Can I Afford to Have a Hot Girl Summer?

Save more, spend smarter, and make your money go further

After a year spent indoors, everyone wants to have a hot girl summer in 2021. But when your financial situation is still recovering from the pandemic, can you really afford to?

Whether you’re struggling to get by or just looking to save a few bucks, use these tips to go big this summer – without going over budget.

Cash in rewards points

Millions of Americans stocked up on toilet paper, hand sanitizer, and disinfectants during the pandemic. But many consumers inadvertently hoarded another item: credit card rewards points.

If you’re planning to reunite with high school friends or travel to a bachelorette party, cash in your points and miles to save on the trip. If you had to cancel a vacation due to the pandemic, redeem any remaining travel credit.

If you have more rewards points than you need, you may be able to redeem them for cash or as a statement credit on your card, which you can then use toward your trip.

Don’t have any rewards cards? Now may be a good time to sign up. Chase is currently offering a 100,000-point bonus for new cardholders who apply for the Chase Sapphire Preferred card, or a 60,000-point bonus for the Chase Sapphire Reserve card. Depending on where you’re going, that’s enough for a couple of flights or hotel stays.

Invite friends over for a swap

My new favorite tradition with friends is to host a swap. Everyone brings items they no longer need, and we take turns picking new-to-us items. Last time I got three dresses, a pair of Madewell overalls, a curling iron, and a dog bed.

You’re not limited to clothes at a swap. I encourage my friends to bring anything, including books, kitchenware, makeup and home decor. It’s a free way to get new items, and it encourages you to declutter your house.

Drink like a college student

Back in college, most people would have a couple drinks at home before venturing to the bars. If you’re going out with friends, consider starting with a drink or two at home.

Another money-saving trick is to eat a full meal before you go out, so you’re not tempted to grab pricey appetizers. If you’re getting drinks with your friends, limit yourself to basic cocktails instead of specialty cocktails, or stick to the draft list instead of buying a fancy bottle.

Create rules for yourself

Now that the world is opening up, it’s tempting to throw your budget away and treat yourself to everything you missed during the pandemic. Before doing that, set up some ground rules to keep yourself from going overboard.

For example, make a rule that if you’re getting dinner or brunch with friends, you won’t get take-out that week. These basic rules will help you spend less without having to give up what really matters.

Use a cash budget

Instead of bringing your credit card with you on a night out, only take the amount of cash you want to spend. You can still use your phone to order an Uber or Lyft, but you won’t have the temptation of a credit card. Decide how much you’re comfortable spending and only bring that amount.

Join a sports league

Group sports leagues like softball, soccer, or kickball are one of the most affordable ways to hang out with friends and get some exercise at the same time.

Most group leagues cost between $50 and $75 a person, depending on the sport, and usually last around six weeks. Sometimes you’ll even get a discount at a local bar where you can hang out afterwards.

Plan a budget-friendly trip

For the past few years, my college friends and I have met up every summer at my in-law’s lake house. The house is located near a small town in Indiana, only a few hour’s drive for most of us.

Instead of picking a more exotic locale, we prioritize saving money. It’s free to stay there, and we split the cost of groceries. I usually spend about $100 on gas, food, and drinks for a three-day trip.

If you’re considering a getaway with friends, get creative. Don’t automatically book a trip to Vegas or Miami. Pick a spot that’s close enough to drive, or near a popular airport where flights will be less expensive.

If you’re not lucky enough to have access to a family vacation home, look on Airbnb and VRBO for affordable destinations. Find a house with a stocked kitchen so you can cook most of your meals.

Pro tip: Use Mint’s free travel budget calculator to help you plan your next adventure.

Budget for it

When the world shut down last year, most of us got used to spending less on gas, bars, and new clothes. But as things start to open up, you may find your spending ramping back up.

Use this time to revise your budget and allocate money toward restaurants, rideshare services, and new outfits. As things return to normal, you may have to change your budget a few times before finding a happy balance. Give yourself some grace, as circumstances may change rapidly.

If you find budgeting for one month at a time difficult, give yourself a weekly allowance to use for non-essential purchases. Redirect some of your pandemic habits, like ordering take-out a few times a week, to your rediscovered social habits, like getting dinner with your friends.

Talk to your friends

While some consumers survived the pandemic without getting laid off, millions of Americans lost their jobs and remained unemployed for months. So while your friends may be ready to party, you might be focused on rebuilding your savings.

If you suffered financially during the pandemic, you may not be able to keep up with your friends this summer. Even though it may seem awkward to discuss your money problems openly, it’s better than making excuses.

If you lie about why you can’t hang out, your friends will think you’re avoiding them. But if you’re honest, they may accommodate you by suggesting budget-friendly activities. Give them the chance to understand, even if it means having an uncomfortable conversation. Who knows – one of them might be struggling as well, but too afraid to speak up.

