave you access to their account before their death, log in to get an overview of their remaining rewards balances across all accounts. If you don’t have access to their accounts, proceed to the next step.
2. Prepare paperwork. You’ll likely need to provide proof of the primary cardholder’s death, such as a copy of their death certificate. Additionally, you might need to provide the name and contact information of the authorized trustee, letter of testamentary, or other details.
3. Contact the card issuer. You must inform the card issuer in the event of a primary cardholder’s death. Supply the necessary documentation you’ve gathered, and inquire about your options to redeem the rewards.
Generally, credit card companies offer at least one of a few options, though how a credit card works will vary by issuer. The rewards might be forfeited if they’re non-transferable or expire upon the cardholder’s death. Some credit card terms automatically convert the rewards into a statement credit, while other issuers allow rewards redemption or transfers to another existing, active account.
Ways You Can Avoid Forfeiting Your Credit Card Rewards
You’re ultimately at the mercy of a reward program’s user agreement in terms of what to do with credit card rewards after death. However, planning ahead can help you avoid relinquishing earned rewards.
Not Hoarding Your Points
To avoid facing a scenario in which your credit card rewards die with you, make an effort to redeem credit card points or miles on a rolling basis.
For example, at the end of each year, use credit card rewards to travel for less money or apply them to your account as a statement credit. Keep in mind that different redemption options have varying valuations, so look into which redemption strategy makes sense for your situation.
Choosing Cards With Favorable Death Terms
Although a particular program might offer enticing rewards — such as the chance to enjoy credit card bonuses — it might not be advantageous if the program has strict terms regarding a cardholder’s death.
American Express, for instance, has relatively lenient terms when dealing with the rewards balances of a deceased cardholder.
Recommended: How to Avoid Interest On a Credit Card
Using a Reward-Tracking Tool
If you have multiple rewards credit cards in your rotation, using a reward tracking app can help you and your surviving family organize and track your rewards. Apps like AwardWallet and MaxRewards can let you easily see all of your rewards in one view.
Naming a Beneficiary in Your Will
Although it’s not a foolproof way to avoid forfeiting your credit card rewards, adding a beneficiary to your will is a smart move. This way, if your card issuer allows rewards transfers or redemptions by authorized individuals, your beneficiary is formally named on your estate documents as your desired recipient.
The Takeaway
Since there’s no way to know when an accident or unforeseen health issue will result in your death, it’s best to be prepared. If possible, redeem earned credit card rewards in a timely manner so you can enjoy them in life. Or consider such steps as naming a beneficiary in your will or racking up rewards on a card with lenient transfer policies.
Whether you’re looking to build credit, apply for a new credit card, or save money with the cards you have, it’s important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
Can I transfer points from the account of a late family member?
Whether you’re allowed to transfer points from your deceased relative’s rewards credit card account depends on the card program’s rules. Some banks allow points transfers, while other programs state that points are non-transferable. Contact the card issuer’s customer support team to learn about its point transfer policy.
Can an authorized user use credit card rewards upon the death of the account owner?
It depends. Not all credit card rewards programs allow authorized users to use a primary cardholder’s earned rewards. Those that do might have restrictions on how and when rewards can be redeemed after a primary user’s death, if at all.
What happens to the miles when someone dies?
Miles earned by a deceased primary credit card rewards cardholder might be forfeited, transferred, or redeemed by the estate or surviving family, depending on the rewards program. Terms vary between card issuers, and even across travel rewards programs, so call the program’s support team to learn about its terms.
Can estates redeem points after death?
Some rewards credit cards allow estates to redeem points after the primary cardholder’s death. American Express, for example, allows estates to request points redemption by submitting a formal written request with documentation.
Photo credit: iStock/supatom
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Looking to learn how to make money without a car? It might seem hard to make money without a car, but there are actually many ways to do it. You don’t need a vehicle to find opportunities that can earn you extra cash or even a full-time income. Whether you want to work from home…
Looking to learn how to make money without a car?
It might seem hard to make money without a car, but there are actually many ways to do it. You don’t need a vehicle to find opportunities that can earn you extra cash or even a full-time income.
Whether you want to work from home or find gigs in your neighborhood, there are plenty of options available to you.
Best Ways To Make Money Without a Car
Below are the best ways to make money without a car.
Here’s a quick summary of my favorites:
Best way to make money without a car by freelancing – Proofreading
Best way to make money without a car to work by yourself – Blogging
Best way to make money without a car for passive income – Selling printables
Best way to make money without a car for people who like numbers – Bookkeeping
1. Blogging
Blogging is a great way to make money without needing a car. You can write about topics you love and share your knowledge with others. All you need is a computer and an internet connection.
I started Making Sense of Cents in 2011, and I’ve made over $5,000,000 with my blog. I began my blog just to share my own money journey. At first, I didn’t even know people could make money from blogging or how to create a successful blog! I didn’t plan to make money with Making Sense of Cents, but after six months, I started earning from it.
And, it all started from home, where I didn’t need a car (and I still don’t need a car to do this job).
Starting a blog takes time and effort, but it can be very rewarding. Plus, you can do it all from the comfort of your home.
Learn more in my How To Start A Blog FREE Course. In this free course, I show you how to create a blog, from the technical side to earning your first income and getting pageviews.
2. Proofreader
Being a proofreader is a great way to make money without a car. You can do this from the comfort of your home. Many companies and individuals need proofreaders for their articles, books, and websites.
To start, you need a strong grasp of the English language (or whatever language you are proofreading in). Good attention to detail is also important. You don’t need a degree to become a proofreader, but it helps to know common style guides.
Proofreaders can make good money, and according to Salary.com, the average proofreader salary is $58,284 a year.
Proofreading is flexible. You can choose your own hours and work as much or as little as you want. This makes it a great side hustle or even a full-time job.
Learn more at 20 Best Online Proofreading Jobs For Beginners (Earn $40,000+ A Year).
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This free training teaches you how to start a proofreading side hustle (and how to earn $1,000+ per month!), even if you are brand new and don’t have any previous proofreading experience.
3. Sell printables on Etsy
Selling printables on Etsy is a great way to make money without needing a car. Printables are digital files like planners, calendars, art prints, and more.
Making printables on Etsy is a great idea because you only need to create one digital file per product. You can then sell that file as many times as you want.
Learn more at How I Make Money Selling Printables On Etsy.
Do you want to make money selling printables online? This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
4. Dog walking
Dog walking is a fun way to make money without a car. You get to spend time with dogs and get some exercise too. Many people need help walking their dogs, especially if they have busy schedules.
