What to Know about FHA 203K loans

Buying a fixer-upper is sometimes romanticized by pop culture. While it’s fun to dream, the reality of home renovation is that it can be laborious and draining, especially if the home needs serious help.

Repair work requires energy and resources, and it can be difficult to secure a loan to cover both the value of the home and the cost of repairs—especially if the home is currently uninhabitable. Most lenders won’t take that sort of chance.

But if you have your heart set on buying a fixer upper, an FHA 203(k) loan can help.

The Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD), insures loans for the purchase and substantial rehab of homes. It is also possible to take out an FHA 203(k) loan for home repairs only, though it might not be your best option if that’s all you need.

If you have the vision to revive a dreary house, here’s info about FHA 203(k) loans and other home improvement loan options.

What Is an FHA 203(k) home loan?

Section 203(k) insurance lets buyers finance both the purchase of a house and its rehabilitation costs through a single long-term, fixed- or adjustable-rate loan.

Before the availability of FHA 203(k) loans, borrowers often had to secure multiple loans to obtain a mortgage and a home improvement loan.

The loans are provided through HUD-approved mortgage lenders and insured by the FHA. The government is interested in rejuvenating neighborhoods and expanding homeownership opportunities.

Because the loans are backed by the federal government, you may be able to secure one even if you don’t have stellar credit. Rates are generally competitive but may not be the best, because a home with major flaws is a risk to the lender.

The FHA 203(k) process also requires more coordination, paperwork, and work on behalf of the lender, which can drive the interest rate up slightly. Lenders also may charge a supplemental origination fee, fees to cover review of the rehabilitation plan, and a higher appraisal fee.

The loan will require an upfront mortgage insurance payment of 1.75% of the total loan amount (it can be wrapped into the financing) and then a monthly mortgage insurance premium.

Applications must be submitted through an approved lender .

What Can FHA 203(k) Loans Be Used For?

Purchase and Repairs

Other than the cost of acquiring a property, rehabilitation may range from minor repairs (though exceeding $5,000 worth) to virtual reconstruction.

If a home needs a new bathroom or new siding, for example, the loan will include the projected cost of those renovations in addition to the value of the existing home. An FHA 203(k) loan, however, will not cover “luxury” upgrades like a pool, tennis court, or gazebo (so close!).

If you’re buying a condo, 203(k) loans are generally only issued for interior improvements. However, you can use a 203(k) loan to convert a property into a two- to four-unit dwelling.

Your loan amount is determined by project estimates done by the lender or the FHA. The loan process is paperwork-heavy. Working with contractors who are familiar with the way the program works and will not underbid will be important.

Contractors will also need to be efficient: The work must begin within 30 days of closing and be finished within six months.

Mortgage LoanMortgage Loan

Temporary Housing

If the home is indeed unlivable, the 203(k) loan can include a provision to provide you with up to six months of temporary housing costs or existing mortgage payments.

Who Is Eligible for an FHA 203(k) Loan?

Individuals and nonprofit organizations can use an FHA 203(k) loan, but investors cannot.

Most of the eligibility guidelines for regular FHA loans apply to 203(k) loans. They include a minimum credit score of 580 and at least a 3.5% down payment.

Applicants with a score as low as 500 will typically need to put 10% down.

Your debt-to-income ratio typically can’t exceed 43%. And you must be able to qualify for the costs of the renovations and the purchase price.

Again, to apply for any FHA loan, you have to use an approved lender. (It’s a good idea to get multiple quotes.)

Home Improvement Loan Options

The FHA 203(k) provides the most comprehensive solution for buyers who need a loan for both a home and substantial repairs. However, if you need a loan only for home improvements, there are other options to consider.

Depending on the improvements you have planned, your timeline, and your personal financial situation, one of the following could be a better fit.

Other Government-Backed Loans

In addition to the standard FHA 203(k) program, there is a limited FHA 203(k) loan of up to $35,000. Homebuyers and homeowners can use the funding to repair or upgrade a home.

Then there are FHA Title 1 loans for improvements that “substantially protect or improve the basic livability or utility of the property.” The fixed-rate loans may be used in tandem with a 203(k) rehabilitation mortgage.

The owner of a single-family home can apply to borrow up to $25,000 with a secured Title 1 loan.

With Fannie Mae’s HomeStyle® Renovation Mortgage, homebuyers and homeowners can combine their home purchase or refinance with renovation funding in a single mortgage. There’s also a Freddie Mac renovation mortgage, but standard credit score guidelines apply.

Cash-Out Refinance

If you have an existing mortgage and equity in the home, and want to take out a loan for home improvements, a cash-out refinance from a private lender may be worth looking into.

You usually must have at least 20% equity in your home to be eligible, meaning a maximum 80% loan-to-value (LTV) ratio of the home’s current value. (To calculate LTV, divide your mortgage balance by the home’s appraised value. Let’s say your mortgage balance is $225,000 and the home’s appraised value is $350,000. Your LTV is 64%, which indicates 36% equity in the home.)

A cash-out refi could also be an opportunity to improve your mortgage interest rate and change the length of the loan.

PACE Loan

For green improvements to your home, such as solar panels or an energy-efficient heating system, you might be eligible for a PACE loan .

The nonprofit organization PACENation promotes property-assessed clean energy (or PACE) financing for homeowners and commercial property owners, to be repaid over a period of up to 30 years.

Home Improvement Loan

A home improvement loan is an unsecured personal loan—meaning the house isn’t used as collateral to secure the loan. Approval is based on personal financial factors that will vary from lender to lender.

Lenders offer a wide range of loan sizes, so you can invest in minor updates to major renovations.

Home Equity Line of Credit

If you need a loan only for repairs but don’t have great credit, a HELOC may provide a lower rate. Be aware that if you can’t make payments on the borrowed funding, which is secured by your home, the lender can seize your home.

The Takeaway

If you have your eye on a fixer-upper that you just know can be polished into a jewel, an FHA 203(k) loan could be the ticket, but options may make more sense to other homebuyers and homeowners.

SoFi offers cash-out refinancing, turning your home equity into renovation money.

Or maybe a home improvement loan of $5,000 to $100,000 seems like a better way to turn your home into a haven.

Check your rate today.



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

SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.

Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apple Card Review – Does It Live Up to the Hype?

Advertiser Disclosure: This post includes references to offers from our partners. We receive compensation when you click on links to those products. However, the opinions expressed here are ours alone and at no time has the editorial content been provided, reviewed, or approved by any issuer.

Apple Card immodestly claims to “completely [rethink] everything about the credit card.” Is it correct? Maybe.

Backed by the Mastercard network, Apple Card certainly has a host of innovative features that old-fashioned credit cards don’t, such as daily cash-back and numberless physical cards. And it’s a harbinger of the cashless, contactless payments landscape to come. No serious observer can dispute that Apple Card is ahead of its time.

But any product that’s truly ahead of its time must also be competitive in the present. And beyond its novel features, Apple Card works pretty much like any other credit card. Indeed, in spite – or perhaps because – of its novel additions, it lacks some consumer-friendly features common to other popular cash-back cards and general-purpose rewards cards.

Here’s a closer look at what sets Apple Card apart, and how it stacks up against other credit cards.

Things to Keep in Mind About Apple Card

Before we dive into Apple Card’s details, two points bear mentioning.

First, though cardholders who don’t pay their statement balances in full each month are subject to interest charges that vary with their creditworthiness and prevailing benchmark rates, Apple Card charges none of the fees typically levied by credit card companies: no annual fee, no late fee, and no over-limit fee.

Second, Apple Card is designed to work with Apple Pay, which runs on Apple (Mac) hardware only. If you’re one of the many millions of iPhone users in the United States, this card is for you. If you’re an Android loyalist, you’re out of luck.

Key Features

Here’s a closer look at Apple Card’s most notable features.

Earning Cash Back

Apple Card has a three-tiered cash-back program:

  • 3% Cash Back. All purchases from Apple earn unlimited 3% cash back. These include, but are not limited to, purchases from Apple.com, physical Apple Stores, the iTunes Store, the App Store, and in-app purchases. Certain non-Apple purchases made using Apple Pay earn 3% cash-back rewards as well.
  • 2% Cash Back. All other purchases made using Apple Pay (including through your Apple phone or Apple Watch) earn unlimited 2% cash back. Hundreds of major retailer chains and brands, encompassing more than 2 million individual merchant locations online and off, accept Apple Pay. These include but aren’t limited to Walgreens, Nike, Uber Eats, Duane Reade, Amazon, and thousands of gas stations. If you’re not familiar with how Apple Pay works, see its site for details.
  • 1% Cash Back. Purchases made with merchants – online, offline, and in-app – that don’t accept Apple Pay earn an unlimited 1% cash back.

