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May 28, 2023 by Brett Tams

Credit card pre-approval makes signing up for your first credit card a lot easier.

The credit card marketplace is crowded, and every issuer is advertising to get your attention. But they may not tell you (or only tell you in the fine print) which cards you’re actually likely to get approved for, or which will score you the best interest rates.

A little research into good credit cards can help you cut through the noise, and the pre-approval process helps you narrow down which cards are the best fit for your (cloth or virtual) wallet. It’s a low-risk opportunity to pick the credit card with the features you want — and to make sure you qualify.

What’s Ahead:

What is pre-approval?

Credit card companies are always on the lookout for new customers. One way they find potential cardholders is by pre-screening credit reports from the major credit bureaus.

They identify consumers whose credit scores and reports are in the ballpark of what the company looks for — like no bankruptcies, no delinquencies for several months, and a score below the company’s minimum cutoff.

Then they’ll send a pre-approval card offer to these consumers.

It’s important to remember that pre-approval doesn’t mean you’re automatically qualified for the card. But it does mean you’ve made the “first cut” by fitting the credit card issuer’s most basic requirements.

What’s the difference between pre-qualification and pre-approval?

Some issuers use the term “pre-qualified” instead of “pre-approved.” Though these terms are sometimes used interchangeably, they describe different types of offers based on who initiates the process.

Pre-qualification for a card means the customer (you) makes the first request.

If you’re interested in a specific card, you can go to the company’s website and fill out some basic info. The company responds by showing you the cards and offers you might qualify for if you made a formal application. At that point, you’re “pre-qualified” and can decide whether or not to apply.

Or a lender may invite you to find out if you pre-qualify for their card (through an advertisement, for instance). This isn’t pre-approval, since the lender hasn’t screened your credit yet to see if you’ve made the first cut.

Pre-qualification may be the route to take if you’re brand new to credit — without a credit score, you’re probably not getting on pre-approval mailing lists.

Pre-approval means the credit card company reaches out to you first because you meet their basic requirements. Once they’ve scanned consumers’ credit scores, they let certain consumers know they’ve been “pre-approved.”

Lenders often tap into their existing customer base to find people to pre-approve, as well. If your current bank is rolling out a new credit card, for example, they might send you a pre-approval offer.

Which is better, pre-approval or pre-qualification?

Neither of these processes is better than the other, or more likely to get you final approval. They’re just different ways to review your credit card options.

For both pre-approval and pre-qualification, you’ll go through a soft credit check — a check that doesn’t impact your credit score. This means both processes are relatively risk-free.

The hard credit check, the one that knocks a few points off your score, doesn’t happen until you fill out the longer application for the card.

Read more: Soft pull vs. hard pull – how each affects your credit

How do I get pre-approved for a credit card?

Respond to an offer from a credit card company

If you have time to pick a card and don’t have a lender you prefer, you can wait for the credit card company to come to you.

Companies do still send offers by snail mail, though not as much as they once did. So it’s worth taking a look at any mail offers before dropping them in the recycling bin.

Pre-screened offers are different from the general mailings that companies send to everyone on their marketing list. Look for the words “pre-approved,” “pre-qualified,” or “pre-screened.” The offer may include an invitation code you’ll need to apply for the card online.

One advantage to applying for a pre-approval offer is that they’ll sometimes give you an introductory deal associated with the offer, like a sign-up bonus or a few extra months of 0% interest.

These deals aren’t always advertised to the general public, so they’re a nice pre-approval perk.

Request pre-qualification on a credit card company’s website

Inquiring about a pre-qualification offer may be the best way to get credit card pre-approval if:

You’re new to credit and opening your first credit card.
You’re rebuilding a low credit score.
You want to go through a certain bank or apply for a specific card, and you haven’t received an offer.
You want to check out a wider range of card options.

Most major card issuers that offer pre-qualification have an online link to a simple form. Usually, you won’t enter more than your:

Name.
Address.
Date of birth.
Social security number.

Why is it important to get pre-approved or pre-qualify?

If you’re shopping around and considering lots of different cards, pre-qualification is a risk-free way to compare initial offers before you fill out any applications.

The pre-approval stage allows you to:

Rule out any cards or issuers that you don’t qualify for, so you don’t waste time applying.
Figure out the interest rate range you’re likely to get.
Compare potential sign-on bonuses, loyalty rewards, and other credit card features.
Double-check the card company’s requirements for cardholders, which are more detailed than their pre-approval requirements.

When you take the next step of a formal application, you’re officially applying for new credit. This means the company is required to run a hard credit check. They’ll ask your permission first.

Hard credit checks do show up on your credit score, usually knocking it down only 10 or 20 points. That’s not a huge deal if it happens once in a while.

But if you apply for credit pretty frequently — more than two or three times in six months — your credit score takes a bigger drop.

With pre-approval, you can make sure you’re only committing to the hard credit check if you’re likely to be approved for new credit.

Picking the right credit card to apply for

As a savvy MoneyUnder30 reader, you probably know this already, but I’ll remind you just in case: pre-approval or pre-qualification doesn’t mean the card is the best fit for your needs and lifestyle.

First, spend some time figuring out what you want in a credit card. I suggest asking yourself questions like:

Are you likely to use it for big expenses like travel, or everyday costs like groceries?
Do you want a card where the rewards category matches up with the way you spend?
Is your main goal to start building credit?

Once you know what’s important to you, you can use the pre-approval process to find cards that are a good match.

This is especially helpful if your credit card pre-approval offer suggests multiple cards from the same company. These cards will all have slightly different terms, so take the time to do your research about their differences.

Read more: Best credit cards for young adults & first-timers

How do you apply for a credit card after you’re pre-approved?

The pre-approval or pre-qualification process doesn’t require much info.

You’ll usually enter your name, birth date, address, and your social security number (either the last four digits or the whole number) to confirm your identity.

The official application is a lot more thorough. At a minimum, be prepared with:

Income information. You may or may not need to submit proof of income, depending on the issuer. But you’ll at least have to estimate how much you earn every year.
Housing payment information. This should include how much you’re paying in rent or mortgage a month.
Employment status.
Income details for a co-signer, if someone is co-signing for the card with you.

Read more: How to apply for a credit card (and approval requirements)

What credit score do you need?

It depends. There’s no minimum score that applies to all issuers, so if you have any credit at all, it may be possible to pre-qualify for a card. Of course, the better your credit is, the more offers will be available.

If you don’t have a credit history, it’s a little trickier. Some card issuers consider alternative credit data, like income and work history, to determine financial responsibility.

Read more: What credit score do you need to get approved for a credit card?

After you get approved

If you make the final cut and get approved, not just pre-approved, it’s time to double-check your card terms.

Credit card companies are required to provide the same terms listed in the initial pre-approval offer if they accept you. This means you should get the same interest rate, fee, or bonus that was stated in the offer. Many pre-approvals show a range of interest rates, so they’re required to give you a rate somewhere within that range.

Read more: The best credit cards – MU30’s top picks

Are you guaranteed approval when pre-approved for a credit card?

Not necessarily. A pre-approval or pre-qualification is an invitation to apply, not a guarantee of acceptance. It means there’s a strong chance you’ll meet the standards for cardholders, but the lender needs to know more before actually extending you credit.

Can you get denied after pre-approval?

Remember, pre-approval is just the first step in the process. You can get denied after submitting a formal application, even if you were pre-qualified or were pre-approved.

According to a 2019 report, only around 40% of credit card applicants made the final cut and got approved for a card.

When you officially apply, you’re giving credit card issuers a lot more information about your financial status than you did in the pre-screening stages. This means they’ll judge you a little more strictly.

Here are some of the most common reasons pre-approved candidates get their applications declined:

Your monthly or annual income doesn’t meet the issuer’s minimum cutoff.
Your reported payments are too high relative to your income.
Your credit data has changed significantly since the pre-approval offer.
You’ve taken on debt or missed several payments since the pre-approval offer.
Your income has dropped since the pre-approval offer.

The lender should send you a letter telling you why they made the decision, so it won’t be a mystery.

What if I can’t get pre-approved for a credit card?

If you don’t get any card pre-approvals or pre-qualifications, don’t sweat it. Credit lenders may be looking for cardholders who fit a particular financial profile, and that doesn’t reflect on your general creditworthiness. You still have a number of options.

Try pre-qualifying with another credit card company. Their terms may be more generous or suited to what you need.
Apply anyway. This is a risk because the issuer will run a hard credit check. But if you have stable employment, good income stats, or a co-signer with strong credit, these factors may make up for a less-than-perfect credit score.
Work on improving your credit. Make rent, bill, and loan payments on time. If you’re brand new to credit, you can take out a credit builder loan (as long as you’re able to pay it back on schedule!). Or ask a trusted family member or partner if you can be an authorized user on their account.

Read more: How to build credit the right way

Apply for a secured credit card

For credit newbies, secured credit cards are a nice bridge into the world of credit, and a lot of major card issuers offer them.

You’ll “secure” the card with a deposit — this amount can vary, but think around $200 — which gives you access to a credit line up to that amount. Then you spend just as you would on any other card.

After several months of responsible use, you’ll usually be eligible to transition to an unsecured credit card from the same company.

Read more: Best secured credit cards

Credit card companies that offer pre-approval

Most of the bigger credit card names have pre-approval or pre-qualification forms that are easy and quick to fill out online.

Keep in mind you may not be able to seek pre-approval for every card in the lender’s collection, but they’ll offer a decent range of cards to choose from.

Summary

Whether you’re getting your first credit card or adding one to your collection, it’s worth going through the pre-approval process first. You’ll save time, preserve your credit, and hopefully end up with a great card that will help you achieve financial stability.

Featured image: Roman Samborskyi/Shutterstock.com

Apache is functioning normally

May 27, 2023 by Brett Tams

Would you like to open a checking account, but you’re worried that your bad credit and past banking history might get in the way? With these issues, it can be difficult to open a new bank account.

20 Best Bank Accounts for Bad Credit

Regardless of your banking history, there are numerous banks and credit unions that offer bad credit checking accounts, all with unique features and benefits.

1. Chime

Our Top Pick

No minimum opening deposit or monthly service fee
Over 60,000 fee-free1 ATMs
Get paid up to 2 days early with direct deposit²
No credit check or ChexSystems

2. U.S. Bank

$400 sign-up bonus
Monthly service fee can be waived
Over 40,000 fee-free ATMs
$25 minimum opening deposit

3. GO2bank

4.50% APY on savings up to $5,000
No minimum opening deposit
Build credit with no annual fees
Overdraft protection up to $200

4. Chase

$100 bonus after 10 purchases in 60 days
No credit check or ChexSystems
Over 16,000 fee-free ATMs
$4.95 monthly fee

5. mph.bank

Earn 4.70% APY on unlimited savings
No minimum balance to open
Get paid up to two days early
Free withdrawals at over 55,000 ATMs

6. Current

No credit check or ChexSystems
No minimum deposit or maintenance fees
Get paid up to two days faster
Overdraft up to $200 without any overdraft fees

7. Walmart MoneyCard

No monthly fee with direct deposits of $500 or more
Earn up to 3% cash back on purchases
Overdraft protection covering up to $200 with eligible direct deposits
2% APY on savings

8. Revolut

No monthly fee
Earn up to 4.25% APY on savings
Cash withdrawals at more than 55,000 ATMs
Commission-free stock trading

9. TD Ameritrade

No monthly fee
Unlimited fee refunds for U.S. ATMs
Free TD Bank debit card
Free checks and unlimited check-writing capabilities

10. Albert

No minimum balance
Cash advances up to $250
No maintenance fees
Free ATMs at over 55,000 locations

: 11. SoFi

With the SoFi Checking and Savings account, you won’t have to worry about being charged any overdraft fees, minimum balance fees, or monthly fees.

Plus, it offers free access to ATMs at over 55,000 locations within the Allpoint® Network. Similar to Chime and Current, you can get your paycheck up to two days sooner when you set up direct deposit.

You’ll also get a 1% APY on your checking and savings accounts and up to 15% cash back at local establishments with your SoFi debit card.

12. Navy Federal Credit Union

If you are an active-duty or retired member of the military, including the Armed Forces, National Guard, Coast Guard, or Department of Defense, you may be eligible for Navy Federal Credit Union membership.

NFCU doesn’t utilize ChexSystems or EWS. They also offer a free checking account alternative with no monthly service fees for those with qualifying direct deposits.

Additionally, NFCU offers its members convenient access to over 30,000 ATMs situated at both credit unions and retail locations across the United States and Canada through the CO-OP Network.

13. Aspiration

With the Aspiration Spend & Save account, you get an online checking account and savings account that has the potential to earn up to 5% APY.

Aspiration also offers unlimited cash withdrawals at over 55,000 ATMs. The minimum initial deposit is $10. Deposits are FDIC insured and you can get paid up to two days sooner.

The Aspiration debit card is made from recycled plastic. Deposits are 100% fossil fuel-free. And this online bank even gives you the option to plant a tree with every card swipe.

14. Southwest Financial Federal Credit Union

Southwest Financial presents a reliable banking option that prioritizes the financial wellbeing of its members. With no monthly service fees, it offers a cost-effective solution to managing your everyday finances.

