Try the 4-Gift Rule to Keep Your Holiday Spending in Check

This strategy sets clear boundaries on what types of gifts to get and caps how much you buy. It’s a great family tradition to adopt if you want to reduce the financial stress of the holiday season.
These tips for using the four-gift rule will help you stay within your holiday budget and avoid post-Christmas shopping regrets.
This gift category is a way to sneak in learning opportunities for your kids, but you can make it fun too. Even if your children aren’t major bookworms, they might love a book based on their favorite TV show or a new movie that’s coming out. Graphic novels and comics count as books too!
But really though — socks and underwear. Do it.

What Is the Four-Gift Rule?

Or go for something a little more exciting, like headphones, hats or headbands.
Just make sure to set a spending limit for this gift — whatever works best for your budget.

  • Something they want
  • Something they need
  • Something to wear
  • Something to read

If you’ve got room in your budget, don’t forget about jolly old St. Nick! You can opt for one Santa gift for the whole family — like a game — or get each kid one present from Santa that you know they’ll love. Look for small trinkets at the dollar store or somewhere similar to fill up the kids’ stockings.
Fortunately, the solution to keeping the kids happy without going overboard with your spending comes down to an easy gift-giving strategy called the four-gift rule.

See, there’s more to this category than just socks and underwear.

Something They Want

This one is quite easy if you save it for last and see what’s left in your budget. It can be as simple as a paperback, or as grand as an e-reader.
You buy one gift per category — that’s it.
Those of us who have fond memories of opening stacks of presents under the tree on Christmas morning want to re-create that same magical feeling for our kids when the holidays roll around.

Something They Need

You can get creative with this category and find something that you and your kids both agree they need.
What we don’t need, of course, is for our eyes to grow wide when checking our credit card statements and our hearts to sink with disappointment when realizing it’ll take months to pay down all the holiday debt.
Using coupons and shopping sales can really help you score a gift from this category without spending hundreds of dollars.

Something to Wear

Your kids may not have included any clothing items on their wish lists, so think hard about what would be exciting for them to get — like a shirt with their favorite cartoon character on it or a personalized piece of jewelry.
This is a no-brainer if your kids play sports and their gear is getting a little worn. Maybe your children are shoe fanatics and would really appreciate a new pair. Or perhaps your little one loves playing dress-up and could use a nice jewelry box to store their many accessories.
If you were under your budget on your shiny “want” gift, maybe you could package up an entire outfit.
Trim your holiday spending budget by finding free books for your kiddos. This article shares 14 ways to get free kids books.

Something to Read

This is where you can make kids’ wishes come true. Go ahead and get the gift they circled in that catalog or saw on a TV commercial. It will be your shiny present with a bow on top, so make it count. Meghan McAtasney is a freelance writer. Nicole Dow is a senior writer at The Penny Hoarder.
Ready to stop worrying about money?

Bonus: One Gift From Santa

By following the four-gift rule and sticking to one present from Santa, the meaning of giving goes a little further instead of letting Santa get all the credit.
The four-gift rule is super simple. It even rhymes, so it’s easy to remember.
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Without being overwhelmed with a plethora of presents, the kids will be able to really focus their attention on the gifts they receive. The magic of Christmas will remain intact — without the extra financial stress. <!–

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Using In-School Deferment as a Student

Undergraduate and graduate students in school at least half-time can put off making federal student loan payments, and possibly private student loan payments, with in-school deferment. The catch? Interest usually accrues.

Loans are a fact of life for many students. In fact, a majority of them — about 70% — graduate with student loan debt.

While some students choose to start paying off their loans while they’re still in college, many take advantage of in-school deferment.

What Is In-School Deferment?

In-school deferment allows an undergraduate or graduate student, or parent borrower, to postpone making payments on:

•   Direct Loans, which include PLUS loans for graduate and professional students, or parents of dependent undergrads; subsidized and unsubsidized loans; and consolidation loans.

•   Perkins Loans

•   Federal Family Education Loan (FFEL) Program loans.

Parents with PLUS loans may qualify for deferment if their student is enrolled at least half-time at an eligible college or career school.

What about private student loans? Many lenders allow students to defer payments while they’re in school and for six months after graduation. Sallie Mae lets you defer payments for 48 months as long as you are enrolled at least half-time.

But each private lender has its own rules.

Recommended: How Does Student Loan Deferment in Grad School Work?

How In-School Deferment Works

Federal student loan borrowers in school at least half-time are to be automatically placed into in-school deferment. You should receive a notice from your loan servicer.

If your loans don’t go into automatic in-school deferment or you don’t receive a notice, get in touch with the financial aid office at your school. You may need to fill out an In-School Deferment Request .

If you have private student loans, it’s a good idea to reach out to your loan servicer to request in-school deferment. If you’re seeking a new private student loan, you can review the lender’s deferment rules.

Most federal student loans also have a six-month grace period after a student graduates, drops below half-time enrollment, or leaves school before payments must begin. This applies to graduate students with PLUS loans as well.

Parent borrowers who took out a PLUS loan can request a six-month deferment after their student graduates, leaves school, or drops below half-time enrollment.

Requirements for In-School Deferment

Students with federal student loans must be enrolled at least half-time in an eligible school, defined by the Federal Student Aid office as one that has been approved by the Department of Education to participate in federal student aid programs, even if the school does not participate in those programs.

That includes most accredited American colleges and universities and some institutions outside the United States.

In-school deferment is primarily for students with existing loans or those who are returning to school after time away.

The definition of “half-time” can be tricky. Make sure you understand the definition your school uses, as not all schools define half-time status the same way. It’s usually based on a certain number of hours and/or credits.

Do I Need to Pay Interest During In-School Deferment?

For federal student loans and many private student loans, no.

If you have a federal Direct Unsubsidized Loan, interest will accrue during the deferment and be added to the principal loan balance.

If you have a Direct Subsidized Loan or a Perkins Loan, the government pays the interest while you’re in school and during grace periods. That’s also true of the subsidized portion of a Direct Consolidation Loan.