Redeeming Cash Back

Cash back earned through Apple Card purchases accrues daily. Each day a purchase posts to your account, you’ll receive the requisite cash back on your Apple Pay Cash card in the Apple Wallet app.

From there, you can use it to pay for purchases within or without the Apple ecosystem or to make payments on your Apple Card balance.

If you don’t have an Apple Pay Cash card and aren’t interested in getting one, you must accept cash back earned to your Apple Card via statement credits, which may not be much of a sacrifice.

Apple Pay Integration

Apple Card is essentially an offshoot of Apple Wallet. It’s designed for use in conjunction with Apple Pay – or, more specifically, as the user’s default Apple Pay payment method. Apple clearly expects most Apple Card transactions to be contactless, executed through a Web portal or with the tap of an iPhone.

Beyond Apple Card’s novelty as the first truly “contactless first” credit card, users benefit from Apple Pay’s stringent security features. These include:

  • Unique Device Number. Your Apple Card is issued with a unique number that’s stored in your iPhone’s Secure Element, the secure microchip that hosts the phone’s most sensitive functions.
  • Two-Factor Purchasing. Every purchase requires your unique device number, plus a unique one-time code generated on the spot.
  • Purchase Authorization Via Face ID or Touch ID. This renders stolen phones all but useless for making purchases.

Apple Card also takes data security seriously. Apple and Goldman Sachs, the card’s issuer, vow never to share customer data with third parties. Only Goldman Sachs has access to users’ transaction histories and personal information.

Physical Credit Card

Apple Card isn’t 100% virtual. The physical Apple Card is a titanium card that looks and feels just like any other premium credit card, except that it’s much sleeker. The card face is a minimalist triumph, with no cardholder name, card number, or CVV and virtually no marks to mar its metallic hue.

Apple and Goldman Sachs tout the security benefits of Apple Card’s featurelessness. Without any information to identify the card, it’s useless in the wrong hands.

Real-Time Fraud Protection

Apple Card’s real-time fraud protection feature notifies you every time your card is used to make a purchase. If something doesn’t seem right about a transaction, or you know for a fact that you didn’t make it, you can immediately initiate the dispute process by tapping the notification.

Purchase Organization and Mapping

Apple Card automatically organizes purchases by purchase category – entertainment, food and drinks, and so on – and merchant. Categories are color-coded for easy visualization and totaled monthly for easy budgeting. With features like that, who needs a paid budgeting app?

Apple Card also automatically maps purchases, showing you where you’ve spent money recently, literally. If a real-time fraud protection notification slips your notice, perhaps seeing a purchase in a city you’ve never visited will jog your memory.

Spending Summaries

Apple Card’s spending summaries, visible in the Wallet app, reveal how much you’re spending, and on what, in any given week or month. You can view spending trends over time here too, which comes in handy for the periodic budget reviews you should be doing.

Payment Due Dates & Frequency

By default, Apple Card statements are due at the end of the month. If you prefer to pay balances more frequently – and reduce interest charges when you can’t pay off your balance in full before the statement due date – you can set weekly or biweekly payments too.

Interest Calculator

Apple Card’s built-in interest calculator automatically tallies expected interest charges when you pay less than the full balance due on your card before the end of the grace period.

Credit card issuers are required to reveal on each statement the true cost of making only the minimum payment due in comparison with at least one larger monthly payment.

However, this is a far more robust and interactive interest calculator that’s significantly more likely to nudge you to boost your monthly payment.

Interest-Reduction Suggestions

If the interest calculator isn’t enough, Apple Card also provides “smart payment suggestions” that encourage cardholders to increase their monthly payments, thereby decreasing their total interest liability.

It’s not clear how Apple Card arrives at these suggestions, but they appear to be based on cardholders’ spending patterns and payment history.

Interest-Free Installment Payments

Apple Card offers interest-free monthly installment payments for select Apple products purchased through the company’s sales channels. You can easily see the size of your installments and how much you have left to pay in the app.

Text-Based Support

Apple Card has a text-based support system that’s available 24/7. If you run into an issue with the card or have a question that doesn’t concern a disputed charge, which you can handle through the real-time fraud protection interface, this is your ticket to a resolution.

Important Fees

Apple Card charges no fees to cardholders: no foreign transaction fees, balance transfer fees, or annual fees.

Advantages

These are among Apple Card’s principal advantages.

1. No Fees

Apple Card doesn’t charge any fees to cardholders. This makes it all but unique, as even avowedly low-fee cards assess fees for less common occurrences such as late and returned payments.

2. Cash Back Accrues Daily

Apple Card is among the only widely available credit cards to accrue cash back on a daily basis, rather than at the end of the statement cycle.

Although the accrual frequency doesn’t affect net cash-back earnings or cash back earning rates, it’s certainly nice to see your spending subsidized in near-real-time.

3. Solid Cash Back Rates on Apple & Apple Pay Purchases

This card earns 3% cash back on virtually all purchases within the Apple ecosystem, excluding purchases with Apple Pay merchants. This 3% category covers, but isn’t limited to, the following:

  • Apple.com purchases
  • Purchases at physical Apple Stores
  • iTunes Store purchases
  • App Store purchases
  • In-app purchases

Apple Card also earns 2% cash back on purchases made with Apple Pay merchants. So if you’re able to limit your spending to the Apple and Apple Pay ecosystems, you’ll net somewhere north of 2% cash back on this no-annual-fee card, depending on your exact spending mix.

4. Above-Average Security Features

Apple Card is more secure than your average credit card. The physical card doesn’t have a card number or CVV, so you won’t have to worry about what could happen between the moment you lose your card and the moment you freeze your account.

The virtual card is denoted by a unique device number locked away in your iPhone’s Secure Element, far from prying eyes.

Perhaps most consequentially, Apple has a strict privacy policy that forbids data sharing with third parties. There’s no need to opt out, which is often easier said than done, and only Goldman Sachs has access to your transaction history.

5. Real-Time Fraud Protection

Apple Card has another security feature worth touting: real-time fraud protection that alerts you whenever your card is used to make a purchase and lets you flag potentially fraudulent transactions with a single tap.

Compared with the traditional dispute resolution process, this is a snap, even when flagged charges turn out to be legitimate.

6. Easy, Flexible Payments

Apple Card’s default payment due date – the last day of the month – is easy to remember, even without the helpful reminders.

If you’re trying to budget on an irregular income and prefer not to wait until the end of the month to pay off your entire balance, Apple Card’s customized weekly and biweekly payment intervals have you covered.

Other credit cards let you pay off balances throughout the month, but few make it as easy as Apple Card.

7. Interest-Reduction Features

Apple Card’s interest calculator and interest-reduction suggestions are classic examples of “nudge” theory in action. By revealing just how much you’ll save over time by paying a little more upfront, these features nudge you to make smart financial decisions.

Of course, it’s always best to pay off your balance in full by the statement due date, but when unexpected expenses make that impossible, it’s nice to feel like your credit card issuer is on your side.

8. Useful Budgeting and Spending Control Features

With so many budgeting and spending control features, Apple Card feels like a personal budgeting suite with a spending aid built in.

Maybe that’s the point. Though most small-business credit cards have basic expense tracking and reporting features, Apple Card’s package is unusually robust for a consumer credit card.

If what’s keeping you from building and sticking to a household budget is the inconvenience inherent in standalone budgeting software, this is a potential game-changer.

9. Text-Based Customer Support

Apple Card’s text-based customer support is a low-friction alternative to menu-laden, over-automated phone support and unpredictable email support.

Whether this feature is as efficient as Apple and Goldman Sachs promise remains to be seen, but it’s difficult to see it being worse than the status quo – for relatively simple issues, at least.

10. No Penalty Interest Charges

Apple Card doesn’t charge penalty interest. While it’s best never to find yourself in a position where penalty interest would apply, the assurance that you won’t be unduly penalized for a lapse beyond your control is certainly welcome.

Disadvantages

Consider these potential disadvantages before applying for Apple Card.

1. Requires Apple Pay and Apple Hardware

Apple Card’s biggest drawback is its exclusivity. The card requires Apple Pay, which runs exclusively on Apple hardware, meaning it’s not appropriate for Android or Windows device users.

If you’re set on applying for Apple Card but don’t have an iPhone or other compatible Apple device, Apple Watch is your most cost-effective option. Apple Pay runs on Apple Watch just fine, and you can pick up refurbished older versions – Series 1, 2, and 3 – for less than $100.

That’s still a significant outlay, though, and no other credit card on the market requires compatible hardware.

2. Only 1% Cash Back on Non-Apple Pay Purchases

Apple Card earns just 1% cash back on non-Apple Pay purchases. If your daily, weekly, and monthly consumption habits involve merchants that mostly accept Apple Pay, you shouldn’t have trouble earning the higher 2% cash-back rate, but not all merchants do.

