Using a Moving Company: FAQs Weâve Got You Covered on
Moving to a new home is an exciting yet stressful endeavor. A lot of different factors go into a move, and it can be difficult to keep everything straight. A major question that we find comes up a lot: should I use a moving company? And with that question, many other questions can come up. How much will it cost? Do they pack my things? The list goes on. We’ve broken things down for you below, and have tackled some major questions that could come up when deciding to use a moving company. The key to a stress-free move is being prepared, and we are here to help you with that.Â
How much should you tip the movers?
We know, paying for a moving company is expensive enough as it is, and to throw a tip on top of it all may feel like youâre breaking the bank. That being said, your movers are working very hard to make sure your items get from point A to point B safely, so tips are much appreciated. The amount you should tip is up to you based on your experience, the service you received, and the complexity of your move. A good rule of thumb to follow is to tip anywhere between 5-10% of the total cost, which will then be split amongst the moving team. If you are feeling tight on money, providing water, snacks, or meals for your movers is another great way to show your gratitude during the move.
Do movers cost more on weekends?
Peak times for moving include the weekends, summer, holidays, and both the first and last few days of the month. Because of the high demand during these times, you can expect the rates to be higher. Regardless of the time of year, moving during the week will always be the more affordable option. While this isnât always the most convenient option for everyone, scheduling a mid-week move will definitely save you some cash.
When is the best time to move?
May through September, the beginning and end of the month, and weekends are the most popular times people choose to move. If you can be flexible with your move, choosing any off times will not only be cost-effective, but your movers will be considerably less busy and therefore, more attentive. Choosing the best date and time for your move will make things a lot easier and a lot less stressful when the day finally comes.
Is it worth having movers pack my things?
This really depends. Do you have a lot of large or hard to move items or a lot of breakable items? Do you have a lot of friends or family help you pack? If you are confident that you can handle the packing on your own, or have plenty of people to help you with it, it may not be worth having the extra money to have the movers pack your things. That being said, if you can afford the splurge, we do think it is worth it. There are a lot of factors that go into moving, and a million things to worry about on moving day. Having someone else handle the packing for you is a huge stress relief, and well worth it in our opinion.
How do I make my move cost less?
In our opinion, planning your move as far in advance as you can be the best way to cut down on costs. As we just mentioned, choosing your move date wisely will be a huge help in terms of cost savings. October through March are your best bet for lower costs. Opting out of having your moving crew pack everything up for you is another great way to cut costs as well. Grab a few friends and pack up your place together rather than paying someone else to do it for you. Another tip: donât pay for boxes. While one box seems cheap, it adds up when you have a whole home to move out of. We like to head to our local liquor store to load up on boxes when we are getting ready for a move.
Do I need insurance while my belongings are being moved?Â
Insurance is a great thing to consider having for your belongings while they are being moved, especially if you are moving far. Established moving companies will typically offer liability insurance for an additional fee, and there are typically different levels to choose from. Another important thing to note: if you have homeownerâs insurance, it may cover any damage to your belongings in the event that something happens. While paying for insurance may feel like an additional unnecessary cost, it is worth it for the peace of mind.
What if they charge me more than the quote?
Weâve said it already, and we will say it again. Moving can get very pricey. Make sure you are paying attention each step of the way when utilizing a moving company. If moving companies offer you quotes, make sure they are firm. On top of that, make sure you are asking the right questions when you are examining the costs behind your moving company. Are there any additional fees that may be added on to this quote? What about cancellation fees? How much more will it cost if things take longer than expected? These are all important things to know and address at the beginning to avoid being charged more than you are expecting.
Read Using a Moving Company: FAQs Weâve Got You Covered On on Apartminty.
American Express cardholders are loyal customers. Not only do they recognize the value offered by the American Express name, cardholders enjoy tremendous perks like extended warranties, travel protections and access to presale tickets to sporting events and concerts. These card benefits can justify a pricier annual fee.
American Express strives to be competitive in the credit card marketplace and continues to look for ways to add value for their cardholders. Although American Express is widely known for its traditional charge card model – which is to pay in full when you receive a monthly statement – American Express also provides solutions for consumer and business card customers who need more flexibility, particularly as their financial needs shift during the COVID-19 pandemic.