Interest will almost always accrue on deferred private student loans.

Although postponement of payments takes the pressure off, the interest that you’re responsible for that accrues on any loan will be capitalized, or added to your balance, after deferments and grace periods. You’ll then be charged interest on the increased principal balance. Capitalization of the unpaid interest may also increase your monthly payment, depending on your repayment plan.

If you’re able to pay the interest before it capitalizes, that can help keep your total loan cost down.

Alternatives to In-School Deferment

There are different types of deferment aside from in-school deferment.

•   Economic Hardship Deferment. You may receive an economic hardship deferment for up to three years if you receive a means-tested benefit, such as welfare, you are serving in the Peace Corps, or you work full time but your earnings are below 150% of the poverty guideline for your state and family size.

•   Graduate Fellowship Deferment. If you are in an approved graduate fellowship program, you could be eligible for this deferment.

•   Military Service and Post-Active Duty Student Deferment. You could qualify for this deferment if you are on active duty military service in connection with a military operation, war, or a national emergency, or you have completed active duty service and any applicable grace period. The deferment will end once you are enrolled in school at least half-time, or 13 months after completion of active duty service and any grace period, whichever comes first.

•   Rehabilitation Training Deferment. This deferment is for students who are in an approved program that offers drug or alcohol, vocational, or mental health rehabilitation.

•   Unemployment Deferment. You can receive this deferment for up to three years if you receive unemployment benefits or you’re unable to find full-time employment.

For most deferments, you’ll need to provide your student loan servicer with documentation to show that you’re eligible.

Then there’s federal student loan forbearance, which temporarily suspends or reduces your principal monthly payments, but interest always continues to accrue.

Some private student loan lenders offer forbearance as well.

If your federal student loan type does not charge interest during deferment, that’s probably the way to go. If you’ve reached the maximum time for a deferment or your situation doesn’t fit the eligibility criteria, applying for forbearance is an option.

If your ability to afford your federal student loan payments is unlikely to change any time soon, you may want to consider an income-based repayment plan or student loan refinancing.

The goal of refinancing with a private lender is to change your rate or term. If you qualify, all loans can be refinanced into one new private loan. Playing with the numbers can be helpful.

Just know that if you refinance federal student loans, they will no longer be eligible for federal deferment or forbearance, loan forgiveness programs, or income-driven repayment.

Recommended: Student Loan Refinancing Calculator

The Takeaway

What is in-school deferment? It allows undergraduates and graduate students to buy time before student loan payments begin, but interest usually accrues and is added to the balance.

If trying to lower your student loan rates is something that’s of interest, look into refinancing with SoFi.

Students are eligible to refinance a parent’s PLUS loan along with their own student loans.

There are absolutely no fees.

It’s easy to check your rate.


We’ve Got You Covered


SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.
SLR18202

Source: sofi.com

Dear Penny: Can My Husband Stop His Brother From Stealing His Inheritance?

Dear Penny,
I should note that some of the assets you mentioned, like IRAs and life insurance policies, pass through beneficiary designation rather than probate. That means whoever is listed as the beneficiary receives them regardless of what the person’s will states.
I’m also a bit confused about what role the accountant played in this situation. Typically, you’d need an attorney to draft legally binding documents, like a will or a trust.
But disputing a will is a long and expensive process. Most people who mount a challenge will lose.
Your husband can try to foster a discussion. He can try to make it as transparent as possible to avoid disputes with his brother. But ultimately, these aren’t your husband’s decisions. This is your mother-in-law’s money, not his. You and your husband will need to live with whatever choices she makes.
Related Posts
Is my husband’s brother able to keep him from his half of their inheritance? His brother has made himself the executor of the will and power of attorney, or something. 

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I think your husband is most likely to be successful if he doesn’t approach the conversation from a position of entitlement. This isn’t about making sure he gets his half. The discussion should be about making sure they understand their mother’s wishes.
A better option would be for your husband to talk directly with his mother and brother about his concerns. That means your husband will have to re-establish communication with his brother. They don’t have to become best friends, but they will need to be cordial. Sometimes parents avoid discussing estate planning with their children when they know the siblings’ relationship is strained.
It’s possible to contest a will during the probate process after someone dies, but this is an uphill battle. Usually, you’d have to prove that the person lacked the mental capacity to make or change their will, or that they signed the will because of fraud or undue influence. You can also argue that the will wasn’t properly signed or witnessed in some cases.


My husband’s brother took their mother to his accountant to make sure her mutual funds, stocks and banking accounts were being taken care of and that nobody would be able to extort money from her. She is wealthy. The will stated everything was to be split equally, half and half. 
Ready to stop worrying about money?
I feel they should have gone together to the CPA. My husband won’t listen to me. Am I in the wrong? 
Source: thepennyhoarder.com
I’m not sure what you’re asking of your husband, or why you think you might be in the wrong. But I can’t imagine why your mother-in-law would leave everything to one sibling if she wanted both of her children to split things 50/50. And if your husband is counting on his brother’s goodwill to get an inheritance, he’s in for a rude awakening.
But your mother-in-law isn’t required to split everything down the middle. In fact, she doesn’t have to leave your husband anything at all. It certainly sounds like your brother-in-law is being sketchy here. But sometimes parents have good reasons for leaving one sibling a greater share of their estate. For example, if one child cared for them in their later years or one sibling has greater needs than the others, a parent may choose not to distribute things evenly.
Dear C.,
But that will be between your mother-in-law and her attorney. It’s important to understand that any attorney’s ethical obligation in this situation is to your mother-in-law. Their job isn’t to make sure your husband or his brother get the inheritance they think they deserve.
She has two homes. My husband’s brother has taken one of the homes and lets his mother-in-law reside there rent-free. 

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Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.

‘The Hangover’ Actor Justin Bartha Lists Canyon Hideaway

Justin Bartha of “The Hangover,” has put his home in the Laurel Canyon area of Los Angeles on the market for $1.375 million.

The 1,416-square-foot Spanish bungalow may be small but it has plenty of space for relaxing, with a hot tub, swimming pool and open patio.