Square has a non-exhaustive list of major merchants that do accept Apple Pay. Do yourself a favor and review it before applying for this card.

3. Goldman Sachs’ First Credit Card

Apple Card is the first consumer credit card issued by Goldman Sachs Bank. Apple touts this as an advantage, arguing that Goldman Sachs isn’t bound by the constraints of legacy credit card issuers such as Chase and Barclays.

And it’s not as if Goldman Sachs is entirely new to the consumer finance realm. Its Marcus by Goldman Sachs loan and savings products are innovative and well-liked.

That said, it’s not hard to imagine a first-time credit card issuer experiencing some growing pains, especially given Apple Card’s novelty. At a minimum, don’t be surprised to see iterative changes to Apple Card as Goldman Sachs figures out what works and what doesn’t.

Final Word

If you’re a committed Apple Pay user with the hardware to back it up – an iPhone, Apple Watch, or maybe an iPad – then it might make sense for you to ditch your traditional credit cards and going all-in on Apple Card.

Users who restrict their spending to Apple Pay merchants only stand to earn 2% cash back across the board, about as good as it gets on a consistent basis for premium cash-back credit cards. To do better than that, you’ll need to upgrade to a premium travel rewards credit card with a hefty annual fee.

Source: moneycrashers.com

How to Install String Lights on Your Patio | ApartmentSearch

Close up image of stringed lights

Make those warm summer evenings on the patio with friends even cozier with the right lighting. String lights can make your apartment balcony or patio dreamy, but do you know how to hang up outdoor string lights without damaging the walls? It can be challenging! Before you start, you’ll need to do a little research. These are the methods you need to know when hanging up string lighting on your apartment balcony or patio.

Adhesive-Backed Hooks

Best for: vinyl siding, brick

Trying to figure out how to hang patio lights without nails so you can transform your apartment balcony into its own little haven? Adhesive-backed hooks make attaching lights to vinyl siding or brick as easy as 1-2-3!

  1. Make a mark where you want to secure your lights.
  2. Stick the adhesive side to the wall.
  3. Drape the lights over the hooks.

Hot Glue

Best for: vinyl siding, brick

Wondering how to hang string lights on an apartment balcony without ruining the exterior siding and incurring a damage fee? Hot glue may be a surprising option. There are two ways to attach string lights using hot glue, depending on the type of bulb.

For larger bulbs:

  1. Apply a small drop of glue to the side of each bulb socket, on the side opposite from the socket’s clip. Gluing the base of the socket can cause the socket to detach from its cord.
  2. Press the socket firmly into the wall and hold it in place until the glue dries.

For twinkle-style lights:

  1. Hold the light cord in place against the wall.
  2. Squeeze a drop of glue onto the cord and wall.
  3. Hold in place until the glue dries.

Gutter Hooks

Best for: stucco

Gutter hooks are S-shaped hooks that hang on the gutter. There is no permanent installment so you can adjust as you go. These hooks are easy to install so you can light up your night in no time!

  1. Thread the light string through one end of the hook.
  2. Slide the other end of the hook over the lip of your gutter.

Staples

Best for: wood

We’re talking a heavy-duty staple gun—think Clark Griswold, minus the mishap. When securing string lights to a wood wall or post, staples are a simple, easy option.

  1. Mark the spots where you want to attach the lights.
  2. Carefully hold the light strand in place (watch your fingers!).
  3. Press the staple gun firmly over the strand and staple into the wood, making certain to not puncture the wire when you fire the staple gun.

Metal Cup Hooks

Best for: wood

Cups hooks screw into the wall and have a cup shape, making it easy to hang and adjust the light strands so you can keep your patio fresh.

  1. Mark where you want to secure the cup hooks to the walls.
  2. Pre-drill small, shallow holes with a wood-bearing drill bit (should be slightly smaller than the hooks) at each mark.
  3. Twist the hook into each hole.
  4. Drape the lights over the cup hook and tweak the slack how you prefer.

Screw Eye Hooks

Best for: wood

Screw eye hooks screw into the wall similar to cup hooks. The difference is that while cup hooks are only a semi-circle, screw eye hooks have no opening. This means you will need tiny metal carabiners or simple zip ties to attach the strand of lights, which is more secure.

  1. Mark where you want to secure the screw eye hooks to the walls.
  2. Pre-drill holes with a wood-bearing drill bit at each mark.
  3. Twist a screw into each hole.
  4. Attach the strand of lights with the preferred method.

Extra Tips:

Decide on design. Will you hang the lights around the perimeter of the patio or start at one point and fan out multiple strands? Do you want the lights taut against the wall or drooping in between? The closer the anchors are to each other, the tauter the lights will be; securing them farther apart will allow for slack in between.

Measure first. Take measurements for both the string(s) of lights and the dimensions of the patio where you are going to hang the lights.

Plot points. As you measure, plan out where you will secure the lights and make sure the spot can handle the hanging method you choose. Mark the placement as you go.

Plan the power source. Make sure the plug is nearest to a power outlet and can either reach the outlet itself or with an extension cord.

Remove the bulbs before hanging. This will help prevent them from breaking or getting glue on them if using it.

Save energy. If you plan to use your lights frequently, also have a plan to conserve energy. LED bulbs are recommended because they help save energy, stay cool, and last longer. An outlet timer that turns the lights on and off automatically is also a good idea to ensure the lights aren’t on unnecessarily.

Choose the best bulb. Twinkle vs. café style, soft white vs. yellow … there are all kinds of combos to choose from and you can’t go wrong whatever you decide. Do look for shatterproof bulbs instead of glass if possible and opt for LED.

Ready to upgrade your outdoor living space? Search for apartments with a large patio or balcony with ApartmentSearch!

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Source: blog.apartmentsearch.com

Home improvement loans

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

Improving your home might be a goal for many reasons. It can increase the value of the property for more profit when you’re selling or renting it out. Improvements can also make life more enjoyable for you and your family. But they can be expensive—the average cost of a small kitchen renovation is between about $13,000 and $37,500 according to HomeAdvisor, for example.

Homeowners who want to update their homes often turn to financing as a way to pay for improvements. Find out about home improvement loans and whether they might be an option for you below.

How Do Home Improvement Loans Work?

The specific terms of home improvement loans depend on which type you apply for, but the general concept is that a lender agrees to give you a certain amount of money and you agree to pay it back with interest. In some cases, the lender might require that you use the money for a specific purpose that you stated beforehand. In other cases, the funds are provided as a personal loan for you to use as you see fit.

You can get money for home improvement from a variety of lenders, including banks, personal loan companies, mortgage companies and government agencies. You could also tap your credit lines or credit cards.

How much you can borrow and the rates you’ll pay on the debt depend on a variety of factors. Those include your credit history and whether or not you’re putting up collateral such as home equity.

Types of Loans You Can Use for Home Improvements

Personal Loans

Personal loans are unsecured signature loans. That means you don’t typically put up collateral, and with some exceptions, you can generally do what you want with the loan funds. You make monthly payments as agreed upon, usually for a period of a few years.

Pros: You may be able to get a personal loan that doesn’t require collateral such as home equity. That means you don’t put your homeownership on the line with the loan.

Cons: The lack of collateral makes the loan riskier for the lender, which usually means a higher interest rate and overall loan cost for you.

Credit score requirements: You may be able to find personal loan lenders willing to work with someone with little credit history or only fair credit. However, to get decent rates on a large loan, you may need a good or excellent credit score.

Government Loans

You might be eligible for government loans and assistance programs to modify or repair your home. For example, HUD offers information about home equity conversion mortgages for seniors as well as the Title I Property Improvement Loan Program. Some homeowners may be able to borrow up to $35,000 via the 203(k) Rehabilitation Mortgage Insurance Program, and the VA offers some home refinance options for eligible veterans.

Pros: The credit requirements for government programs and government-backed loans tend to be a bit laxer than when you’re dealing with banks.

Cons: These programs might have very specific eligibility requirements and terms that you have to follow closely. For example, you may be required to use the funds for specific purposes.

Credit score requirements: This varies according to program, but you may be able to access some options with less-than-stellar credit.

Home Equity Loans

A home equity loan (“HEL”) draws on the amount of equity in your home. For example, if your home is worth $100,000 and you only owe $70,000, you may be able to get a loan for close to $30,000 based on the equity.

Pros: Home equity loans are secured by the value in your home, which makes them a less risky investment for lenders than personal loans and credit cards. That helps you get a lower interest rate, making HELs typically less expensive than other home improvement loans.

Cons: The loan is tied to your home ownership. If you default on the loan, the lender can force the sale of your home to recoup its losses.

Credit score requirements: You don’t need a stellar score to refinance your mortgage, so you might not need a great score to take out a home equity loan.