Save more, spend smarter, and make your money go further

Zina Kumok

Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Conscious Coins. More from Zina Kumok

Source: mint.intuit.com

How to Build a Capsule Wardrobe

Save more, spend smarter, and make your money go further

There are so many fashion trends that come and go; but what does that mean for your pockets? You’re left overspending, making impulse decisions, or buying items because others are doing the same thing. Remember, fashion is a personal experience. It’s unique to each one of us as we all express our personal style in different ways. The cost of living along with everyday essentials are on the rise; what are a few ways to remain stylish while making sure it’s budget friendly? Use the following tips to build a classic wardrobe that’s always on trend – no matter the occasion.

What is a capsule wardrobe?

A capsule wardrobe consists of a set of tops, bottoms, outerwear, shoes, and various accessories that are versatile and can be mixed based on occasion to create a multitude of looks. The focal point of a capsule wardrobe is to own more on quality pieces that can transcend through the various seasons.

Ranging from between 25 – 75 pieces (or more; just depends on your preference) the key is to be able to identify all your clothing items easily and severely cut down on the time it takes to decide what you’re going to wear from day-to-day. Your new wardrobe should be able to reflect you personally while also remaining super functional.

Step 1: Take an assessment of your closet

Before we get started with hitting our favorite stores or buying everything online; take note of what’s currently in your closet. Begin to create a few mounds of clothes – keep, purge, and repurpose piles. What are the items that no longer fit? What items don’t necessarily fit your personal style anymore?

Be honest with yourself during this exercise. For example, if the clothes fit but you haven’t worn them within the past six months, chances are you may not be in love with them like you thought during the initial purchase. Also consider gently used clothes that are still in good shape to donate or sell to a consignment shop. The funds made from items already in your closet can go toward new pieces for your capsule wardrobe! Consider your current lifestyle as well – are you self-employed, working a 9-5 or a stay-at-home parent? All of this will impact your personal decisions as it relates to clothing.

To streamline this process even further, take pictures of the items you’re going to keep and have them all in one album on your phone. This way, you’re able to track each piece you have before making any new purchases. We often believe we have nothing to wear when it’s time to get dressed – when we really are just unsure of what we have. Reprogram your mind to utilize what you already have versus spending out of impatience and frustration.

Step 2: Identify your personal style and experiment

Social media exposes us to so many people, their personal styles and fashion inspirations. When you take a step back from everyone else’s thoughts and opinions; who inspires you? Create a mood board with outfits that pique your interest, that are classic in nature and are flattering to your body type. Ask yourself the following questions:

  • Are these pieces something I’m going to love years from now?
  • Will I feel confident no matter the occasion?
  • Does this fit my work and personal lifestyle?
  • Am I committed to investing in quality items?

Answering these truthfully are a great baseline to tailoring your wardrobe for you – regardless of what’s ever changing on social media. Next is the fun part; begin experimenting with what’s in your closet! Make sure all your items are in one area in your closet or buy a fashion rack so you’re able to easily identify your growing capsule wardrobe. Using either of these methods should not only cut down your decision time when getting dressed, it gives you the opportunity to create multiple looks with the same pieces. The main goal is functionality – make sure it’s adaptable to your lifestyle and its’ demands.

Step 3: Spend wisely and fight the urge against fast fashion

Quality over quantity is the mantra to live by when wanting to build a capsule wardrobe. Think about it in this way – how can you remain timeless while also having a distinct personal style?

When you’re looking for items to add to your capsule, focus on durability and quality. There’s no point in buying a lot of clothes that can’t withstand a few cycles in the washing machine (lack of quality) or shopping for one specific event (non-functional pieces). Refer to the pictures that’ve been taken of your current items so they’re handy during any shopping trip. Don’t forget to leverage consignment shops or thrift stores during this process. Bulkier, yet timeless items such as trench coats or vests with neutral colors can often be found. If you find that shopping for each season initially is too difficult, begin offseason shopping. During the summer, fall and winter clothes can be reduced heavily in price; use these opportunities as a cost savings.

Step 4: Take your time and have fun!

Transitioning from your current wardrobe to a fully functional one isn’t easy. Don’t overwhelm yourself with trying to finalize each piece in your closet over a designated amount of time. Not only is that not realistic, but it’s also expensive (which partly defeats the purpose) and stressful. This should be a fun, experimental, yet intentional time.

Take note of the outfits you enjoy the most. What about them makes you confident? You’ll discover you love every item in your closet versus simply dealing with pieces to complete an outfit. Take a note of items that may be currently missing from your wardrobe that can be worn at least three ways.

Taking this into account, you’ll be able to add those items into your rotation easily. Every purchase should be strategic and purposeful. While others are chasing trends that change every season, you’ll be peaceful and empowered with a wardrobe distinctly curated by you and your wants.

Save more, spend smarter, and make your money go further

Marsha Barnes

Marsha Barnes is a finance guru with over 20 years of experience dedicates her efforts to empower women worldwide to become financially thriving. Financial competency and literacy are a passion of Marsha’s, providing practical information for clients increasing their overall confidence in their personal finances. More from Marsha Barnes

Source: mint.intuit.com

7 Things to Know Before You Start Biking to Work

When I learned that the cost of my monthly parking garage pass was more than doubling to $75 a month, I balked. Seventy-five dollars a month just to babysit my car while I’m at work?