Amex Pay Over Time: Things to know
What is Pay Over Time and how does it work?
Which American Express cards offer Pay Over Time?
How to take advantage of Pay Over Time
Understanding when interest is charged
How Pay Over Time affects your credit score
Pay Over Time vs. traditional revolving credit
Pay Over Time vs. Pay it Plan it
What is Pay Over Time and how does it work?
For cardholders who want or need a bit more flexibility when structuring payments, Pay Over Time is a feature that lets eligible American Express cardholders carry a balance on eligible purchases of $100 or more.
There are specific purchases that are not eligible for Pay Over Time. These transactions include traveler’s checks, cash advances, fees owed to American Express and gambling-related transactions like casino charges.
For those who choose the Pay Over Time feature, applicable revolving balances are subject to accrued interest. In addition to more flexible payment terms, cardholders will continue to earn rewards on all eligible purchases; it does not matter whether the Pay Over Time feature is utilized.
Pay Over Time is a feature of American Express U.S. consumer and business Green, Gold and Platinum cards, and the feature allows eligible charges to be automatically added to a balance that a cardholder can opt to revolve with interest month-to-month, until that amount reaches their Pay Over Time limit.
In short, it’s an extended payment option for cardholders who may not want to pay a balance in full.
Which American Express cards offer Pay Over Time?
The program is offered for both consumer and business Green, Gold and Platinum cards. Here’s a quick look at what the consumer cards have to offer.
American Express® Green Card*
Annual fee: $150
Rewards rate: Cardholders earn 3X points at restaurants worldwide, including takeout and food delivery and 1X points on all other eligible purchases.
American Express® Gold Card
Annual fee: $250
Rewards rate: Earn 4X points on restaurants, including takeout and delivery, and on U.S. Uber Eats purchases (learn more). Earn 4X points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X). Earn 3X points on flights booked directly with airlines or on American Express Travel. Earn 1X points on all other purchases.
The Platinum Card® from American Express
Annual fee: $695
Rewards rate: Earn 10X points on eligible purchases at restaurants worldwide and when you shop small in the U.S, on up to $25,000 in combined purchases, during the first six months of card membership. Earn 5X points on airfare booked directly with airlines or through American Express Travel. Starting January 1, 2021, earn 5X points on up to $500,000 on these purchases per calendar year. Earn 5X points on prepaid hotel bookings through American Express Travel and 1X points on all other purchases.
How to take advantage of Pay Over Time
For consumer cards, when Pay Over Time is set to “on” (cardholders can turn this feature on and off in the mobile app or via their online account), purchases $100 or more ($0 on Green) are automatically added to their Pay Over Time balance that revolves with interest month-to-month, up to their Pay Over Time limit.
For Business cardholders, Pay Over Time will be added at the start of the November billing cycle – there is nothing these users need to do to activate the feature. Pay Over Time provides business owners the option to carry a balance with interest on eligible purchases of $100 or more or to pay the balance in full.
It’s also important to note that both business and consumer cardholders will be unable to add a charge to a Pay Over Time balance if the transaction will exceed their set Pay Over Time limit. Cardholders can find their Pay Over Time limit in their app or cardholder dashboard.
Understanding when interest is charged
When using the Pay Over Time feature, cardholders use their American Express cards as they normally would. If the cardholder pays the entire balance in full at the end of the billing cycle, no interest is charged, and the card continues to function similarly to a charge card.
If you do carry a balance, however, your payments and interest charges will be dependent on your Pay Over Time terms.
Payment deadlines are outlined on your American Express dashboard, found on both the mobile app or online portal. (Note, if you need some flexibility on your monthly due date, American Express might allow you to change it.)
Your interest rate is determined by your creditworthiness. Current rates range from 15.99% to 22.99% variable.
Like a traditional credit card, Pay Over Time allows cardholders to pay just a monthly minimum and carry the rest of their balance (up to their Pay Over Time limit), the full balance or anything in between.
How Pay Over Time affects your credit score
Pay Over Time won’t affect your credit – and more particularly your credit utilization ratio – the way a traditional credit card does. Your credit utilization ratio is the amount you currently owe divided by your credit limit, but this is dependent on your card
issuer reporting your available credit limit to major credit bureaus. Since Pay Over Time isn’t technically a credit limit, it does not show up on your credit report.
