Whether it’s for a new credit card, an auto loan or a second date, rejection stings. But unlike dating app users, lenders can’t mysteriously ghost you if your credit is what led to your rejection.
There are many reasons a company may look at your credit. Learn more about why adverse action notices are sent, what’s contained in a notice, how to dispute inaccuracies and how you can use one to try to improve your credit for the future.
If a lender or company denies you for credit because of information in your credit reports, it must give you an explanation for the denial. This is known as an adverse action notice.
The Fair Credit Reporting Act and the Equal Credit Opportunity Act require issuers to send adverse action notices in the following situations.
If an issuer rejects your credit application based on information in your credit reports you will typically receive an adverse action notice in the mail.
If you’re applying for a job, the employer must provide you written notice that the information may be used in making decisions about your employment and receive your written permission. If the company is considering not hiring you because of the information it received, it must give you a copy of the info it relied on and a special summary of your rights under Fair Credit Reporting Act. The notice you receive will contain different information than the adverse action notice you receive when denied credit, but both notices aim to inform you about the information relied on to make the decision and your rights moving forward.
This gives you a chance to dispute the information. If you’re rejected because of the background check, you’ll receive an adverse action notice that is slightly different from the one that you’d receive if you were denied credit.
The information you find in an adverse action notice can give you more insight to help you improve your credit.
The following items must be included if you get an adverse action notice related to a credit decision.
This information is meant to help you better understand your rights and who to contact if it’s incorrect. You can also file a complaint with the Consumer Financial Protection Bureau if you believe you were wrongly denied credit.
If you get an adverse action notice, you don’t have to respond in any way. But if you disagree with the action and want to dispute or appeal the decision, you may have an opportunity to do so.
Remember that you can request a free copy of your credit reports from each of the three major credit reporting agencies annually through AnnualCreditReport.com.
If you were turned down because of incomplete or inaccurate information on your credit reports, you can dispute the information with the credit bureau. If you file a dispute with the credit bureau, the bureau is required to investigate the dispute unless it determines the dispute is “frivolous.”
No one wants to get an adverse action notice — but if you do, you can use that information to try to improve your credit going forward or fix any mistakes. The requirement for adverse action notices is an important protection that can help you better understand your credit.
The easiest way to find out whether a dealer accepts returns is to ask — ideally, before you make a purchase. If it’s too late for that, being able to return the car typically depends on the dealer’s policies.
What if the dealer is unwilling to work with you? You might have some options if you decide that you don’t want the car anymore or that you can’t afford the monthly loan payments.
Let’s take a closer look at returns, including what some other options are and what you can do to help ensure you get a car that’s right for you in the first place.
If you have buyer’s remorse, chances are the dealer won’t let you return a car you’ve bought. However, there are some exceptions.
Some car dealers such as CarMax and online marketplaces like Carvana and Vroom have policies that allow people to return cars they’ve bought, under certain conditions. If you buy a car from a dealer that explicitly allows returns, you’ll typically be able to take the car back as long as you follow the terms of the policy. Policies may restrict this to a certain time period (seven days, for example) with certain mileage limits. If the dealer doesn’t have a return policy, and it’s not required by law, deciding whether it accepts a return on an individual basis is up to it. It’s a good idea to understand the policy before you purchase.
Lemon laws are state laws that are designed to protect people who buy or lease a car that has defects affecting its use, value or safety. If you purchase a “lemon” and the dealer can’t fix the problem after a certain number of attempts, you may be entitled to a refund or a replacement car that’s similar in value to the one you purchased.
The protections offered by lemon laws vary by state, so it’s important to understand the laws where you live. Lemon laws typically apply to new cars, but in some states they also apply to used car purchases.
What happens if you no longer want the car you bought but the dealer won’t let you return it? You may have a few options.
If you decide you no longer want the car, or you can’t afford it, you can sell your vehicle or trade it in for a less expensive vehicle. Websites like Kelley Blue Book, Edmunds and NADA can help you determine the fair market value of the car. But remember: Cars begin depreciating as soon as you drive them off the lot, so you’re unlikely to recoup the full price you paid.
If you financed your purchase, selling the car may be a bit trickier. You’ll need to pay off the remaining loan balance before selling, so that the title can be transferred to the new owner. And if you sell the car for less than what you owe on the loan, you’ll have to pay the difference.
If you want to return your car because you can’t afford to make the monthly payments, consider refinancing your car loan first. You may be able to reduce your monthly payment with a lower interest rate or longer term.
Keep in mind that if you choose to extend your loan term, you may pay more in interest over the life of the loan.
If you can’t afford your payments and are unable to sell your car or refinance your loan, reach out to the lender to discuss a different payment schedule or options for a voluntary repossession. If you agree to have the vehicle voluntarily repossessed, you may not be responsible for paying the repossession costs, which you’d likely have to pay if the lender repossessed it.
But you’re still responsible for paying the difference between what the lender is able to sell the car for and what you owe on the loan. To make matters worse, your lender may still report the repossession to the credit bureaus, which could negatively affect your credit scores and credit reports for up to seven years.
If you’re unable to make your car payments, a voluntary repossession should be your last resort.
Since returning a car is often not an option, it’s best to do your homework before you make your purchase. Here are some tips to help you get the car that’s right for you at a price you can afford.
Car dealers are usually not obligated to let you return a car. In most cases, it’s up to dealer policies (unless otherwise required by law).
Just don’t forget to do your homework before you start car shopping. This should help prevent you from being in a situation where you need to return the car.
That might not seem logical — but researchers at the credit reporting agency found that, in some cases, taking on a personal loan can help both the borrower and the lender.
Read on for more about the study and for other tips that can help with getting debt under control.
In its study, TransUnion looked at 30,000 people who took out unsecured personal loans in 2017 — half of the borrowers were not delinquent on their debt one month prior to getting the new loan and the other half were. The credit reporting agency then reviewed what happened with those borrowers over the next 12 months.
Although many of the delinquent borrowers continued to struggle after receiving a new personal loan, almost a third (31%) improved on one or more of their past due debts after getting a personal loan. And 24% of borrowers succeeded in keeping up with payments on the new personal loan.
The study found that delinquent borrowers who succeeded in turning their situations around had certain things in common.
TransUnion says this highlighted that some borrowers don’t have chronic debt problems, but instead may be dealing with something unexpected — like a car bill or medical expense — and just need a boost to get their finances back under control.
Recent data from the Federal Reserve Bank of New York shows that in the first few months of 2019, total debt was over $13 trillion, up from the same period last year.
The Fed data shows that credit card debt makes up a significant portion of that total debt, having climbed from $815 billion in the first quarter of 2018 to $848 billion in the first quarter of this year. And there’s some indication that personal loans have been rising in popularity as people may be using them in many cases to help pay off credit card debt.
If you’re having a hard time getting on top of your debt, consider these strategies.
|No down payment required||Late fees for missed payments|
|No application fees||Can’t apply in person|
|Considers people with shaky credit or a past bankruptcy||Not available in every state|
New Roads is the direct lending arm of Consumer Portfolio Services, a company that works with people whose credit needs work. You can apply for a loan to buy a new or used car, refinance your current auto loan or buy out your lease.
If you’re considering applying for a New Roads auto loan, here’s what else you should know.
While New Roads will check your credit reports, the company relies on its own scoring model to decide if you’re eligible for a loan.
Its internal credit models are based on the following factors:
In 2018, the average annual household income for people approved for New Roads auto loans was $56,000, according to the company’s annual Security and Exchange Commission report.
Depending on your credit, you may not have to come up with a down payment for a car loan with New Roads.
But if you can put some money down, you may save on your monthly payment and pay less overall in interest on your loan. The average down payment on a New Roads auto loan in 2018 was 9.1% of the vehicle purchase price, according to the company’s annual SEC report.
If your credit is rough or you have a past bankruptcy — but you’re working to improve your credit — a New Roads auto loan might be right for you. New Roads markets its auto loans to people who’ve gone through bankruptcy or have struggled with credit.
If you don’t make your loan payments on time, you may be penalized with a late fee. If your payment is 15 days late, you’ll be charged a fee that’s $15 or 5% of the amount of the late payment, whichever is greater.
The fee won’t exceed $50, but if you’re worried you won’t be able to make your payments on time this may be a deal breaker.
Here are some more things you should know as you compare New Roads with other auto loan lenders.
You may be a good candidate for a New Roads auto loan if your credit isn’t great or you’ve gone through bankruptcy.
You may also want to consider a New Roads auto loan if you don’t want to put any money down, or if the vehicle you’re eyeing may qualify you for an interest-rate reduction.
If you’d like to apply for a New Roads auto loan, you’ll have to fill out an online application. If filling out an online application is out of your comfort zone, you can call New Roads’ customer service line to have somebody guide you through the process.
Keep in mind that if you complete the application process, New Roads will perform a hard credit inquiry, which can affect your credit scores.
Here’s the information you’ll need during the online application process.
If you’re approved, a customer service representative will call you to discuss your next steps.
If you’re not sure if a New Roads auto loan is a good option for you, here are a couple of other lenders to consider when you’re shopping for a new car.
Most people appreciate flexibility, which is probably why flex loans can sound so appealing. But with a flex loan, you could pay a high price for that convenience — even triple-digit APRs. Read on to find out more about what to consider with a flex loan.
A flex loan isn’t really a loan at all — it’s an unsecured open line of credit. If your loan application is approved, you can withdraw cash at any time up to your approved credit limit, which can be a few hundred to thousands of dollars, depending on the lender and how much you’re borrowing.
In some ways, a flex loan works like a credit card. Flex loans come with a credit limit. You’ll be charged interest for amounts you’ve borrowed. You should get a monthly statement. You’ll have to make at least a minimum payment every month. And you might be charged a fee daily, monthly or even every time you use your flex loan.
It’s important to understand the difference between a flex loan and a personal line of credit from a bank or credit union. Many banks and credit unions offer lines of credit for individual borrowers and businesses. Rates, fees and repayment terms depend on multiple factors, including your credit scores, or whether your line of credit is secured with collateral or is unsecured. Good credit and collateral may help qualify borrowers for favorable terms on a line of credit from a bank or credit union.
But flex loans are unsecured and can be an option if you have rough credit or little to no credit history. Flex loan lenders may not require a credit check. But as with virtually any type of credit, the more risk the lender assumes, the higher the interest rate you’re likely to pay.
Before we get to the bad news, here’s a look at what’s attractive about flex loans.
But those benefits come with some clear dangers.
While many states have laws that aim to regulate predatory lending, the cost of short-term loans can be extremely high. For example, according to a 2017 report from the National Consumer Law Center, laws in some states allow certain lenders to charge triple-digit APRs. And if a state allows a lender to calculate interest on a daily basis, the amount of interest you pay on a flex loan could really balloon.
Like credit cards, flex loans may allow you to make minimum monthly payments — but that often adds up to maximum interest. Minimum payments make it hard to completely pay off your balance, because interest continues to accrue.
Flex lenders may tout the fact that you have to apply for the line of credit only one time, and you can use it repeatedly as long as you haven’t reached your limit. Unlike a closed-end installment loan, flex loans might not have a specific end date. It’s potentially a recipe for trouble the same way it can be with credit cards — you continue to borrow and pay interest without substantially reducing the amount you owe.
Because a flex loan is an open line of credit that you can borrow against at any time up to your limit, you might take on more debt than you can manage now or in the future, when your financial situation might be different. A closed-end personal loan with a fixed loan amount and specific repayment term doesn’t come with this risk.What is revolving credit?
Flex loans (which have more in common with a line of credit than an installment loan) may give you fast access to cash, but you could pay a high price for that convenience. Triple-digit APRs, composed of high interest rates and fees, aren’t uncommon for flex loans. And if there’s no end date for the debt, you can continue borrowing and paying high rates indefinitely. Look at the terms of any flex loan offer carefully — you’ll want to fully understand the pitfalls and costs before you go that route.
If you have healthy credit or collateral, you may be able to get better terms and interest rates with other types of borrowing, like a personal loan, a payday alternative loan (if you’re a member of a participating federal credit union) or even a credit card.
And before you borrow money, always think about why you want a loan, how much you want to borrow and how you’ll repay that amount. If you need cash for a short-term emergency, consider getting a temporary part-time job or side gig, or borrowing from a friend or family member who can help you out with a repayment plan that will be more affordable for you than a costly flex loan.
A debt-consolidation loan may seem like the perfect solution to getting your monthly payments under control. But finding a debt-consolidation loan with bad credit can be difficult. In fact, even if you’re approved for a debt-consolidation loan with bad credit, you might not receive a better interest rate on the debt you’re consolidating. And you may wind up paying more in fees and interest.
It’s possible to get a debt-consolidation loan with bad credit. But it’s important to be aware of the drawbacks, including high interest rates and other costs, that are typically associated with bad-credit loans.
A debt-consolidation loan is a new loan that you apply for to pay off current debts, like credit card balances. The balances from your existing debt are transferred to the new loan, and you make payments on your new debt-consolidation loan.
When you looking for a debt-consolidation loan, it is important to look for more favorable terms, such as a lower interest rate, compared to the terms associated with your current debt. The goal is to find loan terms and an interest rate that are more manageable for you.
Here are a few ways a debt-consolidation loan could help you.Debt-consolidation loans: Pros and cons
Making several types of debt payments each month, whether you’re paying on multiple credit card balances or personal loans, can be difficult to manage.
Rather than risk losing track of all those monthly payments, a debt consolidation loan could let you make just one monthly payment instead of many, which may be easier for you to remember.
A debt-consolidation loan may have a lower interest rate than you’re currently paying on other debts. The average credit card interest rate in the first quarter of 2019 was about 15%, according to Federal Reserve data. But the average interest rate for a 24-month personal loan, which can be used to pay off other debts, was just 10.36%.
If consolidating your debt allows you to pay credit card debt down more quickly, you may be able to improve your credit utilization rate — which may help boost your credit scores.
Another important factor in credit scoring is payment history — and with a debt-consolidation loan, you could potentially improve your record. Rather than keeping track of multiple payments, a debt-consolidation loan leaves you with just one payment to stay on top of every month.Credit card utilization and your credit scores
Different credit-scoring models have different ranges of what scores are generally considered poor, but scores 579 and below are typically considered poor in the FICO® Score 8 and FICO® Score 9 models. With scores in this range, it can be difficult to get a debt-consolidation loan at all — let alone get one with favorable terms.
Using the same scoring models, scores between 580 and 739 are generally considered to be in the fair to good range. You’ll likely have a better chance of securing a debt-consolidation loan with good terms in this range. Scores of 800 and above are generally considered “excellent” and put you in a better position when applying for a debt-consolidation loan than if your scores were lower.Learn more about credit score ranges
It’s important to keep in mind though, that your credit scores are just one of the factors that a lender considers when deciding on whether to approve you for a debt-consolidation loan.
You may face some significant obstacles when you’re looking for a debt-consolidation loan with bad credit.
The first challenge is simply getting approved. If your credit scores are below a certain threshold, some lenders may not work with you. But because lenders typically consider a variety of factors (and not just your scores), including your credit history and debt-to-income ratio, you’re not necessarily ruled out if you have bad credit.
Take note: If you are approved for a debt-consolidation loan and you’ve struggled with credit, you may face higher interest rates than you would if you had strong credit.