So one muggy morning, I decided to give bike commuting a shot. I didn’t plan my route. Or my outfit. Or take my bike for a test ride, even though I hadn’t ridden it in months. Hey, what could go wrong in 2 miles?

I took my usual route to work — a busy street with no bike lanes and a rickety sidewalk where cyclists aren’t exactly welcome in the traffic lanes. Funny what you don’t notice from your car.

My dark jeans and black tunic were drenched in sweat less than a mile into my ride. Not a great choice of biking attire for mid-90s temperatures.

But it wasn’t just the end-of-summer heat that was making me sweat. I felt like I was biking uphill — and I live in Florida. I asked myself: Was biking always this hard? Have my leg muscles atrophied?

Then a guy standing at a bus stop pointed out the obvious: My tires needed air.

7 Tips for Anyone Who Wants to Start Biking to Work

I survived the 2-mile ride to work. Then I Ubered home that afternoon.

A few days later, temperatures dropped slightly, and a helpful co-worker put air in my tires. I decided to give bike commuting another try — if only to get my bike home. This time, I planned my route and took a street with bike lanes.

Since then, I’ve become an avid bike commuter. I love that I get to exercise during my commute, and I’m also saving money. Since I live close to work, my savings on gas are minimal, but I have been able to ditch the $75-a-month parking pass. Plus, I’m less prone to after-work impulse buys. If I stop at the grocery store after work, I’m limited to what I can fit in my bike basket.

Want to try biking to work? Here are a few tips I wish I had known before I tried bike commuting.

1. Do a Weekend Test Run

It’s great when you can figure out things — like that your route of choice doesn’t have bike lanes or your tires need air — when you’re not pedaling furiously to a meeting at rush hour.

Test out your commute by doing a practice run during the weekend. You may be surprised by just how bike-unfriendly your normal route is.

Make sure to wear your work attire if you plan to ride in the same clothing you wear during the day. Seeing just how much you sweat could change your mind.

2. Dry Shampoo Is Your Friend

Wearing a helmet is nonnegotiable whenever you ride your bike, OK? So that means helmet hair is something you’re going to have to deal with.

Dry shampoo comes in handy when you need to freshen up to make yourself presentable for the office.

A woman waits to ride a cross a busy road while bike commuting.
Robin waits her turn to cross a busy road on her way to work. Chris Zuppa/The Penny Hoarder

3. Plan Your Outfit Around Your Commute

Riding your bike to work is a lot easier when you don’t have to do a complete change of costume when you get to the office. Opt for lightweight, breathable fabrics like cotton or linen to minimize sweat during your ride. If you wear skirts or dresses, throw on a pair of bicycle shorts or leggings underneath. (Long skirts and dresses are best avoided, though.)

Keep a spare shirt handy in your backpack in case you sweat more than usual or you ride through dirt or dust. (It happens.)

Pro Tip

If you need to pack your clothes and change at the office, a travel-size bottle of wrinkle spray comes in handy. No, your outfit won’t look freshly pressed, but it will smooth things out a bit.

4. Lighten Your Load Already

You’re saving money by bike commuting. But unless you want to fork over that money and then some to your chiropractor, keep your backpack as light as possible. Investing in saddlebags or a bike crate will be well worth it if you have lots of stuff to cart to and from work.

5. Ask Your Employer for Storage Space

Bikes are best stored indoors, where they’re less likely to get stolen. Plus, they’re more likely to rust when exposed to rain or snow.

Here at The Penny Hoarder’s headquarters in St. Petersburg, Florida, we’re lucky to have a passcode-protected bike closet. If your workplace doesn’t have a designated space for bikes, ask your employer to create one — or at least if there’s an acceptable place that you can stash your bike.

If that’s not possible, keep your bike locked up in a busy area with two different types of locks.

Pro Tip

Your car isn’t the only thing that needs a tune-up: Your bike should get a tune-up anywhere from every few months to once a year, depending on how much you ride. Expect to pay $30 to $80.

6. Be Prepared for Bad Weather

Here in Florida, storms are a bit unpredictable. I keep a kid-size poncho in my backpack that I can pop out if it starts to drizzle. The kid-size part is key because it’s short enough that it doesn’t get in the way of pedaling.

Obviously, when there’s lightning or extreme weather, you shouldn’t be biking. So have a backup plan for the days that you aren’t able to bike to work.

Make sure you know of a parking option that doesn’t require a monthly pass, a bus route that’s close to your office or a co-worker who can give you a ride. Otherwise, you’ll need to work the occasional Uber or Lyft into your budget.

7. Don’t Give up Your Parking Pass… Yet

So you’ve had your first successful bike commute? Congrats!