Pay Over Time vs. traditional revolving credit
The Pay Over Time feature can make your charge card function more like a traditional credit. With charge cards, consumers or businesses are not able to carry a balance; your amount due on your monthly statement must be paid in full.
The difference with Pay Over Time is that it permits cardholders to finance eligible purchases beyond the month with interest.
Yet, Pay Over Time differs from a typical credit card you may have in your wallet. Notably, Pay Over Time enables you to toggle the feature on and off.
Additionally, your qualifying American Express card has no preset spending limit, while your Pay Over Time limit does resemble a traditional revolving credit limit. In effect, you can charge what you want on your American Express card and decide when and how to pay off the amount you owe. (Note, though you don’t have a hard credit limit, American Express won’t approve unlimited spending.)
Pay Over Time vs. Pay It Plan It
Beyond Pay Over Time, there are other features that American Express offers to help customers manage their finances. The Pay It Plan It feature, for instance, can be used in tandem with Pay Over Time.
Pay It Plan It helps cardholders pay off qualifying purchases over time with fixed monthly payments, for a fixed fee. No enrollment is required, although account history and credit history are evaluated. If there’s a history of missed or late payments, American Express might not grant this feature.
The “Pay it” portion of Pay It Plan It lets cardholders tap the American Express app to quickly pay for small purchase amounts, under $100, throughout the month.
”Plan it,” on the other hand, lets consumer cardholders split up qualifying large purchases of $100 or more into equal monthly payments for a fixed fee.
Bottom line
American Express offers cardholders the flexibility to decide how to pay their bill. If you are cash-strapped during a particular month, the Pay Over Time feature allows you to carry a balance on purchases.
Regardless of the flexibility, American Express offers, though, it’s important to continue your diligent payment habits, especially making minimum payments on time.
*All information about the American Express Green Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. This offer is no longer available on our site.
You may dream of owning your home or place of business, but renting is more affordable. Plenty of other people are in the same position, so this is a booming business. Part of a landlord’s responsibilities is creating a usable space for all tenants, which means complying with the Americans with Disabilities Act (ADA).
What is the Americans with Disabilities Act (ADA)?
The ADA became law in 1990 to protect both tenants and renters in cases that could involve disability discrimination. Before you sign your next lease for your home or business, check out what every tenant should know about ADA compliance. Renters are responsible for more than you might think, so it’s essential to fully understand what you’re walking into.
1. Both parties are responsible
People with disabilities are protected by the ADA, specifically when it comes to Title III. This requires landlords to make rental spaces accessible for anyone with a disability so they can access the property equally. They must modify their properties to meet current ADA regulations, which was last updated in 2010.
In the case of renting a commercial or residential unit, both parties are responsible for ensuring they meet ADA requirements. Before signing on the dotted line, discuss any needed additions or renovations and who’s responsible for paying for them. It’s supposed to be a team effort, which can result in liability exposure for the landlord if they don’t comply.
2. Auxiliary aids are included
Hearing and vision impairments sometimes get overlooked during building construction, but they’re part of Title III. Depending on the agreement with your landlord, they may cover most or half of the bill for aids like notetakers, Braille additions or signs in larger print.
3. Accessibility modifications may count
Your landlord may try to fight against paying for accessibility modifications if they want to cut corners. Still, they must pay the full bill if the changes count as reasonable modifications, like installing a ramp to get into the unit. Vertical lifts and elevators may also join the accessibility options list, depending on the renter’s disability.
Reasonable modifications are mostly defined by how inexpensive and quick the projects are, but the landlord should pay the total bill if they haven’t provided an accessible property.
4. Both parties designate responsibility
Most commercial leases leave room for tenants and landlords to allocate responsibility before they become official. Depending on the tenant’s financial capabilities, the two parties will decide what they’ll pay for regarding unmet ADA compliance. The finer details, if any, will vary depending on the lease.
Even after both parties agree on their responsibilities, tenants may have to go a step further. Read through your lease to see if there’s language indicating you need to provide your landlord with a lawyer if they’re the subject of an ADA lawsuit. They’ll still legally have to meet their agreed-upon responsibilities, but tenants could have to pay for their legal representation if it’s outlined in the lease.