If you’re looking for a debt-consolidation loan when you have bad credit, do your research to find a loan that works for you. Approaching the process with a plan can help.
First, take a close look at your credit scores. Knowing your scores could give you a better idea of which loans you can’t qualify for and which ones you might. Also, reviewing your credit reports could help you identify any errors that might be hurting your scores. You may even see opportunities to improve your credit.
Once you have a good understanding of where your credit stands, start comparing terms offered by a variety of lenders. Getting quotes from multiple lenders can help you understand what options may be available.
Getting prequalified can also help you understand how likely you are to be approved for a certain loan. Prequalification can give you insight into the lender’s requirements and typically also would be a soft inquiry. That said, when you make the application, this would still be a hard inquiry.
If your credit isn’t great, you’ll need to search everywhere for the best loan terms. Before you rule out any lenders, be sure to check them out. Credit unions and online lenders may be good options.
Credit unions may be more flexible with loan requirements. Because credit unions focus on their members, it’s possible that they’ll place less weight on your credit scores than a traditional lender might. And you might be able to find some online lenders that are able to work with borrowers who have struggled with credit.
A co-signer is somebody who will share responsibility for a personal loan. Consider asking a friend or family member with good credit and who’s willing to help you to co-sign your loan.
Having a co-signer may mean that you could qualify for a loan that you otherwise could not on your own. And even if you can qualify for a loan on your own, having a co-signer with good credit may help you qualify for a lower interest rate.Learn more: Should I get a personal loan with a co-signer?
It’s important to know that debt consolidation isn’t the only way to deal with debts you’re struggling to repay. Here are some options that may help you pay down your current debt — without creating new debt.
If you’re struggling to keep track of multiple debt payments each month or have high-interest debt that you’d like to refinance at a lower rate, a debt-consolidation loan might be an option for you — even if you have what creditors consider “bad credit.” But your credit may make it difficult to get favorable rates and terms on a debt-consolidation loan.
Before you commit to any loan, make sure to explore all of your options. Once you find a loan that works for you, be sure to always pay the agreed amount on time every month. This can help you begin to improve your credit over time.
|Application takes just minutes to complete||Minimum balance to refinance is $10,000|
|Works with 150+ lenders nationwide||Offers only refinance and lease buyout loans|
|Handles auto refinance process from start to finish|
If you’re in the market to refinance your auto loan, rateGenius may be a good place to begin your search. With a network of more than 150 lenders with varying requirements, the loan comparison platform aims to help you compare rates.
The application process is quick — it can take just a few minutes online or over the phone.
Once your application is submitted, rateGenius will try to match you with lenders in its network offering auto refinance loans with the best interest rates you might qualify for. If approved, you’ll get an offer, and may be able to begin the refinancing process in as little as 24 hours.
Unlike dealer-based or other auto-financing options, rateGenius is a platform that aims to show you lenders that may work for your situation. If your application is approved, the company will work with you to complete the entire auto loan refinancing process, from processing paperwork to handling the title transfer.
RateGenius is an online agency, not a lender, and its platform connects applicants to more than 150 lending partners (mostly credit unions) to help determine your refinancing eligibility.
Since rateGenius connects you with different types of lenders, many people might find they have options to consider — even if they’ve struggled with getting financing in the past.
Despite rateGenius’ lender pool, the online financing platform offers only auto refinance and lease buyout loans. If you’re looking for a new or used car loan, you’ll have to look elsewhere.
And rateGenius is flexible about their auto refinancing terms, too. For example, you may be able to apply for a refinance loan even if you’ve just driven off the lot with a new car. If you’ve made at least one payment on your existing car loan and have 24 months of payments left, you may be eligible for a refinance loan with one of rateGenius’ many lenders.
Here’s what else you should know about rateGenius.
If you’re looking to refinance your car loan, rateGenius could be an option for you, especially considering that the lenders it connects you with consider a number of factors in their decisions. So even if you have credit scores on the lower side, you may still find a lender.
As long as your car is less than 10 years old, has fewer than 120,000 miles on it, is for personal use and your current auto loan is between $10,000 and $55,000 — and meets the other eligibility requirements — you might qualify. And many of the lenders rateGenius works with have requirements: You must also be a U.S. citizen, at least 18 years old and have a gross monthly income of at least $2,000 annually.
Applying for a loan with rateGenius is easy. You can apply online or speak to a loan specialist toll-free at 1-866-728-3436. Either way, you can expect to be done with your application in just a few minutes.
Just keep in mind that the application does result in a hard credit inquiry from rateGenius. And its lending partners may review your credit history afterward.
Before applying, make sure you have the following handy:
To apply online, take the following steps:
With the ability to review multiple lenders and pick the most competitive offer, rateGenius is worth considering. If you’re not sure whether rateGenius is right for you, here are some other options to consider.
|Considers factors beyond your credit scores||May charge an origination fee of up to 8% of the loan amount|
|Potential to receive funding within one business day after accepting loan||Annual percentage rate may be high|
|Loan amounts as low as $1,000 in most states||Limited loan-term options|
Upstart is an online peer-to-peer lender. That means individual lenders and institutional investors can make loans directly to borrowers through the Upstart online platform. Terms vary by state, and loans aren’t available to residents of Iowa or West Virginia.
Upstart looks beyond your credit scores when considering you for a personal loan. In addition to your FICO® scores, credit reports and current income, it considers your occupation and employer, any degrees you earned, your area of study, and the school or university you attended. Founded by former Google employees, Upstart uses artificial intelligence and machine learning to automate the borrowing process.
That said, Upstart tends to lend to people who have fair or good FICO or VantageScore® credit scores. Upstart’s website notes that its customers have a weighted average FICO score of 688 and average annual income of just over $80,000. More than 77% of its borrowers are college-educated.
All Upstart personal loans have a fixed interest rate. The starting interest rate is higher than what some other lenders offer, and the maximum is one of the highest currently charged by traditional personal loan lenders. Upstart notes on its website that the average APR on a three-year loan is 20%.
Upstart offers limited loan-term options. You can choose either a three- or five-year term. But there’s no prepayment penalty, so you can pay off your loan sooner without a fee. If you want a shorter loan term, you’ll need to look elsewhere.
If you’re considering a personal loan through Upstart, here are some additional details to know.
Minimum requirements to get a loan include …
And take note: Upstart may withdraw your loan approval if there’s a significant drop in your credit scores or you take on additional debt between the time your loan is offered and you receive funding.
An Upstart personal loan could be good for someone with a limited credit history and fair to good credit. Since the lender lets you apply for prequalification, Upstart could also be ideal for someone who wants to shop around and compare loan offers. Remember, being prequalified isn’t a guarantee that you’ll be offered a loan — you’ll still need to provide more information before you can be approved and receive an official loan offer.
If you’re considering borrowing a larger amount, you may want to look elsewhere. If you were charged the maximum origination fee — 8% — on a $20,000 loan, you’d end up paying $1,600. Lenders typically deduct the fee from the loan amount.
You can apply for prequalification on Upstart’s website. To apply for prequalification, you’ll need to provide your …
Completing the form triggers a soft credit inquiry, which doesn’t affect your credit scores. If you prequalify, you’ll be able to see your estimated loan offers. If you choose an offer and are approved, you could receive your funds by the next business day, unless you plan to use your loan for education expenses. In that case, there’s a three-day waiting period.
If you’re not sure if an Upstart personal loan is right for you, here are two other options to consider.
But there are some important things to consider before you apply for a lease buyout loan. Depending on the current fair market value of your car at the end of your lease term, or the agreed-upon price in your lease agreement, and what interest rate you may be approved for and what fees are involved, a lease buyout loan could end up being an expensive option.
Let’s take a deeper look at how lease buyout loans work and some steps to take if you decide to get one.
When your lease is up, your options may include extending your lease, returning the vehicle, re-leasing the car or purchasing it.
Check your paperwork to confirm your options because not all leasing agreements allow you to buy the vehicle after your lease term ends. If yours does, and you want to buy the car but don’t have the cash on hand, you’ll likely need to secure financing with a lease buyout loan.
Before you apply for a lease buyout loan, read your lease agreement to learn what you need to do to buy your leased car. You’ll need to let your leasing company know of your plans to buy ahead of time.
Some banks, credit unions, online lenders and finance companies offer lease buyout loans, which are similar to other types of car loans. If approved, the lease buyout loan will be based on the amount you want to borrow, the annual percentage rate and loan term. Shop around to compare estimates of loan rates and terms so you can find the best loan for your needs.
Here are some things to know if you’re thinking about applying for a lease buyout loan.
Whether you plan to borrow from a bank, credit union or finance company, remember that the types of loans available, rates and terms vary by lender. When shopping around, check with potential lenders to make sure they offer lease buyout loans because not all do.
Understanding your leased vehicle’s current market value is important. You can easily get an estimate of what your car is worth by using free online tools from Edmunds, Kelley Blue Book or NADA. If your car’s current market value is substantially higher than its residual value — plus any fees for purchasing the lease — you might have equity in the vehicle and it may make sense to buy it.
If the situation is reversed — meaning the car’s residual value is higher than its current market value — getting a lease buyout loan could put you at risk of being upside down on your loan. Especially if you don’t make a down payment and finance the entire cost of the loan buyout, you may be borrowing more than the car is worth.
Leased cars are considered used cars, meaning you might need to secure financing for a used vehicle. Typically, used car loans have higher interest rates than new car loans.
And lease buyout loans offered by some lenders may have higher interest rates than new or used car loans, too.
Your leasing company may get in touch with you as the end of your lease term approaches to discuss options, or you can check your lease contract. This can help answer any questions you may have about end-of-lease costs or the car’s residual value and help you understand fees that may be associated with a lease buyout.
Some lenders offer the ability to apply for preapproval. If you get preapproved, the lender will let you know the estimated amount you can borrow and what your APR and loan term may be. Just remember that preapproval doesn’t mean you’re actually approved for a loan — it only gives you an idea of whether you might be approved and estimates of what your loan terms could be.
When applying for preapproval, be prepared to share some personal information such as your Social Security number, employment and income information as well as details about your vehicle. Remember, applying for preapproval may still be a hard inquiry on your credit, which may lower your credit scores by a few points.
If you’ve been approved for your lease buyout loan, it’s time to finalize the paperwork and transfer the title. Talk to your lender and visit your state’s motor vehicles department website to find out the steps to take to transfer the title. Typically, the title will be in your lender’s name until you pay off your lease buyout loan.
It’s important to do your homework before deciding to buy out your leased vehicle and apply for financing. Just know that lease purchase fees and potentially higher interest rates that can come with lease buyout loans could make buying your leased car an expensive choice.
If you’re in love with the car but aren’t sure whether a lease buyout loan is the best option for you, buying a used version of the same make and model could help you avoid lease purchase fees.
|Competitive interest rates and rate discounts for military members||Must be eligible active-duty or retired military member, veteran or immediate family to become a Navy Federal member and apply for a loan|
|Preapproval good for 60 days||Limited auto loan options|
|Flexible loan terms including 100% financing and term lengths of up to 96 months for new cars|
Here are some notable features of Navy Federal Credit Union auto loans.
When it comes to cars and trucks, Navy Federal offers new, used and auto refinance loans. If you’re planning to buy a motorcycle, boat or other leisure vehicle, Navy Federal offers loans for those, too.
But if you want a lease-buyout loan or plan to buy a used car from a private seller, you’ll need to apply for a loan from a different lender.
To get a Navy Federal Credit Union auto loan, you must be a member. Membership eligibility, as with all credit unions, is limited to a specific group of people. To be eligible to join Navy Federal Credit Union, you must be one of the following:
Immediate family members of somebody listed above, including parents, spouses, siblings, grandparents, children, grandchildren and other household members, can also join Navy Federal.
Navy Federal offers competitive interest rates on auto loans, and active duty and retired military members may qualify for a 0.25% interest-rate discount. To score the rate discount, you must have direct deposit and contact the credit union by phone or visit a branch.
Rates are lowest for new-vehicle loans, but Navy Federal also offers low rates on late-model used-car loans. Navy Federal considers cars with a certain number of miles and with a model year of 2018 to 2020 to be late-model vehicles. Navy Federal’s rates on older used vehicles or those with more than 30,000 miles are a little higher than what some other banks offer.
Here are some other important details about Navy Federal Credit Union auto loans.
A Navy Federal Credit Union auto loan may be a good fit if you’re a member or qualify to become a member, and you want the ability to apply for preapproval and shop with a check in hand.
A Navy Federal auto loan could also be ideal if you want flexible loan terms, like a longer loan term or a low down payment — or no down payment at all. Just remember that opting for a shorter loan term and making a down payment can help prevent you from owing more on your car than it’s worth. A down payment might also increase your odds of loan approval.
Apart from membership, Navy Federal Credit Union doesn’t specify any requirements, like minimum credit scores. It does note that you can still get a loan if you have limited credit history — though you may need a co-applicant, depending on the amount you want to borrow.
If you have excellent credit and plan to finance a new car for no more than 36 months, Navy Federal may offer you a low starting annual percentage rate. But if you need a longer loan term, you might be able to qualify for a lower interest rate with another lender. Be sure to shop around and compare your loan options.
Credit union members interested in applying for a Navy Federal auto loan can apply for preapproval. The application process is quick, and you can receive a decision within five minutes via email or text. To apply for preapproval, take the following steps.
1. Visit the Navy Federal Credit Union auto loans webpage and click “Apply.”
2. Sign into your Navy Federal online account.
3. Enter your contact information, housing, employment and income information, details on your trade-in (if you have one), and your desired loan amount and loan term. If you have a co-applicant, you’ll need to enter their information as well.
For a refinance loan, you’ll also need to provide the car’s VIN and exact mileage along with your current lender’s information and loan payoff amount.
If you’re preapproved, you’ll be able to see the loan amount and interest rate Navy Federal is willing to offer you. You can then pick up your check at a Navy Federal Credit Union branch or have it mailed to you.
If you aren’t sure whether a Navy Federal auto loan is right for you, here are two other options.
Different types of government loans are available, but they all share a similar purpose: improving the overall economy by investing in people, communities and businesses.
Whether you want to start a business, buy a home or fund an education, the U.S. government offers the opportunity to apply for loans, typically designed for a specific purpose. These loans are designed to support local communities, encourage entrepreneurship, help veterans and active-duty military families, and provide access to education.
Let’s look at the types of loans available from the U.S. government, how they work and who might qualify for one.
Loans that are either directly funded by the federal government, or are underwritten by private lenders with the backing of the U.S. government, can be referred to as a government loan. Borrowers must repay government loans (they’re not grants), usually with interest.
Government loans are either direct loans or guaranteed loans.
With a direct loan, you’re borrowing money directly from a government agency. All loan payments will be made to pay back the government.
With a guaranteed loan, you’re borrowing money from a private government-approved lender. The government makes a guarantee to the lender that it will cover a certain amount of losses if you don’t repay the loan. This guarantee helps reduce the risk for the lender so that it’s able to extend credit to borrowers who might not qualify for a loan from a private lender.
Private loans, made by a private lender like a bank or credit union, are different than government loan programs. It may be more difficult for certain borrowers to qualify for loans through private lenders.
