Tag: Guides

 

Money-Making Apps: What You Need to Know

Is boosting your income on your to-do list? If so, you can start a side hustle or angle for a better a job. But, there may be an easier way to make a few extra bucks: money-making apps.

“While money-making and cash back apps can’t replace your 9 to 5, they’re a great way to earn some change to tuck away for a rainy day,” says Joy Hearn, founder of deal site Cards and Clips.

Indeed, money-making apps can put cash in your wallet. That’s money you can use to pad your savings account or pay off debt. Yet, you may be confused about what these apps do or which ones you might want to try, right? Well, we’ve got the details here, along with tips on how to leverage money-making apps. To learn more, read on.

How Money-Making Apps Work

The basic premise of money-making apps is that they allow you to earn a percentage of what you spend as cash back. You link your debit or credit card to the app, spend at partner merchants and cash back rewards are credited to your app account.

You’re free to use the cash back you’ve earned however you want. And you can double up on rewards if you’re also earning cash back from your linked debit or credit card.

What makes each money-making app and website different is the amount of cash back you can earn, where you can earn it and how that cash is paid out. Some of the most popular money-making apps include:

With Dosh, you can earn up to 10% cash back automatically when you pay with a linked debit or credit card at more than 1,000 stores and restaurants. You can also snag an extra five dollars each time you refer a friend to Dosh and they sign up for an account using your referral link. You can transfer the money you’ve made to your bank account, PayPal account or donate it to charity.

Lushdollar founder Tom Nathaniel likes Dosh because it’s a set-it-and-forget-it way to earn cash back.

“While I could check out which merchants give me cash back, I just look at it as a bonus if my purchase triggers a reward. Since you just add your credit card, the app always knows what you’re buying,” says Nathaniel.

Marc Andre, personal finance blogger at VitalDollar.com says Ebates is his money-making app of choice. Ebates offers up to 40% cash back at more than 2,500 partner retailers. Besides the app, you can also use the Ebates browser extension to make money from your desktop.

“When you’re visiting a website that participates with Ebates you’ll be notified and all you need to do is click on a button in the notification so Ebates can track your purchases. There have been many times when I wasn’t even thinking about getting cash back but the alert from the browser extension reminded me of it,” says Andre.

Another great feature: Ebates automatically searches for coupon codes to help you find even more savings when you shop.

Like Ebates, TopCashback.com is a money-making app that also has a downloadable browser extension. It also features one of the largest merchant networks, with over 4,400 partner businesses.

Hearn at Cards and Clips is partial to Shopkick and Checkpoints, both of which reward you with cash instantly just for walking into stores or browsing retailers online. The difference is that with these apps, you’re earning gift cards instead of cold hard cash. But, the gift card selection includes retailers like Target, Amazon and Starbucks – which can come in handy if you regularly spend with these brands.

Using Money-Making Apps Wisely

Cash back apps and websites can put money in your pocket fairly easily, but there are a few rules to keep in mind as you use them.

1. Set realistic expectations for what you can earn.

Don’t think of money-making apps as a way to get rich quick.

“I think some people download these apps expecting hundreds of dollars. As long as you go in knowing you’ll make a few bucks, they’re fun to use,” Nathaniel says.

2. Don’t try to game the system.

It sounds simple but pay attention to the rules set down by an app for making money. For example, Hearn says that in her experience, survey apps tend to have explicit rules about misuse.

“If they find you’ve created multiple accounts and can track it back to your specific IP address, you can be banned from using the app. Or, if they feel you deliberately raced through a survey to earn money, your account can be terminated,” says Hearn.

Bottom line? “It’s always best to follow instructions and do exactly what an app requires so you can earn your payout,” she says.

3. Be selective.

Deciding which money-making apps to use partly depends on your spending habits, says VitalDollar’s Andre.

Checkout51 and Ibotta, for instance, are designed for earning money on groceries while other money-making apps cover restaurants or major retail brands.

“There are so many different cash back apps that you really can’t use them all effectively. My best advice is to pick a few and stick with those,” says Andre.

4. Don’t let apps dictate buying decisions.

When using money-making apps, it’s easy to get caught up in earning cash. So easy, in fact, that you might end up overspending just to chase down a few extra dollars.

“You have to keep it in perspective,” says Andre.

“Getting 10% cash back on a purchase that you need to make anyway is great. But making a purchase that you don’t need just to get 10% cash back is not wise,” he says.

In other words, keep your spending habits firmly in sight. Getting cash back is great but not if it means blowing your budget.

A Penny Saved Is a Penny Earned

When you’re earning extra cash with these apps, think about what you plan to do with it. Money-making apps can turn into money-saving apps if you’re using those dollars and cents to grow your emergency fund or save up for other goals. Plus, it’s motivating to watch the cash from mobile payment apps pile into a savings account. Are you ready to give money-making apps a try?

 

Chime’s Ultimate Guide to Building Credit

Your financial health is like a puzzle, with different pieces that fit together to create a complete picture.

One of the most important pieces is your credit history and of course, your credit score. (That’s the three-digit number lenders use to determine how likely you are to repay your debts.) FICO scores, the most widely used credit scoring model in the U.S., range from 300 to 850. The average FICO score recently hit an all-time high of 704.

This in-depth guide breaks down everything you need to know about engineering a better credit rating.

Where credit scores come from

Before you can have a credit score, you first need to have a credit report. This is a collection of information about your credit accounts, including who you owe money to, how much you owe, your minimum payments and how long you’ve been using credit.

FICO scores focus on five specific factors to calculate your credit score:

  • 35% of your score is based on payment history
  • 30% is based on your amounts owed
  • 15% is based on the length of your credit history
  • 10% is based on inquiries for new credit
  • 10% is based on the types of credit you’re using (i.e. loans and credit cards)

Knowing what affects your score can help you adopt the habits that you’ll need to build good credit. But what if you’re one of the 62 million Americans with a thin credit file?

“A thin credit file just means that you don’t have an established credit history,” says personal finance expert and Money Crashers contributor David Bakke.