Home Equity Lines of Credit (“HELOC”)

A home equity line of credit is a revolving line of credit based on the equity in your home. The terms work a bit more like a credit card than the terms of a home equity loan do. That means you draw on the credit line as needed to cover repairs and pay it back over time. You can draw again on the funds as you pay them back.

Pros: HELOCs can be a flexible source of income, making it easy to manage costs for renovations without running up excess debt. And because they’re secured by the value in your home, they may come with more favorable terms than credit card debt.

Cons: Again, the debt is tied to your home. If you default on the line of credit, the lender can force the sale of your home to get its money back.

Credit score requirements: Credit score requirements for HELOCs are similar to those for home equity loans.

Other Ways to Pay for Home Improvements

Credit Cards

If you have a credit card with a high enough balance, you can put goods and services on it. The downside is that you might pay high interest on that debt. Alternatively, if you have a strong credit score, you might be able to get approved for a new card with a zero percent introductory APR offer. That might let you pay off your home improvement expenses over a year or two without added interest expense.

Cash-Out Refinancing

If your home has equity, you can also consider a cash-out refinance. If you owe $70,000 and your home is worth $100,000, you may be able to refinance and borrow $95,000. (The other $5,000 If your credit is better than when you bought the home or conditions are more favorable, you might even get better rates.

The $70,000 you owe is paid to the bank holding the original mortgage. You cash out the roughly $25,000 left and can use it as you see fit, including repairing your home.

Tips for Getting a Home Improvement Loan

If you’ve decided to pursue a home improvement loan, use these tips to increase your odds of getting the deal that you want.

Have Specific Terms in Mind

Plan ahead rather than reaching for the loan and then deciding what you’ll do. Define your home improvement plan and budget, and consider whether you can get funding for that much money.

Get a Cosigner If Necessary

Consider whether you might need a cosigner. Depending on what type of loan you want to apply for, a cosigner might help if you don’t have great credit or if your income doesn’t meet the requirements of the lender. Keep in mind that the cosigner will also be taking on all the obligations of the debt.

Know Your Credit Score

Finally, check your credit score and credit reports before you apply. Understanding where you stand helps you choose the financial products you’re more likely to qualify for and avoid unpleasant surprises during the application process. Getting a good look at your credit reports also helps you understand whether there are inaccurate negative items bringing your score down. If that’s the case, consider working with Lexington Law to repair your credit and potentially open more home improvement loan doors in the future.


Reviewed by Cynthia Thaxton, Lexington Law Firm Attorney. Written by Lexington Law.

Cynthia Thaxton has been with Lexington Law Firm since 2014. She attended The College of William and Mary in Williamsburg, Virginia where she graduated summa cum laude with a degree in International Relations and a minor in Arabic. Cynthia then attended law school at George Mason University School of Law, where she served as Senior Articles Editor of the George Mason Law Review and graduated cum laude. Cynthia is licensed to practice law in Utah and North Carolina.

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

Source: lexingtonlaw.com

16 Hidden Freelancer Expenses & Costs That Contractors Have to Cover

Deciding to become a freelancer may seem as simple as choosing to make a go of it on your own and riding off into the freelance sunset. But there are a variety of factors you should consider before making it your full-time gig — not least of which are the expenses you have to cover out-of-pocket.

While employees don’t need to worry about calculating their taxes or budgeting for sick time, freelancers do. And they also have to cover office supplies, health care, and accounting fees as well as a variety of other business-related costs. All of these play into the hourly rate they charge their clients.

Before you make the decision to go from being an employee to a freelancer, here are some of the expenses and costs you should be aware of.

Freelancing Expenses Contractors Have to Cover

From basic office supplies to legal fees, freelancers have to cover a lot of different business expenses that employees don’t. Here are some of the most common costs to take note of before deciding whether the freelance life is for you.

1. Office Space

Many freelancers can work from home or even from a coffee shop, but those who don’t have room for a home office or who frequently need to meet with clients may need to rent out a commercial office space. The costs can vary greatly between cities and buildings, but some affordable options include:

  • Coworking spaces
  • Daily office rentals
  • Sharing a private office with another freelancer

The size, type, and location of the office space you choose will depend on your budget and needs. Unlike employees, you will be responsible for researching, negotiating, and paying for office space if you need it to provide your freelance work to clients and customers.

2. Office Supplies

Whether your office is in your home or in a commercial building, you’ll need to pay for supplies and furniture to fill it. Start with basics such as:

  • A comfortable office chair
  • A desk
  • Business cards
  • Pens, pencils, and notepads
  • A desk or floor lamp
  • A filing cabinet
  • Printer paper and ink

As you grow your business, you can upgrade items to better suit your needs and budget. For example, once you have a few contracts under your belt, you may consider purchasing a standing desk or an ergonomic chair.

3. Hardware and Electronics

One of the biggest costs freelancers have to cover is the hardware and electronics they need to do their jobs. Depending on the services you offer, you may need to purchase:

  • A desktop computer and monitor
  • A laptop
  • A tablet
  • A keyboard and mouse
  • Speakers
  • Headphones
  • A smartphone
  • A camera and microphone
  • A printer

Fortunately, many of these items last for at least a few years, so you won’t have to repurchase them on a regular basis. As an added bonus, they’re typically tax deductions, which means they can help to reduce the overall tax amount you have to pay the IRS.

4. Software, Licenses, and Subscriptions

Once you have hardware, you need to purchase any software required to provide your freelance services to clients and customers. For example, depending on what you do, you may need to purchases licenses or subscriptions for:

Keep in mind that most platforms offer discounted pricing to individuals, so do your research before committing to an annual subscription or license with a hefty price tag. Look for free alternatives to traditional platforms, like Word Online or Google Docs to cut costs while still benefiting from the tools you need to do your job.

5. Advertising

While employees don’t typically have to worry about paying for advertising costs, freelancers do. In order to get new clients and build up a full-time roster, freelancers have to spread the word about their services. You can do so by advertising your business through:

  • Social media ads on Facebook, Twitter, Instagram, or LinkedIn
  • Pay-per-click (PPC) ads on Google, Bing, or other search engines
  • Newspapers, magazines, and other print publications
  • Websites such as Craigslist
  • Professional associations

Before emptying your wallet for expensive ads and self-promotion, research the options available to you and select the method you think will get you the best return on your investment.

There are a number of free options you can choose from, such as joining a virtual or in-person networking group, posting in professional forums, or creating professional social media profiles and sharing information about your services and availability.

You can also post your services on freelancer websites such as Upwork, which typically allow freelancers to post their professional profiles at no cost.

6. Professional Website

Most freelancers need a professional website that prospective clients can visit to learn more about their skills, experience, and services. This could be a basic website similar to a digital portfolio, or it could include a number of additional features such as online booking and digital payments.

Whatever type of functionality you choose, your website will come with some standard costs, including:

  • Design
  • Development
  • Hosting
  • Domain name registration

Although you can reduce your expenses by choosing a free website building platform like WordPress or Wix, you’ll still have to pay for your domain and hosting at the very least. If you want to include a blog, you’ll also need to consider the costs associated with hiring a freelance writer or editor unless you plan to provide your own content.

7. Self-Employment Taxes

Because taxes don’t automatically come out of your freelance invoices, you are responsible for calculating and setting aside your self-employment taxes throughout the year, the current rate of which is 15.3%.

Thankfully, many of your expenses will count as write-offs, which you can include in your annual tax returns, reducing your total amount you owe. However, it’s still a good idea to calculate an approximate tax amount from each invoice and to keep the cash in a separate account, so you aren’t left owing an unexpected amount with no way to pay for it come tax time.

8. Health Benefits

From glasses and prescriptions to medical appointments and emergencies, freelancers are responsible for their own medical costs — either by securing their own health insurance or paying out of pocket.

Fortunately, you have options when it comes to self-employed health insurance that can save you money and stress. Be sure to do your research and choose an option that works for you both practically and financially to support personal and professional health.

9. Retirement Savings

As with taxes, freelancers don’t have the same retirement plans to contribute to as employees. Instead, freelancers must plan and save for retirement on their own. For example, you can choose to set up a solo 401(k) or an IRA, similar to how you would if you were working for a company.

Unfortunately, you won’t benefit from having an employer match your contributions, but you will be setting yourself up for future financial security while still owning your own business.

10. Professional Development

Seminars, conferences, courses, and certifications are all an important part of staying up-to-date in your profession. And they all cost money. Small-business owners like freelancers don’t have employers with perks like professional development budgets, so they have to cover these costs on their own.

But even though these endeavors come with upfront costs, they can end up providing you with a lot of long-term benefits. After all, the more you hone your skills, network with others, and expand the services you offer, the better chance your freelance business has to succeed.