For example, a private mortgage lender may require good credit scores and a large down payment. But you might be able to qualify for an FHA mortgage with a lower down payment and flexible credit qualification.
If you qualify for a government loan, a number of potential benefits can make it an attractive borrowing choice.
Some government loans are subsidized, meaning the government agency will pay the interest on the loan for a certain period of time. Direct subsidized loans for education are an example of this type of loan.
Both direct and guaranteed government loans serve people who might not be able to qualify for loans from private lenders for various reasons.
For example, an FHA mortgage loan can allow borrowers to put as little as 3.5% down and qualify with lower credit scores than they might need for a conventional loan. The U.S. Department of Agriculture, or USDA, also provides home loans with no required down payment to some low- and very-low-income applicants living in rural areas.
Some government loans come with repayment plans that make it easier to pay. For example, some student loans can be repaid on an income-driven repayment plan. These repayment plans calculate your monthly payment using your income and family size to come up with a payment that’s affordable.
Government loans may also offer longer repayment terms to make loan payments more affordable. For example, a home loan from the USDA can come with a repayment period of up to 33 years, or 38 years for low-income applicants who can’t afford a 33-year term. Keep in mind, though, that while a longer loan term can mean smaller monthly payments, it also likely means you’ll pay more in interest over the life of the loan.
Not everyone will qualify for a government loan. Each type of government loan has certain criteria that borrowers must meet in order to qualify. These qualifications may include income, business use (for business loans) and location, among other criteria.
Different types of government loans are available for varying purposes.
If you’re looking to start or strengthen an agricultural business, a number of government loans may be available to help.
The USDA’s Farm Service Agency, or FSA, provides both direct and guaranteed agriculture loans to support family farms and ranches and to promote a strong agricultural economy. FSA loans are intended for farmers who don’t qualify for a private loan. The program aims to help farmers qualify for commercial credit in the future by providing temporary supervised credit.
Fishermen and fisheries may be able to secure long-term financing through the U.S. Department of Commerce’s Fisheries Finance Program. The program makes direct loans to help finance the construction or reconstruction of fishing boats, fisheries and aquacultural facilities.
To help promote economic and community development, a number of business loans are available to help fund businesses of all sizes. The U.S. Small Business Administration, or SBA, can guarantee loans for certain businesses that don’t qualify for financing from other sources. It also funds very small microloans to new or growing small businesses to help provide the capital that they need.
Rural businesses might qualify for a guaranteed business loan through the USDA. This guaranteed loan program was created to help promote economic growth in rural communities.
If you want to apply for a loan for your small business, you can make the application process more manageable with some preapplication steps.
Recovering from a disaster can be time consuming and expensive. Disaster-relief loans provide money to help people and businesses recover from a federally declared disaster.
Qualified businesses and most nonprofit organizations can apply for loans of up to $2 million to repair or replace real estate, machinery, equipment and other business property. The loans are meant to help cover losses not covered by insurance, though eligibility requirements apply.
Even if you don’t own a business, if you’re in a declared disaster area you may be eligible for a disaster loan through the Small Business Administration. These loans cover physical damage to businesses and homes as well as financial harm to a business or nonprofit organization. Both renters and homeowners can apply for a disaster-relief loan.
There are also loans available to support small businesses with employees who are in the military reserves and who are called to active military duty in a declared disaster area. If they meet certain qualifications, businesses can use these loans to continue to pay operating expenses until an employee returns from military duty.
The government sponsors a large number of loan programs to help support housing and development, with programs available for specific groups, like first-time homebuyers, Native Americans and veterans.
Loan programs are also available for …
Education loans are available to help fund undergraduate and graduate education.
These loans, which generally have lower interest rates than private student loans, may be available to qualifying students and parent borrowers to help cover education costs.Learn more: Student loans 101
Additionally, the federal government sponsors loan-repayment programs for people who agree to work on certain types of medical research after graduation, certain graduates who commit to work a minimum of two years for the National Institutes of Health on AIDS research, clinical research and pediatric research, as well as those working in infertility and contraception research. Through these programs, the government repays a portion of the participant’s education debt for each qualifying year.
Nurses and other health professionals who work in specific communities may also be eligible for loan-repayment programs.
A number of government loans may be available for some veterans, service members, reservists and National Guard members. Additionally, surviving spouses may also qualify for some loans. VA loans may include home loans with lower interest rates and lesser down payments requirements, home-refinancing loans and loans against certain life insurance policies.
The federal government offers more than 50 different loan programs aimed at helping people access the credit they need to fund businesses, farms and other agricultural endeavors, education, home purchases and more. These public programs have a common purpose — to stimulate and grow the U.S. economy by supporting the financial goals of people who might not be able to get the credit they need through private-sector sources or who can get better terms than they’d find elsewhere.
A rental-car agency may ask you to purchase insurance in case you get into an accident or the vehicle is stolen. And these costs can really add up. But many travel cards offer certain kinds of rental car insurance without any additional charges.
There are many types of rental car insurance policies, so it’s important to understand what your credit card offers.
Let’s take a look at our picks for the best credit cards for car rental insurance.
Here’s why: The Chase Freedom® might be your best option if you’re trying to rent a car on a budget. This card doesn’t have an annual fee, which helps make it a wallet-friendly option.
You could also earn 5% cash back on up to $1,500 in combined purchases (1% after that cap) in bonus rotating categories for each quarter that you activate (these sometimes include gas purchases). So if you time it right, this card could help you save even more money on your next road trip. (Note that all other purchases net you just 1% back.)
The Chase Freedom® is also a great choice if you don’t already have car insurance. The card offers secondary coverage for rental cars that kicks in only after you go through your personal car insurance company. Because you’re not insured elsewhere, the rental car insurance coverage offered by the Chase Freedom® becomes primary.
Learn more in our review of the Chase Freedom®.
Here’s why: The Chase Sapphire Reserve® provides primary insurance coverage for rental cars all around the world. That’s not always a given.
You may also appreciate that the Chase Sapphire Reserve® has a $0 foreign transaction fee while you’re traveling overseas.
On the rewards front, you can use the annual $300 travel credit to help pay for your rental car. And after you earn that $300 credit, you’ll earn three points for every $1 you spend on travel purchases, including car rental purchases. (You’ll also get three points for every $1 you spend at restaurants and one point for every $1 spent on all other purchases.)
But all of these rewards and perks will cost you — the card comes with a hefty $450 annual fee.
Check out our review of the Chase Sapphire Reserve® to learn more.
Here’s why: The Blue Cash Preferred® Card from American Express could help you save on insurance on your next long road trip.
The card itself offers secondary coverage on car rentals for up to 30 days. But if you plan on traveling for more than a month, you can buy a separate rental car insurance policy from American Express. For as little as $12.25, you could purchase primary coverage for trips of up to 42 days. (The other cards on this list only provide coverage for 31 consecutive days maximum.)
With the Blue Cash Preferred® Card from American Express, you’ll also earn 3% cash back on purchases at U.S. gas stations, 6% back at U.S. supermarkets on up to $6,000 per year in purchases (1% after that) and 1% back on your other purchases. (The card also offers 6% back on streaming services and 3% back on transit.)
The Blue Cash Preferred® Card from American Express comes with a $95 annual fee.
Read our review of the Blue Cash Preferred® Card from American Express to learn more. If you’re not eager to pay an annual fee, check out this card’s little sister, the Blue Cash Everyday® Card from American Express.
Here’s why: The Chase Sapphire Preferred® Card provides primary coverage for car rental insurance and decent travel rewards.
You’ll receive two points for every $1 you spend on dining and travel purchases, including car rentals. Plus it comes with travel insurance (like baggage-delay insurance, trip-cancellation insurance and trip-delay reimbursement) and no foreign transaction fees.
But you’ll have to weigh that against the card’s $95 annual fee.
To help you decide, learn more with our review of the Chase Sapphire Preferred® Card.
Here’s why: When you’re traveling for business, the Ink Business Preferred℠ Credit Card provides primary coverage for rental cars. This is a great way to cut costs on your next business trip.
And if your business trip turns into a personal vacation, the Ink Business Preferred℠ Credit Card still offers secondary coverage for rental cars.
Just know that it comes with a $95 annual fee.
Check out all the reasons why the Ink Business Preferred℠ Credit Card might be a good option for your next business trip.
To find the best credit cards for car rentals, we looked at travel cards that offer rental car insurance.
We focused on credit cards that offer primary coverage. This is important, because if you get in a car accident you can file a claim with your credit card right away — without going through your personal auto insurance policy. That can help keep your insurance premiums low.
We also looked at the different situations where people might rent a car. If you’re planning an international trip, a different credit card might suit you better than if you’re taking a road trip across the U.S.
Before you rent a car, it’s important to make sure your credit card’s insurance will cover you.
The best way to check that is to read your credit card’s guide to benefits or call the benefit administrator to learn more about your car rental policy. You may find it helpful to print out this information and take it with you to show to the rental agency.
Here are a few common practices to help you use your credit card’s insurance to its fullest.
1. Pay for your rental car in full with the credit card that you plan to use for insurance. If you split the payment with another card, you might not be covered.
2. Don’t double dip. Your credit card may require you to decline the car rental company’s collision-damage waiver (also known as loss-damage waiver, or CDW) for your card’s insurance coverage to kick in. So find out before you’re at the rental counter.
3. Decide if you need to purchase separate liability insurance. Your credit card may cover damage to the rental car. But if you get into a car accident, the credit card issuer won’t necessarily pay for damage you cause to other vehicles involved in a collision or injuries sustained by people in those cars. Check your card’s terms to figure out what other coverage you might need.
4. Find out if you’re already covered. Your auto policy may also cover your rental car. But if you file a claim, your premiums may go up. On the other hand, if your credit card offers primary coverage, you can avoid this by filing directly through your credit card company.
5. Follow the rules. Your credit card probably won’t insure you if you don’t follow the rental agreement. This can include provisions that prohibit other drivers who aren’t listed on the rental agreement from getting behind the wheel, as well as coverage for intoxicated drivers.
If you follow these tips — and read your policy carefully — you should be in good shape the next time you rent a car.
|Earn rewards for purchases at Nordstrom and associated brands — in store and online||Confusing application process considers you for three cards at the same time|
|Immediately earn a $40 bonus rewards note when you make a purchase on the day of card approval (that day only)||Cardmember-only benefits are limited to early sale access and in-store alterations|
|No annual fee||Special payment options create potential for additional interest charges|
|Different, potentially high APRs apply for different types of purchases|
There are three Nordstrom credit card options. When you apply for one of them, you might get approved for it — but if not, you could end up with one of the other two cards instead.
The Nordstrom Credit Card is a closed-loop card, meaning it can only be used at Nordstrom and affiliated stores. Then there are the Nordstrom Visa Platinum® or Nordstrom Visa Signature® credit cards, which can be used anywhere Visa cards are accepted.
If you qualify for the retail card and either a Visa Platinum® or Visa Signature® card, you get to choose which card you want. But if you don’t qualify for one of the Visa cards, you could get the more limiting closed-loop Nordstrom Credit Card.
The Nordstrom Visa Signature® version may be the most difficult to qualify for, since it considers not only your credit profile but how frequently you buy at Nordstrom. It may not be an option if you’re not an especially committed Nordstrom shopper.
You can get rewards from any Nordstrom credit card, but your earning power will depend on which card you have. All three cards allow you to earn …
If you’re approved for one of the Visa cards, you’ll also be able to earn …
Those rewards rates are nothing to sneeze at, but they’re not as high as what you see from other store credit cards. For comparison, the Target REDcard™ offers 5% off all Target purchases, and Gap’s credit cards yield five points for every $1 you spend on purchases at their stores.
Plus, Nordstrom’s credit cards aren’t the only way to earn rewards. The store’s rewards program, the Nordy Club, is free to join and will let you earn one point per $1 on all purchases when you don’t use one of the store’s credit cards.
When your Nordy Club account reaches 2,000 points, you’ll be automatically issued a $20 rewards through your account. (You can also redeem points for smaller rewards-note amounts in increments of $5 using the Nordstrom mobile app.)
How quickly you earn rewards notes will depend on how much you spend on your Nordstrom credit card. Given the rewards rates outlined above, you would have to spend nearly $667 at Nordstrom and its associated stores to earn a single $20 reward.
For those who only buy clothing once in a while, it could take months or years to earn a single $20 note.
The Nordy Club offers multiple levels of benefits based on your annual spending at Nordstrom, regardless of how much of that spending goes on your Nordstrom credit card.
There are also certain perks available only to cardholders. But those card-only benefits vary only slightly among tiers and may not be worth it for everyone.
All cardholders automatically earn Insider status, which is usually only available to Nordy Club members who spend at least $500 at Nordstrom in a year. At this level, the cardholder-only benefits are pretty nice — you get early access to Nordstrom’s popular Anniversary Sale and a $100 alterations benefit that you get in the form of rewards notes.
Influencer, the next level, kicks in when you spend $2,000 at Nordstrom over the course of a year. While this level comes with plenty of extra benefits through the Nordy Club, the only additional card-only benefit is an extra $100 added to your alterations credit.
When you look at the full breakdown of cardholder-only benefits, the relative benefits of each tier with the card look relatively light.
|Benefit level||Annual spending required at Nordstrom||Exclusive cardholder benefits|
Early access to July anniversary sale
Up to $100 alterations benefit
Early access to July anniversary sale
Up to $200 alterations benefit
Early access to July anniversary sale
Up to $300 alterations benefit
There are more-exclusive perks at the Nordy Club’s Icon level, but that status requires a whopping $15,000 in annual spending to qualify.
For everyone else, moving up a tier only pays off if you’re likely to use the additional alterations credit. Even then, the additional spending required to earn those benefits might not be worth it.
TD Bank, the issuer of Nordstrom’s credit cards, does not make it easy when it comes to understanding your potential APR.
If you’re approved for the Nordstrom retail credit card, the APR for Nordstrom purchases will be a variable 25.15% APR.
If you’re approved for either the Visa Platinum® or Visa Signature® card, your variable APR on Nordstrom purchases could range from 13.15% to 25.15%. Additionally, non-Nordstrom purchases have a higher variable APR range of 17.15% to 25.15% on these cards.
The application process means you can’t be sure which of these APRs you’ll receive, and the different rate for non-Nordstrom purchases on the Visa cards could lead to some confusion if you carry a balance
The Nordstrom credit card is only an ideal option for the truly Nordy-obsessed. The card’s early access to the July anniversary sale can be a big perk for those that regularly shop this annual sale, and shoppers who appreciate Nordstrom’s alteration service will find meaningful value in the card-only alterations credits.
Otherwise, Nordstrom fans will probably get more value out of joining the Nordy Club for free and paying for their purchases with a more-versatile rewards credit card. For instance, using a credit card that earns 2% cash back as a member of the Nordy Club would allow you to earn a total of 3% back in rewards on your Nordstrom purchases — the same you’d get from one of the store’s credit cards.