The two-bedroom, two-bathroom canyon retreat has vaulted ceilings, a dining room, living room and family room, with floors of hardwood and Spanish tile throughout. It comes complete with central heat and air conditioning, a covered porch and garage.

Built in 1934, the home sits on a 7,500-square-foot lot with lush landscaping, fruit trees and gardens.

Bartha added new cedar closets and a built-out master closet, but kept true to the original character.

Originally from West Bloomfield, MI, Bartha played the character Doug in the three “Hangover” movies. He is also known for roles in “National Treasure” and “The New Normal.”

Listing agent is Jackie Smith of Hilton & Hyland.

Source: realtor.com

What Can You Use Student Loans For?

To attend college these days, many students take out student loans. Otherwise, they wouldn’t be able to afford the hefty price tag of tuition and other expenses.

According to U.S. News & World Report, among the college graduates from the class of 2020 who took out student loans, the average amount borrowed was $29,927. In 2010, that number was $24,937 — a difference of about $5,000.

Student loans are meant to be used to pay for your education and related expenses so that you can earn a college degree. Even if you have access to student loan money, it doesn’t mean you should use it on general living expenses. By learning the answer to, “What can you use a student loan for?” you will make better use of your money and ensure you’re in a more stable financial situation post-graduation.

Recommended: I Didn’t Get Enough Financial Aid: Now What?

5 Things You Can Use Your Student Loans to Pay For

Here are five things you can spend your student loan funds on.

1. Your Tuition and Fees

Of course, the first thing your student loans are intended to cover is your college tuition and fees. The average college tuition and fees for a private institution in 2021-2022 is $38,185, while the average for a public, out-of-state school is $22,698 and $10,338 for a public, in-state institution.

2. Books and Supplies

Beyond tuition and fees, student loans can be used to purchase your textbooks and supplies, such as a laptop, notebooks and pens, and a backpack. Keep in mind that you may be able to save money by purchasing used textbooks online or at your campus bookstore. Hard copy textbooks cost, on average, between $80 and $150; you may be able to find used ones for a fraction of the price. Some students may find that renting textbooks may also be a cost-saving option.

Recommended: How to Pay for College Textbooks

3. Housing Costs

Your student loans can be used to pay for your housing costs, whether you live in a dormitory or off-campus. If you do live off-campus, you can also put your loans towards paying for related expenses like your utilities bill. Compare the costs of on-campus vs. off-campus housing, and consider getting a roommate to help you cover the costs of living off-campus.

4. Transportation

If you have a car on campus or you need to take public transportation to get to school, work, or your internships, then you can use your student loans to pay for those costs. Even if you have a car, you may want to consider leaving it at home when you go away to school, because gas, maintenance, and a parking pass could end up costing much more than using public transportation and your school’s shuttle, which should be free.

5. Food

What else can you use student loans for? Food would qualify as a valid expense, whether you’re cooking meals at home or you’ve signed up for a meal plan. This doesn’t mean you should eat out at fancy restaurants all the time just because the money is there. Instead, you could save by cooking at home, splitting food costs with a roommate, and asking if local establishments have discounts for college students.

Recommended: How to Get Out of Student Loan Debt: 6 Options

5 Things Your Student Loans Should Not Cover

Now that you know what student loans can be used for, you’re likely wondering what they should not be used for as well. Here are five expenses that cannot be covered with funds from your student loans.

1. Entertainment

While you love to do things like go to the movies and concerts and bowling, you should not use your student loans to pay for your entertainment. Your campus likely offers plenty of free and low-cost entertainment like sports games and movie nights, so pursue those opportunities instead.

2. A Vacation

College is draining, and you deserve a vacation from the stress every once in a while. However, if you can’t afford to go on spring break or another type of trip, then you should put it off at this time. It’s never a good idea to use your student loans to cover these expenses.

3. Gym Membership

You may have belonged to a gym at home before you went to college, and you still want to keep up your membership there. You can, as long as you don’t use your student loans to cover it. Many colleges and universities have a gym or fitness center on campus that is available to students and included in the cost of tuition.

4. A New Car

Even if you need a new car, student loans cannot be used to buy a new set of wheels. Consider taking public transportation instead of buying a modest used car when you save up enough money.

5. Extra Food Costs

While you and your roommates may love pizza, it’s not a good idea to use your student loan money to cover that cost. You also shouldn’t take your family out to eat or dine out too much with that borrowed money. Stick to eating at home or in the dining hall, and only going out to eat every once in a while with your own money.

Student Loan Spending Rules

The federal code that applies to the misuse of student loan money is clear. Any person who “knowingly and willfully” misapplied funds could face a fine or imprisonment.

Your student loan refund — what’s left after your scholarships, grants, and loans are applied toward tuition, campus housing, fees, and other direct charges — isn’t money that’s meant to be spent willy-nilly. It’s meant for education-related expenses.

The amount of financial aid a student receives is based largely on each academic institution’s calculated “cost of attendance,” which may include factors like your financial need and your Expected Family Contribution (EFC). Your cost of attendance minus your EFC generally helps determine how much need-based aid you’re eligible for. Eligibility for non-need-based financial aid is determined by subtracting all of the aid you’ve already received from your cost of attendance.

Starting for the 2024-2025 school year, the EFC will be replaced with the Student Aid Index (SAI). The SAI will work similarly to the EFC though there will be some important changes such as adjustments in Pell Grant eligibility.

Additionally, when you took out a student loan, you probably signed a promissory note that outlined what you’re supposed to be spending your loan money on. Those restrictions may vary depending on what kind of loan you received — federal or private, subsidized or unsubsidized. If the restrictions weren’t clear, it’s not a bad idea to ask your lender, “What can I use my student loan for?”

If you’re interested in adjusting loan terms or securing a new interest rate, you could consider refinancing your student loans with SoFi. Refinancing can allow qualifying borrowers to secure a lower interest rate or preferable terms, which could potentially save them money over the long run. Refinancing federal loans eliminates them from all federal borrower benefits and protections, inducing deferment options and the ability to pursue public service loan forgiveness, so it’s not the right choice for all borrowers.