“Maybe you’re younger and just have never had a need for credit, or possibly in general you’ve never signed up for credit cards or taken out a car loan or a home mortgage,” says Bakke.

With a thin credit file, you may not have enough credit history to generate a credit score. Fortunately, that’s a situation you can remedy. Opening a bank account is a good first step. You can use your account to get a handle on your spending, keep track of bills and start growing your savings. Once you begin using credit, you’ll already be in the habit of keeping your spending in check and paying your bills on time. Both of these positive habits can help your score.

How to build credit from scratch

If you’re starting from square one with building credit, there are a few different routes you can take. Here’s a look at some of the most common ways you can build credit as a beginner:

Secured credit cards

Opening a secured credit card can be a great option to build credit for someone who’s new to credit or has a thin credit file, says Steven Millstein, a certified credit counselor and editor of CreditRepairExpert.

“Unlike other credit cards, a secured credit card requires that you make a cash deposit upfront. This deposit will usually be your credit card limit, which serves as collateral if you fail to make payments,” Millstein says.

The major pro of a secured credit card is that your payment history and spending can help to establish your credit history. That’s because many secured card issuers report your activity to the credit reporting bureaus. With a card limit of only a few hundred dollars, this can keep you from racking up debt.

Credit builder and savings secured loans

Credit builder and savings secured loans offer a slightly different take on building credit.

“These are basically small installment loans where the loan is secured by a certificate of deposit or a savings account,” says Jeff Smith, vice president of marketing for Self Lender, which offers credit builder loans.

“As the person repays the loan, the payments are reported to the credit bureaus so they can impact the credit history. At the end of the term, the CD or savings are unlocked and returned to the account-holder.”

Essentially, you’re repaying a loan to build credit, but you don’t get the proceeds of the loan until it’s paid in full. That’s a reversal from how loans usually work, where you get the money upfront.

There are also other drawbacks to credit builder loans. For example, you may not get immediate funds to make a purchase. On the other hand, this may not matter if your main objective is to build credit.

Become an authorized user

Instead of getting a credit card in your name, you can ask a friend or family member to add you to one of their cards as an authorized user.

“The implication is that their (the main card holders) good credit practices will start to build your credit,” Millstein says.

According to Equifax, being an authorized user allows you to make purchases with the card and have the account’s activity show up on your credit report. Yet, you’re not the one liable for the card’s balance. If the primary card holder practices good credit habits, those habits would be reflected in your credit report and score.

There’s a catch, however. If the primary card holder falls behind on payments or maxes the card out, this can hurt your credit.

Ask someone to co-sign a loan with you

Co-signing on a personal, student or auto loan is another way to build credit. Unlike being an authorized user, however, you share responsibility for the debt with your co-signer.

Asking someone to co-sign can help you qualify for a loan that you may not be able to obtain on your own. Once you’re approved, you can work on repaying the loan and building credit history.

But there is some risk involved. If you default on the loan, both your credit history and that of your co-signer can be damaged. And, this can potentially ruin your relationship, Millstein says.

How long will does it take to build credit?

“Building good credit is probably not going to happen overnight and getting a solid credit score as well isn’t going to happen immediately,” Bakke says.

So, just how soon can you expect to see results?

According to Experian, it can take between three and six months of activity to get enough history on your credit report to calculate a credit score. Millstein says it can take about 12 months to grow a fair credit score, which is in the 580 to 669 range for FICO scores. He says working towards a perfect 850 score, on the other hand, can take several years.

Bottom line? You’ll need to be patient and give your good credit habits time to pay off.

Check in with your credit regularly

If you’re hard at work on building credit, don’t forget to track your progress. You can get your credit report three times a year for free through AnnualCreditReport.com. Free credit monitoring services help you track your score month to month.

In the meantime, set up alerts for your bills and schedule automatic payments through your mobile banking app so you never miss a due date. When you make payments on time and keep your balances low, your credit will eventually improve!

 

21 Fun Things To Do In The Winter That Won’t Break The Bank

Winter can drag on – but you don’t have to let it get you down. In fact, even if you’re daydreaming about a tropical vacation, backyard barbeques, and other summertime activities, you don’t have to stay stuck inside.

There are plenty of ways to get out of the house and enjoy the winter – all while spending very little cash. Here are 21 fun activities you can do this winter that won’t bust your budget.

1. Go museum hopping

Museums are a great escape for the whole family. Whether you’re into art, music, history, or science, you can find a museum for almost everything.

Better yet, going to museums can be affordable. For instance, in Seattle, you can get free access to many of the city’s local museums through your city library card, which is also free. And you can always check out deal sites like Groupon to see if there are any discounted rates available in your area.

2. Find an indoor pool

Dreaming of summertime? A trip to the local indoor pool may be just what you need.

Check out your local school, gym, or YMCA to see if there is an indoor pool near you. While gyms often require a monthly membership in order to join and use the facilities, you may find other local pools that offer an open swim hour for a small fee.

3. Go sledding

Instead of avoiding the snow and the cold, dive right into it with some old fashioned sledding! What could be better?

You can find sleds at your local hardware store or supermarket, but you can also find cheaper DIY alternatives. For instance, pool toys, such as a tube floatie, or even a trash can lid often work just as well.

4. Volunteer

Perhaps the best way to get over your winter woes is to dedicate your time and energy to helping others. Plus, volunteering is free, and it’s a great way to get involved with your community.

To find charitable organizations near you, check out VolunteerMatch.org, which will evaluate your interests and help you find opportunities that interest you.

5. Bake some sweet treats

Baking is the perfect cozy-day activity when the weather is indeed frightful. So, stay inside and warm your home with a good, old-fashioned baking day.

To find inspiration for your baking adventures, check out this list of classic baking recipes from Taste of Home.

6. Take an art class

Take advantage of the abundance of indoor time by focusing on hobbies you’ve always dreamed about starting. Why not take an art class?

You can either sign up for local, in-person classes or you can find free options online. One great way to start learning the basics of any skill is to find lessons on YouTube. Nothing is better than free!

7. Read books

Is there anything more comfy than curling up with a cozy blanket, a cup of tea, and a good book on a cold winter’s day?