Still, hang onto your parking pass for at least a couple weeks. It’s great when bike commuting happens without a hitch. But what happens when you’re running late, you have a doctor’s appointment before work or you need to run home at lunchtime?

Once you’ve experienced a few disruptions to your regular routine, you can better assess whether giving up parking is feasible.

Is Bike Commuting for You?

This isn’t really an if-I-can-do-it-anyone-can type of thing. There are a lot of reasons bicycle commuting has worked for me:

I have a flexible schedule. I only work daylight hours. My workplace is casual. I live and work in a bike-friendly pocket of St. Petersburg, Florida, which means I don’t have to deal with snowstorms and subzero temperatures. I don’t have kids to shuttle to and from school or day care. Most importantly, I feel safe bike commuting.

If you want to try it, commit to doing it three or four times over the next months. Take it from me: Your first try may not go perfectly. But after three or four times, you’ll get the hang of it.

What if you hate it? Then it’s probably not worth whatever money you save. Your ideal commute is one that doesn’t leave you frazzled before you’ve even gotten to work.

But don’t be surprised if you get hooked. I find my workdays a lot more enjoyable when they start and end with a bike ride instead of circling a dusty parking garage. And the $75 I’m saving is a pretty sweet bonus.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.  She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community

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Source: thepennyhoarder.com

How Moving to a New City Can Give You a Fresh Financial Start

Save more, spend smarter, and make your money go further

Summer is a common time for many people to change up their living situations by moving either across town or across the country. And whether you are moving for a new job, a recent graduation, or just a change of scenery, moving to a new city can help give you a fresh financial start. Here are a few things to keep in mind as you plan your move.

Changing (lowering) your cost of living

The biggest thing to make sure that you’re aware of when moving to a new city is that your overall cost of living is going to change. This may be obvious to many people, but goods and services cost different amounts in different areas of the country and world. From very expensive places like New York and San Francisco to less expensive places like Tulsa or Boise and everywhere in between. 

Before you move to a new city, make sure to understand the difference in the cost of living between your current city and your new city. There are many online calculators that can compare the cost of living between two different cities. Make sure to dig deeper than just the overall cost of living. The cost of living accounts for lots of different areas of spending like housing, food, transportation, and more. Understanding how different things might change in price from what you’re used to can help you plan a budget for your new city.

Hopefully, you are moving to an area with a lower cost of living. That’s a great opportunity to take your extra money and start saving or investing it. If you are moving to a higher-cost area, you can take the chance to really get serious about budgeting

New friends and family

Your new city will also give you the chance to change who you interact with and how much. You may be moving closer to family, or have the chance to meet new friends. Changes in your family or friend’s situation can also impact your finances. If you are moving closer to extended family, you may have an opportunity to collaborate on child care and save some money that way. 

If you’re moving to a new city where you don’t know anyone, consider how that might affect your budget and your social life. Will you be spending more money at bars, events, and other places to meet new people? Work those expenses into your new budget!

Updating your recurring subscriptions

Recurring subscriptions can be an easy way to lose your money if you’re not careful. Without tracking them with a budgeting tool like Mint, it’s easy to find yourself paying for monthly subscriptions that you don’t actually use. Moving to a new city can be a great way to update your recurring subscriptions and be proactive about which ones you want to pay for.

While some monthly subscriptions like streaming services are easy to transfer with you when you move, others won’t make as much sense. It probably isn’t a good idea to continue paying for your local gym membership if you move halfway across the country. Take the time as part of your move to really take a look at which monthly payments you are making and which are still providing value.

Budgeting for your move

A budget is one of the most important tools you have to achieve a positive financial future. Budgeting for your move is important in two different ways. We’ve talked a bit already about how to adjust your budget for your new situation, but it’s also important to make a budget for the move itself.

Without a budget, it can be easy to spend much more than you intended to on your move. Moving is always stressful, so before you notice it, you can find yourself spending hundreds or thousands of extra dollars. Make sure to do your research on moving options, and don’t forget to give yourself some grace in the budget to account for unexpected things to come up while moving.

The Bottom Line

Moving to a new city is an exciting time, and can be a great opportunity to get a fresh financial start. Make sure to compare the cost of living in your new city, and how it compares to the prices that you’re used to. Adjust your budget for your new living situation and don’t forget to budget for the move itself. One great way to update your budget is to take a look at some of your recurring monthly subscriptions and have an honest conversation with yourself and others in your household about which subscriptions are worth it for you. Following these tips can get you off to a great start in your new city and with your new life.

Save more, spend smarter, and make your money go further

Dan Miller

Dan Miller is a freelance writer and founder of PointsWithACrew.com, a site that helps families to travel for free / cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 kids. More from Dan Miller

Source: mint.intuit.com

Dear Penny: We Have Bad Credit. Is There Any Hope for a Debt Consolidation Loan?

Dear Penny,

We have credit scores in the 500s, and we are being declined for loans to consolidate our debt to improve our credit.

We understand the importance of improving our credit scores and are frustrated that the debt consolidation we have been advised to apply for is not working out — no approvals. Who can we turn to for a loan?