The Takeaway

Student loans can be used to pay for qualifying educational expenses like tuition and fees, room and board, and supplies like books, pens, a laptop, and a backpack. Expenses like entertainment, vacations, cars, and fancy dinners cannot generally be paid for using student loans.

If you have student loans and are interested in securing a new — potentially lower — interest rate, consider refinancing.

There are no fees to refinance a student loan with SoFi and potential borrowers can find out if they pre-qualify, and at what rates, in just a few minutes.

Learn more about student loan refinancing with SoFi.


SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.
SOSL18266

Source: sofi.com

These Healthcare Stocks Should Thrive in 2022

As the COVID-19 pandemic recedes, routine doctor and hospital visits, along with deferred medical procedures such as cataract surgery and heart valve replacements, are returning to normal.

The pandemic has been a global tragedy, but if there is one silver lining it is that the miraculous development of effective COVID-19 vaccines in less than a year is helping to usher in a golden age for the pharmaceutical and health sciences industries.

“We’re seeing a revolution today in vaccine development,” says Andy Acker, manager of Janus Henderson Global Life Sciences.

Before COVID arrived, the fastest vaccine approval had been four years, and the average was 10 years; with COVID, two vaccines were approved in about 10 months. Validation of the mRNA technology used by Pfizer (PFE) and Moderna (MRNA) in their vaccines means that it will now be adopted to treat other medical indications. (The mRNA vaccines teach our cells how to make a protein that triggers an immune response.)

In truth, the COVID-19 medical challenge and the dramatic success of the vaccines have only served to accelerate a powerful trend of innovation in medicine. For instance, the sharply declining cost of gene sequencing is pushing forward the growing field of precision medicine, which aims to tailor treatments to specific diseases, such as cancer.

“The science is exponentially improving for better outcomes,” says Neal Kaufman, manager of Baron Health Care fund.

Of course, the healthcare sector is also riding the (global) demographic wave of aging populations. At CVS Health drugstores, the number of prescription medicines purchased by people age 65 or older is three to four times that of 20- to 40-year-old people, says Jason Kritzer, co­manager of Eaton Vance Worldwide Health Sciences.

In rapidly developing countries with expanding middle classes, such as China, quality healthcare is likely to be one of the first things people rising out of poverty will spend money on.

With innovation and some of these secular trends in mind, we identified six intriguing healthcare stocks that literally span the alphabet, from letter A to letter Z. We particularly like companies that address large and growing end markets, especially global ones. We give extra points to businesses that have less exposure to pricing pressure from insurance com­panies or the government. Returns and other data are through Nov. 5.

healthcare stockshealthcare stocks

1 of 7

Align Technology

Share price: $687

Market cap: $54 billion

Price-earnings ratio: 50

Maker of the Invisalign brand of clear, plastic braces for teeth, Align Technology (symbol ALGN) is a disruptive force in the global teeth-correction market, rapidly gobbling market share from traditional wires and brackets. Jeff Mueller, comanager of Polen Global Growth, credits the “Zoom effect” for accelerating the adoption of the aesthetically pleasing aligners: Workers stuck at home during the pandemic were staring at their own teeth every day on Zoom. “Vanity is increasing around the world,” Mueller says, adding that, due to the rise of smartphones, the internet and social media, “more people are taking pictures of themselves than ever before in the history of mankind.”

A lot of technology is used in the Invisalign process. It employs intra-oral scanners and modeling software, plus mass-customization manufacturing using 3D printing at several plants around the globe (each set of teeth is unique, and individuals change their aligners every two weeks). Because braces are generally for cosmetic purposes, they are not subject to pricing pressure from insurance companies or the government.

Align Technology’s revenues are currently growing by 25% to 30% a year as its market penetration rises, and Mueller expects earnings to continue to compound at double digits for quite a while.

2 of 7

Merck

Share price: $82

Market cap: $206 billion

Price-earnings ratio: 11

Dividend yield: 3.2%

CFRA analyst Sel Hardy thinks that Merck’s (MRK) COVID-19 antiviral pill, molnupiravir, is “a game changer.” The drug maker has applied for emergency-authorization use from the government; approval was expected before the end of 2021. Merck projects that global sales of the oral medication, which has demonstrated strong efficacy against multiple variants of COVID, could be $5 billion to $7 billion by the end of 2022.

Apart from this breakthrough drug, Hardy likes the way Merck is positioned. Sales of Keytruda, its versatile oncology drug, topped $14 billion in 2020 and continue to grow; its animal health division is expanding; and the firm’s $12 billion acquisition of Acceleron Pharma, a biotech firm with strengths in blood and cardiovascular treatments, will augment Merck’s product pipeline.

Hardy thinks Merck, which yields 3.2%, can compound earnings by at least 10% a year for the next three years.

3 of 7

Novo Nordisk

Share price: $113

Market cap: $259 billion

Price-earnings ratio: 31

Dividend yield: 1.3%

Danish pharmaceutical company Novo Nordisk (NVO) focuses on two global pandemics: diabetes and obesity. The World Health Organization projects that the number of diabetics will expand from 460 million to 580 million by 2030, and it estimates that there are nearly 800 million obese people around the world. Novo pioneered insulin injections a century ago and has remained a global leader in diabetes care ever since. Multibillion-dollar drugs include Ozempic, a once-weekly prescription for adults with Type 2 diabetes to lower blood sugar, and NovoRapid, a fast-acting insulin treatment. Novo’s sales are evenly split between North America and the rest of the world.

Investors such as Samantha Pandolfi, comanager of Eaton Vance Worldwide Health Sciences, are also excited about rapid growth in Novo’s newer weight-management business. Wegovy, prescribed for obese people with another disease, such as diabetes, was approved by the FDA in June 2021. Tests show Wegovy typically delivers a weight loss of 15% to 17%, and Pandolfi says sales are off to a blazing start. The century-old firm plows an impressive 12% of sales back into research and development, which helps it stay ahead of the competition and generate earnings growth in the low double digits.