Dust off those old books you have laying around and crack them open. Of course, you can always hit up your local library as well. Or, you can check out ThriftBooks, which sells deeply discounted, gently used books.

8. Do household projects

Have a long household to-do list? Use the winter season to get caught up on indoor projects.

Whether you want to paint a room, or tackle a kitchen remodeling project, take the time to do it this winter. Not only can you stay warm inside, but you can cross these items off your to-do list before the weather changes and you want to spend more time outside.

9. Try painting

Do you have an artistic gift? Even if you don’t, painting is an excellent hobby to test out. Anything can be considered art – all you have to do is start.

Painting canvases is an affordable and fun hobby. Plus, you can use the finished product to decorate your house, saving big bucks on home decor. To stock up on supplies, you can hit up your local art store, or shop at discounted supply stores online, such as JerrysArtarama.com.

10. Get organized

Have clutter hanging around your household? Dedicate some time this winter to organizing.

If you only have a few minutes, start by organizing a single drawer or cupboard. If you have more time, commit to organizing an entire room. Toss any old documents or broken objects and donate the rest. You’ll be amazed at how much better you’ll feel when you don’t have to stare into cluttered kitchen cabinets!

11. Attend a fitness class

Winter blues have you feeling a bit down? Blast away the wintertime sadness by boosting your endorphins. A workout class is an excellent way to meet people, try a new activity, and boost your mood.

Not sure which class is right for you? Try using ClassPass, which is available in major cities. With ClassPass, you pay a monthly fee which allows you to try out classes in various fitness studios. If you aren’t sure whether to do yoga, cycle, or weightlift, ClassPass is an ideal solution.

12. Plan a summer vacation

Well, there’s no shame in admitting that winter just isn’t your favorite season. If you’re more of a summer-lovin’ kind of individual, then take this time to plan your dream vacation.

Whether you prefer to escape to a tropical island or backpack across Europe, planning a trip when it’s cold outside can be just the escape you need.

13. Bust out the board games

Board games may be old school, but they are reliable – and fun. Games are also a cheap way to kill some time.

Even if you don’t have classic board games in your house, you can always borrow them or download free game apps on your smartphone or tablet. Need some ideas to get started? Check out this huge list of iPhone games from TechRadar.

14. Go ice skating

Enjoy the winter with some family-friendly ice skating. Whether you are an expert skater or can barely stand up on your blades, you can surely have a good laugh and a memorable time. To rent skates, you can expect to pay around $15 to $20.

15. Clean out your home

Bored and stuck inside? Take advantage of the slower season and clean your house.

Host a neighborhood garage sale to get rid of the items you no longer need. Anything else can either be donated or sold online through sites like OfferUp and LetGo.

16. Visit friend and relatives

Most of us are guilty of not visiting family or friends often enough. So, if you have relatives or friends nearby, take time this winter to schedule a visit and catch up.

17. Take a winter hike

Hiking isn’t just for summer. There are plenty of winter hikes to take advantage of – if you have the right gear, that is.

Check out your local area to see if there are any winter-friendly hikes near you. The key is to find a hike in a lower elevation (where it isn’t super cold) that is well maintained and not too steep. Make sure you gear up with your hiking boots, winter coat, hats and gloves.

18. Plan a movie day

When the weather takes a turn for the worst, stay put and enjoy a movie day inside.

You can pick a winter classic or another movie of your choice. Whether you prefer action, romantic-comedies or another genre, a movie day is a great way to enjoy a day inside this winter.

19. Start your side gig

This winter season is an excellent time to start earning some extra cash on the side. Take this time to think about what you want to do for your side gig. Whether you’re dreaming of starting a blog, an online retail business, or something else, it’s time to get your creative juices flowing.

20. Try winter photography

Photography isn’t just a summertime activity. The snow and long winter days can make for some ideal photos.

So take your camera, trek out into the snow, and shoot some cool nature photos. For some inspiration, check out these tips from Outdoor Photographer.

21. Relax

There’s no shame in simply relaxing. Enjoy the darker days by spending ample time relaxing and recharging. Take plenty of time for self-care, too. Now is a great time to get in shape, eat right, and start other healthy habits.

Chime has your back this winter

Winter can feel endless, but with some frugal planning, you don’t have to fret. One easy way to kick off your budget-friendly winter activities is to open a no-fee savings account. For example, an online Chime account will help you save money easily – and automatically.

Are you ready to enjoy the winter season and save big bucks at the same time? We thought so.

 

Amazing Resources for Successfully Managing Your Personal Finances

The new year is the perfect time to do some revamping of your finances, starting with the tools you use to manage your money.

Two-thirds of Americans have at least one personal finance app on their mobile devices. These apps are used for banking, budgeting, investing or sending and receiving money. But, perhaps you’re looking for new personal finance tools to add to your arsenal.

In addition to the Chime’s money transfer feature, here are 8 personal finance apps and go-to resources that you might fall in love with.

1. Personal Capital

If you need to get clarity on where you stand financially in the new year, Personal Capital is designed with you in mind. The software, which links all your bank and investment accounts, can help you become more financially aware of how you spend, save and invest. It’s great if you want to get a handle on your net worth, check in on how your investments are doing or see where each and every dollar you spend goes.

2. The Penny Hoarder

You love personal finance blogs, right? That’s probably because you’re looking for tips on how to make smarter decisions with your money. The Penny Hoarder delivers that and then some. This personal finance site offers a wealth of information on everything from paying down debt and saving for retirement, to earning more money with a side hustle and snagging deals on groceries. If you want to dig deeper, The Penny Hoarder Academy features in-depth tutorials on budgeting, improving your credit score and job hunting.

3. “You Are a Badass at Making Money: Master the Mindset of Wealth”

Author Jen Sincero took a series of professional twists and turns before finding her calling as a success coach. Her newest book, “You Are a Badass at Making Money: Master the Mindset of Wealth,” is all about how to chase after the income you want instead of settling for the paycheck you’re earning. You might be working your way up the corporate ladder, trying to get a fledgling freelancing business off the ground or somewhere in-between. If you need a road map (and a mental kick in the pants) to focus on leveling up your income, this book is a solid read.