Opening an account is easy and requires no minimum deposit. As a member of Southwest Financial Federal Credit Union, you enjoy the convenience of accessing your funds through a shared network of ATMs.

15. FSNB

FSNB (formerly Fort Sill National Bank) offers a hassle-free Basic Checking account to its customers, with a $5 minimum deposit requirement.

With the Basic Checking account, you need to maintain a minimum daily balance of $75. Otherwise, you’ll be charged a monthly fee of $5.50.

This account comes with a host of convenient features, including a Visa CheckCard that allows you to make purchases and withdraw cash at ATMs worldwide. Additionally, FSNB offers free online banking services, giving you access to your account from the comfort of your home or office.

16. Wells Fargo

Wells Fargo’s Clear Access Banking offers a practical, accessible checking account designed to suit various banking needs. While there is a $5 monthly service fee, this fee is waived for primary account owners aged 13 to 24.

With a minimal opening deposit of just $25, setting up Clear Access Banking is straightforward and affordable. As an account holder, you’ll have the convenience of accessing your funds through Wells Fargo’s extensive network of 13,000 ATMs and 5,300 branches across the country.

17. United Bank

United Bank has locations in Maryland, Ohio, Pennsylvania, Virginia, West Virginia, and Washington, DC. You can open a bank account with a $50 minimum initial deposit. You do not have to maintain a minimum balance and they don’t charge monthly fees.

You can also upgrade to rewards checking, where you earn cashback rewards on debit card purchases. You also get discounts on movies, theme parks, and prescriptions. The monthly service charge is $10, but you can have it waived if you reach 15 purchase transactions monthly or have a minimum of $500 in regular deposits.

18. Huntington National Bank

Huntington has locations in Arizona, Colorado, Illinois, Indiana, Michigan, Minnesota, Ohio, South Dakota, and Wisconsin.

Huntington Bank uses ChexSystems, but you can still qualify for a checking account as long as you don’t owe the bank any money. However, applicants with an EWS record may not qualify.

For Huntington’s basic account, there is no minimum opening deposit and no minimum balance requirement.

19. Varo

Varo is an online-only bank that offers a hassle-free banking experience with no monthly fees. As a Varo customer, you’ll gain access to early direct deposit payments, which means that your funds will typically be available on the same day they’re received.

Varo Bank knows that just because you need second chance banking doesn’t mean you want sub-standard service. The checking account comes with a free Visa debit card, access to over 55,000 Allpoint ATMs, and free paper check mailing.

20. Regions Bank

You’ll need a minimum opening deposit of $50 to open a Simple Checking Account at Regions Bank. This account doesn’t come with too many bells and whistles. However, it’s a suitable option for anyone with bad credit who wants a basic checking account.

Regions Bank will lower your monthly maintenance fee from $8 to $5 if you sign up for online statements. And you’ll have the option to open a savings account through Regions Bank as well.

What is a bank account for bad credit?

A bank account for bad credit is a type of account designed for people with negative banking records. These people are usually turned away from traditional banks and credit unions because of past instances of bounced checks, overdrawn accounts, or unpaid non-sufficient fund fees.

Fortunately, some financial institutions provide bad credit bank accounts that offer basic banking services such as a debit card, online banking access, and check writing privileges. Direct deposit is also available with some of these bank accounts, which makes it easy to access your income sources.

Bad credit checking accounts are typically easy to open, with minimal fees and most importantly, no credit checks or ChexSystems reports.

How do banks evaluate new account applications?

Opening a bank account can be a straightforward process, but it’s not uncommon for applicants to be turned down or offered limited options. That’s because financial institutions have criteria they use to determine who qualifies for a bank account and what type of account they can offer.

One of the most important factors that banks consider when you apply for a new account is your banking history. To assess this, most banks will check your ChexSystems report, which is a database of your past banking transactions. This report includes information such as any unpaid fees or overdrafts, closed accounts due to fraudulent activity, and other negative marks.

If you have a negative history in ChexSystems, such as unpaid fees or a history of overdrafts, it can be more challenging to open a bank account. In some cases, the bank may decline your application altogether or offer you a limited account that doesn’t allow you to write checks or use a debit card.

Another factor that banks make consider is your credit history. Some banks may pull your credit report from the three major credit bureaus Equifax, Experian, and TransUnion, but most don’t.

Your credit report is typically accessed by credit card issuers and lenders to assess your creditworthiness when you apply for loans or credit cards. But for bank accounts, your ChexSystems record is generally more important.

What is ChexSystems?

ChexSystems is a consumer reporting agency that collects user data from banks and credit unions. One of the things this data is used for is to create consumer reports that financial institutions can use to screen customers.

When attempting to open a new bank account, most financial institutions will pull your ChexSystems report. This report will show your past banking history including overdrafts, bad checks, check fraud, negative balances, or excessive withdrawals.

If you’ve had any of these issues in the past five years, it will likely be on your ChexSystems record. Fortunately, there are several reputable banks that don’t use ChexSystems or check credit to qualify customers. There are also numerous banks that offer second chance checking accounts for people with bad credit.

Can you open a bank account with no credit check?

Opening a no-credit-check bank account is easier than ever, with plenty of reliable banking services to choose from. There are two types of bank accounts for bad credit: banks that don’t use ChexSystems and second chance checking accounts.

Banks that Don’t Use ChexSystems

Some banks simply do not use ChexSystems to evaluate new accounts. These banks offer no-credit-check bank accounts for people with bad credit or a negative banking history.

The good news is that these accounts come with the same features as regular bank accounts offered to everyone else. You can expect to have access to online banking, direct deposit, and a debit card.

Second Chance Checking Account

With a second chance bank account, financial institutions may conduct a credit check or refer to ChexSystems, but they’re willing to give you a second chance regardless of your banking history. Second chance bank accounts usually come with a monthly maintenance fee.

The best second chance checking accounts still have some of the same features as ChexSystems banks and credit unions, such as overdraft protection, online banking, and bill pay. Additionally, it should be possible to upgrade to a standard checking account after demonstrating responsible banking habits.

What to Look for in a Bad Credit Checking Account

If you’re struggling with poor credit history, you might be wondering how to find a checking account that meets your needs while also helping you rebuild your financial reputation. Fortunately, there are several banks that offer checking accounts for bad credit. Here are some key factors to consider:

No Credit Checks

The first thing to look for is a bank or credit union that doesn’t look at your credit report or ChexSystems record when opening a checking account.

Many institutions also offer “second chance” or “fresh start” checking accounts designed specifically for individuals with poor credit or past banking issues. These checking accounts provide an opportunity to rebuild your financial standing, and often offer the option to upgrade to a traditional checking account after a certain period of time.

Low or No Minimum Balance Requirement

When you’re trying to rebuild your credit, every dollar counts. Look for a checking account that doesn’t require you to maintain a specified balance. This way, you won’t be charged fees for falling below a certain balance threshold. This will help you keep more money in your pocket and avoid unnecessary expenses.

Reasonable Account Fees

It’s important to be aware of the fees associated with checking accounts, especially if you have bad credit. Be sure to compare the monthly maintenance fees, overdraft fees, and any other charges associated with the account.

Many online banks offer checking accounts with no monthly fees or waive them if certain conditions are met, such as maintaining a minimum account balance or setting up direct deposit.

Online and Mobile Banking Features

In today’s digital age, having access to online and mobile banking is essential. Look for a checking account that offers a user-friendly mobile app and website, enabling you to manage your money on-the-go. These features should include the ability to check your balance, transfer money, pay bills, and deposit checks remotely.

Account Alerts and Notifications

Opt for a checking account that offers customizable account alerts and notifications. These can help you stay on top of your account activity, track your spending habits, and avoid a potential overdraft fee. You can typically set up alerts for low balance, large transactions, or unusual activity.

Overdraft Protection

Overdraft fees can be a significant burden, especially for people with bad credit. Look for a checking account that offers overdraft protection, which can help you avoid costly overdraft fees. Some banks may offer linked accounts, lines of credit, or small-dollar loans to cover overdrafts.

FDIC or NCUA insurance

Ensure that your checking account is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). This insurance protects your cash deposits up to $250,000 per account holder in case the bank or credit union fails.

Opportunities for Financial Education

Finally, look for a financial institution that offers resources and tools to help you improve your financial literacy. This might include budgeting tools, educational articles, or workshops. The more you understand about managing your money, the better your chances of rebuilding your credit and maintaining a healthy financial future.

Bottom Line

Having poor credit doesn’t mean you can’t get a bank account. But, it does mean that your selection will be somewhat limited. We also show you how to clear your name and remove yourself from ChexSystems so that you can get a bank account anywhere.

It may take some time to get your name removed. Meanwhile, some of the banks we’ve listed above are just as good, if not better, than any account on the market right now. So, it’s a good idea to start with one of those.

Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.

1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

2. Early access to direct deposit funds depends on the timing of the submission of the payment ﬁle from the payer. Chime generally make these funds available on the day the payment ﬁle is received, which may be up to 2 days earlier than the scheduled payment date.

7. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or beneﬁts payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, veriﬁcation or trial deposits from ﬁnancial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

Source: crediful.com

Apache is functioning normally

May 26, 2023 by Brett Tams

In the past, you had to drive to your bank and work with a teller to manage your deposit accounts. These days, however, you have the option to complete virtually any banking need with any device that has internet access. You can pull out your smartphone and deposit a check. Or you may use your laptop to check your account balance.

That’s where banks called neobanks come in. It’s no surprise that neobanks are more popular than ever before. Let’s take a closer look at what they are and how they work so you can decide whether a neobank makes sense for your particular situation.

20 Best Neobanks

While traditional banks take up more market share than neobanks, you can still find a good amount of them if you do your research and shop around. The right neobank for you will depend on your unique lifestyle, needs, and preferences. To help you hone in on the ideal option, here’s our list of the top neobanks of 2023.

1. Chime

Founded in 2012, Chime is a financial technology company that offers banking services from The Bancorp Bank, N.A. and Stride Bank N.A. The Chime Checking Account is free of monthly maintenance fees and no minimum balance requirements.

Its perks include early direct deposit, automated savings features, access to over 60,000 or more fee-free ATMs, and free debit card replacement. In addition, you can take advantage of SpotMe and get up to $200 in fee-free overdrafts.

There’s also a Chime’s Savings Account, which offers a competitive interest rate with no cap on the amount of interest you can earn. Other services include Secured Chime Credit Builder Visa® Credit Card that doesn’t require a credit check, making it a suitable option if you have limited credit. Chime should be on your radar if you prefer a one-stop-shop for all of your banking needs.

You can read our full Chime review to learn more.

2. GO2bank

For more than a decade, Green Dot Corporation has specialized in alternative banking products. In 2013, GoBank made its debut as the first digital bank offering digital financial services. Then, in 2021, the company launched GO2bank, its second online bank.

GO2bank stands out from other neobanks which require you to sign up online because you can pick up their debit cards in person at Walmart and other popular retailers. GO2bank’s bank account tends to be a popular product in addition to its secured credit card that can help you build credit.

For a comprehensive overview, read our full GO2bank review.

3. Current

Since its inception in 2015, Current, which is not a bank, but a fintech company based in New York City, has partnered with Choice Financial Group and Metropolitan Commercial Bank to offer banking services. Its flagship products are a personal checking and debit card you can access via a mobile app on any iOS or Android device.

Even though Current’s product line is limited, the neobank prides itself on no shortage of perks and benefits. You can get your deposit up to two days early and earn cash back for debit card spending from more than 14,000 merchants. Additionally, Current doesn’t charge minimum balance fees or bank transfer fees and offers fee-free ATM withdrawals from ATMs in the Allpoint network.

If you would like to learn more, take a look at our Current review.

4. Revolut

Founded in 2015, Revolut is one of the largest European neobanks, serving more than 16 million customers. It has expanded its footprint to the U.S. market and has plans to become one of the most reputable neobanks in the world.

Revolut is unique in that it offers a wide array of financial services, such as bank accounts, debit cards, peer-to-peer payments, cryptocurrency, and currency exchange. It supports both individual consumers and businesses with more than 30 currencies. For a neobank with a diverse lineup of offerings, Revolut has you covered.

To learn more, read our full Revolut review.

5. Quontic Bank

Quontic Bank is a full-service, FDIC-insured online bank that was founded in 2002. It offers a range of banking products and services, including checking and savings accounts, credit cards, mortgages, and business banking solutions.

They offer some of the best annual percentage yields (APYs) in the industry. Quontic accounts come equipped with no overdraft fees, no incoming wire transfer fees, no monthly service fees, and access to over 90,000 surcharge-free ATMs.

Quontic also has a savings accounts feature called “Roundup”, which makes saving money simple and easy. In addition, they have a responsive U.S. based customer service team available to assist with any questions or concerns.

Read our full Quontic review for more information.

6. Dave

When Dave began in 2017, its sole focus was paycheck advances. Over time, it evolved to offer a checking account with no minimum balance requirements. If you become a Dave customer, you can receive early access to your paycheck, without a credit check or interest charges.

Dave also offers handy built-in budgeting features and doesn’t charge overdraft fees or ATM fees, as long as you use an ATM from the MoneyPass network. Dave may make sense if you’d like the option for small cash advances to get you through a financial hiccup from time to time.