5. Landlords deal with common areas
Even though your rental space may be ADA compliant, the areas surrounding it could be challenging to access. Because spaces like sidewalks and parking lots aren’t included in your lease, landlords are responsible for them.
If you have any issues accessing your rental unit because these areas don’t have the disability modifications you need, your landlord should fix them at no cost to you.
6. Injunctive relief is common
Some renters may seek financial compensation for their time or efforts in dealing with inaccessible spaces, but most of the time, that’s not possible. The majority of states won’t allow plaintiffs to receive monetary damages or compensation under Title III. Still, you may be responsible for attorney fees and costs after the case gets settled in court. The majority of cases end with injunctive relief, where one or both parties work to solve the issues at hand.
The only time plaintiffs might get damages at the end of a case is if the U.S. Attorney General files an action based on a pattern of discrimination on the part of the landlord. The fines then may include financial compensation or back pay as needed.
Get everything in writing
Both tenants and landlords should get everything in writing as they work to come to an agreement about who’s responsible for which ADA compliance issues. If something goes wrong in the future and one party files a complaint in court, documented terms and signed paperwork will help sort through the problem and come to the best solution for everyone.
The post ADA Compliance: What Renters Need to Know appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.
Credit union cards might not get as much attention as popular cards from big issuers, like Chase or American Express. That doesn’t mean they’re not worth looking into. A card from a credit union can be not only an excellent option for those with lower credit scores, but also a finishing touch to a card enthusiast’s strategy.
I got a credit union card last month with good credit and some of the best credit cards already in my wallet. Now, it has potential to become one of the most valuable cards I have because of how well it matches my spending.
Read on to learn about credit union credit cards and their pros and cons and to see if this type of card could be a good choice for you.
Credit union card pros
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The list of pros regarding credit union credit cards is long – see if any or all are appealing to you.
The fees and interest rates tend to be lower
Credit unions are member-owned nonprofit organizations, and the entire system works slightly differently from banks. Because of that, you may get lower interest rates as well as lower fees.
Annual fees, foreign transaction fees and late fees are also lower at a credit union versus a traditional bank. In fact, although 45% of traditional bank credit cards come with annual fees, only 10% of credit union credit cards do.
You may get great value from the card
It’s a misconception that only banks with large resources can offer generous credit card rewards and that credit unions can’t compete.
Of course, a credit union card isn’t likely to offer you premium benefits like airport lounge access or hundreds of dollars in statement credits. Still, if you like to earn cash back as much as I do, you may be surprised how much value credit union cards can provide.
Take the Affinity Cash Rewards Visa Signature® Credit Card that I have. I came across it while shopping for a credit card that would reward me for spending in bookstores (since being a bookworm can be an expensive hobby). What I got was more than just a great card for bookstores – it was the perfect finishing touch to my credit card strategy.
The Affinity Cash Rewards earns 5% back at bookstores, including Amazon.com (on up to $3,500 per month in purchases made at Amazon). Except for books, I do virtually all my shopping on Amazon. Imagine how excited I was when I got this card. This is an outrageously generous cash back rate, there’s no annual fee and no Prime membership is required.
Last year, I spent $2,168 on Amazon (I’m excluding grocery orders since I use the American Express® Gold Card for that). I also spend about $2,000 on books annually. If my spending stays the same, I’ll have earned over $200 in cash back with the Affinity Cash Rewards by my first-year card anniversary just in these two categories. But besides rewarding you for Amazon and book shopping, the card also offers 2% back at supermarkets, restaurants, gas stations and for eligible streaming and ride-sharing services, as well as 1% back on everything else. These cash back rates can put some popular rewards cards from major banks to shame.
Customer service will likely be excellent
One of the biggest advantages of credit unions is their focus on customers’ experiences.
This means you will typically receive excellent customer service and much more flexibility in terms of payments, because credit unions aim to support their customers and help them maintain financial stability.
Credit unions are local institutions that try to connect with a community, those who work for certain companies or have some specific mutual connection. As such, they focus on building trust and a brand within a community.
This, too, often translates to better, local customer service.
I was pleasantly surprised when I got my union credit card and received a call from the union’s customer service. It was a representative who had emailed me earlier letting me know she would be my point of contact in case of any questions. When she called, she asked me how my experience with the card was and whether I needed any help setting things up.