There is a good chance that some of your neighbors within walking distance may need some help with their pets, and this is where you come in!
You can start by letting your neighbors know you are available. Put up flyers or post about your services in local online groups. Another great way to find clients is through dog walking apps like Rover and Wag that connect dog walkers with pet owners.
If you use an app like Rover, you can also offer pet sitting services. This can increase your earnings by taking care of pets overnight.
Dog walking usually pays between $15 and $25 per walk. If you walk several dogs in a day, it can add up quickly. For overnight stays, you might earn $25 to $70+ per day.
5. Freelance writing
Freelance writing is a great way to make money without a car. You can work from home or anywhere with an internet connection. All you need is a computer and some writing skills.
You can write blog posts, articles, or even social media content. Many companies need writers to create content for their websites and marketing materials.
Freelance writing lets you choose your own hours. You can work as much or as little as you want. This makes it a great option if you have other commitments like school or another job.
There are many websites where you can find freelance writing jobs. Examples include Upwork, Freelancer, and Fiverr. Some companies also hire writers directly through job postings on their websites.
I have been a freelance writer for years, and I think it’s a great way to earn income from home, without needing a car.
6. Virtual assistant
You can make good money by becoming a virtual assistant (VA). As a VA, you help clients with various tasks from your home.
Companies and busy professionals need help with things like managing emails and scheduling appointments. You can do this using just a computer and the internet.
Some VAs specialize in things like social media management. Others focus on tasks like data entry or customer service. You can choose what you want to do based on your strengths.
Working as a VA lets you set your own hours. You don’t need to commute anywhere since everything is done online, so this makes it perfect if you don’t have a car.
7. Online tutoring
Online tutoring is a great way to make money without needing a car. You can teach from the comfort of your own home and set your own schedule. There are many websites where you can sign up and start tutoring students in different subjects.
All you need is a computer and an internet connection. Tutor Me Education, for example, connects you with students looking for help in over 200 subjects. You create a profile, and students reach out to you.
If you enjoy teaching, this can be a fun and rewarding way to earn money. It’s also flexible, so you can work as much or as little as you want. This makes it easy to fit tutoring into your busy life.
Some tutoring platforms might require you to have some qualifications, but many are open to anyone with knowledge in a particular area. This means almost anyone can become a tutor and start making money.
8. Selling print-on-demand products
Selling print-on-demand products is a great way to make money without needing a car. You can create your own designs for T-shirts, mugs, and more. Once a customer orders, the product is made and shipped directly to them.
You don’t need to handle any physical inventory. This means you can work from home and all you need is an internet connection and some creative ideas.
Platforms like Etsy, Amazon, and Shopify make it easier to sell your print-on-demand products. They connect you to millions of potential buyers. You can also use services like Printify and Printful to help produce and ship your items.
Starting your own print-on-demand business involves little upfront cost. You only pay for the production of the item when a sale is made, so this reduces your financial risk significantly.
9. Graphic design
If you love art and design, graphic design can be a great way to make money. You don’t need a car for this job because you can do all your work from a computer at home.
Many businesses need logos, social media graphics, and other visual content.
You can find clients on platforms like Fiverr and Upwork, and you can start with small projects to build your portfolio. Once you have a few happy clients, you can charge more for your work.
10. Data entry
Data entry is a simple way to make money from home. You don’t need a car, and you can work in your pajamas (amazing, right?!).
Data entry workers type information into computer systems. Companies need people to enter data accurately and quickly, and this could be anything from names and addresses to inventory numbers.
These jobs can pay anywhere from $12 to $25+ per hour. The pay depends on the company and the complexity of the task.
Data entry is a flexible job. You can often set your own hours and work when it’s convenient for you.
While it may not be the most exciting job, it’s straightforward and doesn’t require a lot of training. This makes it a good option if you need to earn some extra cash.
11. Transcription services
Transcription work is a great way to earn money from home. You listen to audio files and type what you hear. Many companies hire beginners, so experience isn’t always necessary.
The pay varies, usually from $5 to $25 per audio hour.
Working as a transcriptionist can be flexible. You pick the hours you want to work, so this makes it easier to fit into your schedule.
Make sure you meet the typing speed requirements. Most companies look for accuracy and speed. Start practicing if you need to improve in these areas.
Learn more at 18 Best Online Transcription Jobs For Beginners To Make $2,000 Monthly.
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In this free training, you will learn what transcription is, why it’s a highly in-demand skill, who hires transcriptionists, how to become a transcriptionist, and more.
12. Dropshipping
Dropshipping is a great way to make money without a car. You don’t need to buy any stock up front. When a customer buys from your online store, you order the product from a supplier who ships it directly to them.
To start, find a popular product that people want. Use free tools like Google Trends to see what’s in demand. You could sell anything from phone accessories to pet supplies.
Dropshipping allows you to run a business from anywhere. All you need is a computer and internet. It’s perfect if you don’t have a car.
13. Affiliate marketing
Affiliate marketing is a great way to make money without a car. You can do it right from home or anywhere with an internet connection.
In affiliate marketing, you promote products or services for companies. When someone buys through your referral link, you earn a commission.
It does take time and effort to be successful. You’ll need to create content, like blog posts or social media posts, to share your affiliate links.
You could promote anything from clothes to electronics to digital products like ebooks or courses. Pick something you like and know about to make it easier.
For me, I have been doing affiliate marketing for years, and I think it’s a great way to make money at home without a car.
Learn more at Affiliate Marketing Tips For Bloggers – Free eBook.
14. Get roommates
Rent can be really expensive. If you want to save money or even make some extra, getting roommates can help.
When you share your place with others, you split the rent and utility bills. This makes living costs lower for everyone.
Finding roommates isn’t hard. You can ask friends or use sites like Facebook or Craigslist. Of course, you’ll want to make sure to choose people you get along with well.
15. Answer surveys
Answering surveys is an easy way to make some extra money without needing a car. Many market research companies want to know what you think about their products or services. They will pay you for your opinions in PayPal cash or free gift cards.
Each survey can take anywhere from a few minutes to half an hour. While you won’t become rich, it’s a simple and flexible way to make a small but steady income on the side. Even earning a few dollars here and there can add up.
The survey companies I recommend signing up for include:
American Consumer Opinion
Survey Junkie
Swagbucks
InboxDollars
Branded Surveys
Prime Opinion
Five Surveys
PrizeRebel
Pinecone Research
I have been answering surveys for years, and I have always liked how I can answer them at home without having to go anywhere. That makes it very easy!