While you may be more cost-conscious about how you approach professional development when you’re footing the bill, it should still be something you budget for and make a point of pursuing. Some professional development options are relatively low-cost or even free, but still offer new information that can help you to learn more about industry trends and best practices.

11. Vacation and Sick Time

One of the biggest hidden costs of freelancing is budgeting for time off. Many freelancers inadvertently overlook the fact that they have to set aside money to cover any vacation or sick time they take throughout the year. Because they don’t have an employer paying for time off, it’s up to them to calculate and set aside the appropriate amount.

You have a couple of options when it comes to saving up for sick time and vacation days. For example, you can:

  • Take a small amount from each freelance job you complete and save it in a separate account
  • Calculate the amount you need to make to live and then use extra income as vacation pay
  • Work additional hours to cover the amount of time you want to take off each year

As a new freelancer, you’ll probably be starting out with no vacation or sick time, but as you get more clients and start to build up your average monthly income, you’ll have a better idea of how to start banking extra hours and saving for some well-deserved time off.

12. Accounting and Legal Costs

When you’re an employee, it’s easy to take your accounting and legal departments for granted. They track your hours, deposit your paychecks, and provide your employment contract, all without you having to lift a finger. Freelancers have to handle their own accounting, develop their own contracts, and keep track of their own records — or else pay someone to do it for them.

If you aren’t comfortable managing the financial and legal aspects of your freelance business alone, you may want to hire someone to do it for you or, at the very least, purchase software that will help you to do accounting tasks like:

  • Invoicing
  • Drafting quotes and contracts
  • Tracking your billable hours
  • Monitoring payment statuses
  • Documenting business expenses

13. Administrative Tasks

Freelancers don’t typically get paid for the time they spend completing the routine administrative tasks that come with doing business like responding to emails, listening to voicemails, or talking to customer service about a technical issue. That means they need to consider how to cover their non-billable hours so they don’t end up working for free.

The best way to do this is to calculate non-billable work into your hourly rate. That way, you don’t get paid directly for your administrative tasks, but you still make enough money to cover the time you spend doing them.

14. Business-Related Bills

Whether you have a home office or you rent an office space somewhere else, you still have to pay for utilities, Internet, and a phone to run your business. Even if you decide to freelance from home, you could be looking at higher bills due to:

  • Being at home more often
  • Needing an upgraded Internet connection speed or data plan
  • Using more cellphone data at coffee shops or other remote workplaces

Expect an increase in any business-related bills when you start freelancing, regardless of whether you choose to work from a home office, rent a space, or take advantage of a public workspace.

15. Travel

Business travel is expensive but sometimes necessary. From transportation and event tickets to meals and lodging, making a trip to attend a conference or to meet a client can be a pricey undertaking that freelancers typically have to cover on their own.

Occasionally, clients may pitch in or even pay for costs if they require the freelancer to travel specifically for their project. Depending on the freelance work that you offer, you may not have to travel at all. However, if your services require you to fly or drive to meet clients, don’t be surprised if you have to pay your own way.

When possible, take advantage of video conferences and phone calls to get some of the benefits of face-to-face meetings without the associated costs.

16. Transportation

If your freelance business requires you to visit client homes or businesses on a frequent basis, you’ll need to pay for your own transportation costs. For example, you’ll need to have enough to cover your:

  • Vehicle payments
  • Fuel
  • Insurance
  • Bus or transit pass
  • Parking fees
  • Repairs and maintenance

If you’re used to having a company vehicle and credit card to cover gas expenses as an employee, having to pay for these yourself can be a tough pill to swallow — especially if you’re new to freelancing. But these are important costs to include in your pricing calculations and quotes to help you avoid losing money on your freelance jobs.


Final Word

Before making the decision to go from being a full-time employee to pursuing a freelance career, it’s important to understand exactly what you’re getting into. There’s a big difference between taking advantage of the gig economy and starting a sustainable and profitable freelance business of your own.

Consider all the expenses you will have to pay and whether you can afford to cover them based on the clients and contracts you have lined up. If you can’t, don’t give up hope. You can always start by offering your services on the side and gradually move toward a full-time freelance career in the future.

Source: moneycrashers.com

Diderot Effect – Psychology of Buying Unnecessary Things & How to Avoid

When I relocated to a new city, I moved from the apartment where I had lived for seven years to a newer one that had been better maintained. When I started unpacking my belongings, I was struck by how shabby my stuff looked in comparison and overcome with the impulse to buy new things for this beautiful apartment.

Thankfully, before I pulled out my credit card and started a buying frenzy, I remembered a short essay I’d read in a college philosophy class and realized I had fallen prey to the Diderot effect.

What Is the Diderot Effect

Named for the 18th-century French philosopher Denis Diderot, this effect describes the phenomenon in which the introduction of a new purchase or gift makes your existing possessions look dingy, old, or unexciting, thus sparking a spiraling pattern of consumption.

Say you buy a new couch, and you start looking at your existing area rug and side tables with a critical eye. So you replace those, and now your whole living room looks newer — at which point, the bedroom furniture starts to look outdated.

The Diderot effect is all around us, and it influences our purchase choices across all categories: the clothes we wear, the items we use each day, even our cars and houses.

So what is the Diderot effect, how does it work, and what can we do to avoid falling victim to the endless cycle of consumption and spending it provokes?

The Origin of the Diderot Effect

A French philosopher active during the Enlightenment, Denis Diderot was perhaps best known as the co-founder of the Encyclopedie, a general encyclopedia published between 1751 and 1772.

Diderot also wrote widely, publishing a number of essays on a range of topics, including “Regrets for my Old Dressing Gown, or A warning to those who have more taste than fortune” in 1769. This is the work in which he describes the phenomenon that would later be coined “the Diderot effect.”

The story goes that Diderot was either gifted or purchased a new dressing gown, which prompted the now-famous essay in which he laments this acquisition. “My old robe was one with the other rags that surrounded me,” Diderot writes.

But once he has the beautiful new robe, everything around him starts to look shabby in comparison, including his physical appearance underneath the robe. He feels the new robe demands that his other belongings keep up with the same high standards, so he begins replacing his old possessions with new ones.

Out go the modest prints he had tacked to the wall, to be replaced with framed paintings instead. He replaces his old straw chair with a new leather one and acquires a fancy inlaid armoire. The rate of accumulation snowballs from there, until he finds himself with debts he must pay by continuing to work and write.

In his essay, he warns readers, “Let my example teach you a lesson. Poverty has its freedoms; opulence has its obstacles.”


The Diderot Effect in Modern Consumerism

Consciously or not, we express ourselves through our possessions, whether they’re brand-new luxury goods or well-loved items passed down through several generations.

Possessions aren’t the only way to tell the world who we are, of course, but they are one of the subtle ways we convey our sense of self to others, often without needing to say a thing. How many times have you tried on an article of clothing or looked at a piece of furniture and thought, “This just isn’t me”?

When we buy things, we want them to fit into our existing tastes and standards. However, when we bring something new into our lives, we can’t help comparing it to the things we already own, which makes us look at the old items with a more critical eye.

Before you know it, the purchase of a new couch leads you to replace everything in the room, from the furniture to the light fixtures, in an effort to make it all “match.” What started as a new sofa becomes a spiral of consumption with no end in sight.


How to Avoid the Diderot Effect

You can probably identify examples of the Diderot effect in your own life. It’s common, especially in our consumer-driven culture.

Thankfully, there are a number of ways to avoid falling prey to the Diderot effect and stop the spending snowball before it picks up too much speed. Here are a few tactics to try.

1. Reduce Your Exposure to Temptations

The less exposure you have to brand-new things, the less likely you are to desire them. No one who lives in modern society can escape advertising entirely; marketing is simply too ubiquitous. But you can do everything in your power to reduce the temptation.

Stay away from physical stores, which are deliberately laid out to trick you into spending more. Avoid online shopping and unsubscribe from marketing newsletters and store emails. Cut down on the amount of junk mail you get and stop following shops and brands on social media.

If you don’t see as many ads or items beckoning for you to buy them, it’s much easier to control your desire for newer, fancier, more expensive stuff.

2. Put the Brakes on Your Consumption

If you have to tell yourself no each time you encounter something you might want to buy, you’ll quickly exhaust your reserves of self-discipline. Instead, set parameters for yourself and your family so you only have to make a single decision.

For example, you might decide you’re done with purchasing clothing new. You can buy secondhand and vintage items, and if you can’t find exactly what you want in those marketplaces, you simply don’t buy anything.

This way, you’re not saying no to fast fashion or retail stores over and over again, every time you walk past one on the street or get a tempting flyer in the mail. You simply decided to say no once and never look back.

Think about how you can impose a similar restraint or rule for your spending in other categories. Maybe it’s as simple as not buying any new furniture or household goods until your credit card debt is paid off, or doing a no-spend month or pantry challenge with your family.