4 of 7

Thermo Fisher Scientific

Share price: $617

Market cap: $243 billion

Price-earnings ratio: 29

Dividend yield: 0.2%

Eddie Yoon, manager of Fidelity Select Health Care Portfolio, calls Thermo Fisher Scientific (TMO) “the Walmart of life sciences.” Whether it’s a big pharma, biotech or university lab, customers come to this health sciences supermarket for analytical tools, lab equipment and services, and diagnostic kits and consumables. “They are the partner of choice for any pharma or biotech company of any size,” says Jeff Jonas, a portfolio manager at Gabelli Funds. Thermo has benefited from increased demand for its products and services due to COVID-19, and now the firm is poised to benefit from the rise in research and development spending among drug companies around the world.

One thing that distinguishes Thermo, according to health care stock analysts, is the quality of its management. The firm has successfully integrated several strategic acquisitions that helped broaden its menu of products and services. Tommy Sternberg, an analyst at William Blair, notes that Thermo is particularly adroit at staying close to customers and understanding what their scientists are working on. “They do a fantastic job of getting to know customers and their needs, and learning from customers to come up with more solutions more quickly,” says Sternberg.

5 of 7

UnitedHealth Group

Share price: $456

Market cap: $429 billion

Price-earnings ratio: 21

Dividend yield: 1.3%

The U.S. spends a staggering $4 trillion a year on health care. UnitedHealth (UNH)—with annual revenues of nearly $300 billion, a market value of $430 billion and 330,000 employees—is the industry’s largest player. As the top private health care insurance provider, it leads in managed care. Its OptumHealth unit offers pharmacy benefits and owns physician’s practices and surgical centers. Eaton Vance’s Kritzer calls Optum, an industry leader in the digitization of services, “a very large health IT company inside an insurance giant.” United helps the federal government manage costs through its Medicare Advantage plan (the most popular private plan). Plus, it enjoys high customer satisfaction, and it is counting a growing number of seniors as customers (about 10,000 Americans turn 65 every day). Despite United’s massive size, William Blair’s Sternberg thinks it can sustain earnings-per-share growth of about 15% annually.

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Zoetis

Share price: $217

Market cap: $103 billion

Price-earnings ratio: 42

Dividend yield: 0.5%

Like Align Tech­nology’s Invisalign, Zoetis’s (ZTS) main business—companion-animal health—was already riding a tailwind that picked up force thanks to lifestyle changes during the pandemic. Pet-ownership rates spiked as people grew more isolated and sought the companionship of dogs and cats, according to David Kalis, comanager of The Future Fund Active ETF. Zoetis markets vaccines, prescription drugs and diagnostic equipment directly to veterinarians. The industry is regulated, with FDA approval required for the drugs, but Zoetis benefits from the lack of insurance company price pressures and the fragmented nature of the firm’s customer base, notes Eaton Vance’s Pandolfi.

In fact, companion-animal ownership is growing globally, driven by aging populations and shrinking family sizes. Pet owners are treating their pets better, addressing ailments such as skin irritation and arthritis, and visiting the vet more frequently, says Pandolfi. Zoetis books about half of sales overseas; roughly 60% of revenues come from the companion-animal business and 40% from the less-profitable and slower-growing livestock animal division.

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Invest in a Fund

Given the complexity and diversity of the health care sector, investing in a fund makes a lot of sense for many investors. Here are our favorites (returns and other data are through November 5).

Baron Health Care (symbol BHCFX, expense ratio 1.10%) is a young fund off to a sizzling start. Over the past three years, it returned 29.2% annualized, or nearly twice the return of the S&P 1500 Health Care index. Manager Neal Kaufman and assistant manager Joshua Riegelhaupt look for innovative, fast-growing companies. The largest holding is Natera, a clinical genetic-testing outfit.

Fidelity Select Health Care (FSPHX, 0.69%) is a member of the Kiplinger 25, the list of our favorite no-load funds. The fund has a 19.8% three-year annualized return, ahead of the 17.0% average annual gain of its peers. Eddie Yoon, who has piloted the fund since 2008, says he’s light on large pharmaceutical companies in the portfolio, preferring makers of devices used to help manage chronic diseases such as diabetes and heart ailments. The fund’s top three holdings are UnitedHealth, Boston Scientific and Danaher.

Ziad Bakri, a former physician, runs T. Rowe Price Health Sciences (PRHSX, 0.76%), which has returned 21% annualized over the past three years. Nearly one-third of assets are invested in biotechnology, a high-risk, high-return segment of health care. Top positions include Thermo Fisher Scientific and Intuitive Surgical.

If you prefer investing through exchange-traded funds, Simplify Health Care (PINK, $26, 0.50%) is an intriguing, actively managed ETF that launched on October 7. Through November 5, just shy of one month, it returned 5.9%. Manager Michael Taylor, a virologist by training who spent 20 years investing in health care stocks at some prominent hedge funds, expresses his views by increasing or decreasing the fund’s weighting of stocks in relation to the MSCI US Health Care Index.

Source: kiplinger.com

23 Ideas for Cheap Christmas Decorations

If you’re dreaming of a white Christmas, but you live in an area that doesn’t get any snow, you can use spray snow to make your winter wonderland dreams come true. You can spray artificial snow on your windows to create a frosted look or spray your front door wreath to make it appear to be covered with snowflakes. A can of spray snow costs less than on Amazon.
Dress up your dining table to bring out the joy of the holiday season. Drape your table with a red, green or white tablecloth and fill a vase or tray with seasonal elements, such as pine cones, holly leaves, cranberries, sprigs of pine needles, jingle bells, candy canes or candles.
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23 Ideas for Cheap Christmas Decorations

Source: thepennyhoarder.com

1. Wall Christmas Trees

Turn empty flower pots into outdoor Christmas decor with just a little paint. You’ll need at least three pots of varying sizes. Paint them white if you want to create a snowman out of your flower pots or green to make a flower pot Christmas tree. Once dried, stack the pots on top of each other upside down and paint additional embellishments, like a face and buttons on your snowman or ornaments and tinsel on your Christmas tree.