16. Make money on YouTube
Starting a YouTube channel is a popular way to make money online, especially if you don’t have a car. You can record videos with your phone or camera, and you don’t need much else to get started.
You can make a YouTube channel about many different topics like money, home, travel, toys, pets, and more. There’s a YouTube channel for almost everything, and there’s still room for more!
In your YouTube videos, you can add links to products you recommend, earn money from ads that play during your videos, get paid by brands to show their products, and even sell your own items.
Recommended reading: How Much Do YouTubers Make?
17. Mow lawns in your neighborhood
Mowing lawns in your neighborhood can be a great way to make extra money without needing a car. Many people need help keeping their lawns neat, such as older adults or busy families.
To get started, you really only need basic lawn care equipment, like a mower and trimmer.
Next, spread the word about your lawn care services. Talk to your neighbors, put up flyers, or post on community boards online.
18. Deliver food on a bike
Not all food deliveries are by car – plenty can be done by bike, depending on where you live! Thanks to today’s gig economy, you have plenty of options depending on where you live.
If you live in a city, delivering food on a bike is a great way to make money part-time as a side gig or even full-time. You can work for companies like Uber Eats, Instacart (this is for grocery shopping delivery), or Postmates. These apps allow you to deliver by bike in many cities.
Biking means you don’t spend money on gas or car maintenance. Plus, it’s good exercise. You can even do food delivery by e-bike or scooter if you prefer.
Note: You do still have to do a background check, even though you won’t be driving and won’t have to use a driver’s license.
19. Babysit
Babysitting is a great way to make money if you don’t have a car. You can choose when you’re available, making it easy to fit around your schedule.
Lots of families need someone to watch their kids while they’re at work or out for the evening, such as your neighbors.
You can offer your help to neighbors, friends, and family members.
You might need to get CPR certified, but it’s worth it. Parents will feel better knowing their kids are in safe hands (plus, you’ll feel better too about watching someone else and feel more prepared).
20. Play game apps
You can make money by playing game apps on your phone. There are lots of apps out there that pay you to play games. Some popular choices include apps like Solitaire Cash and other game apps where you get paid for playing and watching ads.
These game apps can be fun and a good way to earn a little extra cash. You usually earn small amounts of money or rewards that you can cash out later. Still, it’s important to know that it’s not a way to get rich quickly.
Here’s a quick list of the top game apps that pay real cash:
KashKick
Swagbucks
InboxDollars
Freecash
21. Virtual bookkeeper
You can make money from home as a virtual bookkeeper. This job involves keeping track of finances for businesses.
All you need is a computer and internet access. You can work for one company or offer your services to multiple clients.
Before you skip this because you think you’re not qualified, you should know that you don’t need to be an accountant, have any previous experience, or even have a bachelor’s degree.
Virtual bookkeepers can earn a good hourly rate and often have the freedom to set their schedules. This can be a great option if you need flexibility in your work life.
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This free training will show you how to start a profitable bookkeeping side-hustle in the next 30 days—even if you have no prior experience!
22. Voice over acting
Voice-over acting is a fun way to make money from home. You use your voice to bring characters to life or narrate commercials and videos. It’s a great job if you’re good at reading aloud and can deliver lines clearly.
You don’t need a fancy setup to start. A decent microphone and free software can get you going. Many websites connect you with clients looking for voice talent.
You might work on video games, cartoons, audiobooks, or even ads. Each job can pay differently, so you can find ones that fit your schedule and skills.
Voice-over acting can be both fun and profitable. It’s a flexible way to make money without needing a car. Plus, you can do it all from the comfort of your home.
Learn more at How To Become A Voice Over Actor And Work From Anywhere.
23. Write book reviews
You can make extra money by writing book reviews from home. This is perfect if you love reading.
Authors and publishers appreciate your honest reviews because they help other readers decide what to read. These reviews are fun for readers and helpful for everyone.
Here are some websites where you can earn money by writing book reviews:
OnlineBookClub.org – They give you free books at first. After your first review, you can earn $5 to $60 per review.
Kirkus Media – They need reviewers for English and Spanish books. Reviews are about 350 words and due two weeks after you get the book.
The US Review of Books – They hire freelance writers for 250- to 300-word reviews that provide insights into the book. You need to submit a resume, writing samples, and references.
Reedsy Discovery – You can review books before they are published and earn tips from readers, usually $1 to $5 per review. This helps new books become more popular.
Learn more at 16 Best Ways To Get Paid To Read Books.
Frequently Asked Questions
You don’t need a car to make money. There are many ways to earn, whether from home, on foot, or on a bike. Here are some common questions and answers about how to make money without a car.
How can I make money if I don’t have a car?
You can make money by blogging, proofreading documents, or selling printables on Etsy. You can also offer services like dog walking. If you enjoy writing, freelance writing could be a good fit too. Many of these can be done from the comfort of your home or in your neighborhood within walking distance.
What kind of jobs can you do from home with no car or computer?
Without a computer, you can still find jobs like phone-based customer service or tutoring over the phone or by having your clients come to your home. Selling craft items or handmade goods can also be done from home. Some people even make money as virtual assistants using only their smartphones.
How can a college student make extra cash without having a vehicle?
Many college students don’t bring a car to college, and if that’s you, you may be wondering how you can make money. College students can babysit, tutor younger students, or work as a resident advisor at their college. Selling old textbooks and clothes can also bring in extra cash.
What are some delivery jobs with no car required?
For delivery jobs, you can use a bike or scooter. Platforms like DoorDash allow deliveries by bike in certain areas. Restaurants and local stores sometimes hire walkers or bikers to deliver goods too, but this is more common in big cities (like New York City or Chicago).
What to do with no money and no car?
If you have no money and no car, I recommend starting by looking for gigs that don’t require any investment, like babysitting or dog walking. Answering paid online surveys or signing up for cash back apps can also help you earn some spare cash. You can also offer to run errands or clean houses for neighbors for some quick cash, or even host a garage sale.
What to do if you need a job but have no transportation?
If you need a job but you have no transportation, then I recommend finding a work-from-home job like transcribing, virtual assisting, or data entry. If you want an in-person job but don’t have transportation, then you may need to look into your public transportation options, car sharing in your area, finding a shuttle service, using a rideshare app (like Uber or Lyft), or carpooling.
How To Make Money Without a Car – Summary
I hope you enjoyed this article on how to make money without a car.
There are many ways to make money without a car such as with online jobs like proofreading, blogging, selling printables, and bookkeeping. And, there are also ways to make money in person without a car, such as dog walking, tutoring, delivering food by bike, and mowing lawns.