Perhaps you choose a limit for your shopping budget, and once you hit that limit, that’s it for the month — the envelope system is a great way to do this.

3. Lend and Borrow

Instead of buying new stuff, borrow what you need and lend what you have. This strategy can sometimes take a little more effort, but the payoff can be tremendous, both in the cost savings you’ll see and in the relationships you’ll be able to forge with your friends and neighbors.

From lawn mowers to power tools to camping equipment, explore all the ways that you can borrow instead of buy, and be equally willing to lend what you own. Host a clothing swap with your friends. See if your local public library, church, or community center has a kitchen- or tool-lending library. Join a Buy Nothing group or other frugality group in your area, and talk to your friends and neighbors about how to pool your resources.

Borrowing not only saves you money, but it also prevents you from falling into the trap that Diderot did. Rather than buying new items that make the old ones look less exciting, you see these things for what they are — utilitarian items to be borrowed, used, and then returned to their owner — rather than a reflection on you and your tastes.

4. Reduce, Reuse, and Recycle

Get into the habit of making what you already own last as long as possible.

Instead of replacing a piece of electronic equipment when it breaks, see if it can be repaired. Instead of buying your child a new backpack every school year, have them reuse last year’s or switch with a sibling or friend.

Instead of buying a whole new wardrobe for a new job, refashion or repurpose a few key pieces to quell your desire for something new and match your current aesthetic.

6. Match New and Existing Items

When you’re purchasing items for your home, pay close attention to the items you already own. Look for colors, materials, and designs that fit well with your current stuff instead of feeling at odds or out of place.

Go into a purchase expecting to own each item for a long time, and only purchase things that will fit in with — rather than stand out from — what you already have.

The same goes for your wardrobe. Look for pieces that work with your current clothing and accessories so you can easily mix and match rather than feeling compelled to buy an entirely new wardrobe.

You can still introduce new elements into your style if you want to make a change, but do it gradually rather than overhauling everything in one fell swoop.

7. Follow the “One In, One Out” Rule

One surefire way to avoid thoughtlessly bringing new things into your house is to stick to a “one in, one out” rule. By this rule, every time you bring something new into your home, you must get rid of something else.

Don’t allow yourself to simply set the old item out by the curb and forget about it. Instead, try to sell it on Craigslist, figure out how to donate it to a secondhand store like the Salvation Army, or give it to a friend or family member.

This is more work than simply putting something out for the trash, but that’s the point. By creating a little bit of work for yourself, you’ll be better able to resist the urge to buy new things except for when you really need them. This makes it harder to simply whip out your credit card and buy your way to a whole new living room while kicking the old stuff to the curb.

8. Reframe How You See Physical Objects and Symbols of Wealth

When you see a big new house or shiny car, instead of feeling envious, remind yourself of all the expenses that come with maintaining those pricier items. A bigger house means bigger expenses, from higher monthly payments to higher heating and cooling costs.

A luxury car not only costs a fortune but also requires costly insurance and upkeep. Remind yourself that living more modestly frees up your money for important financial goals, such as saving for retirement or reaching financial independence.

Rather than striving to acquire bigger and “better” things, practice gratitude for what you already have. Consider this famous quote from Epicurus: “Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for.”

What are the things you once hoped for that now you take for granted? Make a list of those and revisit it the next time you find yourself wanting to redecorate or upgrade.


Final Word

By employing these tactics before my instinct got the better of me, I was able to keep my new house purchases to a minimum and avoid going over budget. I bought only the things I really needed and picked objects that fit within my current aesthetic.

Using Craigslist and relying on carpentry and other DIY skills to retrofit existing storage solutions and decor, I made my apartment homey and comfortable without falling victim to the Diderot effect.

Source: moneycrashers.com

[New Link; Targeted] American Express Business Platinum 130,000 Point Upgrade Offer

Update 4/24/21: There is a new deal for 130,000 points, try this link.

Update 9/20/20: More people targeted. You can try this link. Hat tip to Criminalbob

Update 3/18/20: More people targeted.

Update 11/3/19: More people targeted.

Update 9/11/19: This is still working for a lot of people, try this link. Hat tip to jwde2009 for confirming this is still working.

Update 6/12/19: New link to try; seems to working for a lot of people. (ht reader Elef Hamugein)

Update 6/10/19: Another round of offers has gone out, if anybody has a link to share then please do so in the comments below.

Added another new link to try. Hat tip to reader davidrotts63

Another new link available. Also sent out via e-mail with the subject line ‘”name>,  take advantage of this special upgrade offer.” Hat tip to US Credit Card Guide

Added another new link to try. Hat tip to reader davidrotts63

The Offer

Direct link to offer or new link or newest link or even newer

  • Get 50,000 Membership Rewards points after you spend $10,000 in purchases on the Business Platinum Card in the first 5 months from the date your account is upgraded

Card Details

  • Annual fee of $595 is not waived the first year
  • Card earns at the following rates:
    • 5x points per $1 spent on purchases made with airlines or hotels booked directly from AmericanExpress Travel website
    • 1.5x points on qualifying purchases of $5,000 or more
    • 1x points on all other purchases
  • $200 airline incidental credit per calendar year
  • Lounge access:
    • Centurion lounge access
    • International American Express lounge access
    • Delta SkyClub lounge access
    • Priority pass select membership
    • Airspace lounge access
  • Internet Access:
    • Unlimited Boingo internet access
  • SPG gold status (this will also give you Marriott Gold status)
  • Hilton gold status
  • Fee Credit for Global Entry or TSA Pre✓
  • No foreign transaction fees
  • View these other hidden benefits
  • SoulCycle benefits

Our Verdict

You can get a bonus of 100,000 without upgrading. The advantage to upgrading is that you should be able to get the bonus even if you’ve had the Business Platinum before. If that’s you and you’re targeted then this offer is worth considering as normally you wouldn’t be able to get the bonus again. Just keep in mind the $595 annual fee. That’s partially offset by the $200 airline credit and other benefits (e.g lounge access) but still might not be worth it for some especially if you already have another variation of a Platinum card. Spend requirement of $10,000 might also be difficult for a lot of readers to meet.

If you have any questions about upgrade offers, please read this post before asking any questions. General American Express questions are likely answered here.

Hat tip to reader davidrotts63

Source: doctorofcredit.com

How to Save Money on Business Travel – 21 Ideas To Reduce Trip Costs

It doesn’t matter if you’re an executive at a large corporation or a small-business owner. It’s likely you sometimes have to travel for work.

Business travel is also becoming more common. According to Statista, worldwide business travel spending has more than doubled since 2000. While spending has recently declined due to the COVID-19 pandemic, traveling for work is still a reality for some and should eventually recover.

Business travel often involves international travel or significant domestic travel. Trade shows, conferences, networking events, and meeting new clients can require you to hop on a flight to do business in a new city or country. With airfare, hotel costs, transportation, and general travel expenses, costs rack up quickly.

If you want to save money on business travel, you’re in luck. There are numerous ways to reduce travel expenses beyond just booking economy.

Saving Money on Business Airfare

Of all business travel expenses, airfare is often the costliest. Booking flights in advance and sticking with economy are the two most straightforward ways to cut travel costs. But there are other ways to find cheap flights and reduce airfare costs.

1. Book Cheap & Discounted Flights

If you’re trying to save on business travel, booking flights early is the best way to find deals. Last-minute flights are usually expensive, and the more time you have to shop around, the better.

But that’s not the only trick you can use to find cheap flight options.

  • Book flights with layovers, provided the savings are worth the extra travel time.
  • Use airline search engines like Expedia, Travelocity, and CheapOair to find low-cost airfare.
  • Try alternate airports to your closest airport if they have lower prices.
  • Book directly through an airline carrier since some airlines don’t appear on airline search engines.
  • Take a red-eye (overnight) flight.

You can also take travel planning a step further and possibly score free flights or serious discounts. One popular strategy is to buy airline miles during a promotion, which is essentially buying a future flight at a discount. You can also earn airline miles without a credit card by opening a Bask Bank account or even participating in focus groups.

As long as you browse travel sites for deals and remain flexible, there’s no reason your next business flight should be full price.

2. Avoid Airline Fees

Finding cheap airline tickets is an effective way to reduce travel costs. However, if you aren’t careful, unnecessary airline fees can turn an otherwise frugal trip into a significant business expense.

The best way to avoid airline fees is to read the fine print carefully and stick with the right carrier. Some airlines, like Southwest and United, are generally lenient with checked bag fees and carry-on luggage, and you can sometimes avoid paying for these conveniences altogether.

If your airline charges for checked baggage, consider traveling light and just bringing a carry-on. If you need a suitcase to pack business attire, use a luggage scale to weigh your bag at home to avoid paying for overweight baggage.