4. You Need a Budget

There are lots of budgeting apps and programs out there and if you’re looking for something free that’s easy to use, the Mint app absolutely fits the bill. You Need a Budget (YNAB), however, offers a bit more. While it’s not free (you’ll need to cough up $6.99 a month to use it) it can be a financial game changer. If you’ve struggled with budgeting before, YNAB can help you stay accountable while getting down to the nitty-gritty of how you spend. Aside from budgeting, YNAB can also help you map out a debt payoff plan and track your big (and small) money goals.

5. So Money Podcast

Farnoosh Torabi knows money and she dishes out her best personal finance advice and tips on her weekly So Money Podcast. The podcast regularly features money, business and success experts, such as Tim Ferriss, Seth Godin and Jim Cramer. Previous episodes have included discussions about money and marriage, managing finances in yours 20s, figuring out retirement and making the leap into entrepreneurship after a stint with a side hustle. The financial questions addressed are relatable and the advice tends to be practical and on-point.

6. Robinhood

Fees can eat into your returns when you’re trading stocks and trying to build a portfolio of investments. Yet, Robinhood is a mobile app that lets you buy and sell stocks for free from your mobile device or desktop. It may be a good pick for investing newbies who want to play the market but don’t want to shell out hefty fees to a financial advisor. And if you’re a savvy investor, you can also use the Robinhood app to trade options and cryptocurrencies.

7. Credit Karma

Getting your credit score in shape might be one of your top financial resolutions for the new year. The first step is knowing where you stand score-wise and what’s influencing your credit score calculations. This is where Credit Karma can help. This site offers free credit score monitoring and credit education. You can track your score progress each month and use that to improve your finances. For example, boosting your score may help you get approved for better credit card or loan offers. And, consolidating high-interest credit card debt to a single card or loan with a lower rate can save you money over the long-term, help you pay the balance off faster, and improve your finances.

8. Venmo

Splitting expenses can be a headache, especially if you’re constantly nagging your roommate to hand over her share of the rent or dealing with that one friend who never seems to carry enough cash to share the dinner tab. Venmo helps eliminate those kinds of hassles by allowing you to send and receive money with just an email or phone number. You can easily share payments for virtually any expense and get paid back through your smartphone. The app makes keeping track of money a breeze and it’s also a speedy way to receive payments. Just watch out for the fees. Venmo charges a three percent fee when you send money using a credit card. Pro tip: Chime also offers a Pay Friends feature that allows you to send fee-free mobile payments to other Chime members.

What’s your preferred money management tool?

These fintech apps and resources can help you get a better grip on saving, spending, debt repayment, investing, and your short-term and long-range money goals. We encourage you to check out all of these 8 resources to see which of them can help you improve your finances in the new year.

 

Good Credit Scores vs. Bad Credit Scores

Your credit score is a huge indication of your financial health. In fact, your credit is so important that lenders refer to it when you apply for a line of credit, a home mortgage, a car loan or even a new credit card.

But, in order to be approved for loans and credit cards you often need a “good” credit score. That begs the next question: What makes a good score vs. a bad score? Before we jump in, let’s go over the basics.

What is Credit and How is Your Score Calculated

Your credit score is a three digit number that helps lenders determine how credit worthy you really are. In other words, it’s a tool lenders use to determine if you are a good borrower and thus most likely to pay off your loans.

The three major credit bureaus – Equifax, Experian and TransUnion – collect information on you to help determine your credit score. For instance, whenever you open a new account via a loan or line of credit, this information gets reported to the three bureaus.

The bureaus then use a credit scoring model to determine what your score is. The two most popular credit scoring models are FICO and Vantage. FICO is used widely by lenders, but you’ll want to aim for a high credit score no matter which scoring model is being used.

What Makes a Good Credit Score?

There are a few important factors that help contribute to your credit score. These factors include your payment history, amounts owed, length of credit history, credit mix (how many different types of account you have,) and new credit.

Credit scores range from 300 to 850. Good credit scores fall in the 670 to 850 range. Anything below 670 is either considered a fair or bad credit score, according to FICO.

If you want to raise your credit score, it’s important to prove that you’re a responsible borrower and not a risk to the lender. Why? Lenders don’t want to give money to people who won’t pay them back. This is why the most crucial things you can to do improve your credit are:

 

  • Pay your bills on time
  • Keep credit card balances low

To help you do this, you can create a detailed budget and set up reminders or automatic withdrawals to ensure you pay bills on time. The longer you keep up with this habit, the better your score will get. For example, say you have a student loan with a 10-year term. You’ve made on time payments for about eight years so far. Good for you! This will improve your credit and show lenders that you can be trusted to pay back a sum of money over time.

Here’s another pro tip: When it comes to credit cards, never spend more than 30% of your credit limit. Remember, credit is a tool, and it will not help your score if you max out your credit cards. So, if your limit is $2,000, only spend 30% of that limit, or $600. Then, pay the bill on time. If you continue this habit, your credit score should improve.

What Makes a Bad Credit Score

There are a few things you can do that will result in a bad credit score. They include:

  • Not paying your bills and loan payments on time
  • Not paying your loans at all
  • Keeping a high balance on your credit card
  • Applying for multiple credit accounts regularly

For example, let’s take a look at your bills. If you don’t pay your bills on time, companies can report you to the major credit bureaus and this will result in a negative mark on your credit report. Keep in mind that this can happen for medical bills, utility bills, and even your phone bill. If you just stop paying altogether, this is even worse. Your account will become delinquent and it will reflect poorly on your credit reports.

Keeping a high balance on your credit cards is another common mistake that indicates you may not be able to pay back what you borrowed. The takeaway: Borrow only what you can afford to repay in a timely manner.

Ways to Improve Your Credit

If you want to improve your credit, focus on improving your standing with each of the five factors that impact your credit score. Here’s a breakdown of those factors and how much each one contributes to your score:

Payment history: 35%

Amounts owed: 30%

Length of credit history: 15%

New credit: 10%

Credit mix: 10%

Ideally, you’ll want to focus on improving your finances in the two areas that hold the most weight. This means you should pay bills on time and keep your balances around 30% (or lower) of your overall limit.