2. Get an Artificial Christmas Tree

You can buy boxes of candy canes for cheap at grocery stores or dollar stores around this time of the year. Fill candy dishes full of these red and white striped treats to go on your tablescape, coffee table or end tables. Or hang one or two candy canes on your Christmas tree in place of buying more pricy ornaments.

A woman decorates a tiny Christmas tree.
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3. Get a Tiny Tree

The weather’s getting colder. The days are getting shorter. Before you know it, Christmas will be here.

4. Garland

Transform your doors into the biggest presents ever by covering them in wrapping paper. You can use wrapping paper to decorate your interior doors as well as your front door. Add ribbon or a big bow for extra embellishment.

5. DIY Ornaments

Talk about easy Christmas decorations that make your home merry. You can also stack your wrapped present props in an empty corner, by the base of your staircase or on your front porch.

6. Twinkling Lights

Rather than buying an advent calendar this year, make your own. This post from Country Living has several ideas. Come up with whatever little treat, token or message you want to open each day.

7. Window Stickers

Whether you use a kit or make your own gingerbread from scratch, a gingerbread house is a fun holiday project that can double as Christmas decor. Just know it probably won’t last long — so consider this a temporary decoration!

8. Candles

Bundling up on a snowy day to go to the Christmas tree farm and chop down the perfect tree may be a sweet holiday outing, but you’ll get more bang for your buck by opting for an artificial Christmas tree. Now, artificial trees can get pricy themselves, depending on what size and type you choose. However, you can reuse the tree for years to come, rather than having to put it out to the curb when the new year rolls around.

A front door is wrapped in wrapping paper.
Getty Images

9. Decorate Your Doors

Candles are a simple and low-cost way to add a bit of Christmas spirit to a room. You can create a tablescape with red, green, white or gold candles — or set them on the mantle or a wide window ledge. Set battery-operated votive candles inside Mason jars painted in holiday colors for a flame-free decor option.

10. Bells Around Door Knobs

This winter craft doubles as a cheap Christmas decoration. You may be able to make it with items you already have at home: white tube socks, rice, buttons, pins and a scrap of fabric. This post from Darkroom and Dearly tells you exactly how to create them.

11. Decorate With Ribbon

Instead of buying an expensive 7-foot tree, you can save money by getting a much smaller tree that’ll fit on your tabletop. In addition to spending less on the tree, you’ll save on the amount of lights and ornaments you’ll need to decorate it.

12. Wrap Empty Boxes

Dress up your windows with seasonal decals. You can find window stickers of snowflakes, ornaments, gingerbread men and more at the dollar store, craft store and major retailers like Walmart or Amazon. If stored properly, you can even reuse them for next year.

13. Holiday Cards Display

An easy way to light up the outside of your house without needing yards of string lights and a ladder is to use a light projector. You can buy one on Amazon, Home Depot, Walmart and similar retailers for under .

14. Make your Own Advent Calendar

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A boy eats a gingerbread house he made.
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15. Gingerbread House

Deck the halls without wrecking your finances. Here are 23 festive ideas for cheap Christmas decorations.

16. Display Your Kids’ Holiday Artwork

A flat Christmas tree hung on the wall is a great space saver and money saver. You can make wall Christmas trees out of a string of lights, garland, a large piece of felt or even Washi tape. Check out this article from Apartment Therapy for ideas. It looks festive with or without a tree topper!

17. Create a Holiday Tablescape

Make your home not only look but sound festive by tying jingle bells to some red or green ribbon and then wrapping them around your door knobs. Whenever someone opens a door, the kiddos in the house will be looking over their shoulders to see if Santa’s coming.

18. Sock Snowmen

While you’re out shopping for gifts, it can be very tempting to add a bunch of holiday decorations to your cart to help get your home looking merry and bright. But the cost of Christmas decorations often gets overlooked when making your holiday budget — and you end up spending way more than you thought you would.

A person decorates their Christmas tree with candy canes.
Getty Images

19. Candy Canes

To avoid that post-holiday regret, consider these low-budget suggestions for decorating for Christmas.

21. Fake Snow in Windows

Forget the store-bought ornaments, and pick up your hot glue gun. Create wonderful holiday memories while crafting ornaments you can hang on your tree or use as decor around the house. See this Good Housekeeping post for over 75 ideas for DIY Christmas ornaments.

22. Flower Pot Decorations

Nicole Dow is a senior writer at The Penny Hoarder.

23. Light Projector

A string of lights can really spread holiday cheer. To save money, opt for shorter strings of light to cover smaller areas — such as a window or mantle piece, rather than along your gutters or around a 7 foot tree. You can also use a string of lights on a blank stretch of wall in the shape of a star or to spell out “Merry Christmas” in cursive.
You can use ribbon for more than just wrapping presents. Take some thick ribbon in Christmas colors like red, green or gold and use it to make bows to hang on your Christmas tree, your mantle and even on door knobs or drawer pulls. Tie them around a glass vase with a candle inside for a simple Christmas centerpiece. <!–

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Garland is a low-budget Christmas decoration that instantly adds holiday spirit to a room. In addition to stringing garland around your Christmas tree, you can hang strings of garland above your mantle, over your doorways, around your window frames or wrapped around the banister of your staircase. Instead of buying your garland, you can make your own using natural elements like dried citrus and pine cones, construction paper, popcorn or cheap ball ornaments.

Using Income Share Agreements to Pay for School

Many students end up taking out loans to finance the cost of college. As of the first quarter of 2021, Americans collectively held $1.57 trillion in student debt, up $29 billion from the previous quarter. And a significant share of borrowers were struggling with their debt burdens: Just under 6% of total student debt was 90 days or more past due or in default.

Students looking for alternatives to student loans can apply for grants and scholarships, take on work-study jobs or other part-time work, or find ways to save on expenses.

Recently, another alternative has appeared on the table for students at certain institutions: income share agreements. An income share agreement is a type of college financing in which repayment is a fixed percentage of the borrower’s future income over a specified period of time.