This offer is no longer available on our site: Hilton Honors Card from American Express
|First use of the card for a purchase or balance transfer earns enough bonus points for up to two rewards nights||You might get a different card with fewer benefits than the one you apply for|
|Enjoy a more comfortable stay with automatic status benefits||Disappointing rewards rate for hotel purchases|
|Earn an elevated rewards rate for qualifying gas, utility and grocery store purchases||Heads up: There’s another version of the card with the same name, and it has an annual fee|
|No annual fee|
Normally, we wouldn’t be that impressed by this card’s sign-up bonus. But with the Wyndham Rewards® Visa Signature® Card, you can earn 15,000 bonus points after first use of the card for a purchase or balance transfer — enough to book two free nights at a Wyndham hotel.
Also, the Wyndham Rewards® Visa Signature® Card doesn’t charge an annual fee, so this bonus is actually pretty nice considering there’s no upfront cost. Plus, you don’t have to spend a lot to earn it.
Once you use that sign-up bonus, you might have a hard time earning enough points to score another night at a Wyndham hotel.
The Wyndham Rewards® Visa Signature® Card offers just three points for every $1 you spend at participating hotels. That’s a much lower rewards rate than what you could earn with a competing hotel credit card like the Hilton Honors Card from American Express, which offers seven points per $1 spent on Hilton stays.
To put the rate in perspective, you’d have to spend $5,000 at Wyndham hotels to earn another rewards night.
The good news is you’ll also earn two points for every $1 you spend on gas, groceries and utilities with the Wyndham Rewards® Visa Signature® Card. These everyday expenses could add up to earn you a nice number of rewards points over time.
Rest assured — you can sleep easy with the Wyndham Rewards® Visa Signature® Card.
First, the Wyndham Rewards® Visa Signature® Card offers a complimentary Gold Level membership status. This allows you to check out late and choose your preferred room (within the same category) at participating hotels. While you won’t be allowed to upgrade to a more expensive room, you could request a room with a better view, more space or one that’s been renovated — so long as it’s in the same category as the one you paid for.
Unfortunately, you’re not guaranteed to get the Visa Signature version of the Wyndham Rewards® Visa Signature® Card — even if you’re approved. Barclays, the bank that issues this card, says you could get a Visa Platinum card instead.
To make matters even more complicated, there’s another version of the Wyndham Rewards® Visa Signature® Card — with the same name and everything — that comes with a $75 annual fee. This card, which offers you the potential to earn more sign-up bonus points, includes complimentary Platinum status and generally offers more than the version we’re reviewing here.
Before deciding which card to apply for, consider if you’re willing to pay an annual fee and how much use you might get out of the card. And remember to apply for the right one, because you don’t want to end up with the wrong one or have your application denied for a card you didn’t even want.The best hotel credit cards with no annual fee of 2019
It costs anywhere from 7,500 to 30,000 points to get a rewards night at a Wyndham hotel. But keep in mind that Wyndham has blackout dates that could restrict you from booking a rewards stay on the night you want.
You can also redeem your points earned with the Wyndham Rewards® Visa Signature® Card for airfare, car rentals, gift cards and merchandise.
The Wyndham Rewards® Visa Signature® Card is good for travelers who frequently stay at Wyndham hotels.
This could include business professionals who are always on the road and need to cut travel costs. The earnings rate of two points per every $1 spent on gas purchases is a nice bonus, in particular. It could also make your stay a little more comfortable thanks to the complimentary Gold Level status.
But if you’re looking for the potential to earn more sign-up bonus points, you might want to consider the version of the card with a $75 annual fee.
If you don’t stay at Wyndham hotels on a regular basis, you might be more interested in another hotel card.
Source: Federal Reserve
The rise in credit card interest rates could weigh on consumer spending, which accounts for about two-thirds of economic activity in the U.S.
Rising credit card interest rates could hinder economic growth. Although gross domestic product — the total value of all goods and services produced annually — rose at an estimated 3.2% annual rate from January through March, growth in consumer spending slowed from the fourth quarter of 2018.
If people are discouraged from spending because they’re facing higher annual percentage rates on their credit card debt, the economy could see slower growth.
According to the Federal Reserve of New York, credit card balances stood at $848 billion in the first quarter of 2019, falling from a record high of $870 billion in the fourth quarter of 2018.
Meanwhile, first-quarter results from credit card issuers such as Capital One, US Bank, Discover Financial Services and JP Morgan Chase showed rising credit card charge-off rates as more people fell behind on paying their credit card accounts.
If you’re worried about how to handle your credit card debt in this higher interest rate environment, here are some tips.
|Potentially fast funding if you qualify||High APR|
|Applying won’t affect your credit scores||Must get paycheck via direct deposit (unless you live in New Mexico)|
|No prepayment fees||Must apply online|
OppLoans markets its installment loans to people who are in difficult financial situations and need quick cash. OppLoans, a part of Opportunity Financial, positions itself as an alternative to high-interest payday loans, offering lower interest rates than what you might pay on a typical payday loan. But keep in mind that your annual percentage rate — the cost of borrowing, expressed as a percentage rate, including fees or other charges — will still be quite high.
OppLoans offers loan amounts that range from $1,000 to $4,000, and loan terms range from six to 36 months. The lender also offers a line of credit in Kansas, Tennessee and Virginia.
Here are a few other things to know about OppLoans.
When you apply for a personal loan with OppLoans, the lender doesn’t check your credit reports with the three major credit bureaus: Equifax, Experian and TransUnion. Instead, it relies on alternative credit reports from Clarity Services, which is a part of Experian.
OppLoans also looks at other factors to determine if you’re approved for a loan, including …
OppLoans doesn’t accept phone or in-person applications. You’ll have to complete the application process online. This may be a drawback if you don’t like submitting sensitive information online.
If you’d like to pay off your loan early or make additional payments at any time, you won’t be penalized, because OppLoans doesn’t charge prepayment penalties. This is a benefit if you’d like to reduce the amount of interest you’ll have to pay over the life of your loan.
To be eligible for an installment loan through OppLoans, you must receive your paychecks through direct deposit. If you live in New Mexico, you’re exempt from this requirement. If you get paid in cash or your employer doesn’t offer direct deposit, you may need to look elsewhere for a personal loan.
According to OppLoans, loan applications processed and approved before 7:30 p.m. Eastern time Monday through Friday are usually funded by the next business day. So if you need an emergency loan for cash as soon as possible, an OppLoans installment loan may be able to help.
OppLoans offers a variety of resources, including free interactive classes through its learning platform, OppU, to help educate people about their finances. Here are a few more details you may want to know.
If you have bad credit (or no credit), and you need emergency cash but can’t wait for your next paycheck, OppLoans might be a good option for you, particularly if you plan to pay off your loan early since there’s no prepayment penalty.
But it’s important to remember that OppLoan’s interest rates are still very high. You may be better off using a credit card if you can make monthly payments in a timely manner, since the average credit card interest rate is less than OppLoan’s interest rates.
You may also want to consider a payday alternative loan from a federal credit union, since these loans cap interest at a much lower rate. Just keep in mind that these loans are different from typical payday loans, which can be incredibly expensive, and so this option should be a last resort.
If you want to apply for a loan with OppLoans, you’ll need to visit its website and click “Apply Now” to begin the online application process. You’ll have to create an account and be sure to read all the fine print. Here is some basic information you’ll need in order to apply.
You may also be required to provide proof of identity with your driver’s license or other identifying documents.
If you’re not sure OppLoans is the right lender for you or you don’t meet eligibility requirements, here are some other options to consider.
Whether you need to pay a tax on your vehicle depends on state and local law. It may be determined by where your car is registered or where your car is used. The tax you may owe is usually based on the car’s value. If you don’t agree with an assessment, you may be able to challenge it.
It’s important to understand the types of vehicle taxes you may owe so that you can plan for those costs. This guide will explain some common car taxes to help you decide if a car is affordable for you.
Car taxes can take different shapes depending on the state, county and municipality. In some cases, you may need to pay a tax to both your state and local governments.
When you purchase or lease a new or used car, you’ll probably have to pay a sales tax or use tax. For example, in Florida you must pay a 6% sales tax for vehicles purchased, including cars, trucks, motorcycles and truck tractors. Some municipalities and counties also charge a sales tax on top of that.
A sales tax is typically due whenever a vehicle’s ownership changes hands during a purchase. That includes a purchase from a dealer or a sale between private parties. Check to see if your state has an exemption for vehicle transfers between close family members or cars given as gifts.
Buying a car out of your state typically won’t save you from paying a sales tax. You must follow the tax rules of the state where you register the vehicle and pay any taxes when you bring the car back home.
The sales tax may be due at the time of purchase or when you register the vehicle. When you lease a vehicle, the sales or use tax you pay is set by the state or county where your vehicle is registered.
Depending on your state or municipality, you may also owe a personal property tax or excise tax. These taxes are usually paid yearly based on the current value of your car.
About half of all states charge a vehicle property tax, according to a 2019 WalletHub article.
Some municipalities also charge car owners annual taxes. In Boston, for example, residents pay an annual excise tax of $25 per thousand dollars of a car’s value. This tax is in addition to the vehicle sales and use tax that Massachusetts charges.
If you owe an excise or personal property tax, you’ll generally be sent a tax bill and must pay by the deadline.
As a general rule, your car’s tax — which can be influenced by a number of factors — is usually calculated in part by multiplying the tax rate by the value of your vehicle. The exact formula depends on what type of tax you’re paying — such sales tax or property tax, for example — and which state- or municipality-specific tax rates are applicable.
Your car’s sales and use tax is typically based your vehicle’s purchase price, but other factors, such as the category of vehicle you have, can also affect this. Depending on the state and city’s tax rates, you may need to pay a sales tax on the vehicle itself and any accessories included with the car.
The tax rates where you live determine how much your total bill will be. For example, for sales and use tax in Virginia, you pay either $75 or 4.15% of the vehicle’s gross sales price, whichever is greater. If you have an electric vehicle, you will also have an additional $64 fee — excluding mopeds.
If a state or municipality charges an excise or personal property tax on your vehicle, it also sets the rules for how your car is valued.
For example, in Boston, the Massachusetts Registry of Motor Vehicles determines values for the purpose of calculating excise tax.
But in Fairfax County, Va., the county typically uses J.D. Power’s National Automobile Dealers’ Association Official Car Guide to determine a vehicle’s value.
Once your vehicle’s valuation is determined, you pay the applicable tax rate based on that value. This varies based on your state or municipality’s rules. In Fairfax County, the property tax you’d pay on most vehicles would be $4.57 for each $100 of assessed value. A vehicle valued at $20,000 and taxed at this rate would be charged an annual tax of $914.
In Boston, you pay $25 per $1,000 in vehicle value, so a $20,000 vehicle would result in a tax of $500.
Property owners may have the opportunity to challenge valuations by filing an appeal.
Each state, county and municipality determines what it uses your tax payments for. For example, the taxes may be used to fund road maintenance and construction costs.Learn more: What is the federal gas tax?
You want to know both state law and local rules for car taxes so you can understand the total tax you’ll owe. Your state’s Department of Revenue is a good place to start. Your state’s DMV can also provide information about taxes you may owe.
Be sure to understand these taxes upfront to help you understand the true cost of owning a car.
|Works with people who are trying to rebuild their credit||Does not issue loans directly|
|No fee for submitting a loan request||You may need a 10% down payment|
|You can shop for a new or used car and apply for financing on one platform|
If you plan on financing a new or used car with a loan, it’s important to shop around for both the right car and the right loan. CarsDirect can help you do both.
In this CarsDirect review, we’ll look at how the site works and if it may be a good fit for you.
CarsDirect is not a lender — it’s a search hub that helps you find loans from lenders it partners with. The site’s tools let you compare multiple auto loan options.
CarsDirect says its customers usually are able to purchase their vehicles within 24 to 48 hours after completing the application process with a lender.
CarsDirect doesn’t just connect you with car loans. You can search for new and used cars and your loan on the same platform. That can make the purchasing experience smoother because it takes what can be a multiple-step process and condenses it into one process on one site.
If you’ve filed for bankruptcy or have string of late payments on your credit reports, getting approved for a loan may not be easy. CarsDirect can help connect you with lenders that will take your financial circumstances into consideration.
Just remember, if you have bad credit, you’re more likely to pay a higher interest rate on your loan. The lender you’re paired with may require a 10% down payment depending on your credit.
If you’re thinking about applying for a loan through CarsDirect, here are some other details you should know.
CarsDirect primarily markets to borrowers with less-than-stellar credit. If you have good credit, you may find a better deal going through your bank, local credit union or other online lender.
CarsDirect, which doesn’t charge you an application fee, helps you compare the best deals. That will help you understand if you’re getting a competitive rate.
If you apply, you’ll also want to be comfortable with multiple lenders contacting you to vie for your business.
The loan application process starts at CarsDirect.com. The application takes only a few minutes to complete if you have all of your information handy. Head to the auto loans page and click the green “Get Started” button to begin your application.
You’ll need to provide this information:
Once you’ve applied, CarsDirect says you can expect to get a call from potential lenders within 24 hours. You’ll need to complete the application process with the lender and you may need to provide additional documentation such as car insurance, proof of income or proof of residency.
If you want to explore other lending options, here are a couple to consider.
|Provides the ability to prequalify||Only offers loans for refinancing and lease buyouts|
|Offers GAP insurance and extended repair coverage in some states||Funding may take a couple of weeks|
|Allows co-applicants||Publishes limited information about eligibility requirements|
Clearlane, part of Ally Bank, isn’t a lender. It’s an online marketplace that connects consumers with national, regional and local auto finance providers. Here are a few more things to know about Clearlane.
Clearlane only offers auto loans for refinancing and lease buyouts. If you want a loan to buy a car from a dealership or private seller, consider working with a bank or credit union, where you’ll likely have more financing options.
Lenders typically require that you complete a formal loan application, which usually requires a hard credit inquiry, before you can see your interest rate and monthly payment options. But Clearlane also offers the ability to apply for prequalification with a soft credit inquiry, so you can see if you might qualify and receive potential loan offers without a negative impact to your credit scores.Learn more: Hard credit inquiry vs. soft credit inquiry
Keep in mind that if you choose an offer and submit a formal loan application, the lender will conduct a more extensive review of your credit history and other factors. Based on its review, your actual interest rate and terms may be different from what you receive during the prequalification process.
Guaranteed asset protection insurance and extended repair coverage are available in some states. GAP insurance can help cover the difference between what you owe on your auto loan and the current value of your car if it’s stolen or totaled in an accident. Extended repair coverage (or extended warranty) may help cover the cost of repairs after the manufacturer’s warranty expires.
If you want to finance a lease buyout or refinance your current auto loan, here are a few more things to know about getting a loan through Clearlane.
An auto loan through Clearlane might be a good fit if you plan to refinance your auto loan or buy the car you’re leasing. It might also be a good option if you want to see potential interest rates and loan terms from multiple lenders.
And because the prequalification process doesn’t require filling out loan applications, your credit scores won’t be affected as you compare potential offers through Clearlane to find the best rates and terms for you.
Clearlane offers a simple prequalification process that can be completed online within a few minutes.
1. Click the “Get Started Now” button on the home page.
2. Choose whether you want to refinance your existing auto loan or buy your leased vehicle by clicking the “Get Started” button under the right option.
3. Provide your vehicle information, including your car’s make, model and year. You’ll also need to provide the estimated mileage on the car and the amount you want to borrow.
4. Enter your personal information, including name, email address, date of birth and annual income. Add your co-applicant’s information, if you have one.