See also: Free Online Checking Accounts: No Opening Deposit Required

7. Albert

Albert began as a money management app in 2016, but is now a personalized banking service that has attracted over 6 million customers. This digital banking account offers cash back and a range of benefits.

These including no-interest cash advances of up to $250, integrated budgeting and savings tools, and annual savings bonuses of up to 0.10%. There are no minimum balance requirements or overdraft fees. However, there is a minimum monthly fee of $4. Keep in mind that you’ll need to have an external bank account to open an account with Albert.

8. Varo

Varo Bank began in 2015 as a fintech company that partnered with The Bancorp Bank. In 2020, it acquired its own national banking charter, making it different from other neobanks you might come across. Even though Varo operates as an actual bank, it focuses on online banking via its website and mobile app.

Its checking account is free of monthly fees and there’s no minimum balance requirement. Plus it comes with a debit card. In addition, Varo partners with more than 55,000 ATMs through the Allpoint ATM network.

We can’t forget its other perks, such as contactless payments, credit cards with reporting to the major credit bureaus, early direct deposits, and no foreign transaction fee or transfer fees. Varo might be worthwhile if you’re looking for a checking account with all the bells and whistles.

Read our Varo Bank review to learn more.

9. Aspiration

Aspiration was founded in 2013 under the motto “Do Well. Do Good.” It partners with financial institutions like Coastal Community Bank and Beneficial State Bank to offer cash accounts, savings accounts, and a few investment accounts.

Aspiration’s most popular product is the Aspiration Spend & Save Account, which is a hybrid of a checking account and savings account. There’s also the Zero credit card, which offers cash back and plants a tree every time you make a transaction. Aspiration can be a good fit if you’d like to get rewarded for your spending and like the idea of one account for your checking and savings goals.

Read our full review of Aspiration to learn more.

10. Bluevine

Bluevine made its debut in 2013 as a fintech company with a mission to improve banking for small and mid-sized business owners. Its flagship product is the Bluevine Business Checking. It’s completely free and comes with a competitive annual percentage yield and unlimited transactions. This is rarely seen in the world of business checking.

In addition to the business checking account, Bluevine offers financing products, such as lines of credit of up to $250,000. Bluevine should be on your radar if you’re a business owner in search of fast, convenient startup banking and financing.

11. SoFi

Social Finance or SoFi entered the market as a student loan refinance company. Recently, however, the fintech company received its own bank charter to offer digital banking services. You can use the SoFi Checking and Savings combo account to manage your spending and saving needs in one place.

Fortunately, SoFi doesn’t charge monthly maintenance fees, overdraft fees, and ATM fees. Additional perks and extras include no-fee overdraft coverage, sub accounts for various savings goals, and additional products like credit cards, cryptocurrency trading, and retirement accounts, like an individual retirement account.

Read our full review of SoFi to learn more.

12. Acorns

Acorns has a reputation as an easy-to-use micro investing app. Since 2012, many people have downloaded it on their iOS or Android devices to invest their spare change. Over time, Acorns has expanded to offer a checking account.

You can open Acorns Checking for free and enjoy perks such as no monthly or overdraft fees, early direct deposit, mobile check deposit, and access to a network of 55,000 ATMs.

The checking account seamlessly integrates into the Acorns micro investing feature. Plus when you use your Acorns debit card, you can earn cash back at participating retailers and use it to invest, along with your spare change. If you’d like to get started with investing, Acorns is worth considering.

13. One

One is a neobank owned by Walmart. It offers a budget-friendly overdraft program with customized budgeting and savings options for its customers. One’s banking account allows users to organize their money into subaccounts called Pockets.

Pockets offer saving rates of 1% on up to $5,000 for any customer and 1% on up to $25,000 for customers with direct deposit. Additionally, One provides fee-free overdraft coverage of up to $200 for customers with direct deposits of at least $500 per month.

14. Cheese

Cheese is a digital banking platform that was launched in March 2021 and caters specifically to the immigrant and Asian American communities. It offers up to 10% cash back at 10,000 businesses, including Asian-owned businesses and restaurants.

Cheese’s customer support is available in English and Chinese, with more languages to be added in the future. One of the benefits of opening an account with Cheese is that accounts earn interest and do not have monthly fees or ATM fees when using the national MoneyPass ATM network.

15. Unifimoney

Unifimoney is a money management and investment app that helps you manage your banking, investing, and borrowing needs all in one place. It caters to account holders who earn at least $100,000 per year but have significant amounts of student debt. You can download Unifimoney to pay bills, deposit checks, and write checks.

It’s unique in that it also allows you to refinance student loan debt and can create a diverse investment portfolio with particular stocks, cryptocurrencies, precious metals, stocks, and exchange-traded funds (ETFs).

In addition, you can turn to Unifimoney for insurance products, like car insurance and health savings accounts (HSAs). If you’d like to get started with Unifimoney, open the Unifimoney high-yield checking account with as little as $100.

16. NorthOne

Headquartered in New York and founded in 2016, NorthOne offers digital business banking services. If you’re a startup, entrepreneur, or small business owner, NorthOne can be a good fit. It differs from other banks that serve businesses in that there are no transaction limits that require premium upgrades.

You can open a business bank account for a flat $10 monthly fee and won’t have to worry about additional fees for deposits, transfers, ACH payments, or app integrations. In addition, you’ll get to create as many “Envelopes” or sub accounts as you want so you can save for payroll, taxes, and other business needs.

17. Oxygen

San-Francisco based Oxygen focuses on two accounts: the free thinker account for individuals and the pioneer account for business users. Even though it doesn’t charge fees, like monthly fees, ACH fees, and overdraft fees, you will have to pay an annual fee that can go up to a few hundred dollars.

While most neobanks don’t allow for cash deposits, Oxygen does. As long as you have an Oxygen bank account, you can make deposits at GreenDot locations, which are usually located inside popular retailers, like Walmart, Walgreens, and CVS. If you don’t mind paying an annual fee and like the convenience of being able to deposit cash, Oxygen is worth exploring.

18. Bella

Bella is a fairly new player in the neobanking space. Its partner bank is nbkc bank, which allows it to provide banking services. With Bella’s checking account rewards program, you can receive a random percentage of cash back on randomly selected purchases.

The cash back amount may be anywhere from 5% to 200%. Like most neobanks, Bella doesn’t charge monthly fees, ATM fees, and overdraft fees. You can also opt for a no-fee savings account. Bella accounts are FDIC insured for up to $5,000,000.

19. Lili

Lilli services small business owners and believes that managing two accounts is a hassle. That’s why this neobank offers a single account you can use for both your business and personal transactions.

Come tax time, Lili will eliminate financial stress and let you automatically save a certain percentage of your income into a “tax bucket.” Plus, it produces quarterly and yearly reports instantly, reducing your tax prep costs. While the Lili Standard account is free, Lili Pro will run you a couple dollars per month.

If you upgrade to Lili Pro, you’ll get cashback rewards on all your debit purchases and 1% interest on your savings accounts. Lili could be a solid pick if you’re a freelancer or solopreneur hoping to simplify your finances.

20. Monzo

Monzo is a UK-based neobank that just opened up to the U.S. market in late 2022. All accounts are insured by the FDIC for up to $250,000. Plus fee-free withdrawals are available at more than 38,000 ATMs.

Furthermore, Monzo is similar to Aspiration as it strives to protect the planet. Additionally, this neobank offers budgeting tools that can help you meet various savings goals.

What is a neobank?

Often called challenger banks, neobanks have recently entered the financial services industry and challenged banking norms. Most neobanks are financial technology or fintech companies that offer the same banking services you may find at traditional banks, like Bank of America or PNC.

But they promote innovation and act like digital only banks or online banks as they don’t have any physical branches and operate via apps. Most of these apps are user-friendly and loaded with a variety of handy features, such as early deposit and savings tools to simplify the banking experience. They are specifically designed to give you greater control of how you manage and spend your money.

Also since neobanks don’t have any physical branches, their overhead costs and customer acquisition costs are low and enable them to offer more affordable banking products and services. Many neobanks let you choose from a number of free and paid premium subscription services.

Are neobanks safe?

Since neobanks are fairly new and different from many traditional banks, you might wonder whether they’re safe. Fortunately, most of them are very safe because they operate within a regulated market.

These financial institutions typically work with U.S. banks to offer FDIC-insured accounts, which protect your money from potential bank failures and the losses that come with them. To help determine if a neobank is safe, check out their ratings and reviews on reputable websites like the Better Business Bureau (BBB).

Neobanks vs. Traditional Banks

To further explain neobanks and their modern spin on traditional banking, let’s take a closer look at how they differ from traditional banks.

Neobanks

Neobanks operate without physical branches. To take advantage of their offerings, you’ll likely need to download an app and provide some personal information.

While you can expect fewer banking and credit products than you’d find at traditional banks, you’ll reap the benefits of lower fees and extras that improve the overall banking experience.

Some neobanks have decided to expand their lineup of products and services to create more of a one-stop-shop you’d get from a traditional bank. Since most neobanks don’t earn money from lending, like incumbent banks, their business model depends on interchange fees or transaction fees, which usually come from debit cards. They might also charge for premium accounts and extra features.

Traditional Banks

Traditional banks often have brick-and-mortar locations across the country or in a specific geographic region or area. But many of them also have digital banking divisions in which you can perform banking services online.

Most banks focus on strong customer relationships and earning interest through loans as well as account fees from banking, lending, and investing. They typically target customers who appreciate customer engagement and a traditional in-person banking experience.

See also: Best Alternatives to Traditional Banks

Pros & Cons of Neobanks

Just like all types of financial institutions, neobanks have benefits and drawbacks you should consider, including:

Pros

Lower fees: Compared to traditional banks, neobanks offer lower fees. That’s because they don’t have the high overhead costs associated with the upkeep of physical branches.
Higher rates: Neobanks often pride themselves on higher interest rates on their checking and savings accounts. This can make it easier and faster for you to save money.
Convenience: Perhaps the greatest benefit of neobanks is the convenience they bring. You can perform a variety of banking tasks, like depositing checks or making payments from your smartphone device, round-the-clock.
Easy access: You can manage your banking 24/7 without ever having to leave your home and visit a local branch. All you have to do is download an app from the app store.
Simple setup: It’s usually fast and easy to open an account with neobanks. Many of them will approve you, regardless of your credit score or credit history.
Focused services: While most neobanks don’t offer all the services you might find at traditional banks, the few services they do provide focus on service quality and are typically loaded with perks and benefits. For example, you can get a no fee checking account with cash back rewards.

Cons

No bank charters: Neobanks don’t have bank charters. Instead, they often partner with traditional banks to insure their products. Before you move forward with a neobank, ensure they partner with a Federal Deposit Insurance Corp or FDIC-insured bank and offer their own FDIC insurance.
Customer service restrictions: Since neobanks operate on app instead of through physical branches, customer service can be a downside. You may have to turn to chatbots or social media for basic banking questions and support. If you notice fraud in your account, it may be more difficult to resolve the issue.
Fewer services: Traditional banks usually pride themselves on a long list of services, including loans, wealth management, and brokerage services. Neobanks, however, tend to limit their offerings to checking accounts and savings accounts.
Unproven track record: Neobanks are still in the startup phase as many made their debut within the last few years. This means that they may fail and force you to look elsewhere for your banking needs.
Require knowledge of technology: While most neobank apps are intuitive and designed for the average person to use with ease, they may still be inconvenient for some people. If you don’t consider yourself tech literate, a neobank might not make sense.

Bottom Line

There’s no denying that neobanks have revolutionized the banking industry and financial industry. If your primary goal is convenience and you prefer mobile or online banking, a neobank can be a great alternative to a traditional bank or legacy bank. Just make sure you explore all your options and read the fine print before you choose one.

Source: crediful.com

Apache is functioning normally

May 25, 2023 by Brett Tams

Monitoring your credit score sounds about as appealing as writing a term paper.

But having good credit is crucial for everything from getting a loan to getting an apartment. Which means if your credit score is on the lower end, you’ll need to be proactive — not just by monitoring it, but by actively working to improve it.

The problem? There’s a lot of conflicting info out there about what you should do to improve your credit score. Which tactics will actually make a difference, versus the ones that just sound like they’ll work?

Here’s what you really need to know about improving your FICO score, which holds the key to so many financial dreams.

What’s Ahead:

1. Target Collections Accounts First

“If your credit history includes unpaid bills that are in collections, work to pay those off [first] if possible,” says Kelley Long, a member of the National CPA FinLit Commission at the AICPA.

Letting an account get so late it goes to a collections agency is never a good thing for your credit, but the good news is the credit scoring algorithms will reward you for paying these accounts in full.

With collections accounts, the key is to get everything in writing. Request a letter stating that they received your payment in full and that they will update your credit report to show this.

In some cases, a collections agency may be willing to negotiate and settle your debt for less than the full amount. Again, you’ll want to get something in writing showing that the debt was settled and the account closed. But keep in mind this kind of arrangement may appear on your credit report as a settlement, which could be less positive than if you paid in full.