As this financing option grows in popularity, here are some key things to know about how these agreements operate and to help you decide whether they’re the right choice for you.

How Income Share Agreements Work

Unlike student loans, an income share agreement, also known as an income sharing agreement or ISA, doesn’t involve a contract with the government or a private lender. Rather, it’s a contract between the student and their college or university.

In exchange for receiving educational funds from the school, the student promises to pay a share of his or her future earnings to the institution for a fixed amount of time after graduation.

ISAs don’t typically charge interest, and the amount students pay usually fluctuates according to their income. Students don’t necessarily have to pay back the entire amount they borrow, as long as they make the agreed-upon payments over a set period. Though, they also may end up paying more than the amount they received.

Income share agreements only appeared on the scene in the last few years, but they are quickly expanding. Since 2016, ISA programs have launched at places like Purdue University in Indiana, Clarkson University in New York, and Lackawanna College in Pennsylvania. Each school decides on its own terms and eligibility guidelines for the programs. The school itself or outside investors may provide funds for ISAs.

Purdue University was one of the first schools to create a modern ISA program. Sophomores, juniors, and seniors who meet certain criteria, including full-time enrollment and satisfactory academic progress, are eligible to apply.

Students may have a six-month grace period after graduation to start making payments, similar to the six-month grace period for student loans, and the repayment term at Purdue is typically 10 years. For some schools, however, the repayment term ranges from two to 10 years.

The exact amount students can expect to pay depends on the amount they took out and their income. The university estimates that a junior who graduates in 2023 with a marketing major will have a starting salary of $51,000 and will see their income grow an average of 4.7% a year.

If that student borrowed $10,000 in ISA funds, he or she would be required to pay 3.39% of his or her income for a little over eight years. The total amount that student would pay back is $17,971. The repayment cap for the 2021-2022 school year is $23,100.

Again, every ISA is different and may have different requirements, so be sure to check with your college or university for all the details.

The Advantages of Income Share Agreements

ISAs aren’t for everyone, but they can be beneficial for some students. For example, students who don’t qualify for other forms of financial aid, such as undocumented immigrants, may have few other options for funding school.

For students who have already maxed out their federal loans, ISAs can be a more affordable option than Parent PLUS loans or private student loans, both of which sometimes come with relatively high interest rates and fees.

Compared to student loans, many ISAs also protect students by preventing monthly payments from becoming unaffordable. Since the amount paid is always tied to income, students should never end up owing more than a set percentage for a fixed period of time. However, a student’s field of study may impact this. Students who are high earners after college may end up paying more to repay an ISA than they would have under other financing options.

If a student has trouble finding a well-paying job, or finding one at all, payments typically shrink accordingly. For example, Purdue sets a minimum income amount below which students don’t pay anything.

In Purdue’s case, the student won’t owe anything else once the repayment period is over, compared to student loans that can multiply exponentially over time due to accrued interest.

Purdue and several other universities also set the amount and length of repayment based on a student’s major, meaning monthly payments can be more tailored to graduates’ fields and salaries than student loans are. For fortunate students who see their income rise beyond expectations, many schools ensure the student won’t pay beyond a certain cap.

Potential Pitfalls of Income Share Agreements

ISAs come with some risks and drawbacks, as well. Firstly, since the repayment amount is based on income, a student who earns a lot after graduation might end up paying more than they would have with some student loans. This is because if a student earns a high income after graduating, they’d pay more to the fund. Second, the terms of repayment can vary widely, and some programs require graduates to give up a huge chunk of their paychecks.

For example, Lambda School , an online program that trains students to be software engineers, requires alums who earn at least $50,000 to pay 17% of their income for two years (up to $30,000). This can be a burden for recent graduates, especially compared to other options like income-driven repayment, which determines the percentage of income going towards student loans based on discretionary income.

Currently, there is very little regulation of ISAs, so students should read ISA terms carefully to understand what they’re signing up for.

No matter what, income share agreements are still funding that needs to be repaid, often at a higher amount than the principal.

So you’re still paying more overall for your education compared to finding sources of income like scholarships, a part-time job, gifts from family, or reducing expenses through lifestyle changes or going to a less expensive school.

How Do Income Share Agreements Impact You?

Many schools’ ISA programs are designed to fill in gaps in funding when students do not receive enough from other sources, such as financial aid, federal or private student loans, scholarships or savings. Thus, it’s important to understand how an ISA will impact both your long-term finances and other methods to pay for college.

ISAs do not impact need-based aid like grants or scholarships. Students with loans, however, could have a more complicated repayment plan with multiple payments due each month.

With ISAs, there is less clarity as to how much you’ll end up repaying from up to 10 years of income. As your income changes, your payment will remain the same percentage unless it falls below the minimum income threshold ($1,666.67 at Purdue) or reaches a repayment cap.

Whereas students may pay more than the loan principal to reduce interest, ISAs often require reaching a repayment cap of roughly double the borrowed amount to be paid off early.

Depending on your future income and career path, an ISA could cut into potential savings and investments or serve as a safety net for a less stable occupation.

Who Should Consider An ISA?

As previously mentioned, income share agreements are an option for students who have maxed out on federal loans and scholarships. There are other circumstances when an ISA may or may not be worth considering.

Colleges may require a minimum GPA to be eligible for an ISA. For instance, Robert Morris University requires incoming students to have a 3.0 high school GPA and maintain a 2.75 GPA during their studies for continued funding eligibility. Taking stock of how an ISA aligns with your academic performance before accepting funding could reduce stress later on.

Since ISA programs structure repayment as a percentage of income, graduates who secure high-paying jobs can end up paying a significant sum compared to the borrowed amount. An ISA term could be more favorable to students planning to enter sectors with more gradual salary growth, such as civil service.

Repayment plans at income sharing agreement colleges are not uniform. Students at schools with lower payment caps and early repayment options may find ISAs more advantageous.