What do you think is the best way to make money without a car?
I got active on Twitter over the past year and change and to my surprise (not sure why it’s surprising really), encountered lots of housing bears on the platform.
Many were/still are convinced that the next housing crash is right around the corner.
The reasons vary, whether it’s an Airbnbust, a high share of investor purchases, high mortgage rates, a lack of affordability, low home sales volume, rising inventory, etc. etc.
And the reasons seem to change as each year goes on, all without a housing crash…
So, now that we’re halfway through 2024, the obvious next question is will the housing market crash in 2025? Next year’s got to be the year, right?
But First, What Is a Housing Crash?
The phrase “housing crash” is a subjective one, with no real clear definition agreed to by all.
For some, it’s 2008 all over again. Cascading home price declines nationwide, millions of mortgage defaults, short sales, foreclosures, and so on.
For others, it might just be a sizable decline in home prices. But how much? And where?
Are we talking about national home prices or regional prices? A certain metro, state, or the nation at large?
Personally, I don’t think it’s a crash simply because home prices go down. Though it is a pretty uncommon occurrence to see nominal (non-inflation adjusted) prices fall.
Over the past few years, we’ve already experienced so-called home price corrections, where prices fell by 10%.
In 2022, we were apparently in a housing correction, defined as a drop in price of 10% or more, but not more than 20%.
Ostensibly, this means a drop of 20%+ is something much worse, perhaps a true housing crash.
But you have to look at the associated damage. If home prices fall 20% and there aren’t many distressed sales, is it still a crash?
Some might argue that there’s simply no other outcome if prices fall that much. And maybe they’d be right. The point is a crash needs to have major consequences.
If Homeowner Joe sells his home for $500,000 instead of $600,000, it’s not necessarily a disaster if he bought it for $300,000 a few years earlier.
He’s not happy about it, obviously, but it’s not a problem if he can still sell via traditional channels and even bank a tidy profit.
Of course, this means others who had to sell wouldn’t be so lucky, since their purchase price would likely be higher.
Still, this hinges on a major decline in prices, which historically is uncommon outside of the Global Financial Crisis (GFC).
Stop Comparing Now to 2008
One thing I see a lot is housing bears comparing today to 2008. It seems to be the go-to move in the doomer playbook.
I get it, it’s the most recent example and thus feels the most relevant. But if you weren’t there, and didn’t live it, you simply can’t understand it.
And if you weren’t, it’s hard to distinguish that time from now. But if you were, it’s clear as day.
There are myriad differences, even though they’re quick to mock those who say “this time is different.”
I could go on all day about it, but it’s best to focus on some main points.
At the moment, housing affordability is poor thanks to a combination of high home prices and equally high mortgage rates, as seen in the chart above from ICE.
Despite a big rise in prices over the past decade, the high mortgage rates have done little to slow down the party.
Yes, the rate of home price appreciation has slowed, but given the fact that mortgage rates rose from sub-3% to 8% in less than two years, you’d expect a lot worse.
It’s just that there’s really no correlation between home prices and mortgage rates. They can go up together, down together, or move in opposite directions.
Now, proponents of a housing crash often point to buying conditions right now. It’s a horrible time to buy a house from a payment-to-income perspective. I don’t necessarily disagree (it’s very expensive).
But that completely ignores the existing homeowner pool. And by doing so, it’s a totally different thesis.
You can say it’s a bad time to buy but that the average homeowner is in great shape. These statements can coexist, even though everyone wants you to take one side or the other.
Look at the Entire Homeowner Universe
To put this perspective, consider the many millions of existing homeowners coupled with prospective home buyers.
Your average homeowner today has a 30-year fixed-rate mortgage set somewhere between 2-4%.
In addition, most purchased their properties prior to 2022, when home prices were a lot lower.
So your typical homeowner has a rock-bottom interest rate and a relatively small loan amount, collectively a very attractive monthly payment.
To make matters even better for the foundation of the housing market, which is existing homeowners, most have very low loan-to-value ratios (LTVs).
They’ve also got boring old 30-year fixed-rate loans, not option ARMs or some other crazy loan program that wasn’t sustainable, as we found out quickly in 2008.
These homeowners also haven’t tapped their equity nearly as much as homeowners did in the early 2000s, despite home equity being at record high levels (see above).
This is partially because banks and mortgage lenders are a lot stricter today. And partially because of mortgage rate lock-in. They don’t want to give up their low mortgage rate.
In other words, the low mortgage rate not only makes their payment cheap, it also deters taking on more debt! And more of each payment pays down principal. So these loans (and their borrowers) become less and less risky.
Some have turned to home equity loans and HELOCs, but again, these loans are much more restrictive, typically maxing out at 80% combined loan-to-value (CLTV).
In 2006, your typical homeowner did a cash-out refinance to 100% CLTV (no equity left!) while new home buyers were coming in with zero down payment as home prices hit record highs.
Take a moment to think about that. If that’s not bad enough, consider the mortgage underwriting at that time. Stated income, no doc, you name it.
So you had virtually all homeowners fully levered along with a complete lack of sound underwriting.
Slumping Home Sales in the Face of Poor Affordability Is Actually Healthy
That brings us to home sales, which have slumped since the high mortgage rates took hold. This is normal because reduced affordability leads to fewer transactions.
The worry is when this happens supply could outpace demand, resulting in home price declines.
Instead, we’ve seen low demand meet low supply in most metros, resulting in rising home prices, albeit at a slower clip.
While housing bears might argue that falling volume signals a crash, it’s really just evidence that it’s hard to afford a home today.
And the same shenanigans seen in the early 2000s to stretch into a home you can’t afford don’t fly anymore. You actually need to be properly qualified for a mortgage in 2024!
If lenders had the same risk tolerance they had back in 2006, the home sales would keep flowing in spite of 7-8% mortgage rates. And prices would move ever higher.
That spike in home sales in the early 2000s, seen in the chart above from Trading Economics, shouldn’t have happened. Fortunately, it’s not happening now.
At the same time, existing homeowners would be pulling cash out in droves, adding even more risk to an already risky housing market.
Instead, sales have slowed and prices have moderated in many markets. Meanwhile, existing owners are sitting tight and paying down their boring 30-year fixed mortgages.
And with any luck, we’ll see more balance between buyers and sellers in the housing market in 2025 and beyond.
More for-sale inventory at prices people can afford, without a crash due to toxic financing like what we saw in the prior cycle.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.