Read more: When Does an Account Go to Collections, and How To Avoid It

2. Pay Off Debts That Are Close to the Credit Limit

Even if you pay your credit card bill on time, it’s never a good idea to hold a balance near the maximum limit. The magic ratio is 35%, says Kevin Gallegos, vice president of Phoenix operations with Freedom Financial Network.

“If you have a credit card with a limit of $10,000 and you owe $3,500 on it, that’s 35% utilization,” he notes. “Anything over 35% is considered high and can [negatively] impact credit scores. Over 50% will have a definite negative impact on a credit score, and a maxed-out card will very negatively impact the score.”

Read more: What’s Your Credit Utilization Ratio?

3. Get a Higher Credit Limit (If You Can)

Believe it or not, requesting a higher credit line with an existing account can actually help your credit score, says Gail Cunningham, a spokeswoman with the non-profit National Foundation for Credit Counseling (NFCC).

“Or, open a new line of credit. The idea is that you’ll owe the same amount of money but it’s against a higher credit line, thus the ratio of credit-to-debt improves,” she explains.

“This option may not help you if you’re already having credit problems, however, because it takes good credit to get more credit. If, however, your credit score is in the high 600s or low 700s and you want to improve it even more, you may be able to find a credit card that offers a good chance of approval for your credit score range.”

She adds, “I’d caution, however, that this strategy only works for a person who’s very disciplined — and knows they won’t charge more simply because they have access to a higher credit line.”

In other words, take it easy at the mall with that credit line increase.

Read more: What Credit Score Do You Need to Get Approved for a Credit Card?

4. Look for Non-Credit Accounts That Will Report Payments to the Credit Bureaus

John Ganotis, Founder of CreditCardInsider.com, makes this remarkable point: “Rebuilding your credit doesn’t always have to involve a line of credit.”

One way is to put a utility service in your name.

“Call your providers to find who reports to the credit bureaus.”

You don’t even need to go direct to the providers if you don’t want to. Experian Boost is a free service that credits you for on-time utility payments — think cellphone, internet, cable, heating, electricity, water, etc. You just connect your bank account and let Experian do the rest.

Another is to report your living expenses to the credit bureaus, including your rent.

“Experian and TransUnion now include rent payments [in assessing FICO scores] when reported through online third party services.”

Read more: Build Credit By Paying Rent

5. Avoid For-Profit “Credit Repair” Companies

Some businesses charge a hefty sum to “repair” your credit, but they can actually do more harm than good, says Carl Robins, Vice President and Mortgage Banker with PrivatePlus Mortgage in Atlanta.

“What they don’t tell the consumer is that they’re signing up for a service to improve their scores that lenders — and current underwriting guidelines for mortgage transactions — won’t accept if there are still unresolved credit disputes on their credit report.”

He adds, “They also don’t explain the cumbersome process to have unresolved disputes removed from credit reports to qualify for a home purchase or refinance their current mortgage.”

If you feel like you need help managing your credit, look towards non-profit counseling options like the NFCC.

How to Get Approved for a Credit Line with a Less-than-Perfect Credit Score

If you follow the steps above and continue to pay all your bills on time, your credit score will improve.

Unfortunately, however, it takes time. Improving your credit score from below average (mid 600s or less) to good (720 or better) may take a couple of years. If you’re hoping to buy a home or take out other new credit in the meantime, it may be a challenge.

Here are some things to keep in mind:

1. Don’t Apply for New Credit Recklessly

The credit bureaus take note every time you apply for credit, and doing it too often will further hinder your efforts to improve your credit score.

Keep in mind that there are factors other than just your FICO score that are taken into account when you apply for a credit card, such as your income and credit utilization ratio.

Avoid applying for new credit unless you absolutely need it or are confident you will be approved.

Read more: Why You Could Be Denied a Credit Card Despite Your Excellent Score

2. Work with a Community Bank or Credit Union

If your credit score isn’t what it should be, a relationship with a community bank or credit union can really come in handy.

“A banker who knows you can perhaps look behind the poor credit history,” says Charlie Crawford, President and CEO of Private Bank of Buckhead in Atlanta. “They’ll look at the big picture rather than just a score or some other stand-alone piece of information.”

Best of all, a community banker can be straight with you and let you know your chances of being approved before you actually apply. Waiting as little as a couple months while you make some tweaks to your credit usage or budget may mean the difference between being approved or denied for a mortgage, and a knowledgable banker can tell you that.

Read more: Credit Unions vs. Banks: Think Local, Save Money?

3. Consider Secured Credit

“Establishing some cash-secured credit is one way to demonstrate your ability to pay while not putting a new bank loan at risk,” says Crawford.

If your credit score is in the low 600s, you may consider a secured credit card to help you establish a new credit line and have timely payments reported to the bureaus.

A secured credit card works just like a regular credit card except you first have to deposit money in a savings account to “secure” your credit line. Most secured credit cards can be converted to traditional credit cards (and you get your security deposit back) after a period of responsible use.

Read more: When To Consider a Secured Credit Card

The Bottom Line

The road to improving your credit isn’t always easy, but it’s well worth it. Consumers with good credit scores pay thousands less in interest over their lifetime and avoid hassles when getting jobs, apartments and, of course, loans.

Featured image: Nataliealien/Shutterstock.com

Apache is functioning normally

May 25, 2023 by Brett Tams

Our rating

U.S. Bank Secured Visa® Card

Annual Fee: $0
Security Deposit: Yes, required
Initial Credit Limit: Depends on deposit amount
Sign-Up Bonus: None
Rewards: None

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If you’re building or rebuilding your credit, you’re probably looking into a secured credit card like the U.S. Bank Secured Visa® Card. And as a potentially useful bridge to a more rewarding card, it’s one of the better secured credit cards on the market.

Like all secured credit cards, U.S. Bank Secured Visa requires a security deposit before you can begin using it. Don’t worry: You get it back when you pay off your balance and close or upgrade the account. And in the meantime, you build credit — as long as you use the card responsibly.

U.S. Bank Secured Visa isn’t perfect, though. Before you rush out to apply, understand its ins and outs.

What Is the U.S. Bank Secured Visa Card?

The U.S. Bank Secured Visa Card is a secured credit card with no annual fee. Once you make the initial security deposit, you use the card as you would any other, paying off your monthly statement or carrying a balance with interest.

The U.S. Bank Secured Visa Card has no notable incentives, such as a rewards program or sign-up bonus. It’s not meant for long-term use but rather for building or improving your credit until you’re in a position to apply for a more generous cash-back credit card.

What Sets the U.S. Bank Secured Visa Card Apart?

The U.S. Bank Secured Visa Card shares a lot in common with other secured credit cards and has no unique features of note. To the extent that it stands out at all, it’s because it has:

No annual fee. Without an annual fee, you don’t have to worry about losing money each year you keep it.
No preset credit limit. Your credit limit is always equal to your security deposit, but U.S. Bank doesn’t set a minimum or maximum. If you have the means to make a big deposit, you enjoy greater spending power than with competing cards that set low initial limits.
No need for a FICO score. U.S. Bank considers your credit history if you have one, but you don’t have to have a FICO score to apply. So this card could work as your very first.

Key Features of the U.S. Bank Secured Visa Card

The U.S. Bank Secured Visa Card is very straightforward. The most important things to know about it are the rules around security deposits, credit limits, and credit reporting.

Security Deposit

Before you can begin using this card, you must make a security deposit into a special FDIC-insured bank account controlled by U.S. Bank.

Your deposit remains locked up until you upgrade to an unsecured card or pay off your balance and close the account. You make monthly payments from your regular bank account, not your security account.

If you stop making at least the minimum payment on your account, U.S. Bank may use your security deposit to cover the shortfall. If that happens, U.S. Bank closes your account and you get a serious black mark on your credit report.

Credit Limit

Your credit limit is always equal to your security deposit. You can charge up to your limit, but you can’t exceed it without first paying off previous charges.

Credit Reporting & Monitoring

U.S. Bank reports your payment history and credit utilization to the three major credit reporting bureaus: TransUnion, Equifax, and Experian. You have access to your FICO credit score in your online account dashboard, so you can track how these reports affect your credit score (hopefully for the better) as time goes on.

Overdraft Protection

You don’t need a U.S. Bank checking account to qualify for this card, but if you have one, you can use your U.S. Bank Secured Visa Card as a backup to cover negative balances in that account. U.S. Bank charges the negative amount to your credit card to make your bank account whole.

There’s no additional fee for this service, but overdraft protection charges begin accruing interest right away. You should pay them off as soon as you can to reduce your net cost.

Important Fees

This card has no annual fee. Foreign transaction fees cost 3% of the transaction amount. Balance transfers cost the greater of 3% or $5.

Ongoing APR

There’s no introductory promotion. The APR for purchases and balance transfers is 28.99% from day one.

Credit Required

If you have enough credit history to have a FICO score, you need fair or better credit to qualify for this card. You probably won’t qualify with a recent bankruptcy on your record.

But if you have no credit history at all, U.S. Bank may consider noncredit factors like income and assets when assessing your application. You don’t absolutely need a FICO score to qualify.

Advantages

The U.S. Bank Secured Visa Card’s biggest advantages concern its relaxed underwriting standards, flexible credit limit, and credit-building capabilities. It doesn’t hurt that it has no annual fee either.

No annual fee. This card has no annual fee. Many other secured cards charge recurring fees, so this is a notable and positive feature.
Relaxed standards. You can qualify for this card with fair or better credit. Some secured credit cards have surprisingly strict standards, requiring FICO scores close to 700.
May qualify with limited or no credit. If you don’t have a FICO score due to limited credit history, you may still qualify for this card based on noncredit factors like income and occupation. That’s another advantage over some competing secured cards that strictly require FICO scores.
Deposit sits in an FDIC-insured account. Your security deposit is safe in an FDIC-insured account until you close your credit card account. You’d expect this from a major bank, but it’s still nice to have the peace of mind.
You can control your credit limit. Your credit limit depends on the size of your initial deposit, which means you can boost your spending power if you’re willing to lock away more cash upfront.
Comes with free credit monitoring tools. With this card, you always know where your credit stands. That’s a nice perk if you don’t already have a credit monitoring service.
May offer a path to unsecured status. After several months of responsible use, you may qualify for an unsecured credit card from U.S. Bank. U.S. Bank is vague about how long that takes and how it determines who’s eligible, but it’s something to aspire to nonetheless.

Disadvantages

This card’s downsides revolve around its total lack of cardholder incentives. That isn’t surprising for a basic secured credit card, but it’s disappointing nonetheless.

No sign-up bonus. This card has no sign-up bonus for new cardholders who hit an early spending target. Such an incentive would be nice right out of the gate.
No APR promotion. The U.S. Bank Secured Visa doesn’t have a 0% intro APR promotion. This feature is uncommon in the secured credit card space, but it’s increasingly popular on unsecured entry-level credit cards for people with fair or limited credit.
Few perks. This card has few extra benefits to speak of. If you can qualify for a card with more perks, don’t waste your time with this one.
No rewards program. This card has no ongoing rewards program. While it’s still not necessarily common in the space, some competing secured credit cards do, including a few without annual fees. Look into those if you qualify.

How the U.S. Bank Secured Visa Card Stacks Up

The U.S. Bank Secured Visa Card isn’t the only no-annual-fee secured credit card from a major U.S. financial institution. Before you apply, see how it compares to another popular option: the Citi Secured Mastercard.

	U.S. Bank Secured Visa	Citi Secured Mastercard
Annual Fee	$0	$0
Credit Limit	Depends on deposit	Up to $2,500
Rewards	None	None
Sign-up Bonus	None	None
FICO Score	Yes	Yes

Final Word

The U.S. Bank Secured Visa® Card has a lot of advantages relative to other secured credit cards. It has no annual fee, which is relatively rare, and it doesn’t require a FICO score to qualify. The credit limit is flexible too — based on your initial deposit.

But it’s not perfect by any means. With few extra perks, it offers little in the way of incentives for cardholders. It’s best used as a stepping stone to better credit, which is probably your plan, anyhow.

The Verdict

Our rating

U.S. Bank Secured Visa® Card

Annual Fee: $0
Security Deposit: Yes, required
Initial Credit Limit: Depends on deposit amount
Sign-Up Bonus: None
Rewards: None

Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

Source: moneycrashers.com

Apache is functioning normally

May 24, 2023 by Brett Tams

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When you swipe a credit card or take out a loan to make a purchase, you probably don’t think of the experience as a test of your personal integrity or reliability. You’re more interested in how you’ll feel behind the wheel of your new car, walking through your new home’s kitchen, or sitting in front of your new flat-screen TV.

But your creditors don’t care about how your purchasing habits improve your personal happiness or quality of life. They just want to recover the money they lent you — with interest. And they know from experience that it’s more difficult to recover said money (and interest!) from some borrowers than others.

The risk that you won’t repay your loans is known as your credit risk. Lenders assess credit risk using three-digit personal credit scores. The lower your credit score, the more trouble you’ll have qualifying for a credit card, mortgage, and many other types of credit.

There are also many less well known consequences of a low credit score. Find out what they are and how they can affect your life in unpredictable, unwelcome ways.

How Your Credit Score Works

Your personal credit score is based on the information in your credit report, which is a comprehensive look at your recent financial history.