You should also avoid applying for new credit too often. Each time you apply for credit, it adds an inquiry to your report. Too many inquiries can hurt your score.

Over time, your credit history length will increase as long as you keep accounts open. If you close an account, your credit history will die with it. This is why it’s better to keep credit card accounts open even if you aren’t using them regularly.

Here are some other tips: If you have existing debt, you can boost your credit by paying it off. You can also establish positive borrowing history by getting a secured credit card and paying off the balance in full each month. With this type of credit card, you have to put money down first to establish your credit limit. Then, you borrow against it and repay it responsibly.

Lastly, consider establishing a no-fee bank account and emergency fund so you won’t be tempted to use credit to help you cover unexpected expenses that you can’t afford.

Know the Difference and Protect Your Score

In order to improve your credit history, you’ve got to start somewhere. A good place to begin is to know what makes a good credit score and a bad credit score. Ultimately, improving your credit score boils down to your spending and money management habits.

Are you ready to develop better money habits? Follow this guide and over time you will watch your credit score move into the “good” range.

 

What is A Good Credit Score To Buy A Car?

Ready to buy a car?

A car may be one of the most expensive purchases you’ll ever make – second only to a home. The average car price is $36,000, according to Kelley Blue Book. That’s a whole lotta dough.

While you can certainly save money by buying a used car, you will still need to come up with enough cash to drive away in your new wheels. If you don’t have the money on hand, your other option is to get a car loan.

Car loans can certainly help you buy a car, but in order to get approved for a loan, you’ll generally need a good credit score and money in the bank for a downpayment. Read on to learn more about car loans and how your credit score can help you buy a car.

How Do Car Loans Work?

Car loans are similar to other types of loans. You usually have to come up with a down payment and you can then apply to borrow the rest. You can get a car loan at an auto dealership, or at a bank or credit union. There are also some online lenders that specialize in car loans.

Some car dealerships will allow you to trade in your current car and use the value as a down payment for the new car. They will then run your credit and shop around for the best lender for your loan. This can take some time which is why it’s not uncommon to spend several hours at the car lot as you wait for a financing decision.

Once you have been approved for a car loan – either at a dealership or through another lender – you can review loan terms and sign paperwork. You’ll be given an interest rate based on your credit score, income, and debt-to-income ratio (how much you already pay toward your debt each month compared to how much income you bring in.)

Generally, you’ll be asked what your budget is for a monthly car payment. Lenders can shorten or lengthen your loan repayment term based on this preference. For example, you can get a 36-month car loan or even a loan that will take you seven years to pay off. The longer the loan, the more interest you’ll typically pay over time.

What Type of Credit Do You Need?

Your credit score is the number one factor that will determine whether you get approved for a car loan or not.

Of course, if your credit score is excellent or above average, you can rest assured that you’ll likely get a loan with the best terms. If you have no credit whatsoever, you probably won’t be approved for a car loan and it’s time for you to build your credit.

Each quarter, Experian publishes a report detailing the state of the automotive finance market. This is how Experian, as well as most lenders, rank borrowers’ credit scores:

Super Prime: 781 – 850

Prime: 661 – 780

Nonprime: 601 – 660

Subprime: 501 – 600

Deep Subprime: 300 – 500

If you have super prime credit, meaning your score is excellent, you can expect a low interest rate around 2.6% for a new car and 3.4% for a used car. With nonprime credit or an average score, you can expect a rate around 6.39% for a new car and 9.47% for a used car.

With deep subprime credit, which are the lowest scores, you may not get approved for a loan at all. If you do, your interest rate will be the highest, averaging around 13.3% for a new car and 18.9% for a used car, according to Bankrate.

Clearly, having a higher credit score will get you the best terms and the lowest interest rates. And this can save you a ton of money as you repay your loan. If your credit score is subprime or worse, it’s probably a better idea to work on building your credit before applying for a car loan.

Getting Your Credit Ready For a Car Loan

If you want to build your credit score or improve it, you first need to understand how credit works. Lenders look at your FICO score when considering whether to approve your car loan application. FICO is a specific credit scoring model, but it helps to understand how it works so you’ll know which areas of your credit report to focus on.

According to MyFico, credit scores are calculated by using these five main factors:

Payment History – 35%

Amounts Owed (overall utilization of your credit limits) – 30%

Length of Credit History – 15%

Credit Mix – 10%

New Credit – 10%

As you can see, your payment history and amounts owed hold significant weight in terms of determining your score. If your score is low, odds are your payment history is not good.

So, how long does it take to improve your credit? Depending on how much work you need to do, some experts state that you can improve your credit in as little as a few weeks on up to 18 months. To start making improvements, you can do the following:

  • Try monitoring your credit and tracking your improvement by using free sites like CreditKarma and CreditSesame.
  • Use your credit cards wisely, which includes paying off some debt to lower your balances.
  • If you see missed payments or defaults on your credit report, contact the lenders to find out if you can settle the balance.
  • If you have no payment history whatsoever, consider getting a secured credit card and putting a small monthly charge on it. Then, pay it off in full each month to build some positive payment history.
  • Keep your credit utilization under 30%. This means that if you have a credit card with a $2,000 limit, for example, you shouldn’t carry a balance of more than $600. Going above and beyond that amount tells lenders that you can’t control your spending and rely on credit too much. If you aren’t making consistent payments on your balance on top of that, this makes you look like a risky borrower.

Temporary Alternatives to Financing a Car

If you have bad credit or no credit at all, now is a good time to try transportation alternatives to buying a car. For example, while working on building your credit, you can give public transportation or carpooling a whirl.

Or, you can try buying an older used car with cash just to get you from one place to another. You can use windfalls like a tax refund or bonus payments from your job to help you round up the money to buy a cheap car. This might hold you over until you can beef up your credit score and apply for a car loan for a new car.

Working for a Better Credit Score is Worth It

Don’t lose hope or patience if your credit score needs to be improved before you finance a car. The benefits of working your way up to an excellent credit score will be well worth it when you get a car loan with the better terms and a lower interest rate.