5. Provide your housing information, including your address, whether you rent or own, and your monthly rent or mortgage payment.
6. Enter your mobile phone number and click the “Submit” button to see if you prequalify.
If you receive loan offers and want to move forward, you’ll need to complete the lender’s credit application, which includes a hard credit inquiry (so note that applying might ding your credit scores).
If you’re not sure a loan through Clearlane is right for you, here are two other lenders to consider.
This is because credit card issuers shouldn’t approve a card transaction that puts you over your limit unless you’ve specifically consented to over-the-limit charges.
You also wouldn’t usually use the term “overdraft” when it comes to spending more on your credit card than what you have in available credit; with credit cards, this is usually known as “going over your credit limit.” Overdrafting is the term you’d use if you spend more money than what’s available in your checking account.
But it’s still possible to go over your credit card limit if you’ve opted into some sort of over-the-limit program with your card issuer. Here’s what you should know.
In most cases, if a purchase is going to push you over your credit limit, your card transaction will be declined and you won’t have any additional fees or balance overages to deal with.
This is because of the Credit CARD Act of 2009. This law says card issuers can’t charge you any over-the-limit fees unless you’ve specifically consented to transactions that will take you over your limit in advance.
Your card issuer may offer you the ability to go over your credit limit with programs known as over-the-limit coverage or protection plans. If you opt into this kind of program, your card issuer can authorize card transactions that exceed your limit.
But these programs come with the potential for extra fees, so make sure you read the fine print. The first time you go over your limit, you can usually be charged a fee of up to $25. After that, the fee can go up to $35 if you go over your limit a second time within six months from the last time you exceeded your credit limit — although it won’t be more than the amount you spent over your limit.
This fee may not be a one-time thing, either. If your balance remains above your limit in the next billing cycle, you could be charged the over-the-limit fee again. And if you can’t pay the minimum payment, you could be hit with late fees. You may also face increased interest rates with a penalty APR if you go over your limit.
Another potential consequence of going over your credit card limit is a drop in your credit scores. This is because your credit scores factor in your credit utilization ratio, or how much of your available credit you’re using. Many experts recommend keeping your overall credit card utilization below 30% of your balance.
In other words, if you have $10,000 in available credit but you’ve borrowed $10,500, you could be seen as a credit risk because you’ve got a higher utilization ratio.
If you’ve opted into over-the-limit coverage, you might already see the impact of going over your card limit with additional fees on your statement.
Here’s what you can do in case you’ve spent over your credit limit.
The first thing you can to do is turn off the over-the-limit coverage. You can request to opt out of the coverage, but it may require sending a written request. Let your credit card issuer know that you don’t authorize any additional transactions that will exceed your available credit.
Pay down your card balance until it’s below your credit limit again. This way, you won’t be continually hit with fees each billing cycle that your account balance remains above the limit.
If you’re concerned about going over the limit on your credit card, one longer-term option is to request a credit limit increase.
Some issuers will increase your credit card limit automatically from time to time, and you can also often request a credit limit increase with a quick phone call to your credit card issuer. Sometimes you can even request a credit limit increase online.
Just remember, if you need to request a credit limit increase — and are approved — make sure that you won’t feel tempted to meet that limit by spending more just because it’s there.
If you’ve gone over your credit limit as a result of deeper financial issues, it may be a good idea to stop using the card and focus on paying down the debt. A budget can help you feel more in control of your finances and get a handle on your debts. Here’s how to make a budget.
If keeping the card open and trying to not to use it doesn’t work for you, you might want to consider closing your credit card account altogether. You’d still be responsible for paying your monthly minimum payments on time and in full and as agreed — and you can still be charged interest on the amount you owe — but you won’t be able to put new charges on the card.
The upside is that you’ll stop your balance from growing with new purchases. The downside is that closing a credit card could increase your credit utilization ratio, decrease your age of credit history and negatively impact your credit. But it might be worth it to take the hit if you’re battling unhealthy spending habits with your card.How to cancel a credit card: The do’s and don’ts every cardholder should know
If you’ve opted into a program with your card issuer that allows you to go over the limit with your credit card, it’s similar to overdrawing your bank account. With a credit card, you can be charged over-the-limit fees — and with your bank account, a negative balance means you can be charged overdraft fees.
If you do find yourself going over the limit and facing these fees, act quickly so you don’t end up owing more on your credit card than what you can comfortably afford to pay off.
|Amex can pay creditors directly or deposit the funds in your bank account (if you qualify)||Must be an existing eligible cardholder and have an online account|
|No origination or prepayment fees||Limited time to accept a loan offer before it’s withdrawn|
|Decision within minutes||Max. amount you can borrow is $40,000|
|APR won’t be higher than the max. APR quoted in your preapproval offer|
American Express offers existing eligible cardholders unsecured personal loans and business loans issued by American Express National Bank. The bank offers its personal loans in amounts from $3,500 to $40,000, with terms ranging from 12 to 48 months. With direct payments for debt consolidation and competitive interest rates, an Amex personal loan could be a good solution for consolidating high-interest debt.
Here are some other things you should know about American Express personal loans and what to consider if you’re not already an American Express cardholder.
American Express limits its personal loan applications to existing eligible cardholders. If you’re not already an American Express cardholder, you may want to consider becoming one if you want to apply for a personal loan with the bank.
Keep in mind that American Express personal loans don’t include the rewards programs and other benefits that can come with an American Express credit card. These loans are primarily designed to help cardholders consolidate debt or fund things like a wedding or home-improvement project.
American Express offers competitive personal loan APRs to cardholders. The lender considers at least nine months of account history, along with other factors like your credit history and current financial picture, when looking at your application and deciding on the terms of your loan. If you’re preapproved and then decide to formally apply, your offer APR may be different than your preapproved APR. But Amex says it won’t exceed the maximum APR you were preapproved for.
While American Express doesn’t specify credit score minimums for approval, you must have been approved for at least one of its credit card before applying for a personal loan. Cardholders with higher credit scores generally qualify for lower APRs — which could help save money long term.
While you can use an American Express personal loan to plan the ultimate getaway, pay for a wedding or consolidate credit card debt, there are plenty of restrictions on what you can use your loan for.
For example, you can’t use the loan to fund any postsecondary education expenses, real estate purchases, business costs, securities or vehicle purchases (other than as down payment).
If you need help funding your business, American Express offers business loans to preapproved American Express business cardholders. These loans are restricted to business purposes only.
Take note that you may only have one personal or business loan at a time. If you already hold one type of American Express loan, you can’t apply for another one until your loan balance is repaid in full.
The preapproval process for an American Express personal loan takes only a matter of minutes before a decision is made. If after preapproval you formally apply and then are approved for a loan, you’ll have three days to review and sign your loan agreement. Once you sign your loan agreement, your loan funds should be directly deposited into your bank account, or sent directly to your creditors, within three to five business days.
If you choose not to sign the loan agreement, or don’t add your bank account information within the allotted time frame, Amex will withdraw the offer and won’t fund the loan. If you decide to accept the loan after all but miss the deadline to sign the agreement or add a bank account, you’ll have to wait another 60 days before you can begin the process all over and apply for preapproval for another personal loan.
American Express personal loans don’t come with origination, application or prepayment fees. But if you’re late on a payment, you’ll be charged a late-payment fee of $39.
If you’re considering an Amex personal loan, here are some additional things you should know.
American Express personal loans may be a good option for Amex cardholders who need to consolidate high-interest credit card balances — as long as those balances aren’t on Amex credit cards. The lender will send payments directly to up to four of your credit card accounts from other issuers.Paying off credit cards: Top reason to get a personal loan
If you’re an eligible American Express cardholder, you can apply for preapproval directly through your online account. Once you log in and answer a few questions, you should receive a decision in a matter of minutes.
Keep in mind that being preapproved doesn’t mean you’ve been approved for an actual loan. If you’re preapproved, you’ll need to complete a full application to find out if you’ll receive a loan offer.
Here’s some of the personal information you’ll need to provide.
American Express may also request other information and documentation that verifies your identity, like pay stubs or tax returns.
If you’re not currently an American Express cardholder and want to explore other loan options before making a decision, here are a couple to consider.
Form 1099-Q reports total withdrawals from QTPs like 529 plans or Coverdell educational savings accounts. Knowing what to do with this form can help you avoid paying taxes and penalties on withdrawals that could be tax-free.
Both the 529 college savings account and Coverdell education savings account, or CESA, are tax-advantaged investment accounts that can help your family save for education expenses. The accounts allow your earnings to grow tax-free as long as you use withdrawals only for qualified education spending and follow other IRS requirements for the accounts.
If you withdraw funds from one of these accounts during the tax year, the account administrator is required to issue Form 1099-Q to you and the IRS. This short form provides the following information:
The administrator may also enter a distribution code in the blank box below boxes 5 and 6, although they’re not required to do so. The distribution codes, which are provided by the IRS, are designed to help taxpayers determine whether their distribution is taxable income.
If you received distributions from more than one administrator or more than one account with the same administrator, you might receive multiple 1099-Qs.
If you used all the money you withdrew from your QTP or Coverdell ESA to pay for qualified education expenses, and meet other IRS requirements, the distributions aren’t taxable and you don’t need to report them as income. Just file your 1099-Q with your tax records.
Definitions and caps vary for both 529 plans and Coverdell ESAs, but typically qualified education expenses for higher education include tuition, fees, books, supplies and equipment required for enrollment or attendance at an eligible educational institution. If the student is enrolled at least half time, funds can also be used to cover room and board. But room-and-board expenses are limited to the amount the school charges for on-campus housing, even if the student chooses to live off campus.
But if your distributions exceeded your qualified education expenses, you used the money for nonqualified expenses, or you had another distribution, deduction or credit for the same expenses, some of the earnings reported in Box 2 may be taxable. Instructions for calculating the taxable portion of your distribution are included in IRS Publication 970, and the result is added to the total on Line 21 of Schedule 1 attached to your Form 1040.
You may also need to calculate a 10% additional tax on any amount included in your income. You figure and report the penalty using Part II of Form 5329, and the result carries to Line 59 on Schedule 4 attached to your Form 1040.
In certain circumstances, you may qualify for an exception to the penalty if the desginated beneficiary of the account …
You may also qualify for an exclusion if the amount was included in income because you used the expenses to calculate the American opportunity or lifetime learning credit. There are additional requirements for coordinating with these credits.
And, for distributions from Coverdell ESAs, you may also qualify for an exception for the 2018 tax year if you took a distribution of an excess 2018 contribution before June 1, 2019, and included the distribution in your gross income for the year in which you made the excess contribution.
If you receive Form 1099-Q, don’t panic. As long as the distribution was spent on qualified education expenses and meets all other qualifications, you can simply save the form with your other tax documents and records of how the funds were used.
If you do need to include all or part of the distribution on your tax return, follow the instructions for calculating the taxable portion in Publication 970. And try to avoid taking unqualified withdrawals next year so that you can avoid losing your savings to taxes and penalties.
|Considers people with poor to fair credit scores||High interest rates|
|May reduce interest rates, for residents of most states where it does business, after you make on-time payments||Small loan amounts|
|Prequalification with a soft credit inquiry||Not available in all states|
Rise Credit is an online lender that offers small personal loans — $500 to $5,000, depending on your state — and considers people with poor to fair credit. The lender is pretty upfront about its cost of borrowing: It calls its loans “an expensive form of credit,” because the annual percentage rate, or APR, on these loans can get very high.
On the upside, the APRs may still beat those of title loans and payday loans. Still, we recommend that Rise loans be a last resort, used only in emergency situations for sudden expenses such as car repairs, medical care or crucial travel. If you do take out a Rise personal loan, try to pay it off as soon as possible to save on interest. And know that there’s no prepayment penalty if you pay off the loan early.
Your APR will depend on the state in which you live, your income and your credit, but it could reach triple digits.
Here’s how that APR can really cost you. Say you live in Illinois and take out a $2,000 loan from Rise with an APR of 98.69% and a 16-month term. On top of paying back the $2,000 loan, you’ll pay an eye-popping $1,488.32 in interest.
Rise says you can “progress to better rates” by making on-time monthly payments but doesn’t provide further detail. This rate-reduction program isn’t available to residents of Kansas or Tennessee.
Rise considers people with lower credit scores. If you take out a loan and your credit improves, you may be able to qualify for better rates and terms down the line if you get a new loan with a traditional lender.
Rise reports payments to a major credit bureau, which is why a Rise loan can help you boost your credit if you make on-time payments. The lender also provides a free look at your TransUnion® credit score, sends credit alerts and offers financial resources.
Rise is owned by Elevate, a Texas company that owns several other lending companies focused on people with less-than-stellar credit. Here’s what else you need to know about Rise loans.
Rise personal loans may be a good option for people who need money quickly and have trouble getting approved by other lenders because of their credit. But given the lender’s high APRs, we suggest exploring all possible loan options and alternatives before getting a Rise loan.
Alternatives might include getting a payday alternative loan from a federal credit union or asking a trusted friend or relative to co-sign a loan from another lender, which can increase your odds of approval and result in a lower interest rate. Be sure to shop around and compare all your options.
If you do get a Rise loan, keep in mind that you have five business days to change your mind and pay back the principal.
Rise offers the ability to apply for prequalification with no effect on your credit scores. To apply for prequalification, you’ll need to provide the following information:
If you prequalify and decide to get a Rise loan, you’ll need to submit a formal application, which will result in a hard credit inquiry. If your application is processed and approved by 6 p.m. Eastern Standard Time on the day you apply, you can get your money as soon as the next business day.
If you’re not sure if a Rise loan fits your needs, here are some other options.
A Roth IRA allows you to save after-tax dollars in a retirement account. Roth IRAs work a bit differently than traditional IRAs or employer-sponsored savings plans like 401(k)s. But they also have some unique advantages.
Let’s look at some things to know about Roth IRAs, who can contribute to them, and the Roth IRA income limits for the 2019 tax year.
Like a traditional IRA (or individual retirement arrangement), a Roth IRA allows you to contribute money into an account to save for retirement. But Roth IRAs differ from traditional IRAs in several important ways.
“[With a Roth IRA], you have complete accessibility to your contribution,” says René Nourse, a certified financial planner and founder and CEO of Urban Wealth Management. “It’s a dual manner of saving for now and saving for the future.”
As long as you’re 59 ½ or older and your withdrawals are qualified distributions, “you can pull out the principal and these contributions aren’t taxable because you’ve already paid taxes on them,” Nourse says. But if you’re younger than 59 ½, you may need to pay a 10% additional tax on withdrawals, unless you qualify for an exception.Learn more about the different types of IRAs
You can open and contribute to a Roth IRA on two conditions: You (or your spouse if filing jointly) have taxable compensation and your modified adjusted gross income (your income after adjustments like deductions) meets the limitations. But contribution limits can prevent certain people from contributing to a Roth IRA.
If you meet the income limitations for 2019, you can make a maximum contribution of $6,000 to a Roth IRA if you’re younger than 50 (up to $7,000 if you’re 50 or older).
But if your taxable compensation for the year was less than the maximum contribution limit, your taxable compensation amount for the year then becomes your maximum contribution limit. For example, say your taxable compensation for the 2019 tax year was just $5,000 and you’re younger than 50 — the most you could put into your Roth IRA for the year would be $5,000.