I have cards from some major issuers known for their great customer service, yet none of them were able to offer me this level of attention or a designated person I could contact.
You might find it easier to get credit
It’s usually easier for members to get credit at a credit union if their credit isn’t perfect.
This allows consumers with less-than-perfect credit an opportunity to get a quality credit card product even when more well-known cards might not be available to them.
Additionally, credit unions are more flexible with small businesses and their unique needs, such as gas cards for employees or multiple users on an account.
You may get a second chance if you get denied
Consumers with lower credit scores or even an average credit history can find it difficult to get a credit card from a bank. But if a credit union declines your application for a credit card, you can ask it to reconsider the decision.
Sometimes credit unions will grant your request and require you to enroll in financial education classes to make sure you learn to use it responsibly.
See related: How credit scores affect interest rates
Credit union cons
Most financial products come with some downsides, and credit union credit cards are no exception. Here are some things to consider before you apply for a card from a credit union.
Your other accounts are used as collateral
Perhaps one of the biggest downsides of using a credit union for a card is sometimes they may use a cross-collateralization system, which ties all your credit union accounts together.
For instance, if you have multiple loans at the same credit union and for some reason you can’t make a payment on one of them, it automatically gets secured by the other loans you have. Say someone put up a used car as collateral for a personal loan and they default on a credit card payment – that car could be repossessed to satisfy the credit card debt.
Luckily, that’s not always the case. It’s possible to get a credit union card without securing it with any collateral. Make sure to research various options and pay attention to terms to avoid getting a card on conditions you’re not comfortable with.
You must meet specific membership criteria
To get a credit card from a credit union, a customer must meet membership criteria. This can be a restriction on location, employment or a variety of membership eligibility requirements. For example, I was once rejected by a credit union in Dallas when refinancing my car loan because the union only serves U.S. citizens – no permanent residents (rude).
When you apply for a credit card at a bank, you usually don’t need more than the legal requirements, and your application depends only on your credit history and income.
On the other hand, many credit unions provide an option to become a member by paying a small fee if you don’t meet the membership criteria.
The application process may be lengthy
In my experience, getting approved by a credit union can be a bit stressful. I’ve dealt with this process three times – twice when trying to refinance my car loan and once when applying for a credit card – and each time has been a pain.
What takes five minutes when you’re applying for a card from a major issuer can take days and even weeks with a credit union. You can be asked to send your paystubs to prove your income and your utility bills to prove you live where you say you live, among other things. This slows things down considerably.
Customer service may not be available 24/7
Although a credit union may provide outstanding customer service, it might not be available 24/7.
For example, if you’re traveling and have a problem with your card, you might not be able to get in touch with the credit union’s customer service department right away.
See related: How long does it take to get a credit card?
Decision time
While there are advantages to credit union credit cards, there are some downsides, too.
Membership can be exclusive, you’re not guaranteed card approval just because you’re a member, and the application process can be stressful.
On the upside, because credit unions don’t offer credit cards for a profit, members indirectly benefit from those credit cards – when credit unions make money, they can offer better interest rates, reduced fees and even valuable rewards.
Otherwise, credit union credit cards are just like big-bank credit cards.
You can use them for purchases, balance transfers and cash advances, and you must make at least the minimum monthly payment to keep your account in good standing.
In addition, most credit unions report your account history to Experian, TransUnion and Equifax, which is an extra incentive for making your payments on time as it can help you build credit.
You’ve been running a credit card balance for a few months, but finally, you have enough cash on hand to zero out the statement balance.
With great relief – and not a little pride – you pay it off. Thank goodness you’re done with that debt.
But wait: did you also pay the residual interest?
What is residual interest?
Residual interest is the interest that’s accrued on the unpaid credit card balance all this time that you’ve not been paying it. It’s also called trailing interest – because it trails into the next month.
The federal Consumer Financial Protection Bureau investigated residual interest charges on credit cards in 2015 as part of its biennial credit card report to Congress.
“We recognized, based on our research, that there is some confusion about this so-called ‘ghost charge,’ said Wei Zhang, the bureau’s credit card program manager. “People wanted to know, ‘What is this? Why is it happening?’”
The bureau did not find issuers doing anything illegal; however, they did discover that many details were buried in the fine print of credit card agreements. Card owners often were unaware of or did not fully understand what happened if they failed to pay their bill in full or how interest on the balance was calculated.