Remember: A lower interest rate for your car loan will potentially save you thousands of dollars. Are you ready to start building your credit?

 

Chime Debit Card vs. Prepaid Debit Cards

By now you may have heard of Chime, a bank account with no hidden fees that helps you manage your money on the go and save automatically. Pretty awesome, right?

But did you know that Chime members also get a Chime Visa Debit Card, designed to help you save more money?

You may be wondering how a debit card can help you save money. Plus, you might be thinking you don’t need another debit card as you already have a prepaid card or two in your wallet. You may also be wondering if there are any reloadable prepaid debit cards with no fees. But, once you learn more about its benefit, we think you’ll be trading in those prepaid cards for a brand new Chime debit card.  

What’s the difference between a debit card and prepaid card?

Before we go any further, it’s important that you understand the main difference between a debit card and a prepaid card. It boils down to this: A Chime debit card is linked to your bank account and a prepaid card is not.

So, if you use your Chime debit card, your purchases are deducted from your Spending Account. A prepaid card, on the other hand, is not connected to any bank account and it’s up to you to load money onto it in advance. Typically, you can use your prepaid card until your loaded up funds run dry.

5 Key Differences Between the Chime Debit Card & Popular Prepaid Bank Cards

To make it easier for you to understand other differences between Chime debit cards and prepaid cards, we took a closer look at four of the most popular prepaid cards: Netspend, RushCard, Brink’s and Bluebird by American Express. We then compared the Chime debit card to these prepaid cards in terms of five key categories: fees, mobile apps, ATM access and fees, early direct deposit and security. Here’s what we found.

1. Fees

Chime: There are no hidden fees associated with Chime’s debit card. This is important as the average U.S. household pays more than $329 in bank fees every year. Chime, however, is on a mission to change this with no overdraft fees, no monthly maintenance fees, no monthly service fees, no minimum balance fees, and no foreign transaction fees when you use your debit card. In short, a Chime Spending Account is virtually free to use.  

Prepaid cards: All of the four prepaid cards that we analyzed charge fees for certain services, including, ATM withdrawals and transferring funds. 

2. Mobile App

Chime: The Chime app has 17,000+ 5-star reviews. Whoa. Offering the best mobile banking experience, Chime’s award-winning mobile app helps you track your spending and savings, pay friends and relatives, transfer money, send and deposit checks, and pay bills. You can accomplish all of this from any smartphone.

Prepaid cards: These cards all offer mobile apps that allow you to manage many financial tasks, like depositing checks, paying bills and viewing your transaction history. But, none of them offer extensive features like Automatic Savings or Pay Friends. Why? Prepaid cards are not tied to full service bank accounts, which ultimately limits your overall banking experience.

3. ATM Fees

Chime: How does easy access to money sound? With a Chime account, you can use your debit card to get cash at more than 38,000 ATMs – for no fees. Period.

Prepaid cards: With all four prepaid cards on our list, you can withdraw money from ATMs. However, there are fees involved.

  • Netspend – $2.50 per domestic withdrawal
  • RushCard – $2.50 per out of network withdrawal
  • Brink’s – $2.50 per domestic withdrawal
  • Bluebird – no fees for MoneyPass withdrawals and $2.50 per non MoneyPass withdrawal

4. Early Direct Deposit

Chime: Chime members can get paid up to two days early with direct deposit, as well as enable the option to automatically save a percentage of every paycheck. That’s right. No more waiting for your money or worrying about lost paper checks. Chime gets you paid faster and helps you save money.

Prepaid cards:  All four of the prepaid cards also offer an early direct deposit option, allowing you to get your funds two days early. But unlike Chime, these cards are not tied into your savings account, leaving your personal savings up to you.

5. Security

Chime: Security is a priority at Chime, and this includes keeping your information and money safe. Deposits of up to $250,000 are insured through Chime’s partner, The Bancorp Bank, Member FDIC. Chime also uses 128-bit AES encryption to make sure your cash is parked safely. Here are some of the other security features you’ll get with a Chime account:

  • You can instantly block your Chime debit card. This means that if your debit card is missing or stolen, you can block all transactions right from the app.
  • Chime sends you real-time, instant transaction alerts. This way you can stay informed about your money at all times.
  • You can shop worry-free at millions (yes, millions) of merchants. That’s because the Chime debit card is protected by the Visa Zero Liability Policy, which ensures that you won’t be responsible for unauthorized charges.
  • Your privacy is important, which is why Chime requires two-factor authentication.

Prepaid cards: These cards do offer some security features. For example, Brink’s allows you to add your picture to your card. RushCard, in turn, offers One Touch Access, allowing you to use your fingerprint to access your account. And, because Bluebird is part of the Amex family, you’ll get purchase and fraud protection.

But at the end of the day, none of these four prepaid cards are bank accounts and therefore do not offer the full scope of security features found at Chime.

Switch to Chime For No Hidden Fees

There are many differences between prepaid cards, and Chime’s debit card. As you can see, Chime is not a prepaid card – far from it. Plus, the Chime debit card offers a lot more perks and benefits than prepaid cards.

If you’re looking for a singular card that wins across all categories, Chime takes home the trophy. What are you waiting for? Sign up for a Chime account today and start saving money now. 

 

Should You Donate to Charity If You Are in Credit Card Debt?

Donating to charities and nonprofits is one of the most fulfilling uses of your money, but should you hand over your hard earned dollars to a nonprofit if you have big debt? Probably not. Let’s take a look at why, how you can have a greater long-term impact, and other ways to contribute outside of your checkbook so you can put your finances first.

Why credit card debt should keep you from donating

Finance experts often argue about whether or not any type of debt could be considered “good debt,” but there is a nearly universal agreement that credit card debt is bad for consumers. If you have credit card debt, you’re likely paying upwards of 20% APR on your balance.

If you have an $8,000 credit card balance with a 20% interest rate, that means you will pay around $1,600 per year in credit card interest. When you have to pay hundreds or thousands of dollars per year in high-interest payments, you should not be giving generously to a religious organization or anywhere else.