-D.

Dear D.,

When you have a smorgasbord of debts, life feels like a juggling act. So many due dates, so many interest rates, so many terms and conditions to keep track of.

Then you see the claims in the ads for debt collection loans. Get rid of high-interest credit card debt today! One low monthly payment!

It sounds like a magic little pill that will cure all your financial ailments, right? If only it were that simple.


Unfortunately — as you’ve learned — the people who could benefit most from a debt consolidation loan often don’t qualify. Most lenders require a credit score of at least 620.

You could try applying through a credit union, though membership is required. Unlike big banks, credit unions tend to look beyond your credit score at your overall financial health when you’re seeking a loan.

You can also use websites like Credible, Even Financial or Fiona to shop around for loans. (No, none of them paid me to say that.) But keep in mind that many of the lenders these sites partner with will also require a credit score in the 600s.

While you might be able to consolidate with a lower credit score, you’ll often pay astronomical interest rates — sometimes as much as 30% — which kind of makes the cure as bad as the disease.

But here’s the thing about debt consolidation: Often the benefit is more psychological than mathematical. Sure, life would be a lot simpler with a single monthly payment, but if you can’t lock in a lower interest rate, debt consolidation won’t save you money.

You say you want to consolidate to improve your credit score. If you have enough money to make at least your minimum payments, you’ll gradually see your score increase as you make on-time payments and lower the percentage of your credit you’re using.

Consider speaking with a credit counselor, especially if you can’t afford your minimum payments. The world of debt relief is rife with scammers, so make sure any counselor or organization you work with is a nonprofit that’s accredited by the National Foundation for Credit Counseling.

A credit counselor will help you figure out how to manage your money and debts. The counselor may work out a debt management plan where you make a single payment each month to the counseling organization, which will pay your debts on your behalf. They might be able to lower your monthly payments by negotiating lower interest rates or a longer repayment period, though they generally won’t be able to reduce what you owe.

Avoid companies that offer to work out a debt settlement plan, in which you’ll stop making payments so the company can negotiate to reduce your debt. Not only will these plans kill your credit, but you’ll also owe taxes on the amount that’s forgiven.

It’s easy to get discouraged when you’re deep in debt and low on options for rebuilding your credit. But keep in mind that while a debt consolidation loan might improve your credit somewhat in the short term, it won’t fix the underlying causes of your debt.

Building good credit doesn’t happen quickly. You have to figure out a way not to rely on credit, and to spend less than you make. It requires discipline and a commitment to financial health. And there’s no magic pill for that.

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.

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Source: thepennyhoarder.com

Credit Card Network vs Issuer: What Is the Difference?

While credit card networks and card issuers both play a role when you use your credit card to make a purchase, they do different things. Credit card networks facilitate transactions between merchants and credit card issuers. Meanwhile, credit card issuers are the ones that provide credit cards to consumers and pay for transactions on the cardholder’s behalf when they use their card.

Where it can get confusing is that some credit card networks are also card issuers. To get a better understanding, keep reading for a closer look at the differences between a credit card network vs. issuer.

What Is a Credit Card Network?

Credit card networks are the party that creates a digital infrastructure that makes it possible for merchants to facilitate transactions between merchants and the credit card issuers — meaning they’re key to how credit cards work. In order to facilitate these transactions, the credit card networks charge the merchants an interchange fee, also known as a swipe fee.

Here’s an example of how this works: Let’s say someone walks into a clothing store and uses their credit card to buy a pair of pants. They swipe or tap their credit card to make the purchase. At this point, the store’s payment system will send the details of this transaction to the cardholder’s credit card network, which then relays the information to the credit card issuer. The credit card issuer decides whether or not to approve the transaction. Finally, the clothing store is alerted as to whether or not the transition was approved.

Essentially, credit card networks make it possible for businesses to accept credit cards as a form of payment, making them integral to what a credit card is. Credit card networks are also responsible for determining where certain credit cards are accepted, as not every merchant may accept all networks.

The Four Major Card Networks

The four major credit card networks that consumers are most likely to come across are:

•   American Express

•   Discover

•   Mastercard

•   Visa

All of these credit card networks have created their own digital infrastructure to facilitate transactions between credit card issuers and merchants. These four credit card networks are so commonly used that generally anywhere in the U.S. it’s possible to find a business that accepts one or more of the payment methods supported by these merchants. When traveling abroad, it’s more common to come across Visa and Mastercard networks.

Two of these popular payment networks — American Express and Discover — are also credit card issuers. However, their offerings as a credit card network are separate from their credit card offerings as an issuer.

Does It Matter Which Card Network You Use?

Which credit card network someone can use depends on the type of credit card they have and whether the credit card network that supports that card is available through the merchant where they want to make a purchase. Most merchants in the U.S. work with all of the major networks who support the most popular credit cards, so it shouldn’t matter too much which credit card network you have when shopping domestically. When traveling abroad, however, it’s important to have cash on hand in case the credit card network options are more limited.