How much you can contribute also depends on your tax-filing status.
Here’s a chart that details Roth IRA contributions and how they phase out depending on your filing status and income.
|Tax filing status||Modified AGI||Contribution limit|
|Single, head of household or married filing separately (and you didn’t live with your spouse during the year)||
● Less than $122,000
● At least $122,000, but less than $137,000
● $137,000 or more
● Up to the $6,000 limit ($7,000 if you’re 50 or older)
● Reduced contribution
● No contribution allowed
|Married filing jointly or qualifying widow(er)||
● Less than $193,000
● At least $193,000, but less than $203,000
● $203,000 or more
● Up to the $6,000 limit ($7,000, if you’re 50 or older)
● Reduced contribution
● No contribution allowed
|Married filing separately (and you lived with your spouse at any time during the year)||
● Less than $10,000
● $10,000 or more
● Reduced contribution
● No contribution allowed
While your contribution limit is clearer if you’re at the bottom of these ranges, figuring out your reduced contribution if you’re in the middle can be tricky. Fortunately, the IRS provides worksheets to help you sort this out. Once you’ve determined your modified AGI, you can use Worksheet 2.2 in IRS Publication 590-A to help determine your contribution limit.
While a Roth IRA can help you save for retirement, it’s also important to stay within your annual contribution limit. If you don’t, you could be hit with a tax penalty on the extra contribution amount.
For example, if you use Worksheet 2.2 and find that you’re only allowed a $3,000 contribution for the year and you’ve already contributed $5,000, Nourse says the best thing to do is withdraw your excess contribution. Otherwise, the IRS will apply a 6% tax to the excess.
“If you discover it before you file your tax return, you can pull it before your tax-filing deadline,” she says.
Maybe retirement seems as if it’s years away, but the choices you make today can help secure your future tomorrow. A Roth IRA can be a valuable retirement savings tool, if you’re eligible to participate in one. Consider maximizing your contributions and stay within the limit designated for your income and filing status.
Nourse says it’s important to remember that you can make contributions to your Roth or traditional IRA up until the federal filing deadline for a given tax year (excluding extensions). So even if it’s Dec. 31 of the tax year and you haven’t made your full Roth IRA contribution, you still have some time to save as much as possible and potentially grow your retirement savings.
|Considers people with low credit scores||Charges origination fees in some states|
|Offers the ability to apply for prequalification||Extremely high interest rates|
|Funding in one to two business days||Not available in all states|
Based in San Diego, Personify Financial offers installment loans that can be as low as $500 and up to $10,000, but the loan amounts offered vary by state.
If you have bad credit, it can be difficult to find a lender willing to give you a loan. If you’ve had trouble getting approved in the past, Personify Financial may be an option. Personify looks beyond your credit scores and credit history to consider more of your financial situation.
Although a loan from Personify Financial isn’t a payday loan, the interest rates can still be much higher than what many other lenders charge. Personify Financial’s starting annual percentage rate, or APR, is close to the maximum APR some other lenders charge. And depending on factors like where you live and your credit, interest rates can reach the triple digits.
If you need cash quickly, you may be willing to sign off on that interest rate just to get the loan. But it’s important to understand how that interest can add up.
Let’s say you took out a $3,500 loan with an APR of 179.65%. With a three-year repayment term, your monthly payments would be $527.45. By the end of your loan term, you will have paid $15,488.20 in interest — more than four times your original loan amount — for a total loan cost of $18,988.20.
While Personify Financial doesn’t charge an application fee, it might tack an origination fee onto your loan. Depending on the state you live in, Personify may charge you 5% of your loan amount.
To put that into perspective, if you took out a $1,000 loan with a 5% origination fee, Personify Financial would add $50 to the cost of your loan. Your new loan balance would be $1,050. Depending on the size of your loan, the origination fee can add significantly to your debt.
In addition to origination fees, Personify charges a fee for late payments or if you don’t have enough money in your bank account to cover a payment.
Here are a few other important details to know about Personify Financial.
Personify Financial loans may be good for people with low credit scores who need a smaller amount of money quickly to fund an emergency expense. But given the high interest rates and potential origination fees, we recommend only getting a loan from Personify Financial if you’ve exhausted all other options.
Possible lower-cost alternatives could be a payday alternative loan from a federal credit union or finding a friend or family member with good credit who’s willing to co-sign a loan with you. This can increase your odds of approval and help you get a lower interest rate.
If you have healthy credit, you can likely find a personal loan with a much lower APR elsewhere.
You can complete Personify Financial’s prequalification application online in just minutes. To see if you prequalify, you’ll need to provide your …
If you prequalify, you’ll be able to see your potential loan offers. If you decide to apply for a Personify Financial loan, you’ll need to fill out a formal loan application and may be asked to provide documentation to verify your source of income, employment or identity. As part of the application process, Personify Financial also requires you to log into your checking account so it can verify your income and other financial information.
If you’re not sure if a loan from Personify Financial is right for you, here are some other options.
The Federal Trade Commission says these Social Security scam calls are on the rise. In fact, the FTC received 76,000 complaints in the last 12 months about this phone scam, up from just 3,200 complaints in 2017. Victims of this scam reported collective losses of $19 million in those 12 months, according to the FTC.
How can you protect yourself and keep your personal information safe? Check out some tips below.
There are a few tell-tale signs to look out for in this scam.
The fraudsters are going to pretend they’re from the Social Security Administration — and they’ll likely be pretty convincing. The callers often say that you need to provide highly personal information — like your full Social Security number — to prevent your account from being suspended.
The scammer may then ask you to withdraw money from a bank account and put it on a gift card to keep your Social Security or bank accounts from being seized.
If you get a call like this, hang up. This is a scam. The FTC says the Social Security Administration would never threaten your benefits or tell you to put money on a gift card, wire money or send cash.
The first thing you should do if you notice any of the red flags above is hang up. Remember, even if you answer a call from what appears to be the real Social Security Administration number, 1-800-772-1213, it could still be a scammer.
The safest thing to do is end the call and dial the number yourself so you can speak to a real Social Security employee and confirm whether the agency actually needs information from you.
If you do get one of these scam calls, you can file an online complaint with the FTC to help the agency warn others.
The important thing to remember is that your personal information is yours, and you shouldn’t feel pressured to give it out. In addition to the tips above, there are some other ways to reduce your risk of scams in the digital age.
“When the lender walks out the door and closes it behind him, the tax man knocks,” says Riley Adams, a CPA from financial blog Young and the Invested.
That’s because the IRS generally treats forgiven and canceled debts like income. For example, if you settle with your credit card company for $5,000 less than you owe, the IRS views it the same as if your credit card company cut you a check for $5,000.
But all hope isn’t lost — the tax code has a number of exceptions and exclusions to this rule. And even if you do end up owing, you may be able to apply for an IRS payment plan so that you can pay off your tax debt over time.
If you can’t repay your debts, like credit card debt or a personal loan, it’s possible that your lender might agree to settle for less than you owe or forgive your debt entirely. This can bring a welcome sigh of relief — until you get a Form 1099-C in the mail when it’s time to do your taxes.
When qualifying creditors cancel $600 or more of debt for an individual, corporation, partnership, trust, estate, association or company, they must issue a 1099-C, which shows the amount of debt forgiven. Creditors must do this even if the debtor isn’t required to report the amount as income, and they must issue the form for the tax year when the debt was canceled.
“People usually associate tax forms with some kind of exchange of cash,” says Logan Allec, a CPA and owner of the personal finance site Money Done Right. “Either cash they made, like W-2 income or a 1099 for interest, or cash they paid, like a 1098 for mortgage interest or a 1098-E for student loan interest.”
Even though you might not think of your canceled debt as “taxable income,” the IRS may count it that way. And just like any other income, you have to report and pay taxes on it. In this case, the creditor reports that income to the IRS in the form of a Form 1099-C.
If your lender agreed to accept less than you owe for a debt, you might get a Form 1099-C in the mail. Alternatively, your lender might automatically discharge the debt and send you a Form 1099-C if it’s decided to stop trying to collect the debt from you.
While lenders are only required to send 1099-Cs if a canceled debt is worth $600 or more, you’re still responsible for reporting smaller amounts of canceled debt as gross income on your federal income tax return. And you may be obligated to pay tax on canceled debt, even if you don’t receive a 1099-C for it.
“Just because you receive that form doesn’t necessarily mean that you’re going to have to pay tax on the canceled debt,” says Allec. “Congress has laid out some exceptions and said, ‘Well, if one of these exceptions applies to you, then you don’t have to pick up this cancellation of debt as income.’”
If you’re lucky enough to qualify for any of these situations, you may still need to file a Form 982 along with your federal tax return. The form explains why your discharged debt should be excluded from your gross income.
If someone (like a friend or family member) lends you money and later tells you not to worry about repaying them, the IRS considers this type of debt cancellation to be a gift. Your benefactor isn’t required to issue you a Form 1099-C, and you aren’t required to report it as income.
If your total debts (including the forgiven debt) are greater than your total assets then you aren’t required to pay taxes on the canceled debt, up to the amount you’re considered insolvent. You do have to file a Form 982 to qualify for this exclusion.
“Let’s say you have $20,000 of debt, including the forgiven debt, and you have $12,000 of assets,” Allec says. “You’re insolvent by $8,000. But then let’s say you had $10,000 of that total debt forgiven. You can only exclude $8,000 of that debt because that’s the amount you were insolvent.” So you’d still have to pay taxes on $2,000 worth of income.
When you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, some or all of your debts may be canceled. The IRS doesn’t require you to pay taxes on debt that’s canceled through bankruptcy court or through a plan approved by the court. You’ll need to file a Form 982 with your tax return for this exclusion.Learn more: Can bankruptcy wipe out tax debt?
Generally, debt forgiven through student-loan forgiveness programs is also treated as debt income. For example, if the balance of your federal student loans is forgiven while you’re on an income-driven repayment plan, you may still owe taxes on the forgiven amount unless you qualify for another exception.
But if your student-loan balances are forgiven as part of the Public Service Loan Forgiveness program, you won’t have to report that forgiven debt as income. Similarly, with new changes from the Tax Cuts and Jobs Act, if your federal student loans are discharged because you become disabled, you won’t need to include that canceled debt in your income.
Finally, you may not have to pay taxes on certain forgiven debts resulting from your business. If you’re a farmer, earned at least half your income from your farm in the three tax years before the current tax year, and have farm-related debt forgiven by a qualified person, you won’t have to include the canceled farm debt in your income.
Similarly, if you have debt from business real estate canceled, you may not owe any taxes on this either. You’ll need to file a Form 982 for this exclusion. And the exclusion amount may be limited if you also have an insolvency or bankruptcy.
If you’re struggling to pay your bills, debt relief can feel like getting a fresh financial start. But before you can begin rebuilding your finances, it’s important to know whether you’ll owe federal income tax on the forgiven debt.
Regardless of whether you receive a Form 1099-C, you may have to report canceled debt as income, since the IRS generally considers forgiven debt to be taxable income. Under certain circumstances, you may qualify for an exception. But if you do owe tax on forgiven debt, you may be able to apply for a payment plan with the IRS, which could allow you to spread out your repayment over time.
When a deceased person leaves behind debt, like credit card bills, their estate pays off the balances. If there isn’t enough money to pay them and no one else co-signed for the debt, creditors may be out of luck.
That’s because family members of a deceased person are typically not obligated to use their own money to pay for credit card debt after death, according to the Federal Trade Commission. But there could be some exceptions, like for joint accounts and certain laws that vary by state. Here’s what to know.
Everything a person owns at the time of their death, including everything from money in the bank to their possessions to debts they owe, is collectively called an estate. If the deceased person has debt, then the executor of the estate will go through a process called probate. The executor is the person named in the deceased person’s will to handle their affairs.
During the probate process, bills are paid off using the estate’s assets. Due to certain provisions, some assets may not be included in this process because they don’t transfer to the estate, so these won’t be used to pay creditors.
Typically, a relative of the deceased person is expected to notify any lenders — including credit card companies — when that person dies. The CARD Act of 2009 says that the card issuer must promptly notify the estate executor if any balance is due, and the issuer can’t add any more fees or penalties while the estate is being settled.
But if there isn’t enough money in the estate to cover credit card balances, the card issuer may be out of luck. Unlike some debts, such as a mortgage or a car loan, most credit card debt isn’t secured. In these cases, the card issuer may have to write off that debt as a loss.
Although you’re generally not responsible for paying credit card debt after a relative or loved one’s death, there are some exceptions, including the following circumstances:
Credit card authorized users aren’t usually responsible for credit card debt after a relative’s death unless one of the rules above applies. That’s because authorized users were allowed to use the card but didn’t formally agree to being responsible for paying off the balance.
Handling credit card debt after a loved one’s death can be confusing and emotionally difficult, especially when collectors start calling. Credit card companies may contact a deceased person’s family regarding any debt left behind, but they must follow rules established by the federal Fair Debt Collection Practices Act, or FDCPA.
A debt collector can contact a deceased person’s spouse, parents (if the deceased person is a minor), guardian, executor or administrator to discuss the debt. But the debt collector can’t mislead people by saying they’re responsible for paying the debt if they’re not, and the collector can’t use abusive, unfair or deceptive practices to try to collect a debt.
You can also ask the collector to stop contacting you, regardless of whether you’re legally responsible for the debt or not. If you’re responsible for the debt though, the collector may contact you once more to explain that the creditor plans to take a specific action, like filing a lawsuit to collect the debt or confirm there will be no further contact.
If a collector does reach out about a deceased person’s debts, you can specify how you’d like to be contacted in the future. And know that they’re legally required to provide certain information to you. Don’t give out any personal information until you’ve verified that the debt collector is legitimate. And if you can, talk with an attorney before making any payments to avoid any potential problems. You can also opt to have the debt collector contact you through your lawyer.
If you prepared your tax return through a tax-preparation service and you’re expecting a refund, you may be able to apply for a short-term loan against your anticipated federal income-tax refund. But taking a loan against your anticipated refund may have costs associated with it, as well as the risk that your refund won’t be as much as you expected.
Let’s take a look at how these refund-advance loans work, examine some of the pros and cons of a loan against your tax refund, and explore some possible alternatives.
A loan against your tax refund, also known as a refund-advance loan or a refund-anticipation loan, is a type of secured loan. This means that collateral is used to guarantee the loan (in this case, your anticipated tax refund). Refund anticipation loans may have fees and interest, or they may be marketed as “no-fee” — although they usually have other costs associated with them. Refund-anticipation checks, another kind of refund-advance product, is a loan for the tax-preparation fee from your refund.
Tax-refund loans are short-term loans and must be repaid when you receive your tax refund. Banks typically partner with tax-preparation services to offer these loans to their customers.
You’ll usually receive your refund-advance loan as a deposit into a bank account, or on a prepaid debit card. When the IRS issues your refund, it will be deposited into that bank account or onto the prepaid debit card, and the loan amount and any interest or fees will typically be deducted from the account.
Tax-refund loans marketed as “no-fee” are usually for smaller advance amounts than loans that charge interest, but products vary. The amount you can borrow depends on factors such as the lender, the tax preparer, and your financial and credit health.Quick loans: Your guide to personal loan options
There are some pros and cons to consider when thinking about whether applying for a tax-refund loan may be a good option for you.