If someone from your church pressures you to give up to 10% of your income when you can’t afford it, they don’t really have your best interest in mind. They have their own interests at heart. While writing a check to your church may give you a warm fuzzy feeling, it just puts you in more debt!

Turning around debt so you can make regular donations

If you don’t have any debt and want to donate to a favorite cause, that’s wonderful! If you do have debt, you should focus on getting out of debt so you can confidently contribute to a meaningful cause.

When you have credit card debt, you generally have to make big interest payments in addition to your efforts to pay off your balance. If you give $100 per month to charity, that is $100 per month you could use for your debt freedom efforts. Each month, that $100 could get you closer and closer to a debt-free lifestyle.

Once you have your debt paid off, you may find you have enough to easily donate to your comfort level without the struggles you had before. After all, you no longer have any interest or principal payments due. That credit card payment of hundreds of dollars per month can turn into a combination of savings and charitable contributions that better align with your long-term financial goals.

Giving is good, but be careful

Bill Gates and Warren Buffett started a movement of more than a dozen billionaires who have pledged to give away at least half of their wealth. These philanthropists are great inspiration for all of us non-billionaires, but we need to take a more pragmatic approach to giving.

I personally give to a few causes, including religious ones, but I have never had any credit card debt. In the days I had student loans and car loans, I was not in the habit of donating to any nonprofits or charities. These days, however, I only have a mortgage. That allows me to give to my favorite organizations without adding extra financial strain to my family.

Tithing is a common practice at churches around the world. The worth tithing comes from the same root as a tenth, or 10%, of your income. If you have credit card debt, donating 10% of your income is very irresponsible.

When you board a commercial flight, the flight attendants remind you that “you should always put your oxygen mask on yourself before helping others.” If you are unconscious, you can’t help anyone else let alone yourself. With your money, it works the exact same way. Credit card debt is the same thing as a depressurized cabin. If you can’t afford to pay off your debt, you can’t afford to take care of anyone else.

With the right financial discipline, you can turn around financial struggles and get your donations underway. But always be sure to pay off your high-interest debt before giving away money to others.


This article originally appeared on Due.com

 

6 Cable Alternatives: The Best Streaming Services to Cut Your Cable Bill

Saving more money is one of the best ways to ensure a lucrative financial future. And, with a new year looming, now is a great time to take actionable steps to reach your money goals.

A good first step is to set up an automatic savings plan and lower some of your monthly expenses to free up money. Where to start? Try cutting out cable. Cutting the cable cord doesn’t mean you have to give up the TV shows and movies you love to watch. In fact, you can still watch your favorite shows – thanks to streaming services.

Here are 6 of the best streaming services to replace your cable service, and help you save money.

1. Netflix

You’ve probably heard of Netflix by now. It’s one of the most popular streaming services for movies, television shows, documentaries and more. Netflix is a monthly subscription service that gives you access to their entire library of content.

The basic plan is $7.99 per month: Watch on one screen at a time in standard definition. Download videos on one phone or tablet.

The standard plan is $10.99: Watch on two screens at a time. HD available. Download videos on two phones or tablets.

The premium plan is $13.99 per month: Watch on four screens at a time. HD and Ultra HD available. Download videos on four phones or tablets.

Netflix doesn’t always feature the most up-to-date episodes for TV shows, but they have an awesome line-up of original shows including Stranger Things, Black Mirror, and House of Cards. You can sign up for a free 30-day trial here.

2. Hulu

Hulu is a streaming service that has an affordable monthly subscription rate. You can watch movies, TV shows and now even live television.

Hulu has a great TV show collection including their own original series. New users can get a free 30-day trial. After that, the cost is just $5.99 per month for the first year. For the second year, the monthly fee goes up to $7.99. Hulu does show ads on streaming shows, but if you want an ad-free experience, you can update your plan to $11.99 per month.

Hulu also allows you to stream 50+ of the top TV channels, and you can add on content from networks like HBO®, SHOWTIME®, CINEMAX® and STARZ®. This membership is $39.99 per month.

3. DIRECTV NOW

DIRECTV NOW is a no-contract streaming service with four service plans, ranging in price from $40/month to $75/month.

This option is great for someone who likes to watch live TV as DIRECTV NOW provides access to over 65 channels for the basic $40 monthly plan and more than 125 channels for the top tier $75 monthly plan.

The best part is that you don’t have to commit to a contract or hidden fees, and you can cancel any time. You can sign up for a free 7-day trial of DIRECTV NOW here.

4. Sling TV

Sling TV is a streaming service that’s similar to DIRECTV in that you can stream live TV channels to your devices instead of paying for cable.

Sling TV is great for sports lovers and there are three main packages: Orange ($25/month), Blue ($25/month) and both ($40/month). Sling TV even offers a $5 kids add-on package with family-friendly networks.

The one downside is that while Sling TV allows you to stream movies from the site, not all of them are free. Yet, you can try out the service for seven days before committing to a paid subscription. Get more details here.

5. Amazon Instant Video

If you’re an Amazon Prime member, you’ll have unlimited access to Prime Video. This allows you to stream TV shows and movies from various devices.

This service makes sense to have if you like to watch movies and Prime originals, like the award-winning The Marvelous Mrs. Maisel. Since Prime Video comes with a paid Amazon Prime membership, this is a great perk for those already taking advantage of other membership benefits, including fast and free shipping on more than 100 million items. Get a 30-day free trial here.

6. YouTube TV

YouTube is one of the most-used websites to date. Some of the video content can be addicting and it’s great to support up and coming content creators. While I can watch free YouTube content all day, a paid streaming service is also available.

YouTube TV – touting itself as cable-free live TV with no cable box required – is just $40 per month. For that price, you get access to more than 70 different channels covering everything from news and sports to entertainment and scripted shows. You can have up to six different accounts per household and use the personalized DVR service.

This streaming service is only available in select areas right now but you can check to see if your city has it and sign up for a free trial here.

Cut the Cord and Save

Imagine how much money you can save by cutting the cord and getting rid of cable. Better yet, take action and actually cancel your cable subscription. Then start adding up the savings when you switch to one of these more affordable television streaming services.