Merchants are the ones who are more likely to be affected by the credit card networks that they use. This is due to the fact that credit card networks determine how much the merchant will pay in fees in order to use their processing system.

Recommended: Charge Cards Advantages and Disadvantages

What Are Credit Card Issuers?

Credit card issuers are the financial institutions that create and manage credit cards. They’re responsible for approving applicants, determining cardholder rewards and fees, and setting credit limits and the APR on a credit card.

Essentially, credit card issuers manage the entire experience of using a credit card. Cardholders work with their credit card issuer when they need to get a new card after losing one, when they have to make their credit card minimum payment, or when they want to check their current card balance.

Credit card issuers can be banks, credit unions, fintech companies, or other types of financial institutions. Some of the biggest credit card issuers in the U.S. are:

•   American Express

•   Bank of America

•   Barclays

•   Capital One

•   Chase

•   Citi

•   Discover

•   Synchrony Bank

•   U.S. Bank

•   Wells Fargo

Credit Card Network vs Issuer: What Is the Difference?

Credit card issuers and credit card payment networks are easy to confuse. The main difference is that credit card networks facilitate payments between merchants and credit card issuers whereas credit card issuers create and manage credit cards for consumers. If you have an issue with your credit card — like in the instance you want to dispute a credit card charge or request a credit card chargeback — it’s the issuer you’d go to.

These are the main differences to be aware of when it comes to credit card networks vs. issuers:

Credit Card Issuer Credit Card Payment Network

•   Creates credit cards

•   Manages credit cards

•   Accepts or declines applicants

•   Sets credit card fees

•   Determines interest rates and credit limits

•   Creates rewards offerings

•   Approves and declines transactions

•   Processes transactions between credit card companies and merchants

•   Creates the digital infrastructure that facilitates these transactions

•   Charges an interchange fee to merchants

•   Determines which credit cards can be used at which merchants

How Credit Card Networks and Issuers Work Together

Credit card networks and issuers need each other to function. Without a credit card network, consumers wouldn’t be able to use their card to shop with any merchants, and the credit card issuer’s product would go unused. Credit card networks create the infrastructure that allows merchants to accept credit cards as payment.

However, it’s up to the credit card issuers to approve or decline the transaction. The credit card issuer is also the one responsible for getting credit cards into consumers’ hands when they’re eligible and old enough to get a credit card, thus creating a need for the credit card networks’ services.

Recommended: When Are Credit Card Payments Due

Get a New SoFi Credit Card Online and Earn 2% Cash Back

Credit cards can be a useful financial tool, but it’s important to understand their ins and outs before swiping — including the difference between a credit card network vs. card issuer. Both are critical to credit card transactions, with the credit card network facilitating the transaction between the issuer and the merchant, and the credit card network approving or denying the transaction.

While the major credit card networks are available at most merchants in the U.S., this may not be the case abroad, which is why it’s important to be aware of when choosing a credit card. This among many other considerations, of course, such as searching for a good APR for a credit card and assessing the fees involved.

If you’re on the search for a new card, consider applying for a credit card with SoFi. SoFi cardholders earn 2% unlimited cash back when redeemed to save, invest, or pay down eligible SoFi debt. Cardholders earn 1% cash back when redeemed for a statement credit.1

Learn more about the SoFi credit card today!

FAQ

What is a credit card network?

A credit card network is the party that creates the necessary infrastructure to process transactions between a credit card issuer and a merchant. Whenever someone makes a purchase with a credit card, it is processed by a credit card network. In return for processing the transaction, the merchant pays the credit card network an interchange fee, which is how the credit card networks make money.

How do I know my credit card issuer?

To find out a credit card’s issuer, simply look at your credit card. There will be a string of numbers on the credit card, and the first six to eight digits represent the Bank Identification Number (BIN) or the Issuer Identification Number (IIN). The Issuer identification number identifies who the credit card issuer is.

Who is the largest credit card issuer?

The four largest credit card networks are American Express, Discover, Mastercard, and Visa. Most merchants in the U.S. work with all four credit card networks. When traveling abroad, it’s more common to come across Visa and Mastercard networks.


1See Rewards Details at SoFi.com/card/rewards.
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.
The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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Source: sofi.com

Swimming Pool Financing: What to Know and Best Pool Loans

Who doesn’t love a relaxing dip in the swimming pool on a sweltering, hot day? And when that swimming pool is in your backyard, it’s even better.

You could bring your friends together over the summer by hosting pool parties. You could teach your kids to swim right at home. If you rent out your place on Airbnb or Vrbo, you could fetch top dollar for the additional amenity.

Sounds like a dream.

If your house didn’t already come with a pool when you moved in, there’s still a possibility of turning your pool fantasies into reality if you have enough space.

And if you don’t have tens of thousands of dollars upfront to spend on a pool construction project, there’s always pool financing.

What Is Pool Financing?