If you apply and are approved for a tax-refund loan, the funds may be available quickly — in as little as 24 hours from certain banks if you choose to receive funds via a prepaid debit card. That’s a lot faster than the 21 days the IRS says it typically takes to issue a refund when filed electronically. But remember, a refund-anticipation check, which is only a loan of the tax-preparation fee, won’t get you your refund any faster.
Getting a tax-refund loan may or may not involve paying interest. But even if the refund-anticipation loan you’re approved for doesn’t assess interest, there may be fees. For example, refund-advance products typically come with administrative fees associated with transferring your refund.
Every tax preparer is different — some may offer tax-refund loans with no interest or fees while others may charge interest and fees on the loan. It’s important to understand the fees and interest for your refund loan, and read your refund-loan agreement to ensure you’re actually getting the type of loan you thought you applied for.
Deadlines to get an advance from an online tax preparer are early — typically in February, well before you may have planned to prepare and file your taxes.
The potential risk with any kind of refund loan is that the amount of the loan is based on how much you anticipate getting back in a refund. But many factors could make your actual refund amount different than what you expected.
For example, if you owe a federal or state debt, child support, back taxes or student loans, the IRS can reduce the amount of your refund. When that happens, you could wind up with a lot less money than you anticipated after you’re done repaying your refund loan and any associated fees.
There are a few alternatives to consider if you’re not sure whether a tax-refund loan is right for you.
While tax-refund advance loans can be an option to quickly get the cash you need, there are many things to keep in mind before you decide if applying for this type of secured personal loan will work for you. If you do decide to apply for a tax-refund advance, here are a couple of tips.
|3% cash back for every $1 spent on gas station and restaurant purchases||Low rewards rate in all other categories|
|Purchases will fund donations to Drive to End Hunger campaign||You can redeem points for travel only through the bank’s portal|
|$0 annual fee||No special benefits for AARP members|
|Low spending requirement for cash back sign-up bonus|
The AARP® Credit Card from Chase is marketed to AARP members, but it doesn’t offer any major benefits to the organization’s members. In fact, you don’t even need to be a senior or an AARP member to qualify for the card.
With the AARP® Credit Card from Chase, you can redeem points to pay for your annual AARP membership. And using your card at restaurants can support the AARP Foundation, but that’s the extent of the card’s AARP-specific features.Read more: The best credit cards for seniors
The AARP® Credit Card from Chase offers a rewards rate of 1% cash back for each $1 you spend on purchases, which equates to one point for each $1 spent. At this rate, you’ll earn $1 in cash back rewards for every $100 you spend, which is equal to 100 points. But that rate triples to 3% cash back for each $1 spent on purchases at restaurants or gas stations, which equates to three points for every $1 spent.
You can use your points to redeem for any available rewards options, including a statement credit or cash.
A 3% cash back rate for purchases at restaurants and gas stations is competitive, especially for a card that doesn’t have an annual fee. But if your main expenses don’t come from restaurants or gas stations, you can probably find more bonus categories that suit you better with other cash back cards.
For example, the Wells Fargo Propel American Express® Card offers three points for every $1 spent on purchases made at restaurants and gas stations and for purchases on rideshares, transit, other travel and select streaming apps.
If you like to get a sign-up bonus when you enroll for a credit card, then you might like the offer from the AARP® Credit Card from Chase. The card offers 10,000 bonus points (redeemable for $100 in cash back) when you spend $500 or more in qualifying purchases within the first three months from account opening.
While that’s not the largest bonus that you’ll see offered from a card with no annual fee, the low $500 spending requirement can make this bonus attainable for many cardholders.
You can redeem your rewards points for more than just cash back, which many may find to be a nice feature of this card. Along with cash, other redemption options include …
Redeeming for cash back with the AARP® Credit Card from Chase is straightforward: It can either be deposited electronically to your eligible bank account or be issued as a statement credit.
Also, redeeming points for your AARP® membership and for gift cards can be completed online or over the phone.
But redeeming your points for travel isn’t quite as easy.
While this card is advertised as best for cash back, there are travel redemption options too.
In fact, your points are worth about 10% more when you redeem for travel through Chase.
But we don’t recommend this redemption option for someone who wants a straightforward experience. Any travel redemptions must be redeemed through the Chase Travel Center, which can be limiting for some users. If you want more flexibility, you might be better off with another travel card.
There are some other things you’ll want to know when considering this card.
If you spend a lot at restaurants and gas stations and want to earn cash back for doing so — without paying an annual fee — this card could be a decent pick. It’s not the best cash back card you’ll find, but it has a relatively straightforward cash redemption program and AARP affiliation.
But remember, you don’t need to be a senior or an AARP member to get this card. In fact, there aren’t any clear benefits to holding the card as an AARP member.
Otherwise, you might be better off with a card that offers an elevated rewards rate in more, or different, categories that better suit your habits.
If you don’t eat out much or you would prefer more flexibility with travel options, consider these alternatives.
A personal loan from a credit union can have several benefits over personal loans from other types of lenders. Generally, credit union loans can offer lower interest rates and fees. And a credit union may be more open to lending to borrowers with less-than-perfect credit.
Here’s what you need to know about credit unions and credit union loans.
Credit unions offer similar financial products and services to banks. With both credit unions and banks, you can access services like direct deposit, mobile banking, ATM access and overdraft protection. Financial products available through both credit unions and banks include credit cards, secured and unsecured personal loans, mortgages, auto loans and home equity lines of credit.
But banks are for-profit institutions in the business of using money to make money — and credit unions are nonprofit organizations. Credit unions are member-owned, cooperative institutions. If you qualify to join and are approved for a loan at a credit union, your loan can be funded by other members’ savings.
Credit unions can use their nonprofit status to pass savings along to their members, giving them higher interest on savings accounts and charging lower interest rates and fees on loans. And even if your credit’s not so great, you may still be able to get a personal loan from a credit union.What is the difference between a credit union and a bank?
Each credit union has criteria for who can join. Membership eligibility is usually based on a common bond among members, like location, relationship to an existing member, or membership in a church, school, labor union or homeowners association.
You can find credit unions in your area via the National Credit Union Locator. Once you find a credit union you want to join, review the membership requirements. If you’re eligible, you can contact the credit union directly to join.
The goal of a credit union is to promote financial well-being for its members — not to turn a profit. As a credit union member, you may be able to get more favorable loan terms — like a lower interest rate and fewer fees — than you might get from a bank or other type of lender.
Federal credit unions can’t charge you an annual percentage rate, or APR, higher than 18% for most types of loans they offer. But the average APR for an unsecured three-year loan from a credit union is much lower: 9.22%, according to data collected by the National Credit Union Administration.
Compare credit union rates to those offered by online lenders, some of which may charge APRs of up to 36%.
With a lower APR, you’ll save money overall — and you may also have a lower monthly payment.
“The potential for lower interest rates alone is a reason to consider a credit union over a traditional lender,” says Chad Rixse, CEO and Wealth Advisor at Far North Capital.
Not only are the interest rates typically lower, but the associated fees may also be lower. By charging lower fees, credit unions can “continue to help members with smaller loans, making them a cost-effective option for personal loans,” says Ron Smith, senior vice president of Texas Trust Credit Union.
If you have strong credit, you might have access to favorable loan terms like low APR. But credit unions may be willing to work with you even if you’ve struggled with credit in the past.
Some credit unions provide loans to borrowers that have rough credit or no credit history at all. If you’re already a member of a federal credit union and you need fast cash, a payday alternative loan can help you make ends meet until your next paycheck.
While you likely won’t find interest rates as low as you would for other unsecured personal loans, federal credit unions cap APRs at 28% for payday alternative loans. The equivalent APR for traditional payday loans can be as high as 400%.
If you want to build your credit, another type of credit union loan to consider is a credit-builder loan. Improving your credit can help your chances of getting favorable loan rates and terms in the future.
Just remember that a credit union may not be willing to give you a loan — even if you’re a member — if they don’t consider you a member in good standing.
Credit unions typically serve a smaller customer base than traditional banks. You might find that your credit union has a limited number of physical branches. And some credit unions may not be using the latest personal banking technology, which may also be inconvenient for you.
Credit unions are similar to banks in many ways, including the products and services they offer. Still, there’s one area where credit unions generally get much higher marks than banks — customer satisfaction.
Never be afraid to reach out and ask about membership and interest rates. It’s always important to shop around and look at multiple offers from a variety of lenders before deciding which personal loan is best for your situation.
If you qualify for membership at a credit union, you may be able to get a lower interest rate on a personal loan. But be sure you understand all of the terms of the loan you’re offered before you sign.
This offer is no longer available on our site: Hilton Honors Ascend Card from American Express
|Score one free night each anniversary year for keeping the card open||$95 annual fee|
|Could earn a second hotel night each account anniversary||Must spend $15,000 per year to earn a second night at a Hyatt hotel or resort|
|Big sign-up bonus||You won’t earn as many rewards or enjoy the same perks when you stay at non-Hyatt hotels|
|Earn more points for each $1 spent at Hyatt hotels and resorts|
|Double your points in reward categories like local transit, fitness clubs and gym memberships|
|Complimentary hotel elite status|
We think that The World Of Hyatt Credit Card is one of the best hotel credit cards. Here’s why.
The World Of Hyatt Credit Card offers one free night each year after your cardmember anniversary at a mid-tier Hyatt hotel or resort. There’s no spending requirement either. All you have to do is keep the card open and in good standing.
Depending on which Hyatt hotel or resort you stay at and when you visit, the value of your free night could more than make up for The World Of Hyatt Credit Card’s $95 annual fee.
Plus, if you spend at least $15,000 each anniversary year (or $1,250 per month), you’ll earn an additional night.
The World Of Hyatt Credit Card features a two-part sign-up bonus worth up to 50,000 points, but it can be a little bit confusing.
With The World Of Hyatt Credit Card, you can earn 25,000 bonus points after spending $3,000 on purchases during the first 3 months of account opening. And if you spend another $3,000 on purchases (for a total of $6,000) during the first six months of account opening, you’ll take home another 25,000 bonus points.
The spending requirement for The World Of Hyatt Credit Card might seem high, but keep in mind it comes out to an average of $1,000 per month, which can make it more attainable than the sign-up bonuses offered by other top travel rewards cards.
And if you qualify for the full sign-up bonus, that’s enough points to book up to 10 nights at low-tier Hyatt hotels or resorts.
You could earn up to nine points for every $1 you spend at Hyatt: four bonus points for every $1 you spend using The World Of Hyatt Credit Card, and another five base points for every $1 you spend as a World of Hyatt member.
The World Of Hyatt Credit Card also offers two points for every $1 you spend in a handful of categories.
And you can earn one point per $1 spent on all other purchases.
The World Of Hyatt Credit Card comes with automatic elite Discoverist status that can make for a more comfortable stay. Take a look at some of the perks you’ll get as a member with Discoverist status.
These features are definitely worth taking advantage of, but they aren’t exclusive to Hyatt. Hilton and Marriott offer co-branded cards with similar perks.
As you might have guessed, you can use your points earned by using The World Of Hyatt Credit Card to book Hyatt hotel rooms.
World of Hyatt points are worth an estimated 1.62 cents each, according to Credit Karma’s point valuations. But the exact value you get depends on which hotel you stay at and when you visit.
World of Hyatt also partners with dozens of airlines where you can transfer your points. But we don’t recommend transferring your points if you’re looking for their top value. In most cases, you’ll get only one mile for every 2.5 points you transfer.
Considering Hyatt points are already more valuable than most airline miles — according to our point valuations — this is a terrible redemption value. Not to mention, it can take up to two months for the transfer to complete.
The World Of Hyatt Credit Card is great for travelers who are loyal to Hyatt. You’ll have the opportunity to earn hotel nights and hotel status. This could help you save money and enjoy a more comfortable stay.
But if you prefer the flexibility to stay at any hotel you like, The World Of Hyatt Credit Card might not be the right fit for you.
If you don’t stay at Hyatt hotels or resorts when you travel, you might want to check out one of these other credit cards.
The Consumer Financial Protection Bureau has proposed changes to how debt collectors can contact consumers. If finalized, some of the proposed changes to the 40-year-old Fair Debt Collection Practices Act would…
The CFPB says the proposed changes are a step forward because they clarify both the rules that debt collectors must follow and the rights that consumers have under the Fair Debt Collection Practices Act. But some consumer advocates are alarmed. While they support certain changes, they say others actually give debt collectors more legal support to carry out aggressive, potentially harmful tactics.
Millions of Americans have debts in collections, according to the CFPB. The Fair Debt Collection Practices Act outlines how debt collectors can contact people, but the law was enacted in 1977 — back in the days of landline phones and long before the arrival of email and social media.
This dated regulation has left debt collectors uncertain about how they can contact people beyond phone calls or mailed letters. In addition, other rules around communications have remained somewhat vague.
In a report to Congress about debt collection practices, the CFPB said it received more than 81,000 complaints last year about debt collection. The CFPB also says consumers file about 10,000 lawsuits against debt collectors each year alleging violations of the Fair Debt Collection Practices Act.
With the proposed changes, the CFPB said it aimed to provide clarity about how collectors can contact people using newer technologies, and how consumers can exercise their rights when it comes to debt collections.
Some consumer advocates are worried the proposed changes actually leave consumers less protected. For example, the proposed rules limit debt collectors to seven contact attempts per week by phone about a particular debt. In addition, the rules would restrict debt collectors to one phone conversation with a debtor per week about any one debt. But this means someone with multiple debts could still face dozens of calls every week.
“A student with eight loans could receive 56 calls per week,” National Consumer Law Center attorney Margot Saunders told the Wall Street Journal.
Another worry: The proposed rules don’t include limits on the amount of emails or text messages debt collectors can send — although the rules do specify that consumers can opt out of such electronic communications.
Some experts say the sum total of the proposed rule changes could be that they give debt collectors more and easier access to people with outstanding debts.
The CFPB’s proposed changes will be published in the Federal Register for public comment. After 90 days, the agency can finalize its changes to the debt collection rules.
In the meantime, you can learn more about your rights under the current version of the Fair Debt Collection Practices Act.
But the best card for you depends on what you’re looking for and what your business needs. We like the Ink Business Preferred℠ Credit Card because it offers a competitive rewards structure. But if your startup is operating on a tight budget and you’re looking to cut costs, the Ink Business Cash℠ Credit Card might be a better fit for you.
The Brex Card for Startups is another trendy option for more-advanced new businesses.
In some ways, it’s superior to the other business credit cards we talk about here. But it could be difficult for early-stage startups to qualify for a corporate card like this. So if you’re a new business owner, it’s worth taking a look at some of the other cards we’ve listed.
Here’s why: The Brex Card for Startups doesn’t hold you personally responsible for repaying the money your business spends and won’t impact your personal credit.
Unlike many business credit cards, it doesn’t require a personal guarantee. That means that as a founder, you aren’t legally obligated to take money out of your personal bank accounts to pay for your startup’s credit card bills. And it can be tough to find a business credit card with no personal guarantee.
What’s more? The Brex Card for Startups has a $0 annual fee.
But this is technically a corporate card, and there are some additional requirements for the card that could make it tough to qualify for.