 

6 Year-End Money Moves: Salary vs. Hourly

It’s that time of year again – the time when everyone focuses on the holidays. This includes buying gifts, planning holiday travel and preparing for all those holiday parties.

Yet, this is also the time of year when you can easily let things fall to the wayside, including your own finances and career. So, before you let yourself get carried away with holiday spending, it’s time to take an inward look at your own money matters.

A good place to start is to answer this question: Are you paid by the hour or are you salaried? The answer to this question is important because how — and when — you earn your money can make a big difference in the year-end financial actions you take. For example, if you are a salaried employee, you may already have company-sponsored insurance and a retirement plan in place. If you are hourly, however, you may have to set up your own retirement account and purchase insurance. On the other hand, if you work an hourly job, you may have the opportunity to earn extra money by working overtime hours.

So, with one month left to go in 2018, take a look at these 6 financial housekeeping moves for salaried versus hourly employees.

Contribute to a Retirement Plan

Regularly saving money in a retirement plan is one of the most important things you can do to prepare yourself for retirement. And one of the best ways to do that is by contributing to a 401(k), a tax-deferred retirement plan offered by many employers.

You’ll often hear about 401(k) plans coming with a “company match.” Matching contributions are when your employer will deposit a dollar amount or certain percentage into your retirement plan. It’s basically free money from your job – which you can get just for contributing to your retirement account.

“Perhaps the worst financial mistake someone can make is turning down free money,” says Robert Johnson, a professor of finance at Creighton University.

“If one doesn’t contribute enough in a 401(k) plan that has a company match, one is basically turning down free money.”

Here’s how you can maximize your investments if you have an hourly or salaried job.

Salary:

  • Max out your allowable retirement account contributions by adjusting your limits through your employer or investment portal.
  • If you’re already spreading yourself too thin financially, aim to contribute as much as you can to your 401(k) to get the maximum company match.

Hourly and self-employed:

Review Your Insurance Policies

“As the year comes to a close, it’s important to review insurance policies to make sure your coverage still fits your life,” says Lingwe Wang, co-founder of life insurance provider Ethos.

Take a look at the suggestions below.

Salary (and hourly, where applicable):

  • Thoroughly review your insurance policies, to include health, auto, homeowners and life – particularly if you anticipate a major life change in the upcoming year, like a marriage, birth or relocation.
  • Open new policies and close old ones. Make this move by determining if you may need more or less coverage, depending on your individual situation.
  • Monitor insurance rates. Keep an eye on insurance rates all year, but make sure you conduct a full scale review at the end of each year.
  • Pay attention to your deductibles. Here’s a good example: “If you have an expensive (medical) procedure coming up, and have reached or nearly reached your deductible, you could consider scheduling the procedure this year, rather than next, to maximize your benefits,” says Kevin Gallegos, senior vice president of client enrollment for Freedom Debt Relief.

Hourly/contract/self-employed:

  • Pick a plan. Now is the time to select the health insurance coverage right for you. Open enrollment for healthcare coverage on the health insurance marketplace lasts from November 1 to December 15. Make sure you don’t miss this window!

Utilize an FSA (if applicable)

A Flexible Spending Account, or FSA for short, is a tax-exempt way to save money to pay for certain qualifying medical expenses that may not be covered by your health insurance. This may include prescription medications, co-payments, or even portions of your deductible.

Salary:

If you’ve been making deposits into an employer-sponsored FSA plan, start using those dollars. According to HealthCare.gov, you’ll generally need to spend your FSA funds within your plan year. So, if you started coverage at the time of open enrollment, this leaves just two short months before the money you’ve socked away goes to waste.

“There is still time to make relevant purchases to use the money,” says Gallegos.

“Many kinds of products and services apply, so if it’s too late for a doctor’s appointment, determine if you need other qualifying items.”

Hourly/contract:

If you don’t have an FSA in place, now is the time to open one for more flexibility within your health insurance coverage. You’re allowed to deposit up to $2,650 per year, per employer, into an account.

Check Your Credit Report

Ensuring your credit is in good standing is important no matter whether you’re salaried or hourly.

With that, make a habit of checking your credit report at least once a year, and now is a great time to start. Your credit report is available for free at annualcreditreport.com and by reviewing your report, you’ll be able to spot signs of identity theft, which can adversely affect your report and credit score.

If you find anything that looks suspicious or errant — such as a loan listed as delinquent that you paid off, an unfamiliar looking credit account, incorrect spellings or dollar amounts, or other information that’s amiss  — you can dispute your findings with the three credit bureaus: TransUnion, Equifax and Experian.

Checking your credit report gives you the security and control you need over your financial situation, regardless of your employment status: full-time, part-time, salaried, hourly or contract.

Prep Your Taxes

Before you know it, the holidays will be over, a new year will have begun, and tax time will be here. April 15, 2019 is the next deadline for filing taxes, so make sure you prepare ahead of time.

Salary and hourly:

  • Check your tax withholdings. “Depending on your preference and your salary, some tax withholdings are better than others,” notes McCall Robison, chief editor of Best Company.

“Look at this year’s finances and tax withholdings, and determine if your current tax withholding is working with your budget. If not, you may want to change your tax withholding choice to better work with your financial situation.”

Hourly only:

  • Calculate any extra pay you earned throughout the year. For example, if you worked overtime or earned tips, include that in your total annual income. To learn more about how to report tips on your tax return, you may want to access IRS Form 4070.

Build Your Budget

Salaried and hourly employees may be paid differently, but making an effort to start a budget or make changes to improve your current budget is a great way for everyone to save money.

“Take into account your budget for the current year and think of where you could improve,” advises Robison.

“Did you eat out too much this year? Are there some bills you could cut down on? Do an expense audit, making a list of all of your bills and other expenses, and see where you can improve next year. This will give you a great start in the new year.”

A Fresh Financial Beginning at the End of the Year

The end of the year is an opportunity to make positive financial changes in the upcoming year. No matter what kind of work you do, how much you’re paid, how you’re paid, or what your unique work situation is, this is the time to make some smart money moves.

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