Credit reports include data on:

Past loan payments, including late or delinquent payments
Credit utilization (how much you borrow as a percentage of your approved credit lines)
Recent credit applications, generally stretching back two years
The different types of credit accounts you have, like credit cards, personal loans, auto loans, home loans, and more — with information about the credit limit, lender, and other details for each
Recent adverse financial events, like bankruptcies and foreclosures

In the United States, most consumer credit reports are issued by the three major credit reporting bureaus: Experian, TransUnion, and Equifax. Keep in mind that although your credit score is derived from the information in your credit report and history, your credit score is not your credit report.

Your credit score is a number that summarizes your credit risk. Consumer credit scores generally follow a scale ranging from 300 (riskiest) to 850 (least risky), although there are exceptions. The most popular credit scoring methodology was devised by FICO and is known as your “FICO score.”

Lenders often segment credit score ranges into quality classifications, such as “A,” “B,” and “C.” They may use qualitative descriptors, like “Good,” “Very Good,” and “Excellent.” They may also draw a line separating “prime” and “subprime” borrowers at a particular score — usually somewhere in the 600s, depending on the lender.

Because each bureau’s report contains slightly different information at any given time, a credit score based on your one report is likely to vary a bit from the score based on another. That said, all three bureaus are considered reliable sources of credit-related information, and your score shouldn’t vary more than a couple dozen points at any given time.

The Possible Costs of a Bad Credit Score

Your credit score and, by extension, your overall credit profile don’t just affect your personal finances. Your credit influences many aspects of your personal and public life, including plenty that don’t involve borrowing.

This list covers seven well-known and not-so-well-known consequences of bad credit, such as difficulty getting approved for a loan, higher rates and terms on approved loans, costlier insurance, and difficulty qualifying for a traditional cellphone contract.

1. Getting Approved for a Loan Can Be Difficult

You probably know already that your credit score directly affects your likelihood of securing approval for a new loan or credit application. The lower your score, the less likely you are to find a willing lender. Many lenders simply don’t make loans to subprime borrowers or those who fall below a particular quality level or numeric score.

This can feel unfair because practically speaking, a credit score of 698 isn’t much different from a credit score of 702. But 700 is an important level to many lenders, which means those four points often make a real difference — with real-world consequences for your ability to invest in your future.

2. Higher Rates and More Restrictive Terms on Approved Loans

Getting approved for a loan counts as a victory. But if your loan comes with an unfavorable interest rate or restrictive terms, it could soon feel like a hollow one.

Every lender is different, and for competitive reasons, most are reluctant to disclose exactly how they set interest rates. But most are upfront about the fact that lower credit scores mean higher interest rates. According to Bank of America, one of the biggest lenders in the United States: “A higher credit score may help you qualify for better mortgage interest rates … and some lenders may lower their down payment requirement for a new home loan.”

The impact of higher rates and more restrictive terms can be enormous. An interest rate difference of a single percentage point can add tens of thousands of dollars to the total cost of a mortgage, depending on how the loan is structured. I used a free mortgage calculator to find the lifetime interest cost difference for a 30-year, $400,000 mortgage at 6% vs. 7% interest:

Total Interest at 6%	Total Interest at 7%	30-Year Difference
$463,352.76	$558,035.59	$94,682.83

A single percentage point higher and you pay nearly $100,000 more over the 30-year life of the loan. Astounding! And although the numbers aren’t quite as large, the same effect applies to auto loans, home improvement loans, personal loans, and credit cards.

In many cases, the difference between a good credit score and a not-so-good credit score is less obvious for inexperienced borrowers. For example, if you’re a first-time homebuyer with a 615 credit score, your only realistic chance at getting a mortgage might be to a FHA home loan. But FHA loans take longer to close than conventional mortgages, which can scare off sellers. They also come with expensive mortgage insurance requirements that may last the entire life of the loan, adding hundreds to your monthly payment.

3. Trouble Renting an Apartment

If you’re applying for an apartment lease and local laws don’t explicitly prevent them from doing so, the landlord is likely to run your credit. Which makes sense. Like it or not, applicants with lower credit scores are statistically less likely to make timely rent payments. Landlords are especially wary of applicants with patterns of late payments, delinquencies, foreclosures, and bankruptcies in their credit reports.

But if you’re an applicant, this arrangement may not feel fair — and it can have a major impact on where you end up living. Landlords who own well-kept, modern properties in desirable neighborhoods typically hold renters to higher credit standards because high demand for their properties affords them the luxury of picking and choosing who they rent to. I’ll never forget one of my ex-landlords telling me that he wouldn’t rent his best properties to anyone whose credit score came in below 640, but that he was more lenient about places on what he called “the wrong side of town.”

He’s not the only one. Small-time landlords like him and bigger management companies alike follow the same general pattern. So if your credit score is below prime, you could find yourself in a shabby rental in a neighborhood you’re not crazy about.

4. Trouble Getting a Job or Security Clearance

According to a study cited by the Association of Psychological Science (APS), there’s little if any correlation between employee credit and job performance. Worse, APS found that credit checks during the hiring process appeared to reinforce racial disparities in employment by disproportionately disadvantaging Black applicants.

But that doesn’t stop employers from checking applicants’ credit during the hiring process. In fact, unless you live in one of the handful of states where the practice is banned or severely restricted, you should expect to have your credit checked when applying for a job. According to a survey by Demos — a think tank that focuses on consumer finance issues — one in four job applicants have had their credit run, and one in seven has been advised that they were denied a job due to poor credit (such disclosures are required in some jurisdictions).

Applicant credit checks are especially common in government and the financial industry. And the credit check process can rear its head even after you’re hired. Government agencies and contractors may run credit checks when you apply for a promotion that requires a new or higher-level security clearance, which means your boss could pass you over for reasons that have nothing to do with your job performance.

5. Trouble Getting a Cellphone Contract

Getting a cellphone contract sounds trivial when you’re worried about finding a job or place to live. But these days, living without a cellphone isn’t really an option. Do you even have a landline anymore?

Unfortunately, cellphone carriers pay close attention to new customers’ credit when determining whether to approve a new contract. As in rental housing, they know that higher-risk customers are less likely to make timely payments or have enough money in their account on the auto-debit date. Even if you’re only interested in a month-to-month phone plan, your carrier is still likely to run your credit because they know how easy it is to rack up excessive data, roaming, and international calling charges in a single month.

If you’re disqualified for a traditional cellphone contract due to a bad credit score, you still have options. They’re just likely to be costly or inconvenient.

Some carriers accept security deposits in an arrangement similar to a secured credit card. If you make timely payments, you generally get your deposit back after a year or two.

A prepaid phone plan is another option. The catch is that you often have to pay out of pocket for your new phone or find yourself choosing from older, less fun models. Prepaid plans are more likely to have restrictions on talk and data usage, though these aren’t as common as in the past.

6. Higher Insurance Premiums

The federal Fair Credit Reporting Act allows auto and homeowners insurance companies to pull consumers’ credit reports when making underwriting decisions. Most states further govern this practice, though few outlaw or severely restrict it.

Timely payment histories and outstanding debt levels are particularly important to insurers. If you don’t stack up well on these metrics, you’re likely to pay higher premiums than someone with better credit on an otherwise identical policy.

7. Potential Strain on Personal Relationships

Your credit score and overall credit profile can put tremendous strain on your personal life, especially the relationships that matter most to you. Although your credit profile doesn’t actually merge with your spouse’s after marriage, their credit can affect your ability to qualify for or afford new loans that you’re applying for together, such as auto or home loans.

Say you have excellent credit and your spouse’s is just so-so. When you apply for a mortgage, the lender looks at both profiles and assesses your household’s overall credit risk as the riskier of the two (your spouse’s). So even if your risk is low enough to meet the lender’s qualification standards, you’re likely to pay a higher interest rate or larger down payment together than you would were it just you applying for the loan.

To take another example, if you and your spouse jointly apply for a credit card with you as the primary user and they as the authorized user, their card usage and payment history (or lack thereof) can affect your credit. Should they fall behind on payments or rack up irresponsible charges, both of your credit profiles suffer the consequences.

Situations like these can lead to tension at home — possibly threatening the relationship’s very existence.

Bad Credit Score FAQs

Still have questions about what your credit score means for your finances, career, and personal life? See our answers to some common questions about bad credit — and what to do about it.

What Counts as a Bad Credit Score?

It depends how you define “bad credit score.”

The lowest FICO credit score considered “prime” by U.S.-based lenders is 660. Scores between 620 and 659 are considered “near-prime.” On the qualitative scale, near-prime scores are considered “fair” or “average.”

Verge below 620 and you’re getting into bad credit territory. Precise cutoffs vary, and many lenders prefer “bad” to poor, but suffice to say that if your credit score is below 600, it needs work.

Can You Get Insurance If You Have a Bad Credit Score?

Yes, you can get insurance if you have a bad credit score. But you’ll probably have to pay more for it via higher premiums.

To find the best possible deal, follow the age-old rule of buying insurance and shop around. It takes only a few minutes to get multiple quotes using an online insurance broker, and you could save hundreds per year on big-ticket auto or home policies.

Can You Lose Your Job Due to a Bad Credit Score?

No, you’re unlikely to be fired from your job due to a bad credit score alone. It’s more likely that you won’t get the job in the first place or that you’ll be denied a promotion that requires a higher security clearance. Not that those outcomes are much better.

Can You Get Evicted If You Have a Bad Credit Score?

No, you probably won’t get evicted from your apartment just because you have a bad credit score, or because your credit score drops due to a missed loan payment.

But you certainly can get evicted from your apartment for missing multiple rent payments, which is statistically more likely for folks with bad credit.

This is why many landlords avoid renting to people with low credit scores and why you’ll likely have to work harder to find a place if your credit isn’t where you’d like it to be.

Does Your Spouse’s Credit Score Affect Yours?

Not exactly. Your spouse’s credit score has no direct bearing on yours, but their actions can affect your credit and vice versa. For example:

You take out a joint loan (like a mortgage) and your spouse stops paying their share. Eventually, you default on the loan, damaging your credit.
You cosign your spouse’s loan application and they stop making payments at some point down the road. Your credit score drops along with theirs (unless you step in to make payments for them).
You make your spouse an authorized user on your credit card and they rack up a ton of charges they can’t pay back. You know the drill by now.

Trust is always important in a relationship, but so are boundaries. If you don’t trust your spouse to make financial decisions in your own best interest, think carefully before merging your finances completely.

How Long Does It Take to Improve Your Credit?

It depends on your starting point and on the details of your credit profile. It’s often easier and faster to build credit from the ground up than to recover after a major financial setback, like bankruptcy.

Final Word

It’s hard to overstate the importance of your personal credit. At the same time, it’s not the end of the world if your credit score isn’t exactly where you want it to be at the moment.

With such an incredible range of online credit-tracking resources, it’s easy to monitor your credit and learn how to improve it. Tracking your credit is also a great way to boost your financial self-confidence. Every incremental credit score improvement due to a timely payment or reduction in credit utilization is a minor cause for celebration. And the sooner you begin, the sooner you can start racking up those little wins.

Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

Source: moneycrashers.com

Apache is functioning normally

May 24, 2023 by Brett Tams

.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-wrappadding:23px 23px 23px 23px;background-color:#f9fafa;border-color:#cacaca;border-width:1px 1px 1px 1px;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-contents-titlefont-size:14px;line-height:18px;letter-spacing:0.06px;font-family:-apple-system,BlinkMacSystemFont,”Segoe UI”,Roboto,Oxygen-Sans,Ubuntu,Cantarell,”Helvetica Neue”,sans-serif, “Apple Color Emoji”, “Segoe UI Emoji”, “Segoe UI Symbol”;font-weight:700;text-transform:uppercase;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-wrap .kb-table-of-content-listcolor:#001c29;font-size:14px;line-height:21px;letter-spacing:0.01px;font-family:-apple-system,BlinkMacSystemFont,”Segoe UI”,Roboto,Oxygen-Sans,Ubuntu,Cantarell,”Helvetica Neue”,sans-serif, “Apple Color Emoji”, “Segoe UI Emoji”, “Segoe UI Symbol”;font-weight:inherit;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-wrap .kb-table-of-content-list .kb-table-of-contents__entry:hovercolor:#16928d;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-list limargin-bottom:7px;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-list li .kb-table-of-contents-list-submargin-top:7px;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-basiccircle .kb-table-of-contents-icon-trigger:after, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-basiccircle .kb-table-of-contents-icon-trigger:before, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-arrowcircle .kb-table-of-contents-icon-trigger:after, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-arrowcircle .kb-table-of-contents-icon-trigger:before, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-xclosecircle .kb-table-of-contents-icon-trigger:after, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-xclosecircle .kb-table-of-contents-icon-trigger:beforebackground-color:#f9fafa;

Getting your first credit card can be an exciting milestone. You start to picture all the responsible things you’ll do with it, like putting your bills on autopay, getting extended warranties on vital electronics like laptops and cellphones, and collecting and cashing in all those sweet, sweet rewards points.

But sometimes, your credit history doesn’t meet the requirements for approval. Fortunately, there are options available to help you secure a credit card and start building your credit.