Finally, resist paying for airline fees like early boarding or picking your seat if you aren’t picky about getting the aisle or window seat. These sound like luxuries, but these expenses add up quickly and don’t necessarily improve the quality of your flight.

3. Skip Airport Parking

Another common airport travel expense is parking. If you’re traveling for a week or longer, the daily cost of airport parking adds up. For example, at John F. Kennedy International Airport in New York, 24 hours of parking is $18 in the economy lot, meaning seven days of parking is an additional $126.

Thankfully, you can avoid parking fees entirely. One method is to take an Uber or Lyft to the airport. Alternatively, having a co-worker or family member drop you off is your next best bet. Public transportation is also worth the extra time if it saves you from expensive daily parking fees.

4. Book Through Rewards Websites

Booking your flight and hotel through a rewards website helps you save money on vacation and personal trips. But the right website can also cut business travel expenses.

Rakuten lets you earn cash back for shopping at thousands of partners. Creating an account is free, and once you shop at an eligible partner, you earn cash back in your account. You get paid quarterly as long as your account has $5, which is easy to do if you score cash back on a flight or hotel stay.

Rakuten has numerous travel partners, including:

  • Travelocity
  • CheapOair
  • OneTravel
  • Cheapair
  • Orbitz
  • Priceline
  • Holiday Inn
  • Extended Stay America
  • Hotels.com

Rakuten also has non-travel partners you can use to save even more money. For example, it lets you earn up to 5% cash back at thousands of restaurants, which helps you save if you eat out or take clients out for meals. Additionally, Rakuten partners with office supply companies, print shops, and electronics retailers, so you can save on a variety of business-related expenses.

It might seem strange to use a rewards website for business expenses. But if you’re trying to cut costs, every bit of savings counts.

Read our Rakuten review for more information.

5. Always Use a Travel Rewards Credit Card

If you’re a frequent business traveler, you need a travel rewards credit card. Typically, these cards let you earn points for travel-related expenses like flights and in-flight purchases alongside everyday spending.

You can often redeem points for discounted flights and even free airfare if you stack enough points. Plus, many travel rewards credit cards offer additional perks like hotel discounts, priority boarding, and airport lounge access.

Popular travel rewards credit cards include:

  • Chase Sapphire Reserve Card: Earn a $750 travel bonus for spending $4,000 in your first three months; $300 annual travel credit; triple points on travel and dining; perks like lost luggage and trip cancellation coverage; $550 annual fee
  • American Express Platinum Card: Earn a $750 bonus for spending $5,000 in your first three months; $200 annual airline fee credit; quintuple points on flights and prepaid hotels; $200 annual savings on Uber rides and food delivery; various hotel upgrades and discounts; $550 annual fee
  • Chase Sapphire Preferred Card: Earn a $750 travel bonus for spending $4,000 in your first three months; double points on travel and dining; quintuple points on Lyft rides; perks like lost luggage and trip cancellation coverage; $95 annual fee

There are other travel credit card options, including lucrative cash-back credit cards. If you’re a business owner, you can also look at small-business credit cards like the Chase Ink Business Preferred credit card. This card has numerous travel perks and an impressive $1,250 account opening bonus if you spend at least $15,000 within the first three months of becoming a cardholder.

Ideally, your credit card should offer enough travel perks and other rewards to help you save money even with the annual fee.


Saving Money on Accommodations

Finding a pleasant hotel or rental can help foster a successful business trip. Ideally, the location is close to clients or any event you need to attend and has ample access to restaurants for client meetings. Ultimately, you want to strike a balance among comfort, convenience, and affordability.

That can be difficult to get right. The worst-case scenario is that employee performance suffers because of location or simply being too cheap when booking. On the flip side, always sticking with 5-star luxury suites isn’t cost-effective.

As with airfare, there are several tips you can use to reduce how much you spend on accommodations.

6. Negotiate With Hotels

As an independent traveler, calling a hotel and negotiating room prices isn’t always feasible. But business travelers have a slight advantage, especially when traveling in larger groups.

Hotel chains want to incentivize visits from business travelers because it’s reliable, repeat business. If you’re heading out of town for a conference or meeting, take time to call nearby hotels to see what they can offer.

If it’s a frequent trip and you plan to return regularly, let the hotel know. You might find the manager is willing to drop your room price or at least give a free upgrade to keep you happy.

7. Try Dosh Travel

Dosh is a popular cash-back reward app that pays you for shopping at hundreds of partners. Once you link a credit or debit card to Dosh, you automatically earn for shopping at eligible retailers. That’s different from apps like Ibotta that require you to preselect offers before shopping.

Dosh works with dozens of companies, including:

  • Walmart
  • Pizza Hut
  • Sephora
  • Macy’s
  • Uber
  • Old Navy

Currently, you can earn with Dosh at over 100,000 stores across the United States. However, Dosh is also a way to save money on your next business trip.

With Dosh Travel, you can earn up to 40% cash back for booking a hotel through the app. Dosh works with more than 600,000 hotels globally, so there’s no shortage of choice.

You need at least $25 to withdraw your balance, but a single hotel stay can easily earn this amount. Additionally, Dosh partners with local restaurants and Uber Eats, so you can save money taking clients out and feeding your employees. With partners like Walmart and Office Depot, you can also earn cash back for buying office supplies, which can help you reach $25 faster.

Read our Dosh app review to learn more.

8. Consider Airbnb

If your company is traveling with multiple employees, it’s likely everyone needs their own room. Ultimately, that means a substantial hotel bill, even if you negotiate prices or find a deal.

Before you spend thousands of dollars on multiple hotel rooms, search Airbnb’s business accommodations. The platform has grown beyond vacation rentals, and you can find top-rated homes and boutique hotels that also have collaborative workspaces. Plus, Airbnb listings also mention nearby activities and attractions you can use for team building.

Airbnb isn’t always cheaper than hotels, but large groups are likely to save money. Even when you factor in cleaning charges and service fees, Airbnb has some remarkably low nightly prices. Plus, you can negotiate with hosts to get a lower price, and your amenities are likely better than a single hotel room.

If you want to save money and increase your comfort, using Airbnb for your next business trip is certainly worth it.


Saving Money on Food

It’s standard practice for employers to pay for employee meals during business trips. And taking clients and potential customers out for food and drinks is common during business travel. But expenses like client dinners and catering for your team add up quickly unless you implement some money-saving tips for food costs.

9. Schedule Breakfast & Lunchtime Meetings

The practice of wining and dining exists for good reason. For existing relationships, taking clients out shows them you appreciate their business. Similarly, taking a prospect out for food and drinks helps establish a more personal relationship and lets you discuss business in a less formal environment.

However, dinner is almost always more expensive than breakfast or lunch. If you treat a client to a nice dinner with a main course and drinks, you could easily spend $100 or more for the meal, depending on where you go and how many diners you have.

For example, at Scarpetta, a popular Italian restaurant in New York City, most dinner entrees range from $30 to $45. If you add two drinks and an appetizer, that’s another $50 or so for your bill. With an 18% tip, you’re paying around $140 for dinner for just you and one client. When you multiply that by several dinners over a business trip, expenses rack up quickly.

To save money on client meals, schedule breakfast or lunch meetings instead. The brunch menu at Scarpetta, which runs until 3pm, is noticeably cheaper than the dinner menu, with most entrees costing $18. Even with drinks, brunch or lunchtime dining likely brings your bill down to around $80, saving you over 40% on your meal with a client.

For breakfast, you can also find trendy restaurants and cafes suitable for client meetings, like La Parisienne, where a breakfast meeting for two costs around $40 to $50.

You don’t have to go to fast-food restaurants to save money on taking clients out. Instead, research several restaurants with affordable lunch and breakfast menus in the city you’re traveling to so you have some options.

10. Use Corporate Meal-Delivery Services

You may also need to feed your team on business trips. For that, you can save even more using corporate food-delivery services instead of catering companies, time-consuming reimbursement, or cash per-diem allowances.

For example, if you’re running a team event, try using DoorDash for Work to order everyone’s food. Perks of DoorDash for Work include:

  • No delivery fees
  • Lower service fees
  • Easy-to-create group orders
  • Spending limits and reimbursement options to let employees expense their meals

Uber Eats also has a corporate option that lets team members place group orders. As an employer, you can create rules like stipends and hours during which you cover employees’ expenses.

11. Scout Ahead for Cheap Food Joints

Often, if you book accommodations in a city’s downtown business district, you’ll find yourself surrounded by expensive restaurants and bars. But if you’re a mile or more out of downtown, you can probably find cheaper restaurants that are still suitable for client meetings and employee dining.

When booking accommodations, scout the area for affordable restaurants and nearby grocery stores. You should also search for quick and cheap restaurants or even food trucks that are nearby. That’s especially handy if you’re attending trade shows or events and only have time for a quick bite during a lull in the day.