Good dental health can be essential to your overall well-being, but the cost of dental work — even after dental insurance — can make it challenging to pay upfront. According to the American Dental Association (ADA), the average cost of a porcelain or ceramic crown is $1,213, while the cost of a root canal can range as high as $1,539 for a single session.
A dental credit card is a white-label version of a credit card intended to be used on dental care expenses. It is one way to cover these costs in smaller, more manageable installment payments. Although a credit card for dental work can serve as a useful financing tool, it’s also important to be mindful of the caveats of using credit for dental care.
What Is a Dental Credit Card?
A dental credit card is a credit card that’s designed specifically to pay for your out-of-pocket dental health care costs. These cards are typically offered in dental offices that accept the particular medical card it advertises as a form of payment.
Like a basic credit card, a dental credit card requires patients to undergo a credit check for qualification. The card’s use is limited to dental offices within the card issuer’s network for the purpose of financing your dental bills.
Dental care credit cards typically have high interest rates, even if they offer a temporary deferred interest period.
Recommended: Tips for Using a Credit Card Responsibly
How Do Dental Credit Cards Work?
Your dental provider’s office might mention a dental credit card as a payment option if you’re unable to cover the expense in one lump sum. Typically, the office facilitates the process of completing your application for credit approval, but it is not financing the cost directly. In other words, your dental office isn’t the lender.
Instead, credit for dental care is provided by a third-party credit card issuer. Similar to how a conventional credit card works, your application is reviewed by the issuer’s underwriting team, and your credit history and score are evaluated.
If you’re approved, the card issuer will send you a physical credit card that you can use for services at an in-network health care office up to your approved credit card limit. Your dental provider is paid in full by the card issuer, and you’ll repay the issuer through monthly payments, plus interest if you carry a balance.
Deferred Interest Periods on Dental Credit Cards
Some credit cards for dental work offer zero interest charges for a limited period, also called deferred interest. This option can be advantageous if you’re confident that you can successfully repay the full balance before the deferment period ends.
However, if there’s a remaining balance after the deferment period ends, interest charges that accrued throughout the deferment period are added to the principal balance that’s due. Additionally, the new higher balance continues to accrue interest charges at the dental credit card’s APR, or annual percentage rate.
Because of this, use medical credit cards for dental work cautiously, as it’s a high-interest financing option that can lead to higher medical debt if you’re unable to repay your dental expenses quickly.
Recommended: What Is a Charge Card
Choosing a Dental Credit Card
When applying for a credit card specifically for dental care expenses, make sure you ask about the card’s features, terms, annual percentage rate (APR), and how it calculates interest during and after any deferment period.
If you’re approved, ensure that your dental office provides you with a copy of your dental credit card’s disclosure agreement. Also pay attention to the agreed-upon amount for any dental services you receive so you can verify that the card was charged for the correct amount.
You’ll want to note the deferment dates for your card, if any, and the interest rate you’re offered. That way, you can make enough monthly payments to repay your balance in full before interest kicks in.
Paying for Dental Care If You Have Bad Credit
Getting approved for a dental care credit card might be challenging if you have bad credit. If you’re in a difficult position and need help paying for expensive dental work now, here are some options to explore:
• Inquire about a low-fee payment plan. Even if your dental provider doesn’t typically offer payment plans, it’s worth asking. They might accommodate you.
• Shop around with other dental providers. Prices vary across dental offices, so compare costs across a handful of affordable sources. You might consider a non-profit dental clinic or a dentistry school.
• Seek help from a family member. Ask a relative if they’re willing to offer a low-interest loan for your dental care.
• Explore local government programs. Some state and local governments offer low-cost dental care programs to residents.
Alternatives to Dental Credit Cards
If a dental credit card isn’t an option for you, there are a handful of other financing options to cover dental work, such as the cost of a root canal.
Credit Cards With 0% Interest Rates
Other types of credit cards, like a 0% APR card, are a good alternative to dental care credit cards. They offer a promotional period — sometimes from six months to 18 months — during which you don’t incur interest charges.
This kind of card may differ from deferred interest programs. With some promotional APR cards, interest only starts accruing on your outstanding balance after the promotional period ends. Still, the credit card rule applies to try to pay off your balance in full before the promotional period ends to avoid paying interest.
Payment Plans Through Your Provider
Some medical providers offer a payment plan at no additional cost or at a small installment fee. In this situation, you’re arranging low installment payments directly through your dental office until you’ve repaid your balance in full.
Not all dental offices offer this type of payment plan. But if yours does, it can work with you to create a custom monthly payment amount and due date that’s manageable for your finances.
Personal Loans
Compared to a dental credit card, personal loans might offer lower interest rates for qualified borrowers. A low-interest personal loan achieves the same result as a credit card for dental work in that you can chip away at your outstanding balance in small increments, plus interest.
Among the main differences: You’ll receive a lump-sum loan disbursement from your lender that can be used to pay your dental office upfront. Also, you may find that a personal loan has a lower interest rate than what a credit card would charge you.
Recommended: How to Avoid Interest On a Credit Card
Help From Relatives
Seeking financial assistance from a close relative can help you avoid dental care debt. When asking for help, clarify whether any available funds are a gift or need to be repaid.
If it’s the latter, discuss the repayment window and additional interest (if any). Also talk about expectations if you’re suddenly unable to make payments due to, say, an injury or job loss.
The Takeaway
Getting a credit card designed to pay for dental work can be useful if you’re faced with an urgent oral treatment or procedure and need fast financing. However, the high interest rates of credit cards for dental work compared to other financing options can make it a financially risky option.
Whether you’re looking to build credit, apply for a new credit card, or save money with the cards you have, it’s important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
What credit score do I need to get a dental credit card?
Credit score requirements vary by credit card issuer, but generally, you’ll need at least fair credit. However, a higher score can help you qualify for more competitive interest rates.
Is a dental care credit card hard to get?
Dental care credit cards are commonly offered online or at your provider’s dental office, so applying for a card is typically straightforward. However, being approved for a dental credit card involves many factors, like your credit history, income, debt-to-income ratio, and other factors.
Should I pay for dental care with a credit card?
If you don’t have the cash flow to pay for your dental costs upfront, using a dental credit card helps you cover costs in small, monthly payments. That being said, doing so might cause you to incur high interest charges, so evaluate your financial situation and your options.
Can I get a dental loan with bad credit?
Dental loans for patients with bad credit are available, though they might come with high interest rates, low limits, or other restrictive factors.