Two common approaches are having a co-signer or becoming an authorized user on someone else’s account. However, these credit relationships are more complex than they appear at first glance. It’s essential to explore the differences between co-signers and authorized users before you even ask someone.

Co-Signer vs. Authorized User: What’s the Difference?

Co-signing involves you having your own credit card, whereas an authorized user is something you become. Both could give you access to a credit card and improve your credit history, but both roles also have credit implications and unique responsibilities.

What Is a Co-Signer?

A co-signer essentially lends their creditworthiness to support your credit application.

If you don’t meet the issuer’s requirements, such as having insufficient income or a problematic credit history, you can find someone who has good enough credit to act as a co-signer. And even if you do qualify, having a co-signer with better credit might get you more favorable terms, such as a lower interest rate.

The credit card company checks both your credit before deciding to issue you a credit card. And by co-signing, they become just as legally obligated for the debt as you are.

So expect your co-signer to want to stay informed about the account’s activity and take measures to ensure timely payments. They have a personal stake in your financial responsibility. That’s why co-signers are typically trusted family members or close friends.

Co-signing a credit card can have a significant credit score impact, both on you and your co-signer. The account activity, including payment history and credit utilization, shows up on both parties’ credit reports.

Any late or skipped payments, high balances, or defaults can negatively affect the credit scores of both individuals. That’s because co-signed debt appears on the co-signer’s credit report just like any other financial obligation, potentially impacting their ability to take on new credit or loans of their own.

And if you don’t pay up, the co-signer has to pay the entire debt, including any accrued fees or interest. If they don’t, you could both face lawsuits, wage garnishments, and severe credit score damage.

On the plus side, responsible credit management on your part can benefit both parties and help improve both your credit profiles.

Unfortunately, it can sometimes be difficult for them to get removed as a co-signer. Check the card agreement for a co-signer release option. Even if there is one, for them to get released, you must have a good payment history so the lender feels confident relieving them of co-signer responsibilities.

And if things go south, it can strain your relationship and have long-term financial consequences if you aren’t careful.

If you’re not 100% sure you can use the credit card responsibly, it’s probably best to seek out other options. It’s not worth destroying a relationship over.

What Is an Authorized User?

An authorized user is someone the primary borrower adds to their credit card.

An authorized user shares no legal responsibility for the debt, meaning they don’t necessarily make payments. They just have permission to make purchases on the account. But if you’re just trying to build your credit history, it can help to have someone add you to a card that reports on authorized users’ credit too (which is most of them).

When the primary account holder adds you to their account, you receive a card with your own name on it. The primary account holder retains control over the account and can monitor your spending activity. So it’s crucial to discuss upfront whether there are any guidelines they’d like you to follow.

For example, they may ask you to limit purchase totals to a certain amount, use the card only at certain locations or for specific reasons, or only use it if you can pay them back. They can swiftly cancel your card if you violate any of the rules.

It’s most common to become an authorized user on the cards of family members or trusted individuals. They may be willing to grant access to the account for various reasons, such as building credit, convenience, or sharing expenses.

Being an authorized user can have both positive and negative impacts on your credit. The account’s history, including payment behavior and credit utilization, is typically reported on your credit report as well. If both you and the primary account holder demonstrate responsible credit management, such as making timely payments and maintaining low balances, it can have a positive influence on your credit score.

But if the primary account holder has a history of late payments, high balances, or defaults, it can negatively affect your credit profile. You can also negatively impact their credit rating by charging too much or failing to pay them as agreed so they can afford the monthly payment.

As an authorized user, you don’t have the same level of control or decision-making power as the primary account holder. That means they can cancel the account, revoke your access, or make unexpectedly bad decisions that negatively affect your credit.

You’re not legally responsible for the debt incurred on the account, but you are ethically responsible if you agreed to pay. And there’s nothing to stop them from suing you if you don’t hold up your end of the agreement.

Additionally, pretty much everyone else involved is going to act like the account holder is doing you a favor — probably because they are. So you’re unable to access certain account features or make changes to the account.

It’s essential to establish clear communication with the primary account holder to understand any restrictions or guidelines associated with your authorized user status. And if your primary goal is improving your credit score, it’s critical that you become an authorized user with someone who has good or excellent credit on a card that reports on the authorized user’s credit.

Key Differences Between Co-Signers & Authorized Users

Co-signers and authorized users are pretty much opposite in terms of their rights and responsibilities. The only thing they have in common is how it affects their credit score.

	Co-Signer	Authorized User
Definition	Personally guarantees repayment	Granted permission to use someone else’s credit card
Role	Repays debt if you don’t	Authorized to make purchases
Credit Check	Yes	No
Credit Impact	Activity affects credit reports of both parties	Activity may or may not impact the credit report of authorized user
Financial Risk	Obligated to repay the debt if the borrower defaults	No legal obligation for the debt
Control	Has access to account information and decision-making	Account control remains with the primary cardholder
Relationship	Typically trusted family members or close friends	Often family members or individuals with shared needs
Easy to Remove	Only once you meet co-signer release threshold	Yes

Should You Use a Co-Signer or Become an Authorized User?

You may find a credit card co-signer is the best option if you have credit or income issues. But you should only do it if you have no other option for getting credit. And consider whether you can just wait a bit and improve your income or credit score enough to qualify alone.

And you need someone willing to take on the risk as your co-signer. They should know you well enough to trust that you’ll pay your card on time, and you should also feel confident you can. The co-signer also needs to have good enough credit to qualify.

Using a co-signer can cause awkward situations and disagreements, so if you want to maintain a good relationship, think twice. After all, the person puts their finances and credit on the line for you. Running up charges or missing a payment can easily cause issues.

When deciding whether to add an authorized user, consider whether you trust the person to spend responsibly and pay you back as agreed. Even when they use the card, you’re the one stuck with the debt. So, you can easily end up with financial strains and a dinged credit score.

While you might intend to help a loved one build their credit as an authorized user, don’t disregard how it could affect your relationship. Arguments can happen if the person runs up your balance or doesn’t pay you back. This makes a usage agreement with the person crucial.

If you have any doubts about letting the person access your credit card, it’s safer to just not agree to make them an authorized user. Instead, you could help them create a budget and find other ways to build a credit history. That way, they can eventually get credit on their own.

How to Add a Co-Signer or Authorized User to Your Account

If you want to add a co-signer to a credit card application, first ensure your prospective creditor allows it. Unfortunately, most major banks no longer allow the practice. However, you may have better luck going through a smaller bank or credit union.

Depending on the creditor, you may have options to apply online, by phone, by mail, or even in person. In all cases, you must supply personal and financial information for yourself and the co-signer. Exactly how that works depends on how you apply.

Online: You both digitally sign and submit the application.
Phone: The creditor may need to speak with the co-signer in addition to the borrower.
Mail: You must both fill out and sign the application, then mail it to the listed address.
In Person: You must both fill out and sign the application, then you must both go to a branch in person.

The creditor runs both your credit files. Then depending on how you applied, you may find out instantly whether you’re approved or have to wait for an email or even a letter.

If you want to add an authorized user, you’ll have better luck since most card companies allow it. You can either do it when you fill out your application or after you’ve opened the account. Either way, the process is straightforward, and you can do it online, by phone, by mail or in person

When applying, there’s a step to add authorized users. If it’s an existing account, you can log into your online portal, contact customer service, or if it’s at your bank, just walk in.

The creditor won’t run a credit check, but they do need some information about the user. Common information requested includes the authorized user’s full name, birth date, Social Security number, address, and relationship to you. The user should receive their card upon approval.

Final Word

Becoming or adding a co-signer or authorized user is not a decision you should take lightly. Both parties must feel comfortable with the responsibility and trust they’ll act in each other’s best interest. Otherwise, you risk a messy situation in which both parties’ finances and relationships are at risk.

Communication and financial planning is key. If you use a co-signer, budget for your monthly payment and don’t carry a high balance that can harm you both. And if you add an authorized user, set limits with them and don’t hesitate to revoke their access if needed.

If your finances or relationships are too big a risk, other options exist for those who struggle to qualify for regular credit cards. Backed by a security deposit, a secured credit card involves a much easier approval process and can help with building credit for easier borrowing experiences later.

Heather Barnett has been an editor and writer for over 20 years, with over a decade committed to the financial services industry. She joined the Money Crashers team in 2020, covering banking and credit content for banking- and credit-weary readers. In her off time, she enjoys baking, binge-watching crime dramas, and doting on her beloved pets.

Source: moneycrashers.com

Apache is functioning normally

May 24, 2023 by Brett Tams

Best for cash back: Maximum Rewards® World Mastercard® by Amalgamated Bank

Pros

No annual fee
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$30 bonus (30,000 points) when you spend $600 within the first three billing cycles
0% intro APR on purchases and balance transfers for the first 12 billing cycles

Cons

Higher variable APR on purchases and balance transfers after the introductory period
3% foreign transaction fee

Features

Travel insurance including

Amalgamated Bank supports a number of different causes from environmental sustainability to workers’ rights, and it’s union-owned to boot. Founded in 1923, it’s been rallying behind rallying people for over a century. It’s net-zero and run on renewable energy, pro-union, an ally to immigrants, and politically progressive.

But we’re here to talk about the credit card too. The Maximum Rewards® World Mastercard® is a rewards credit card that earns 1.5% rewards on all purchases. It’s got a great 12-month intro APR, a signup bonus, and good redemption flexibility — all without an annual fee.

Choose this option if you want to have your cake and eat it too (i.e. side with a bank that’s doing some good and still get a great flat-rate cash back card).

Learn more.

Best socially responsible card: Rewards Platinum Visa® from Green America

Pros

No annual fee
Unlimited one point per dollar on all purchases
0% intro APR on purchases and balance transfers for the first 12 billing cycles
$150,000 in Travel Accident Insurance

Cons

1% foreign transaction fee

Features

Donates a portion of profits to charities
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Maybe you’ve heard of Green America, the nonprofit working to combat climate change, promote ethical practices and corporate governance, fight for social justice, and more. Green America’s work covers a broad range of issues, and its credit card, the Rewards Platinum Visa®, supports these efforts with every transaction. And it earns unlimited points on everything.

This affinity card has a fairly competitive APR, doesn’t charge an annual fee, and has a few nice benefits like travel insurance and a lower foreign transaction fee. But it’s not perfect, and we wish it were more clear about how donations worked and where exactly they were going.

This is a good choice if you’re interested in socially responsible causes and giving back.

Learn more.

Best card for charitable donations: Charity Charge Card

Pros

No annual fee
Lower interest rate on purchases

Cons

Does not earn rewards
2% foreign transaction fee

Features

Donates 1% of all purchases to the charity of your choice

The Charity Charge Card automatically gives to charity every time you use it. Can your current card do that?

When you apply for this credit card, you get to choose the nonprofit you want your spending to automatically benefit. If a nonprofit is set up to receive credit card donations, it is likely available as an option. Bonus: your donations may qualify for charitable tax deductions, which can help the fact that you otherwise won’t earn rewards or cash back sting a little less.

Since donations are calculated as a percentage of spending, you’ll have a greater impact the more regularly you use this card. If you don’t want to miss out on rewards entirely, you could use this card for some of your spending that wouldn’t qualify for the best rates otherwise.

Learn more.

Read more: Want To Help But Can’t Give Cash? 10 Alternatives To Donating Money

Best secured credit card: Secured Mastercard® by Amalgamated Bank

Pros

Potential for a credit limit increase in as little as seven months after opening
Set your own credit line between $300 and $5,000
Potential to receive security deposit back in as little as 11 months with on-time payments

Cons

Does not earn rewards or cash back
$35 annual fee
3% foreign transaction fee

Features

Set your own limit and qualify for a credit limit increase

The Secured Mastercard® by Amalgamated Bank is a decent low-fee secured card for eco-conscious borrowers. It has a minimum limit of $300 and a maximum of $5,000, and your line is determined by your security deposit. This carries a modest annual fee (for a secured card) of $35 and fairly average interest rates, and it’s a little more flexible than the average competitor.

You may be eligible for a credit limit increase in as little as seven months after opening an account with responsible use and can get your deposit back in less than a year.

This is a good option for borrowers with little or poor credit, but you should only choose this if you couldn’t qualify for one of the others, as it doesn’t earn rewards and has higher fees.

Learn more.

Best for travel: Visa Signature Card (Climate Card) by Beneficial State Bank

Pros

No annual fee
Unlimited one point per dollar on all purchases

Cons

1% foreign transaction fee

Features

Travel insurance and protection including: Travel & emergency assistance services, travel accident insurance, auto rental collision damage waiver, and roadside dispatch

Beneficial State Bank is a purpose-driven financial institution with an eco-friendly card for people who may want their spending to help out green charities and nonprofits.

The Climate Card is similar to the Rewards Platinum Visa by Green America in that it earns flat-rate rewards that can be donated to charity. But unlike the Green America card, the Climate Card has you choose what happens to your points. So if you want to donate them, you can. But if you want to instead redeem for cash or travel, that’s your prerogative too.

This is a good travel card because it has a 1% foreign transaction fee (compared to 1% or 2%) and comes with benefits like insurance and roadside dispatch. And because it lets you choose between keeping your points and donating them, it’s also one of the most flexible choices.