12. Book Cooking-Friendly Accommodations

You don’t need a hotel with a complete kitchen for business travel. But having a microwave and small stovetop means you and your employees can cook some meals rather than relying on hotel food services and eating out constantly (a boon for those on special diets or with food allergies or restrictions).

The savings can add up quickly. For example, if you book a room with a stovetop, you can make a quick breakfast of eggs and toast rather than eating out each morning. That means you’re spending $1 to $2 at most for breakfast instead of $10 to $20 going out. However, if the cost of the room is significantly more expensive than a room without a kitchen, the savings likely aren’t worth it, so consider how impactful potential food savings is when booking accommodations.

For long business trips, companies like Extended Stay America have rooms with a full kitchen and let you save up to 31% on nightly rates if you book for 30 nights or longer. Booking an Airbnb is also ideal for saving on food since you typically have access to a full kitchen.


Saving Money on Transportation

While transportation usually doesn’t cost as much as airfare or accommodations, getting around a new city can still be a significant business travel expense. If you want to cut costs, there are several tricks you can try.

13. Use Rideshare Apps

As a business traveler, your first instinct might be to use an airport car rental service or even a higher-end rental company like Silvercar. However, when you consider car rental upsells and various hidden fees, it can be challenging to find a cheap car rental option.

Plus, if your trip consists of meetings and conferences, you won’t spend much time behind the wheel, making your rental car a near waste. In that case, you’re better off using rideshare apps like Uber and Lyft to travel.

Uber and Lyft also simplify corporate travel budgeting. For example, companies can set travel stipends and track ride history to ensure employees are only expensing business rides rather than personal.

If you’re responsible for approving reimbursement requests, you can quickly check the time, pickup, and drop-off location of every ride an employee expenses. If a ride seems like it wasn’t for business purposes, ask for clarification so your company doesn’t accidentally pay or attempt to take a tax deduction for personal employee expenses.

14. Book Accommodations in the Right Location

In an ideal world, you can skip renting a car or using rideshare apps altogether by booking accommodations within walking distance to wherever you need to go for your business trip.

If you’re attending a trade show or conference, check to see if they have arrangements with nearby hotels to offer special prices for attendees. Alternatively, book your own accommodations within walking distance. Even if you pay slightly more per night, the savings on a rental car or rideshare apps is probably worth it.

15. Save Money on Gas

For some business trips, renting a car or driving your own vehicle is more economical than taking a flight or using rideshare apps. But if you’re driving, anything you can do to save money on gas helps make your trip cheaper.

For starters, use a gas credit card to earn rewards for refueling. Popular gas credit cards include:

  • CitiBusiness AAdvantage Platinum Select Mastercard: Earn 65,000 bonus miles for spending $4,000 within your first four months; earn 2 AAdvantage miles for every $1 you spend at gas stations and car rental companies; earn unlimited 1 mile per $1 you spend on other categories; $99 annual fee that’s waived for your first year
  • Costco Anywhere Visa Card by Citi: Earn 4% cash back on gas for the first $7,000 per year and then 1% thereafter; 3% cash back on restaurants and travel purchases; 2% cash back on Costco and Costco.com purchases; 1 cash back everywhere else; no annual fee
  • Wells Fargo Propel American Express Card: Earn a $200 bonus for spending $1,000 in your first three months; earn unlimited 3% cash back on gas, restaurants, rideshares, transit, flights, hotels, and car rentals; earn 1% cash back everywhere else; no annual fee

To complement your gas credit card, use apps that help you find cheap gas stations, like GasBuddy. With GasBuddy, you can also get up to $0.25 off per gallon by signing up for Pay With GasBuddy, a free fuel rewards card you use like a debit card to pay at the pump and save.

Finally, when driving, use an app like Waze to avoid traffic and find the most efficient route possible. That’s especially important in an unfamiliar city where you don’t know your way around very well. Driving more efficiently helps reduce fuel consumption, ultimately saving more money.

It’s essential to conduct a cost-benefit analysis of driving versus flying and using rideshare apps or a rental car. But if the savings point toward driving, there’s no reason to pay full price at the pump.


Other Tips to Save on Business Travel

If you can cut down on airfare, accommodation, and transportation costs, you’re already on track to keep business travel more affordable. But there are other tips you can use to save money and keep trip planning simple.

16. Have a Trip-Approval Process

If you want to cut business costs, you need to understand your annual expenses to identify areas of wasteful spending. Therefore, every business budget should have a designated portion for business travel expenses and an approval process for trips.

You don’t need an extensive corporate travel policy to take a client out for lunch or drive across town for a meeting. But for out-of-town trips, it’s worth getting management involved. Ideally, employees should submit a trip summary that includes:

  • The purpose and length of a trip
  • The employees who are attending
  • A rough estimate of cost

The summary should then pass to human resources or management for approval.

While this might seem redundant, this process is useful for tracking costs and whether trips result in business development. Plus, as a business owner, you might find that you can skip certain trips or involve fewer employees after reviewing the details more closely.

17. Create a Travel Stipend

A trip approval process helps an organization budget for business travel expenses and forces teams to put more thought into deciding to travel in the first place.

But your business travel policy should also outline a daily employee stipend.

Creating a travel stipend for business travel benefits everyone. For employers, a travel stipend makes budgeting simpler. For employees, a stipend helps clarify limits and ensures there aren’t any awkward post-trip conversations about expensive restaurant or bar tabs.

You should also decide on a reimbursement method. One option is to open a business credit card for traveling employees. For example, Ramp lets you create unlimited virtual and physical cards for employees and pays 1.5% cash back. Plus, there’s no annual fee, and Ramp also collects and stores receipts automatically to help track spending.

Alternatively, you can let your employees spend with their own cards and submit expenses for reimbursement. However, ensure your employees know they need to provide receipts.

But weigh the pros and cons of leaving it in your employees’ hands. Making employees pay for expenses means they have to front significant costs like hotels and flights. That could put employees having financial issues in a tight spot they’d rather not discuss with their employer. And it also means they get to leverage their own credit card rewards that otherwise would have gone to the business.

18. Look for a Corporate Travel Agency

If you’re booking a simple business trip, working with a travel agency probably isn’t worth it. Travel agents used to be incredibly helpful because they could find exclusive deals and would book your trip for you. These days, booking travel plans online is straightforward, and you can find travel deals with a few searches.

But if you’re planning a complicated business trip with multiple employees and hotel bookings, a corporate travel agency could be worth it. Agencies charge a fee to ensure a smooth journey, but it could pay for itself if it prevents one of your employees from taking time out of their day to plan an entire trip.

19. Always Keep Receipts

Another simple way to save on business travel is to keep receipts for tax season. There are numerous tax deductions for self-employed individuals and small-business owners, but you need to track expenses to claim them accurately.

Business travel expenses are also deductible. Examples of deductible expenses include:

  • Travel by train, airplane, bus, or car between your home and business destination
  • Shipping baggage or business products to other work locations
  • Using your car for business purposes
  • Accommodations and business-related meals
  • Tolls, parking fees, and rental car usage for business purposes
  • Dry cleaning
  • Taxis and shuttle services

Keeping paper receipts is one way to track your spending. Alternatively, personal finance apps like MoneyPatrol let you save receipts on your smartphone to ensure you’re ready for tax season.

20. Plan Ahead

If you leave trip planning until the last minute, it’s almost impossible to find low prices or deals. That means paying more for flights, hotels, and transportation. Plus, feeling rushed is a surefire way to have a worse trip and potentially forget a critical part of planning.

Give your organization more time to plan trips whenever possible. Ideally, your company should have a calendar of upcoming trips throughout the year to help budget and plan business travel.

That responsibility can fall to department heads or relevant employees, but it needs to be prioritized if employees regularly travel for work.

21. Prioritize Impactful Savings

One of the worst ways to reduce business travel spending is to save money in a way that hurts your business’s image. For example, if you take a client out for lunch, choose a decent restaurant instead of a fast-food joint and cover the bill.

Similarly, there’s little point in nickel-and-diming your way toward a cheaper travel budget. If you spend hours agonizing over rental car prices to save $15, that’s hardly worth your time as an employee.

Ultimately, you should focus on efficient trip planning and tackling major expenses. Find cheap airfare and accommodations, consider sending fewer employees on trips, and always maximize rewards with the right business credit card.


Final Word

Business travel can be a significant expense. But as long as you plan and budget accordingly, there’s no reason for business trips to hurt your bottom line. In fact, business trips are an excellent way to increase business revenue if they create new opportunities.

Just remember to factor upcoming trips into your annual budget and create a trip-approval process and travel stipend. You can also conduct a yearly business checkup to review whether business travel costs have paid for themselves with new opportunities.

Source: moneycrashers.com