Before we get into those details any further, though, let’s start by explaining some terms:
Billing cycle – That’s the time between two bills. Many billing cycles are about a month long.
Closing date – That’s the date on which the billing cycle ends. When the closing date occurs, the card will post a statement balance. That’s the amount of purchases you charged during this billing cycle.
Grace period – This is the period of time between when the billing cycle closes and your payment is due. This can be a few weeks, or even up to a month.
Due date – This is the last possible day to make your payment without penalty. After this day, interest will start to accrue on the balance.
That interest that accrues? That’s residual interest.
See related: How to lower your credit card interest rate
How does residual interest work?
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Here’s an example of how residual interest comes into play:
You have a credit card with a billing cycle that closes on the 15th of every month. On March 15, your statement balance is $1,200.
Your due date on the bill is April 14th. But when the date arrives, you can only afford to pay $900 – meaning you leave a balance of $300 on the credit card.
That $300 starts accruing interest the very next day. How much interest? Depends on your particular credit card. Let’s say, for this example, your card charges an APR of 22%.
To figure out how much that will be, divide the APR by the number of days in the year. So 22 divided by 365 – 0.0602%.
Multiply this by your current $300 balance, and you get 18.06 cents. That’s the amount of residual interest you will get charged on the balance each day.
By the time the next month’s due date rolls around, 30 days later, you will owe $5.41 in residual interest.
This is where things get tricky. Maybe you decided to clean up your financial act. You’ve only charged $200 this month, and now you can afford to pay off both the new balance and the $300 from last month. Everything’s squared away, right? Nope, not so fast. You still owe that $5.41. And if you don’t notice it and neglect to pay it, it will continue to accrue interest.
Or, you do pay the entire bill by sending a check in the mail. Interest may continue to accrue on the balance between the time you mail the check and the time the bank receives it and cashes it. Remember, once you enter the land of accruing interest, there is no more grace period.
“Because it accrues after the billing period closes, [residual interest] won’t appear on your current statement – meaning that this could be a surprise amount you discover in your next statement,” said Megumi Smisson, who discusses personal finance on her podcast Ms. Money Moves and her website, Money With Megumi. “Or, worst case, you think you’ve paid off your card, don’t check your next statement to make a payment, and incur a late fee and potentially damage your credit.”
See related: What happens when you miss a credit card payment?
Do all cards charge residual interest?
Residual interest is a common credit card feature. Supposedly, there are banks that don’t charge it, though those are increasingly hard to find.
“I’m not saying it’s impossible, but … [scoring a credit card that doesn’t charge residual interest] is kind of like finding the pot of gold at the end of the rainbow with a unicorn standing next to it,” said Bruce McClary, spokesman for the National Foundation for Credit Counseling in Washington, D.C.
There are many credit cards that offer 0% APR on new and transferred balances for a number of months. To find out how your card deals with leftover balances, look at the back of the statement. It probably won’t say “residual interest” in those words.
Scan instead for writing like “finance charges may be assessed even if we receive payment in full in the current billing cycle.” Other ways to get this information, and discover what the APR is for your card, are to look at your card’s terms and conditions, go to the card issuer’s website or call the issuer.
How to avoid residual interest
There’s no reason you should have to pay months’ worth of residual interest on your credit card for a balance that’s quickly resolved. Here’s how to make sure this isn’t a problem for you.
Pay your card in full each month. “The No. 1 rule, the best advice for avoiding residual interest altogether, is to pay off your purchases immediately,” McClary said.
First timer? See if you can get a break. There’s no harm in calling your credit card issuer and asking if you can get an extension on your payment deadline, so you can avoid late fees, finance charges and any residual interest on this one cycle. “You never know what you’ll get until you ask,” McClary said.
If that’s not possible, check your balance and pay it online. The credit card issuer should post real-time information about your leftover balance and any accruing interest.
Get confirmation from the card issuer. This is particularly important if you are paying your balance by mail, either from a paper statement or from what you see online. Interest on the balance continues to accrue until the moment the bank cashes your check. If the check is insufficient because it doesn’t include those extra few days of interest, interest will accrue on the unpaid balance. Instead, before you write the check, pick up the phone and ask the credit card issuer for the payoff balance. “That is the best, the most foolproof way to accurately know the balance that would pay off the account,” McClary said. He advises overestimating the day the payment will arrive by a day or two; the company will repay you any overpayment but will charge more interest if you fall short again.