Considering Private Loans

Students should generally exhaust all their federal options for grants and loans before considering other types of debt. But for some students looking to fill gaps in their educational funding, private student loans may make more sense for their needs than ISAs.

Recommended: Examining the Different Types of Student Loans

In particular, students who expect to have high salaries after graduation may end up paying less based on interest for a private student loan than they would for an ISA. Some private loans can also allow you to reduce what you owe overall by repaying your debt ahead of schedule.

SoFi doesn’t charge any fees, including origination fees or late fees. Nor are there prepayment penalties for paying off your loan early. You can also qualify for a 0.25% reduction on your interest rate when you sign up for automated payments.

The Takeaway

As mentioned, an income share agreement is an alternate financing option for college. An ISA is generally used to fill in gaps in college funding. Generally, it’s an agreement between the borrower and the school that states the borrower will repay the funds based on their future salary for a set amount of time.

One alternative to an ISA could be private student loans. Keep in mind that private loans are generally only considered as an option after all other sources of federal aid, including federal student loans, have been exhausted.

If you’ve exhausted your federal loan options and need help paying for school, consider a SoFi private student loan.


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SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Lending Corp. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
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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Source: sofi.com

Paying your credit card early: Does it help your score?

Couple looking at finances together.

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Paying your credit card early can raise your credit score. After your statement closes, your credit card issuer reports your balance to the credit bureaus. Paying your bill ahead of time lowers your overall balance, so the bureaus will see you using less credit in total. Since utilization makes up around one-third of your credit score, paying your card early can have a positive overall effect. 

However, paying your credit card bill early may work differently if you carry a balance on your card each month. Instead of paying your next statement early, you’re actually making an extra payment on your previous balance. Therefore, you’ll likely still need to pay the minimum amount on your next statement, or your payment could be considered late.

In most cases, paying your credit card bill early is a good idea—and it can have a positive impact on your score. 

Read on to learn more about how paying your card early affects your score. 

How paying your credit card bill early can help your credit score

Paying your credit card bill early may increase your credit score, since the overall debt that gets reported to the credit bureaus is likely to be lower. 

To understand how paying a bill early could raise your score, you need to understand two things: the factors that make up your score and how your credit issuer reports to the credit bureaus. 

How paying early could raise your score

Your score is calculated based on several factors, and two of them are relevant to paying your bill early: credit utilization and payment history. 

  • Payment history makes up around 35 percent of your score, and simply put, paying your bill early means that you aren’t paying it late. Late payments can have a major negative effect on your score, so paying your bill on time or early will help boost your score.
  • Credit utilization accounts for around 30 percent of your score, and it represents how much of your available credit you’re actually using. As a general rule, you should aim to use one-third of your credit or less. For example, if you have a total credit limit of $9,000, you’d want to keep your balance below $3,000.

The credit bureaus—TransUnion®, Experian® and Equifax®—are responsible for keeping track of your credit history. They receive all of their information from lenders, like the financial institution that issued your credit card. 

After your monthly statement is issued with your balance, you have a grace period before the payment is due—typically around 21 days. During that time, your credit card provider will report your balance to the credit bureaus. If you pay your balance before your statement closes, the total listed balance will be lower, so the credit bureaus will see your overall utilization as lower, which could increase your score.

That said, your particular situation may change how early payments work, so you’ll want to make sure you understand your billing cycle and balance before making early payments.

Is it ever bad to pay your credit card early?

While it is never bad to pay your credit card bill early, the benefits you receive from doing so may vary depending on your circumstances.

For example, if you carry a balance on your credit card every month, you may need to adjust how you handle early payments. While it is a myth that carrying a balance on your card improves your score, there are reasons you may have lingering credit card debt nonetheless.

Early payments work differently if your credit card has a balance.

If you do carry a balance on your card each month, keep the following in mind:

  • Your early payment may not count as your minimum payment. If you have a balance from a previous month, you can’t make an “early” payment toward your next statement. Instead, you’re making an extra payment, so you’ll still need to make a minimum payment after your new statement is issued.
  • You may not save money on interest and fees by making an early payment. Depending on how your credit card issuer calculates finance charges on your previous balance, your early payment may not reduce your interest or fees by much or at all. For example, if you’re charged based on average daily balance, simply paying at the end of the month may not help much.

All that said, it’s still usually a good idea to pay down your credit card debt if you have the funds available to do so. You may not see an immediate score increase if you have a substantial balance, but over time, you’ll build the financial habits that can help you eliminate debt and begin making on-time—or early—payments consistently. 

When is the best time to pay your credit card? 

The best time to pay your credit card bill is before the payment is late. While you may benefit from paying your bill early, you’ll definitely see negative effects if you pay your bill late. 

Paying early keeps your payment history intact and may help lower your overall utilization, while paying your bill more than 30 days late will likely lead to a negative item on your credit report. And if you neglect to pay long enough, your account could get sent to collections. 

If you do start paying your credit card bill early, you’ll want to begin checking your credit report regularly to see how your balance is being reported to the credit bureaus. Over time, you should see your utilization drop and your credit score increase.

While sifting through your credit report, it’s important to keep an eye out for inaccurate information like fraudulent accounts, incorrect negative items or factual mistakes. Any of these inaccurate items could be lowering your credit score. Fortunately, it’s possible to dispute these items on your report and repair your credit score. 


Reviewed by Horacio Celaya, Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Horacio Celaya was born in Tucson, Arizona but eventually moved with his family to Mexicali, Baja California, Mexico. Mr. Celaya went on to graduate with Honors from the Autonomous University of Baja California Law School. Mr. Celaya is a graduate of the University of Arizona where he graduated from James E. Rogers College of Law. During law school, Mr. Celaya received his certificate in International Trade Law, completing his thesis on United States foreign direct investment in Latin America. Since graduating from law school, Mr. Celaya has worked in an immigration firm where he helped foreign investors organize their assets in order to apply for investment-based visas. He also has extensive experience in debt settlement negotiations on behalf of clients looking to achieve debt relief. Mr. Celaya is licensed to practice law in New Mexico. He is located in the Phoenix office. 

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com