Pool financing is when you borrow money from a financial institution or lender to cover the costs of building a pool. Pool construction typically costs anywhere from $17,971 to $46,481 with the average cost being around $32,059, according to HomeAdvisor.

Of course, the cost will vary based on the size, the type of pool, your location and where you plan to build the pool on your property. Adding a small plunge pool to a cleared, flat space in your backyard will cost considerably less than adding a resort-style pool with waterfalls and a jacuzzi to your property that requires you to cut down multiple trees and level the land.

Besides the personal enjoyment that comes along with having a pool, this addition to your home could boost your property value and make your home more desirable to future buyers, renters or short-term guests.

The high cost to install a pool means that many people rely on pool financing. There are several ways to go about getting a loan for a pool.

Options for Pool Financing

If you want to add a pool to your property, but don’t have the cash upfront, you have several options.

You could get a personal loan (sometimes referred to as a pool loan), a home equity loan, a home equity line of credit or a cash-out refinance. Some pool builders or retailers offer in-house loan programs through their partner lenders. You might also consider using a credit card as your method of financing.

Personal Loans (AKA Pool Loans)

Pool loans are unsecured personal loans offered by banks, credit unions and online lenders. You may be able to get a pool loan through the financial institution where you already have existing accounts, or you might choose to get financed from an online lender or financing consultant company that deals exclusively with pool loans and home improvement loans.

One of the benefits of personal loans is that you don’t have to offer up any collateral. If you stop making payments and default on your loan, you don’t have to worry about your house being foreclosed — though the lender still could sue you. If approved for an unsecured personal loan, you can usually receive funds within a couple of days, much quicker than some other financing options.

Because you don’t have any collateral backing the loan, however, these financing options can come with higher interest rates. Interest rates can start around 3% and go up to about 36%.

A borrower’s credit score, credit history, income and existing debt load all affect the interest rate.

Personal loan terms generally range from about two to 12 years — though some pool loans can have terms up to 20 years or more. You can get loans from $1,000 to over $200,000 to fund simple above-ground pools or elaborate in-ground pool projects.

Home Equity Loans

Home equity loans are essentially when you tap into the equity you have in your home and take out a second mortgage. If you have a significant amount of equity, you could finance your pool project this way.

Home equity loans generally have lower interest rates than personal loans because your home is used as collateral. If you default on your loan, the lender could foreclose on your home.

Also, with home equity loans you’ll face additional fees, like a home appraisal cost and closing costs, so be sure to factor that into your decision making.

Home Equity Line of Credit (HELOC)

A home equity line of credit or HELOC also taps into the equity you have in your home, but it’s a revolving line of credit that you can use for several years instead of a loan that provides you with one lump sum of cash.

With a HELOC, you can pull out funds as needed to finance your pool construction and other home improvement projects. While you’ll only pay back what you borrow, the interest on HELOCs are usually adjustable rates rather than fixed rates. That means your monthly payments can increase during your repayment period.

Cash-Out Refinance

A cash-out refinance is essentially when you replace your existing mortgage with a new mortgage that exceeds what you owe on the house and you take out the difference in cash.

You can then use that lump sum to pay for your pool, and you’ll pay it back throughout the course of your new mortgage — over the next 10 to 30 years depending on your loan terms.

A cash-out refinance might make sense if you’re able to get a lower interest rate than your current mortgage. However, just like with a home equity loan or HELOC, your home is being used as collateral, and you’ll face additional fees involved in the refinancing process.

In-House Financing from the Pool Builder

Some pool companies may directly provide you with pool financing offers, so you don’t have to search for financing on your own. The pool companies typically aren’t offering the loan to you themselves, but they’ve partnered with a lender or network of lenders to provide you with financing options.

This type of financing is the same as applying for a personal loan or pool loan. The benefit is that you get a one-stop-shop experience instead of having to reach out to lenders individually. Your pool contractor may even be able to assist you through the loan process.

The downside is that you could potentially miss out on a better deal by only getting quotes from the pool company’s partnered lenders.

Credit Cards

Because of their high interest rates, credit cards are usually not recommended as options for financing a new swimming pool. However, there can be situations where it’d make sense.

If you’re able to open a zero-interest credit card and pay the balance back before the zero-interest period expires, paying with a credit card can be a great option — especially if it’s a rewards card that’ll give you points, airline miles or cash-back for spending or a bonus just for opening the account.

If you choose this financing option, be sure that you’ll be able to pay off the balance in a relatively short period of time. Most credit cards only offer zero-interest periods for the first 12 to 21 months. After that your interest rate could go up to 18% or more.

Pool Loan Comparisons

Getting quotes from multiple lenders will help you select the best deal for your pool construction project. Here’s what a few top lenders are currently offering.

Lyon Financial

Best for Long Loan Terms

4.5 out of 5 Overall

Key Features

  • Pays the pool contractor directly
  • 600 minimum credit score
  • Offers military discounts

Lyon Financial is a financing consultant that has been in business since 1979 and works with a network of lenders to provide loans for pool and home improvement projects. Unlike personal loans that provide the borrower with the funds upfront, Lyon Financial disburses the funding directly to the pool builder in stages as the project progresses.