Learn more.

Best fee-free credit card (for people in Washington): Verity Signature Rewards Visa

Pros

No annual fee
No foreign transaction fee
1.5 points per dollar on all purchases
0% intro APR on purchases and balance transfers for the first 12 billing cycles

Cons

Only people in Washington state are eligible to join Verity Credit Union

Features

Signature Rewards Visa protection benefits including: extended warranty protection, emergency assistance travel services, accident insurance, and more

Credit cards without foreign transaction fees can be hard to come by, but this card makes it happen. The Signature Rewards Visa by Verity Credit Union charges no annual fee and no foreign transaction fee, giving it a huge advantage over all the others on this list. But it has the huge disadvantage of being only available to people in the state of Washington.

Points can be redeemed for cash, travel, gift cards, or purchases and there are no restrictions for earning. There’s also an intro APR offer of 12 months on purchases and balance transfers, making this comparable to many rewards cards on the market. If you do qualify to join Verity, consider it for this — especially if you’re on the fence about eco-friendly cards.

This is a good card from an admirable credit union, but it won’t be a fit for everyone (or most).

Learn more.

Best debit card for earning: Aspiration Spend and Save

Pros

Up to 10% cash back on eligible Conscience Coalition purchases
Earns up to 3.00% interest with qualifying debit activity

Cons

Monthly fees for the Plus Plan ($7.99 a month paid monthly or $5.99 a month paid annually)
Does not earn cash back on all purchases
Does not build credit

Features

$10 minimum deposit
Additional green benefits like carbon offsetting and planting trees with purchases

The Aspiration Spend & Save account offers a debit card that earns rewards like a credit card and comes with a whole host of eco-friendly benefits. There are two plans to choose from.

The base Aspiration plan uses a “pay what is fair” fee structure and the Aspiration Plus plan costs $5.99 or $7.99 a month depending on if you pay monthly or annually. The Aspiration plan pays up to 1.00% interest and up to 3% – 5% cash back while the Aspiration Plus plan pays up to 3.00% interest and 10% cash back on Conscience Coalition spending.

Both have features like early direct deposit and the ability to plant trees when you spend, but only the Aspiration Plus account includes additional automatic offsets and Purchase Assurance. If you decide this account is right for you, pick the Plus Plan to maximize benefits.

Read our full Aspiration review.

Aspiration Zero Credit Card

Aspiration used to offer a credit card called the Aspiration Zero Credit Card, but they are no longer accepting new applications. Now, this bank’s only individual solution is the Spend & Save account, a rewards-earning checking account with a debit card.

Best debit card for eco-friendly spending: FutureCard Visa Debit Card

Pros

No monthly fees or annual fee
6% cash back on eligible purchases at FuturePartners
5% cash back on “climate-smart spending” purchases such as EV charging, bikes and scooters, public transit, etc.

Cons

Does not earn cash back on all purchases
Does not build credit

Features

See your climate impact using your FutureScore
Complete missions to earn FutureCoins

The FutureCard Visa Debit Card earns rewards based on your spending habits. The more eco-friendly your purchases, the more you’ll earn.

With this card, you’ll get points for “climate-smart spending.” This is defined as purchases with a lower carbon footprint, and examples include electric vehicle charging and secondhand items. There’s no cap on earnings but you won’t earn cash back on all purchases.

This card is also unique because it provides you with a summary of your impact in the form of a FutureScore. The app then gives you suggestions for living more sustainably and pays FutureCoins, which can be redeemed for cash, when you complete Missions. Look out for promotions and bonus days to earn even more cash back on your purchases.

Learn more.

Best business credit card for nonprofits: Charity Charge Nonprofit Business Card

Pros

No annual fee
Discounts and rebates on business spending

Cons

Does not earn rewards

Features

Mastercard Zero Liability protection

If you own or work for a nonprofit and are looking for a business credit card, look no further than the Charity Charge Nonprofit Business Card. This business card is exclusively for nonprofits and works with over 2,000 nonprofits to meet their spending and financing needs.

This card doesn’t charge an annual fee and offers service benefits specifically geared toward not-for-profit rather than for-profit institutions. These include expert guidance from the support team and dedicated representatives.

The Charity Charge Nonprofit Business Card is ideal for nonprofits with less credit to work with, especially newer and growing organizations.

Learn more.

🌳 What is an eco-friendly credit card?

An eco-friendly credit card or green credit card has a positive environmental impact.

There isn’t one single type of eco-friendly credit card, as the term “green” looks a little different to everyone, but the point is that they’re better for the planet. There are also green and eco-friendly debit cards.

A card might be green if it:

Has a smaller carbon footprint than the average card
Rewards you for eco-friendly spending
Donates to environmental nonprofits
Plants trees with each transaction

These are just a few examples.

There are also cards that have a more general positive impact. For example, they might support socially responsible missions such as fair labor and equal housing. These can benefit the planet but might also benefit other causes as well. The Rewards Platinum Visa® from Green America is a good example of this.

Pros and cons of greener cards

Green credit and debit cards aren’t for everyone, but for some might be just what they’ve been looking for. Here are a few of the main pros and cons to consider with this type of product.

👍 Pros

Eco-friendly cards offer many benefits for people with environmental — or financial — goals.

Some allow you to donate to charities without using money out of your own pocket, and these donations could be tax deductible. The best ones even let you choose the charity.

Others incentivize you to be more eco-friendly in your spending habits by handing you the most rewards points for green purchases. This could help you live more sustainably.

And a few have their own unique benefits, like Aspiration’s tree-planting with transactions.

Many of these cards earn some sort of rewards for spending, with several offering flat rates on everything. And a handful also have everyday perks like purchase protection and discounts too.

👎 Cons

While greener cards offer benefits like lowering your impact and motivating yourself to make more sustainable choices, they do require you to compromise in some areas.

When it comes to rewards you actually earn, most of these cards just aren’t as competitive as others. The highest rate we’ve seen for green credit cards is 1.5% cash back, and this is the lowest base rate for many of the best rewards cards out there. And you might not have a lot of flexibility in how you redeem these rewards with an eco-friendly card.

These cards also don’t have as much going for them in the perks department. They have leaner travel benefits, if any at all, and very few free features.

Sure, the satisfaction of knowing you’re helping the planet is rewarding, but it might not help you save money and isn’t as flashy as what other cards offer.

Who are eco-friendly credit cards and debit cards best for?

If your spending habits make sense for one of these cards and you’re willing to compromise on rewards some in order to do good with your dollars, an eco-friendly card could be right for you.

You might decide to go green with your card because you don’t want to support big banks with harmful practices that hurt the planet, people, or both. For example, many major card issuers are responsible for enormous carbon footprints and lend money to fossil fuel companies.

Some are also involved in scandals, wrapped up in politics, and sneaky about where they spend money. It’s not a good look.

If you want to be part of something different, these cards are just one way to do that.

Read more: What is public banking?

Who are eco-friendly credit cards and debit cards not ideal for?

Don’t go for a green credit card or socially responsible card if your number one priority is earning the most rewards. These cards have lower payouts than others, fewer options for redemption, and often less earning flexibility.

Eco-friendly credit and debit cards are not yet on par with the rest of the options in the personal finance world. And until they have higher rewards rates and more benefits overall, they’re not likely to become mainstream any time soon.

Fortunately for those who want to help the planet but don’t want to sign up for one of these cards, there are other ways to spend more sustainably. This next section is for you.

What if you don’t want a green credit card?

If you don’t want to have to compromise on rewards — or you just don’t need a new card — but still want to make a positive impact, you can skip the card and do these things:

Click the link below for more ways to make your money green.

Read more: 12 easy ways to make your money green and protect our planet

Summary

There are many green credit and debit cards to choose from, each with its own benefits for your wallet and the environment. We’ve highlighted the best here, but even some of these leave a little to be desired when it comes to rewards earning, perks, and redemption.

But if this category catches on as consumers grow more conscious of their impact on the planet, more eco-friendly cards will be available and this space will become more competitive.

Apache is functioning normally

May 23, 2023 by Brett Tams

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I like to think I know more about credit cards than the average person. I’ve written dozens of credit card reviews for Money Crashers and personally tried out more credit cards than I’d like to admit.

So I was surprised and a little embarrassed to learn for the first time recently that the IRS permits taxpayers to make federal tax payments by credit card.

Virtually all individual filers are eligible to pay their year-end taxes by credit card. And freelancers and independent entrepreneurs responsible for quarterly estimated tax payments can pay those with plastic too. With some important caveats, particularly around withholding taxes, business owners are also eligible to pay tax bills on credit. But it’s not as simple as calling up the IRS and giving them your credit card number. There are a few things you need to know first.

Paying Taxes With a Credit Card: Approved Vendors & Costs

Paying your federal taxes by credit card isn’t rocket science. An IRS primer outlines what you need to know about the process.

In virtually every state that collects them, you can pay state income taxes with a credit card as well. Check this nifty cheat sheet from Mastercard for details about individual and business payment portals for state income taxes.

Before we go any further, we should clarify that paying your taxes and paying tax preparation fees are two different things. Tax payments go to the IRS or state tax collectors. Tax preparation fees go to the accountant or service you retain to prepare your taxes. Since taxpayers frequently make these distinct payments simultaneously, it’s understandable when novices get them confused.

IRS-Approved Tax Payment Processing Vendors

Taxpayers willing to file paper returns and forms can choose from three IRS-approved payment processing vendors:

Pay1040.com: 1.87% of the total tax paid or $2.50 minimum (same fees and minimums for debit card payments)
PayUSATax.com: 1.85% of the total tax paid or $2.69 minimum ($2.20 minimum for debit card transactions)
ACI Payments: 1.98% of the total tax paid or $2.50 minimum ($2.20 minimum for debit card transactions)

Note that you don’t need to turn in paper vouchers for quarterly estimated tax payments you make by credit card. All three vendors accept Visa, Mastercard, and American Express plus popular mobile wallet providers.

Taxpayers who prefer to e-file their returns can chose from the same three IRS-approved processors for end-of-year payments, extension payments, and other types of tax payments accompanied by IRS forms.

Check the IRS Frequency Limit Table by Type of Tax Payment for more information on when and how often you can make various types of tax payments.

Paying Taxes With Your Credit Card: Things to Keep in Mind

Note these items before scheduling a credit card tax payment:

Payment Cancellation. Under ordinary circumstances, you can’t cancel credit card tax payments. Check with the IRS for more details and potential loopholes.
New Card Sign-Up Bonuses. Before paying your taxes, consider applying for a new credit card with an attractive sign-up bonus offer. The best sign-up bonus cards on the market have bonuses worth $400, $500, even $1,000. The catch: You have to meet a hefty spending threshold within a preset time frame, usually three months from your account opening date. Paying end-of-year or estimated taxes is a great way to accelerate your progress toward the threshold without spending on stuff you don’t really need.
Federal Tax Liens. If you’re subject to a federal tax lien arising from an unpaid tax liability, tax payments made by credit card won’t automatically release the lien. Speak with the IRS and a tax professional for guidance.
Paying in Full. Unless you qualify for a 0% APR introductory rate on a new credit card, it’s best to pay off your credit card balance in full by your statement due date. Balances carried from month to month accrue interest at an impressive clip: typically, anywhere from 10% APR to 30% APR or more, depending on your card, creditworthiness, prevailing rates, and other factors. If you use your credit card for lots of other purchases already and suspect you’ll have trouble accommodating the added burden of a three- or four-figure tax payment multiple times per year, look for an alternative tax payment method.

Should You Pay Your Taxes on an Installment Plan?

If you can’t afford to pay your full tax liability right away, but aren’t sure that paying by credit card is the best choice, consider an installment plan instead.

The IRS offers immediate, short-term, and long-term online payment plans. An immediate payment plan is just another term for “pay in full.” Short-term payment plans must be paid off within 180 days of the start date. Long-term payment plans are more open-ended, with monthly payments on an agreed-upon schedule.

You can apply online for a short-term payment plan if you owe less than $100,000 in combined tax, penalties, and interest. You can apply online for a long-term plan if you owe less than $50,000 in combined tax, penalties, and interest, and have filed all relevant tax returns. If you don’t meet these criteria, you may need to apply by mail, phone, or in person.

Setup is free for immediate and short-term plans, and payments cost nothing when you elect to direct-debit payments from a linked bank account. Long-term plans cost $31 to set up with direct debit or $130 to set up with manual payment, plus accrued penalties and fees until the balance is paid off in full.

This sounds pricey, but it’s probably cheaper than putting your entire tax bill on a credit card and paying it off (with interest) over a similar timeframe.

Advantages of Paying Your Taxes With a Credit Card

Key advantages of paying taxes with a credit card include cash flow benefits, the potential to build credit, and eliminating extension form requirements.

Helps With Cash Flow

Like other large outlays, tax payments are financially disruptive. If money is tight throughout the year, sending off hundreds or thousands of dollars to the IRS probably doesn’t help matters.

Putting periodic tax payments on your credit card eases the crunch for weeks or months. Scheduling payments for the beginning of your card’s statement period provides up to four weeks of breathing room.