Photo credit: iStock/zadveri
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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As predicted the refreshed American Express gold card is now live. Benefits are as follows:
$325 annual fee ($75 increase)
Option of white gold card (alongside gold or rose gold)
Card earns at the following rates:
4x on restaurants (limited to $50,000 per year, previously no limit)
4x on grocery (limited to $25,000 per year)
3x points on flights Booked directly with airlines or on amextravel.com
2x points on On Prepaid Hotels and other eligible travel purchases, booked through AmexTravel.com
1x points on all other purchases
$7 monthly Dunkin donuts credit (new)
$50 semi annual resy credit (new)
$10 monthly Uber cash credit (same as before)
$10 monthly GrubHub/5 Guys (previously not available on 5 guys, but available on mile bar and shake shack purchases)
How good/bad the refresh is really depends on how easily you can use the additional credits. Personally don’t find these types of cards worth keeping long term as I know I’ll forget to use the monthly credits/end up buying stuff I wouldn’t normally purchase. That being said let’s hope we get some links with no lifetime language. For existing cardholders you will get to take advantage of the new benefits without having to pay the increased annual fee until your next annual fee bills (sometimes there is an additional grace period where they keep billing the old annual fee as well).
If you’ve heard it once, you’ve heard it a thousand times: older Americans overwhelmingly support aging in place in their own homes, with some recent survey data indicating at or over 90% of seniors supporting retirement living in their own homes.
But sometimes the cost of renovations can exceed the amount of cash that a retiree has access to, particularly for the majority of older Americans living on fixed incomes and relying on benefit programs like Social Security.
To that end, a recent column published in U.S. News & World Report asked a number of seniors aging in place and experts about the best and most effective renovations they can make to meet their goals for remaining in their own homes.
Dak Kopec, a professor at the University of Nevada, Las Vegas explained that the age of the property itself is a big determinant of the costs associated with aging in place renovations.
“Widening doorways, enlarging bathrooms and installing stair lifts in an older home can quickly become expensive,” the column said based on his input, but there are still less expensive options that can go a long way. Some of the least expensive additions to support aging in place include grab bars and support railings that are available from major home improvement stores.
While some may be turned off by cheaper additions since they can draw attention to the concept that the occupant of a home is getting older, making targeted changes can help, and it’s not always a given that certain things must be changed in a home. Stairs are often targets of scrutiny, but it also depends on the person, Kopec said.
“Don’t automatically think you have to do away with stairs,” the column said based on Kopec’s input. “In his experience, older adults who continue to use stairs maintain their knee and leg strength longer.”
Home remodeling site Fixr told the outlet that the national average cost of aging-in-place renovations can run the gamut between $3,000 and $15,000, depending on the work performed. More drastic renovations can double or even triple that figure. But a group of retirees were consistent in targeting one room of the home in particular: the bathroom.
Those with limited mobility face challenges to their safety and physical well-being when adding water on slick surfaces into the mix, and investing in accessibility fixes there can have a big impact on both safety and mental outlook.
“It was terrifying to get into the shower by myself,” said a 67-year old retiree interviewed for the piece.
Another senior, interior designer Nancy Bean, described the challenges for her older husband — afflicted with Parkinson’s disease — who is afraid of falling in or out of the bathtub due to issues with his balance.
“Low-entry or curbless showers are game-changers for those with limited mobility. But it’s also crucial to have the proper tiling or mats on the floor to avoid slips and falls,” according to input from Bean.
Earlier this year, a story published by the Associated Press (AP) detailed the pivot that some major home improvement retailers were making toward aging-in-place. Some of the chains reporting increased renovation and modification activity include The Home Depot and Lowe’s, two of the largest home improvement retailers in the U.S.
The Home Depot is refreshing an in-house brand with accessibility in mind for things like grab bars and easier-to-use faucets. Meanwhile, in 2021, Lowe’s established a single stop for items including wheelchair ramps and shower benches, the story explained.
From the lively streets of Nashville, to the historical significance of Memphis, where the legacy of Elvis Presley lives on, Tennessee’s unique attractions draw millions each year. But what else is Tennessee known for? Whether you’re considering renting a home in Knoxville, looking to settle into a charming apartment in Chattanooga, or just planning a visit, you’ll soon find that Tennessee has much more to offer than meets the eye. In this article, we’ll explore what makes Tennessee special and why so many are proud to call it home. Let’s jump in.
1. Nashville’s country music scene
Nashville is famously known as the “Music City.” The city stands as the epicenter of country music, home to the Grand Ole Opry, the longest-running radio broadcast in U.S. history. While here, be sure to visit Broadway to experience live music in legendary honky-tonk bars. Additionally, visit the Country Music Hall of Fame and Museum to see memorabilia from iconic artists like Johnny Cash and Dolly Parton. Nashville’s lively music scene continues to shape the genre, attracting aspiring musicians from around the world.
2. Great Smoky Mountains National Park
Great Smoky Mountains National Park is the most visited national park in the United States. The park offers breathtaking views, diverse wildlife, and over 800 miles of hiking trails. Visitors enjoy exploring scenic spots like Clingmans Dome and Cades Cove, a beautiful valley with historic homesteads. Also, the park contains a remarkable diversity of plant and animal life, including over 1,500 species of flowering plants and more than 200 species of birds. One of the best times to visit is in spring where wildflowers blanket the park, creating vibrant displays of color along the trails.
3. Hot chicken
Nashville hot chicken is a culinary delight that has gained national fame. This spicy fried chicken, served with pickles and white bread, remains a staple at local establishments like Prince’s Hot Chicken Shack and Hattie B’s. The dish is known for its fiery heat, which comes from a blend of spices added to the crispy coating. Furthermore, Nashville hot chicken festivals celebrate this iconic food, where people challenge their taste buds and enjoy Tennessee’s bold culinary scene.
4. Jack Daniel’s Distillery
The Jack Daniel’s Distillery in Lynchburg produces Jack Daniel’s whiskey, the top-selling American whiskey worldwide. Patrons can take guided tours of the distillery to learn about the whiskey-making process and the history of this iconic brand. The tour includes visiting the original cave spring, the source of the water used in the whiskey, and ends with a tasting session. As a result, the distillery attracts whiskey enthusiasts from around the world, making it a must-see destination in Tennessee.
5. Bristol Motor Speedway
Bristol Motor Speedway located in Bristol is a legendary venue in the world of NASCAR racing. Known as “The Last Great Colosseum,” this half-mile track is famous for its steep banking and fast-paced action. Because of this, the speedway hosts major races like the Food City 500 and the Bristol Night Race. The speedway can accommodate over 160,000 fans, creating an electrifying atmosphere. Events at Bristol are unforgettable for racing enthusiasts, offering thrilling experiences both on and off the track.