Lyon Financial

APR (interest rates)

As low as 2.99%

Maximum loan amount

$200,000

Loan terms

Up to 25 years

HFS Financial

Best for Large Pool Loans

4 out of 5 Overall

Key Features

  • Provides loans up to $500,000
  • Most loans are funded within 48 hours
  • No prepayment penalties

HFS Financial is a financing company that partners with third-party lenders to provide homeowners with the money to construct pools on their property. Use their “60 second loan application” to kick off the loan process. Funds are typically dispersed within 48 hours.

HFS Financial

APR (interest rates)

As low as 2.99%

Maximum loan amount

$500,000

Loan terms

Up to 20 years

Viking Capital

Best for Customer Service

4.5 out of 5 Overall

Key Features

  • Supports a network of pool builders
  • 650 minimum credit score
  • Offers military discounts

Viking Capital is a family-owned business that has been in operation since 1999. The company acts in the capacity of a financial consultant, and partners with a network of lenders to provide multiple loan offers for pool construction projects.

Viking Capital

APR (interest rates)

As low as 5.49%

Maximum loan amount

$125,000

Loan terms

Up to 20 years

5 Steps to Securing Pool Financing

Follow these steps to secure a loan for your pool.

1. Determine What Monthly Payments You Can Afford

Before you dig into your pool financing options, you should be clear on what monthly payment you can afford. Having a pool is a luxury. You don’t want a pool construction project to jeopardize your ability to pay your bills and meet your needs.

Figure out how much disposable income you have to work with by comparing your monthly earnings to how much you typically spend each month.

Don’t forget to factor in maintenance and additional utilities usage when estimating how much you can afford to go toward pool costs.

2. Check Your Credit History

When you’re financing a pool, having a good or excellent credit score will help you secure a loan with a low interest rate. Ideally, your credit score should be 700 or above.

Some lenders may offer you financing if you have fair or poor credit, however you may have to pay a lot more over time due to higher interest rates.

To boost your credit score before applying for a pool loan, follow these steps.

3. Get Cost Estimates for Your Pool

Talk with pool builders to get estimates on the total cost of your desired pool project. Get estimates from multiple pool companies so you have a better idea of what options exist.

If the estimates come in higher than you expected, consider scaling down the size of your pool project or using different materials.

Make sure any additional work — like constructing safety fencing — is included in your estimate.

4. Choose What Type of Financing Your Prefer and Shop Around For Lenders

After you figure out what options are available within your budget, it’s time to decide on what type of financing you prefer.

Will you be applying for an unsecured loan or do you plan to tap into your home equity or refinance your mortgage? Are you going to purchase a small above-ground pool that you could pay off in 15 months using a zero-interest credit card?

Once you know what type of financing you’ll go with, reach out to multiple lenders so you can compare offers and choose the best deal. You may be able to use a competitor’s lower offer to get a lender to reduce their offer even further.

5. Complete Loan Application and Sign Off on All Paperwork

The final step to get your pool project financed is to complete any additional paperwork and sign off on the dotted line. Expect to provide information about your income and other existing debt.

Your credit score may take a dip after taking on new debt, but it should rebound as you make regular, on-time payments.

Alternatives to Pool Financing

Taking on debt for a new pool doesn’t have to be your only option.

You could put off your pool construction project for a few years and save up for the expense in cash. Open a high-yield savings account to use as a sinking fund and don’t make withdrawals from the account until you’ve reached your savings goal.

If you think you’re outgrowing your current home — or are looking to downsize — wait until you’re ready to move and then look for a new home with an existing pool.

Or if you’re okay with not having a pool in your backyard, you’ll save money by visiting public pools or renting private pools from Swimply on occasion. This is a good option if you think you wouldn’t get much regular use of having your own pool.

Frequently Asked Questions

How many years can you refinance a pool for?

You can finance a pool over 20 to 30 years, depending on the type of financing you secure. If you need decades to pay back the loan, you might consider refinancing your mortgage or taking out a second mortgage. Private, unsecured loans typically need to be repaid sooner, however some have loan terms of 20 years or more.

What is the best way to finance a pool?

It all depends on your individual circumstances and preferences. If you’ve built up a ton of equity in your home and want to spread your debt payments over a lot of time, you might lean toward a home equity loan or HELOC. If you’ve got excellent credit and would qualify for a low-interest personal loan (unsecured loan), that might be the better option.

What credit score do you need for pool financing?

Ideally, you’ll want to have a credit score of 700 or higher to get the best interest rates for pool financing. Some companies, however, will accept lower credit scores. As a result, your loan may have a higher interest rate.

What is a good interest rate for a pool loan?

An interest rate around 5% is a good deal for a pool loan. You may be able to find rates even lower if you have excellent credit.

Nicole Dow is a senior writer at The Penny Hoarder.

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Source: thepennyhoarder.com