Taking advantage of a long 0% APR introductory financing offer is even better. Some introductory offers last as long as 21 months.

Potential to Build Credit and Raise Your Credit Score

If your near-term goal is rebuilding your credit after an adverse event, such as bankruptcy, consider applying for a secured credit card and using it as a vehicle for your tax payments.

For ideas, check out our list of the best secured credit cards on the market from top credit card issuers like Citi and Capital One.

Fees May Be Tax-Deductible

If you itemize deductions, you may be able to deduct the convenience fees charged by your chosen credit card payment processor. That’s not trivial: On a $3,000 estimated tax payment, a 2% convenience fee adds up to $60.

The convenience fee deduction isn’t guaranteed, so check with a tax professional before assuming you qualify.

Can Set Your Payment Date Well in Advance

If you tend to file your taxes early, you can delay your payment date for weeks or months when you choose to pay with a credit card. This is another cash flow benefit to paying taxes with a credit card.

Estimated Tax Payments Can Boost Spending Power

Estimated tax payments can dramatically boost your credit card spending power, bringing high-dollar sign-up bonus spend requirements within reach.

These one-time spend thresholds, usually set at three months from the account opening date, frequently reach $4,000 or $5,000. Unless you’ve miscalculated your projected income or experienced an unexpected windfall during the tax year, you probably won’t owe that much when you file. But your quarterly estimated taxes could certainly approach or exceed those figures.

Some travel credit cards have even higher spend thresholds for coveted travel loyalty program windfalls. For suggestions, see our list of the best credit cards to pay your taxes.

Partial Payments Negate Extension Form Requirements

When you partially pay your end-of-year taxes with a credit card, you automatically earn an extension without any additional paperwork required. When you opt for another form of payment, you may be required to file IRS Form 4868. The extension deadline is usually six months after the filing deadline: October 15 or thereabouts.

Disadvantages of Paying Your Taxes With a Credit Card

Paying taxes with a credit card does have some drawbacks, including processing fees, higher credit card balances and credit utilization ratios, and higher fees for integrated e-file and e-pay providers.

Carries a Processing Fee of at Least 1.85%

Every IRS-approved credit card payment processor charges a convenience fee. As of the 2022 tax year, the lowest possible fee is 1.87% with PayUSATax, or $2.50 flat (for smaller payments only) with ACI Payments and Pay1040.com.

These fees are high enough to eat up, and potentially exceed, earnings from most cash-back credit cards, whose returns on general spending typically top out around 2% outside sign-up bonus periods.

Paper check and EFT remain the cheapest tax payment methods for cardholders who don’t expect tax payments to trigger point or mile windfalls via sign-up bonuses or ongoing spending thresholds.

Can Substantially Increase Credit Card Balances and Utilization Ratio

Credit utilization is one of several factors used to calculate your credit score. Your credit utilization ratio is your total aggregate credit balance divided by your total aggregate credit limit.

All other things being equal, a high ratio can adversely impact your score. If your aggregate credit limit (available credit) is on the low side, a large end-of-year or estimated tax payment could spike your credit utilization ratio. In turn, this could temporarily affect your ability to secure new loans or lines of credit on favorable terms.

May Result in Hefty Interest Charges

There’s a good chance you won’t be able to pay off your entire tax bill in a single month. Which means the balance generated by your tax payment will accrue interest unless you’re within a 0% APR introductory period.

Your credit card interest rate will almost certainly be higher than the IRS’s interest rate on unpaid tax balances. On larger balances, this could end up costing you more than setting up an installment plan.

Higher Fees for Integrated e-File and e-Pay Providers

E-filing is faster and more convenient than submitting a paper return. Unfortunately, it’s also more expensive. Returns filed using the IRS’s integrated e-file and e-pay function carry convenience charges that are almost certain to exceed your rewards credit card’s cash-back or point-earning rate.

Employers Can’t Make Federal Tax Deposits

The IRS requires employers that withhold employment taxes to deposit federal tax collections once or twice a month using the Electronic Federal Tax Payment System®. They can’t make these deposits with a credit card.

Though this doesn’t affect individual filers directly, you need to plan accordingly if you own a small business with traditional employees.

When Should You Pay Your Taxes With a Credit Card?

Paying your taxes with a credit card can sometimes work in your favor, but it’s not always the right move. See when you should and shouldn’t do it.

When to Pay Your Taxes With a Credit Card

Paying income taxes with a credit card makes sense in these situations:

You’re in the qualification period for a new card sign-up bonus. If you owe a significant amount in taxes when you file, or you pay quarterly estimated taxes anyway, your payment could account for a big chunk of the spend required to earn a new card sign-up bonus. Maybe the whole thing.
You qualify for a 0% intro APR promotion on purchases. If your credit card has a 0% APR promotion, you can carry the resultant balance for many months without paying any interest on it. Just be sure to zero it out before the promotion ends, or you could wind up paying deferred interest.
You can pay off the charge in full before any interest accrues. Even if you’re not eligible for a 0% APR promotion, you can avoid interest by paying off your charge in full during the grace period. This is more feasible when your tax bill is small and the value of rewards earned on the payment is greater than the processing fee.
You have no plans to apply for new credit in the near future. Charging a big tax payment to your credit card can spike your credit utilization ratio and temporarily push down your credit score. Both could make it harder to qualify for a mortgage, auto loan, or new credit card.

When Not to Pay Your Taxes With a Credit Card

You shouldn’t pay income taxes with a credit card in these circumstances:

You aren’t eligible for a sign-up bonus or 0% intro APR offer. If neither incentive applies, the benefit of paying your taxes with a credit card is marginal at best. There’s a good chance you’ll lose money on the transaction, even if you avoid interest.
You can’t afford to pay off the charge in full before interest accrues. If you can’t avoid interest on the charge, you definitely shouldn’t put your tax payment on a credit card. You’ll end up paying a lot more than you owe.
You qualify for an IRS installment plan. For bigger tax bills, an installment plan should be your first choice if you qualify. It’s cheaper in the long run than carrying a balance with interest.
Your tax bill is small enough to pay out of pocket. If your tax bill is manageable enough to pay out of cash on hand — without dipping into your emergency fund or long-term savings — then that’s the way to go. It won’t cost you anything extra.

Your tax bill is big enough for the processing fee to offset a sign-up bonus. On the other hand, if your tax bill is huge, the processing fee could be bigger than any sign-up bonus it qualifies you for. The line depends on the expected bonus value, but as an example, a 1.85% processing fee on a $10,000 tax payment is $185, so you’d need to earn at least that much as a bonus for the payment to pencil out.

Final Word

If you don’t expect to have a major year-end or quarterly estimated tax liability this year, don’t worry. There are plenty of other ways to earn your new credit card’s sign-up bonus offer: making major travel or home improvement purchases in advance, for instance.

Just remember that credit card use is a privilege, not a right. Don’t put yourself in an uncomfortable — and avoidable — financial pickle just to earn a few extra cash back dollars or summit the final hill in your sign-up bonus climb. You could find yourself stuck with the consequences for years to come.

Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

Source: moneycrashers.com

Apache is functioning normally

May 20, 2023 by Brett Tams

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

Last week I was in Athens, GA guest lecturing at the University of Georgia . I’m up there once a semester speaking with senior students who are about to graduate and go out into the “real” world. And while my agenda is to talk about credit reports, credit scores, and how the whole financial services system works, it usually ends up becoming a fairly lengthy Q&A session about how best to establish and build your credit. Here’s the deal…you have one chance to establish credit, that’s it. You can either do it the right way or the wrong way, but you can never have a mulligan. For those of you who’ve already built credit and managed it poorly (for whatever reason), you’re not going to have to build your credit; you’re going to have to re-build it. Here are some of the more common methods for each, and their pros and cons:

Opening A Secured Credit Card

A secured credit card is a legitimate credit card issued by a legitimate bank. You make a deposit at the bank and they will issue you a credit card with a credit limit equal to your deposit. Since you’ve essentially fully secured any purchases you’ll make with a cash deposit, banks are more willing to issue these cards to either new credit users or those who are trying to rebuild their credit. Additionally, you can open a secured card for as little as a $250 deposit, so it’s a nice option for people who have limited cash flow. Secured cards aren’t a good long-term option,however; the fees associated with these cards and the interest rates aren’t very good. But, you have to remember that you’re opening the card for a purpose and that purpose is to get something good on your credit reports. After a few years of paying the bills on time you may be able to convince the card issuer to convert the account to an unsecured credit card and refund your deposit. And because this is a credit building strategy, you’ll want to make sure you choose a card issuer who reports their secured card accounts to the credit reporting agencies. Otherwise, you’re just wasting your time.

Being Added as an Authorized User

An authorized user is someone who has been authorized to use a credit card issued to another person. Most of the time, parents will add their children to one of their existing credit cards, which allows them to have a card in their name but doesn’t convey any sort of liability for payment of the balance. The good news is that the account history is reported to the authorized user’s credit reports and can almost instantly establish them a solid credit history. This is my favorite option, as it really has no downside. I call the authorized user strategy “having a credit card with training wheels.” As long as the account is managed properly, then it’s a positive addition to your credit reports. And, this is a great option for consumers who have limited (or zero) cash flow or are already working hard to get out of debt. If the account is mismanaged by your parent (or spouse, as this is also common among spouses) then all you have to do is ask that your name be removed from the account and it will also be removed from your credit reports. In fact Experian, one of the major credit reporting agencies, will automatically remove the account history from the authorized user’s credit report if it becomes derogatory, “because an authorized user has no responsibility for repayment of the debt”, according to Rod Griffin, Experian’s Director of Public Education. “We will also remove the account at the request of the authorized user.” The good news for authorized users is that the FICO scoring system gives you full benefits for a properly managed authorized user account on your credit report, as long as you have a legitimate relationship with the primary cardholder. A few years ago, credit repair companies were trying to take advantage of the authorized user strategy to boost the credit scores of consumers who had bad credit. FICO figured out a way to filter out the consumers trying to game the system, so they won’t get the same benefit as a legitimate parent/child or husband/wife relationship.

Co-signing For a Loan

Co-signing for a loan is when you sign the promissory note (the promise to pay back the loan) and accept equal liability for payments on someone else’s loan. The newly opened loan will likely end up on your credit reports and will help you to establish or re-build your credit. Co-signed loans are normally auto loans, personal loans, or mortgages. That’s where the good news ends. I don’t like this option for three reasons:

1) It’s unnecessary. You don’t establish credit any faster by obligating yourself to a huge loan than you do by opening a $250 secured credit card. Choose the path of least resistance!

2) You can’t change your mind. There is no such thing as “co-signing for credit only” although some consumers have tried to challenge this in court, unsuccessfully. When you co-sign you’re just as liable for payments as anyone else on the loan. If the payments start being missed, it’s your problem. You have to be prepared to make all the payments if you choose this option.

3) Missed payments will go on your credit reports. If the payments on the loan are missed then anyone who has signed for the loan (yes, including you) will have a record of those missed payments reported on their credit reports. And, if the loan goes into default any aggressive collection actions, including litigation, it will be targeted at you. I’m not a fan of co-signing for a loan EVER, unless you need two incomes to qualify for a mortgage.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.

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What is pre-approval?

What’s the difference between pre-qualification and pre-approval?

Which is better, pre-approval or pre-qualification?

How do I get pre-approved for a credit card?

Respond to an offer from a credit card company

Request pre-qualification on a credit card company’s website

Why is it important to get pre-approved or pre-qualify?

Picking the right credit card to apply for

How do you apply for a credit card after you’re pre-approved?

What credit score do you need?

After you get approved

Are you guaranteed approval when pre-approved for a credit card?

Can you get denied after pre-approval?

What if I can’t get pre-approved for a credit card?

Apply for a secured credit card

Credit card companies that offer pre-approval

Summary

Read more:

20 Best Bank Accounts for Bad Credit

1. Chime

2. U.S. Bank

3. GO2bank

4. Chase

5. mph.bank

6. Current

7. Walmart MoneyCard

8. Revolut

9. TD Ameritrade

10. Albert

11. SoFi

12. Navy Federal Credit Union

13. Aspiration

14. Southwest Financial Federal Credit Union

15. FSNB

16. Wells Fargo

17. United Bank

18. Huntington National Bank

19. Varo

20. Regions Bank

What is a bank account for bad credit?

How do banks evaluate new account applications?

What is ChexSystems?

Can you open a bank account with no credit check?

Banks that Don’t Use ChexSystems

Second Chance Checking Account

What to Look for in a Bad Credit Checking Account

No Credit Checks

Low or No Minimum Balance Requirement

Reasonable Account Fees

Online and Mobile Banking Features

Account Alerts and Notifications

Overdraft Protection

FDIC or NCUA insurance

Opportunities for Financial Education

Bottom Line

20 Best Neobanks

1. Chime

2. GO2bank

3. Current

4. Revolut

5. Quontic Bank

6. Dave

7. Albert

8. Varo

9. Aspiration

10. Bluevine

11. SoFi

12. Acorns

13. One

14. Cheese

15. Unifimoney

16. NorthOne

17. Oxygen

18. Bella

19. Lili

20. Monzo

What is a neobank?

Are neobanks safe?

Neobanks vs. Traditional Banks

Neobanks