6. The birthplace of the blues
Memphis is celebrated as the birthplace of the blues, a genre that has deeply influenced American music. If you love the blues, be sure to check out Beale Street in downtown Memphis. This historic district is lined with blues clubs where live music fills the air every night. The city’s rich blues heritage is also commemorated at the Blues Hall of Fame, featuring memorabilia from legendary artists.
Fun facts Tennessee is famous for
Graceland: Memphis is home to Graceland, the famous mansion where Elvis Presley lived. It’s now a museum dedicated to the King of Rock ‘n’ Roll.
The world’s largest underground lake: Tennessee holds The Lost Sea, the largest underground lake in the United States.
Birthplace of Mountain Dew: This state is the birthplace of Mountain Dew. The popular soft drink was originally created in the 1940s in Knoxville by Barney and Ally Hartman, who were looking for a mixer for whiskey.
7. MoonPies
Tennessee proudly stands as the birthplace of the MoonPie. This beloved snack is made of marshmallow sandwiched between two graham crackers and coated in chocolate. Created in Chattanooga in 1917, MoonPies have become a staple of Southern cuisine. The Chattanooga Bakery still produces these treats, which are especially popular during Mardi Gras celebrations in Mobile, Alabama. Furthermore, the annual MoonPie Festival in Bell Buckle celebrates this iconic snack with games, music, and, of course, plenty of MoonPies.
8. The Tennessee River
The Tennessee River winds through the state and is a vital waterway that offers locals a plethora of recreational activities. Chattanooga, in particular, capitalizes on the river’s beauty with attractions like the Tennessee Aquarium, riverboat cruises, and the scenic Riverwalk. The river is a hotspot for fishing, boating, and kayaking, drawing outdoor enthusiasts year-round. Events like the annual Riverbend Festival celebrate the river’s significance, featuring music, food, and fireworks along its banks.
9. Dollywood
Named after country music star Dolly Parton, Dollywood is an iconic a theme park in Pigeon Forge. The park offers a blend of thrilling rides and live entertainment, set against the backdrop of the Smoky Mountains. Visitors can enjoy roller coasters, water slides, and musical shows that celebrate the culture of the region. Furthermore, Dollywood features seasonal festivals like the Smoky Mountain Christmas, making it a year-round destination for fans of Dolly Parton.
10. The Ryman Auditorium
The Ryman Auditorium, known as the “Mother Church of Country Music,” is a historic venue that has hosted countless legendary performances. Originally built as a tabernacle in 1892, the Ryman gained fame as the home of the Grand Ole Opry from 1943 to 1974. Today, it continues to host concerts by top artists across various genres, offering unparalleled acoustics for concert-goers.
11. Oak Ridge National Laboratory
Oak Ridge National Laboratory is one of the world’s premier research facilities. Established during World War II as part of the Manhattan Project, it has since become a leader in scientific innovation. The lab conducts cutting-edge research in areas such as nuclear energy, advanced materials, and environmental science. While visiting, you can learn about its history and contributions to science at the American Museum of Science and Energy in Oak Ridge.
Jenna is a Midwest native who enjoys writing about home improvement projects and local insights. When she’s not working, you can find her cooking, crocheting, or backpacking with her fiancé.
If you’re on TikTok or Reddit, it’s likely you’ve come across a tenacious rumor: That it’s better to invest in life insurance than a 401(k) for retirement. So, is it true?
Life insurance vs. 401(k)
Life insurance isn’t an investment, while a 401(k) is a type of investment account offered through your employer. Permanent life insurance (which offers lifelong coverage) isn’t an investment, and its exorbitant fees erode the money you pay into your policy and any earnings you might make for the first decade.
“It was very strange to me that there were so many life insurance salespeople all over TikTok, basically soapboxing about life insurance, like it was the next big thing like it was the most amazing investment on Earth,” says Vivian Tu, founder of Your Rich Bff, a TikTok channel that focuses on financial education, based in Miami Beach, Florida.
Can life insurance grow like an investment account?
In some cases, yes. There are some types of life insurance, such as whole life insurance or universal life insurance, that have the ability to increase in cash value. But how do some of those policies earn money like an investment return? By tracking market indexes.
One of the features touted by TikTok influencers is that returns made on insurance policies aren’t affected by the overall stock market, but that isn’t necessarily true. The insurance companies may invest in the stock market with part of their portfolio, which is technically a portion of a policy owner’s premium. Though some policies provide fixed returns, some depend on current interest rates and investments. Some policies have you pick the stock or bond indexes for your policy to mirror, such as the S&P 500, and the insurance company pays you interest based on how those indexes perform.
Life insurance vs. 401(k): Fees
If life insurance can earn stock market interest in a way similar to that of a 401(k), what’s the issue?
The issue is that, depending on the policy, the staggering fees insurance policies charge often wipe out the amount you would get back from those premiums and any investment returns.
For example, if you pay the premium for seven to 10 years, most of those premiums go toward the cost of providing that insurance. In addition, there are administrative fees and the agent’s commission, though you may not see a commission listed on a statement and it may be difficult to figure out exactly how much those commissions are. Those commissions aren’t a one-time payment: You may continue to pay them for seven to 10 years, or as long as the policy is active.
The premiums you pay that cover fees don’t sit in an account waiting for you to cash them in. If you pay into a 401(k) for a decade, you get to keep all that money less any fees and investment losses. With an insurance product, it’s only after a decade (again, depending on your policy) of monthly payments that you actually start accruing premium money and interest in a cash value account the insurance company holds for you.
That interest percentage is less than you can get in a high-yield savings account and far less than the stock market’s long-term average of 10% (not accounting for inflation).
Insurance policies also have significant surrender charges, which are fees you have to pay if you withdraw money from your policy early. These charges are often so large that they can dramatically reduce the net value of your policy until the first few years pass.
For example, if you wanted to take money out of your policy after the first two years, your surrender charge would likely be so high that there would be little to no money to take out. These charges eventually reduce to zero, but it can take 10 to 16 years.
While 401(k)s do charge a 10% penalty if you want to take money out of your account before you’re 59½, that 10% is likely to be far less than a surrender charge. Plus, there are lots of exceptions to the 401(k)’s 10% penalty, including disabilities, the birth of a child, medical expenses and emergency personal expenses.
If you were to invest in the stock market through a 401(k), you wouldn’t lose 10 years’ worth of investment dollars to the cost of insurance, and your management fee would likely be less than 1%.