Here’s why: The Capital One® Spark® Classic for Business can help your startup build credit.
Many business credit cards cater to owners with excellent personal credit. This can make it difficult for people with less-than-stellar personal credit to build business credit.
But the Capital One® Spark® Classic for Business may be available to startup founders who are working on their personal credit.
And its $0 annual fee can make it more accessible for startups looking to build business credit.
Here’s our breakdown of some of the best Capital One® Spark® business credit cards. You might also be interested in our guide to building business credit with poor personal credit.
Here’s why: The Business Platinum® Card from American Express features a welcome bonus of up to 75,000 Membership Rewards® points. You’ll earn 50,000 bonus points after you spend $10,000 and 25,000 more points after you spend an additional $10,000 on qualifying purchases within your first three months of account opening.
That might sound like a lot of money, but it’s not uncommon to spend more than you normally would when starting a new business.
And you’ll get more rewards for all that startup spending. The card gives you five points for every $1 spent on flights and prepaid hotels booked through amextravel.com, and 1.5 points for every eligible purchase of $5,000 or more (up to 1 million points). And you’ll get one point for every $1 spent on purchases.
Combine the welcome bonus with rewards spending and you might even save up enough points to pay for your next business trip.
Beyond rewards for travel spending and other purchases, The Business Platinum® Card from American Express also makes traveling more comfortable and affordable.
The Business Platinum® Card from American Express has a lot going for it. But you’ll have to decide if these rewards and travel benefits outweigh the card’s $595 annual fee.
Check out our full review of The Business Platinum® Card from American Express for more.
Here’s why: The Ink Business Unlimited℠ Credit Card allows you to spend more time growing your business and less time optimizing rewards.
With this flat-rate cash back card, you’ll earn 1.5% cash back on every purchase you make.
Instead of trying to keep up with a complicated rewards structure, you can stay focused on the things that matter to your business.
You can also earn a sign-up bonus of $500 cash back if you spend $3,000 on purchases during the first 3 months after account opening.
All this for a $0 annual fee.
If you’re interested in this card, it might be worth reading our breakdown of the best Chase Ink business credit cards.
Here’s why: The Ink Business Preferred℠ Credit Card can help you spread the word about your new business.
You’ll earn three points for every $1 you spend on up to $150,000 in combined purchases each year in certain spending categories (after that, you’ll earn one point per $1). There are a couple of categories to choose from, but one that stands out is advertising your startup online through search engines like Google and social media websites like Facebook.
That’s in addition to the 80,000 bonus points you’ll earn after spending $5,000 on purchases during the first 3 months after account opening.
Just know that the Ink Business Preferred℠ Credit Card comes with a $95 annual fee.
Read more with our full review if you’re wondering if the Ink Business Preferred℠ Credit Card is right for your business.
Here’s why: Online retailers could save big on shipping.
The American Express® Business Gold Card offers four Membership Rewards® points for every $1 you spend (on up to $150,000 in combined purchases each year) in two of the card issuer’s specified categories in which you spend the most each month (and one point per $1 in the issuer’s other spending categories). After you hit the $150,000 limit, you’ll earn one point per $1.
One of the card’s spending categories is U.S. purchases for shipping, so if you’re starting a business on Amazon or eBay, you could potentially rack up points fast. But there’s a $295 annual fee, so you might want to wait until the sales start rolling in to apply for this card.
Check out cardholder reviews of the American Express® Business Gold Card from the past year.
Here’s why: The SimplyCash® Plus Business Credit Card from American Express features cash back on your bills for your U.S. phone services.
You’ll get 5% cash back on purchases at U.S. office supply stores, as well as phone services purchased from U.S. service providers (on up to $50,000 in purchases per calendar year — after that, you’ll get 1% back).
Whether you’re closing a business deal, recruiting new talent to join your company or trying to attract investors, if you conduct business over the phone you should seriously consider paying your bill with the SimplyCash® Plus Business Credit Card from American Express.
Plus, there’s no annual fee to hassle with.
Read more about the SimplyCash® Plus Business Credit Card from American Express with cardholder reviews from the past year.
Here’s why: Starting a business can be expensive — there’s no need to spend even more on credit cards.
Not only does the Ink Business Cash℠ Credit Card charge a $0 annual fee, but it also waives the fee that some business credit cards charge for employee cards.
So it’ll be even easier to earn rewards when you include the purchases your employees make on their employee cards without accounting for an individual card fee.
The Ink Business Cash℠ Credit Card features $500 bonus cash back after you spend $3,000 on purchases during the first 3 months after account opening. You’ll also get 5% cash back (on up to the first $25,000 you spend each year) on internet, phone and cable services, as well as at office supply stores each account anniversary year (then 1% back).
It’s a bonus you could easily reinvest into your startup.
Learn more about the Ink Business Cash℠ Credit Card with our review.
Here’s why: If you don’t have a ton of capital floating around, you might need to borrow money to grow your business.
Instead of taking out a loan, consider The Blue Business℠ Plus Credit Card from American Express, which features an introductory APR of 0% on purchases and balance transfers for the first 12 months months after opening your card. (After that, you’ll be charged a variable APR of 15.49% - 21.49% on both purchases and balance transfers.)
If you’re looking to transfer a balance to this card, you’ll need to make your balance transfer within 60 days of account opening to qualify for the intro APR, so pay attention to timing. There’s also a fee of 3% (minimum $5) for transferred balances.
This should give you enough time to get your business off the ground before the regular interest rates for purchases and balance transfers kick in.
Just keep in mind, you still have to make your minimum payment (on time) during the introductory APR period, or you’ll risk being hit with a penalty APR of up to 29.99% if you’re late or miss a payment.
The Blue Business℠ Plus Credit Card from American Express also comes with a $0 annual fee.
Read our review to learn more about The Blue Business℠ Plus Credit Card from American Express.
To write this review, we started by looking at some of the best business credit cards out there. Then we considered which features are most important to startups whose founders may be looking to build business credit.
Because your startup may be operating on a budget and be short on capital, you’re probably looking for ways to save money. And you may want the freedom to take risks without being on the hook personally if the business fails.
But we also recognize that each startup faces its own unique challenges, so different small-business credit card features might matter more to different founders. That’s why we came up with a variety of options for the best business credit cards for startups.
There are a few things you should understand about using a business credit card.
Opening a business card is a good way to build business credit. But even though you’re applying for a business credit card, the issuer may still check your personal credit scores. This means that your personal credit could play a role in whether you’re approved for the business card — and it could also be affected by your use of the card.
To complicate matters even more, many business credit cards hold you personally responsible for repaying the money your business spends. That means if you go out of business, the credit card issuer may still expect you to personally repay what the business owes.
That’s what makes the Brex Card for Startups so exceptional: It doesn’t require a personal guarantee from founders or affect their personal credit.
But because it’s a corporate card, the Brex Card for Startups may be difficult for certain startups to qualify for until their business is a little more established.
Look at some of the other business credit cards on this list to find one that’s a good fit for sole proprietors like freelancers and gig workers, who may have to rely on their personal credit to get started.
Regardless of which business card you apply for, we recommend you use it only for business expenses. If you’re interested in understanding more about your business card, check out our introduction to business vs. personal credit cards.
There are many options for those looking to consolidate debt, including a home equity loan, a balance transfer credit card or a personal loan. Interest rates will vary by lender, but the difference in these rates can depend largely on the type of debt-consolidation loan, your credit and other factors. Generally, the better your credit, the more likely you may be to get approved for a lower interest rate.
Here’s some important info to know about debt-consolidation loans, and what could help you get approved for the best debt-consolidation loan for you.
A debt-consolidation loan merges multiple debts, like credit card balances, into one new loan, with one monthly payment and a potentially lower interest rate.
Some debt-consolidation loans may be secured (like a home equity loan) or unsecured (like a personal loan). With secured loans, the borrower is required to provide collateral, like a home or savings account, to secure the debt. The lender can take the asset to satisfy the debt if you stop making payments. But unsecured loans don’t require collateral.
Many factors influence debt-consolidation loan rates, including the type of loan you apply for. Generally, you can find lower interest rates on secured loans than on unsecured loans.
As of February 2019, the average interest rate on a two-year personal loan from a commercial bank was 10.36%, according to Federal Reserve data. But keep in mind that personal loan APRs can range from 7% to 36%, depending on your credit and other factors.
The average credit card interest rate as of February 2019 was 16.91%, according to the Fed’s data.
You’ll typically need strong credit and a low debt-to-income ratio to qualify for the lowest rates.
Balance transfer credit cards allow you to move several credit card balances onto one credit card. These may come with an introductory 0% APR period, which usually lasts for a specific period of time, typically in the range of 12 to 21 months. You should aim to pay the balance in full during the promotional period because after the intro period is up, you’ll have to pay interest and fees on the remaining balance.
With a home equity loan, you can borrow a lump sum and pay it back over time with interest. Because you’re tapping into your home as collateral, home equity loans may offer lower interest rates than other types of loans. But if you default on the loan, you could be at risk of losing your home.
Several factors can affect your debt-consolidation loan rate. The type of product you’re looking at can dramatically impact your rates — for example, personal loans have different rates and fees than credit cards. But several other factors can impact your rates as well.
Generally, strong credit could help you qualify for lower interest rates. But if you have a few recent missed or late payments on your credit reports, consider taking the time to work on improving your credit before applying for a debt-consolidation loan. Remember, your credit is only one of many factors that can determine your interest rate.
Although you can find debt-consolidation loans at traditional banks, credit unions or online lenders, each may charge a different rate. You can generally find lower APRs at credit unions when compared with traditional banks, but you’ll need to be a member of a credit union to apply for a loan from one. Some online lenders market to people with bad credit. But interest rates can vary widely, from around 6% up to 36%, whereas the range is typically lower with a bank personal loan.
Your debt-to-income ratio, or DTI, is how much of your monthly gross income (before expenses) that you put toward paying debts. Generally, lenders equate higher DTIs with higher risk. If your DTI is high — around 43% or higher — then you might find it difficult to get approved for lower interest rates.What is debt-to-income ratio and why does it matter?
A loan term is the amount of time you have to repay a loan. In general, a shorter-term loan will offer lower interest rates and reduce your overall cost because you’re paying interest for a shorter period. Longer loan terms, on the other hand, typically offer higher interest rates and a higher total cost, but they may also mean a smaller minimum monthly payment.
A fixed interest rate may get you a higher interest rate to start with, but is more likely to remain steady during your loan term. Variable interest rates may start lower but can increase over time based on changes in the market.
Multiple sources of debt-consolidation loans can make it hard to pin down a single average debt-consolidation loan rate. It’s important to shop around to ensure you’re comparing options for the credit product that will work best for you. Applying for prequalification can help you get an idea of what loans and rates you might qualify for — just remember that it doesn’t guarantee that you’ll be approved, or that the terms you’re offered will be the same as those you prequalified for.
It’s also important to address how you ended up in debt — and in need of a debt-consolidation loan — in the first place. If you find it helpful, you may want to consider credit-counseling options if you’re having trouble paying off debts.
New cars typically come with manufacturer warranties. But if you’re buying a used vehicle, it’s crucial to check if there’s some sort of warranty and what it might cover. You’ll want to examine any warranty closely to see whether it’s worth the extra cost, if it’s one you’d have to purchase separately.
When we refer to “used car warranties,” we simply mean any kind of warranty you might get for a used car — whether it’s backed by a manufacturer or dealer.
Buckle up as we examine some important things to know about used car warranties.
Information about any used car warranty should be available in what’s called a “Buyers Guide.” Dealers are required by the Federal Trade Commission, or FTC, to display this in used cars that are for sale. You can usually find the Buyers Guide displayed on the car’s window.
The Buyers Guide says whether a vehicle comes with a warranty or is being sold “as is.” Buying an as-is car means that if you run into any issues or your vehicle needs repairs after driving it off the lot, you’re likely out of luck. If the car does come with a warranty, the Buyers Guide should include the percentage of repair costs the dealer is required to pay as part of the warranty — if it’s required to pay for any of the repairs at all.
A number of states restrict what vehicles may be sold as is or have different rules around these types of sales. For instance, if a used car is selling above a certain price, an as-is sale might not be allowed — and some states require different disclosures on the Buyers Guide for an as-is sale.
Here are some states with different restrictions and rules around as-is sales.
|Maine||New Jersey||West Virginia|
|Maryland||New Mexico||District of Columbia|
You can look up your state attorney general’s office and contact them to find out what as-is sale rules apply in your state.
Here are a couple of other things to keep in mind about Buyers Guides.
If the Buyers Guide from the dealership says your car is covered by a warranty but your contract says the sale is as-is, the dealer must honor the terms in the Buyers Guide. What’s stated in the Buyers Guide trumps anything that might be contradictory in your contract related to warranty coverage.
If you’re buying a used car directly from a private party, they’re usually not required to post a Buyers Guide or provide a warranty — it’s possible that there may be implied warranties but you may not want to hang your hat on this. You’d need to sign a written contract providing for what you agree to be covered.
There’s a chance that a manufacturer’s warranty still applies when you buy a used vehicle. You may be able to find this under the “systems covered/duration” section of the Buyers Guide.
To reap the benefits of any warranty that’s included, you have to know what’s in it and confirm that it’s transferrable. Ask the dealer for the vehicle’s warranty documents. Once you look over what’s covered, along with other details like the expiration date/mileage, you can reach out to the manufacturer to verify it’s accurate.
A car manufacturer’s warranty often covers a vehicle’s first three years or 36,000 miles, though powertrain warranties may last longer.
If your vehicle does come with a used car warranty, the coverage may be limited.
The warranty should give specifics on the vehicle service contract and explain who is legally responsible for the repairs. Look over the fine print to get all the details and make sure all of your questions are answered before you buy your vehicle.
You’ll also want to check who you’re buying the warranty from, since in some instances the dealer may be selling a contract from a third-party warranty company. You can research the company’s auto warranty policies and BBB rating from the Better Business Bureau.
A manufacturer or dealer can’t claim that your warranty is void because another repair shop did work or maintenance to your vehicle. But the dealer or manufacturer can require you to use certain repair facilities if the repairs will be free under the warranty.
When you purchase a used vehicle, you may have the option to purchase a service contract, also known as an extended warranty. With a service contract, the dealer agrees to perform or pay for certain repairs or services on the car. You can buy the coverage for an extra cost.
Here’s some guidance for gauging whether an extended warranty is worthwhile.
Feeling unsure about getting a used car that doesn’t come with a warranty? Thinking that the cost of a warranty might not be worth it?
Consider these other options.
Put money aside for repairs. If you can stash away some cash, it can help cover whatever might need to be fixed down the road. And if it there’s nothing to repair, you can keep saving the money for your next car or use it for some other need.
Lease a car. If you go this route, your leased car may come with a warranty that covers repairs. In turn, you may not have to worry about being hit with a major unexpected expense. There are pros and cons to leasing a car, but it can be a cost-effective alternative to buying.Searching and applying for an auto loan: How to get it right
When you buy a used car, check carefully to see if a warranty is available and what type of warranty or service contract it is, and what it may cover. If there isn’t one, you’ll want to examine the details closely to see if an extended warranty is the best choice for your financial situation — or if you’ll be able to manage paying for any repairs without a warranty at all.