“The idea that 401(k) fees are higher than an insurance product that would be serving as an investment, I don’t even know how you support that idea,” says Georgia Lee Hussey, a certified financial planner and founder of Modernist Financial, a wealth management firm in Portland, Oregon.
Insurance fees are complex
In addition to paying commissions and exceptionally high fees, you may not even know how much you’re paying because insurance fee structures are so complicated.
“Whole life policies are basically called the black box of insurance policies. You can’t really see what’s happening inside them,” Hussey says. “You can understand the internal expense ratio sometimes but you usually have to go deep into the disclosure documents to understand what the insurance company is really getting paid.”
If you purchase insurance through an agent or broker (or a TikTok influencer), it’s possible that that person will be making a commission, and that’s on you to figure out.
“When you actually look into it, you realize that all of these people are, in fact, life insurance brokers. They don’t even work at life insurance companies that provide the policies,” Tu says. “The vast majority of them are not fiduciaries, so they are not legally obligated to do right by you financially.”
On the topic of using insurance to invest, it’s good to remember two cardinal rules of investing: If it sounds too good to be true, it probably is. And if you can’t explain it clearly to a friend, you probably don’t understand it, which could be a sign to steer clear.
As Tu says: “It’s insurance. It’s not an investment.”
Writing a check to yourself is one way to withdraw money from your bank account or transfer funds from one account to another. While there are other, more high-tech methods for making these transactions, writing a check to yourself is an easy option.
But it’s not the best choice for every situation. Sometimes, it’s more efficient to move funds electronically or visit an ATM to make a withdrawal. Here’s when writing a check to yourself makes sense, and how to do it.
Table of Contents
Key Points
• Writing a check to yourself is a way to transfer money between your own accounts.
• Start by writing your name as the payee and the amount you want to transfer.
• Sign the check on the signature line as the payer and write “For Deposit Only” on the back.
• Deposit the check into your other account through a mobile banking app or at a bank branch.
• Keep a record of the transaction for your own records and to reconcile your accounts.
How to Write a Check
If you don’t often use your checkbook, you may be wondering how to write a check. First, be sure to use a pen (that way, the information can’t be erased) and choose blue or black ink. Then, for every check you write, fill in each of the following details:
• The date
• Pay to the order of (the person or company the check is for)
• The amount the check is for in numbers
• The amount written out
• Memo (this is optional—you can use it to note what the check is for—or leave it blank)
• Your signature
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Recommended: Ordering Checks – A Complete Guide
How to Write a Check to Yourself
The only difference when you write a check to yourself, versus a check to someone else, is that you put your own name on the “Pay to the order of” line. Then, just like you do for every other check you write, you’ll add the date, the dollar amount written in numbers, the dollar amount written in words, an optional memo, and finally, your signature.
Be sure to record the amount the check is for in the check register that comes with your checks when you order them (you should keep this in your checkbook along with the checks themselves). In the register, write down the date, the check number, the name of the person the check is for and/or what it’s for, and the amount. This will help you balance your checkbook so you know how much money is in your account.
Why Would You Write a Check to Yourself?
Writing a check to yourself is the low-tech way of transferring money from one bank account to another, or withdrawing money from your bank account. Here is when it can make sense to write a check to yourself.
• Making a transfer. If you’re closing one bank account and opening another, you can move funds by writing a check to yourself. You can also write yourself a check to deposit funds from one account into another at the same bank. Or, if you have accounts at different banks, you can transfer money by writing yourself a check from one bank and depositing it in the other.
• Getting cash from your bank account. If you want to withdraw money from the bank, you can simply write yourself a check, take it to the teller at the bank, and cash it. Just be sure to endorse the check by signing it on the back.
Examples of When You Would Write a Check to Yourself
If you have money in different bank accounts and need to consolidate your funds in order to make a large purchase, you could write a check to yourself. For example, if you’re remodeling and need to transfer $20,000 from your home equity line of credit (in one institution) to your bank account (in a different institution), you can write a check to yourself to transfer the money.
Recommended: Does Net Worth Include Home Equity
When Writing a Check to Yourself Doesn’t Make Sense
Writing a check to yourself isn’t always the best, most efficient option for transferring funds or obtaining cash. Online banking, electronic transfers, and ATMs are typically faster and easier ways to get transactions done.
Transferring Money Within the Same Bank
If you have two accounts at the same bank and you want to move money from one account to the other, it’s much quicker and more convenient to transfer your money through online banking. Writing yourself a check to do this is a hassle.
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Getting cash out of your account
If you need to withdraw cash from your account, using an ATM can be faster and easier. If you write a check to yourself, you will need to visit the bank and go through a teller in order to cash the check and get your money. Just make sure to use an ATM within your bank’s network to help avoid ATM fees.
Risks and Concerns of Writing a Check to Yourself
When writing a check to yourself, never make the check out to “Cash.” Instead, always put your own name on the “Pay to the order of” line. This helps protect you. Otherwise, if a check is made out to “Cash,” and the check is lost or stolen, anyone can cash it.
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Other Ways to Move Your Money
There are several other ways to move money that are more convenient than writing a check to yourself. This includes wire transfers, ACH transfers, electronic funds transfers, and electronic banking.
Wire Transfer
Often, when people use the term “wire transfer,” they’re referring to any electronic transfer of funds, but the technical definition involves an electronic transfer from one bank or credit union to another. To make a wire transfer, you’ll pay a fee, usually between $5 and $50, and need to provide the recipient’s bank account information.
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ACH or Electronic Fund Transfer
An ACH is an electronic funds transfer across banks and credit unions. If you have direct deposit for your paychecks, for instance, that money is transferred to your bank account through ACH (which stands for Automated Clearing House). You can use ACH to transfer money from an account at one bank to an account at another. The transaction is often free, but check with your bank to make sure.
Electronic Banking
Online banking will allow you to move your money from one account to another within the same bank. All you need to do is log into your online account and use the “transfer” feature.
The Takeaway
Writing a check to yourself is one way to transfer money or obtain cash, but there are many methods for doing these things that are often more convenient, such as online banking or electronic transfers. Exploring all the options can help you decide what makes the most sense for you.
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FAQ
Can you legally write a check to yourself?
Yes, it is legal to write a check to yourself, as long as you’re not writing the check for more money than you have in the bank. It would be illegal to write a check for more funds than you have and then try to cash it.
Can I write a large check to myself?
Yes, you can write a large check to yourself if you have enough funds in your account to cover the amount. Never write checks for more money than you have in your bank account.
Can you write your own check and cash it?
Yes, you can write your own check and cash it at your bank or at any other location that offers this service.
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