See related: Should I pay off my credit card all at once?
Bottom line
Remember, if you’ve let a balance carry from one statement to the next, you don’t just have to pay off the balance on your statement. You may also owe residual interest that is not included in your current statement. Check your total online. Call the card issuer to double-check. You can also check your credit card agreement to find out about residual interest or minimum finance charges.
And after you’ve paid what you believe you owe, check again, to be sure.
“Don’t just anticipate ‘I’m off the hook’ next month,” Zhang said. “In many cases, you are probably not off the hook. Make sure there are not any residual balances next month.”
Qualifying for a credit card can be a challenge if you have damaged credit. It can be difficult, too, if you have a short history of using credit or you haven’t established any credit history at all.
But there is an option if you can’t qualify for a traditional credit card: secured credit cards. These cards, which typically come with lower credit limits and few frills, can help you quickly build a credit history or steadily repair bad credit.
Amy Maliga, a financial educator at Take Charge America, a nonprofit credit counseling and debt management agency based in Phoenix, said secured cards are one of the most important tools for consumers who need to build or rebuild their credit.
“Secured credit cards can be a lifeline for consumers who may have a hard time obtaining credit through other channels,” Maliga said.
But what are secured cards, and how do they compare to unsecured credit cards?
How do secured credit cards work?
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There are some important similarities between unsecured and secured credit cards: You can use both types of credit cards to make purchases. You pay back these purchases each month. And if you don’t pay off everything you owe by your due date, you’ll be charged interest on your unpaid balance.
But there’s one big difference between secured and unsecured credit cards, and it has to do with your credit limit.
With a secured credit card, you first make a deposit with the bank or financial institution issuing the card. That deposit becomes your credit limit. If you deposit $500, you can charge up to $500 on your secured card. If you deposit $1,000, your card’s credit limit is $1,000.
Traditional credit cards – which are also known as unsecured cards – don’t require any deposit from borrowers. These are the cards you are probably most familiar with: They’re the standard Visa, American Express, Discover and Mastercard credit cards issued by banks and credit unions.
Your past credit history determines your credit limit on an unsecured credit card. If you have a history of paying your bills on time and a strong credit score, your credit limit will be higher.
The pros of secured credit cards
There are several benefits to secured credit cards for consumers with weak or bad credit.
They’re easier to get
The deposit arrangement is what makes secured cards attractive to borrowers with little or bad credit. If you fail to make your card payments on time, the bank or financial institution issuing your card can take what it is owed from your deposit. Because you can’t charge more than you deposited, you can never owe more than what your bank can take.
This offers financial protection to banks and makes it less risky for them to pass out secured credit cards to consumers with a short credit history or ones with blemishes on their credit reports. It’s easier, then, for consumers to qualify for secured cards than it is for them to nab unsecured credit cards.
“Think of the monetary deposit with a secured credit card like the deposit for a rented property,” said Jim Pendergast, senior vice president of AltLINE Sobanco, a company partnered with Alabama’s Southern Bank Company. “It acts as an assurance that you’ll pay your balances. Just like for a renter’s deposit, you can earn your deposit back by using the card responsibly.”
To qualify for a traditional credit card, especially one with a strong rewards program and a lower interest rate, you’ll need a stronger credit score. With a secured card, though, your credit score isn’t as important because of that initial deposit.
You can use them to build better credit
Every time you make an on-time payment on your secured credit card, it is reported to the three national credit bureaus – Experian, Equifax and TransUnion. As these payments are recorded, your credit score will gradually build if you haven’t had enough credit to generate one or will slowly improve if you have a score that late or missed payments have damaged.
Once your credit score improves, you can then apply for a traditional credit card. At first, you might qualify only for basic credit cards with no rewards programs. But if you make your payments on these cards on time each month, too, your credit score will continue to improve until you can qualify for cards that offer cash back bonuses, miles or rewards points.
The cons of secured credit cards
Secured credit cards also have their drawbacks.
Limited spending power
Your credit limit will usually be lower if you’re using a secured card. That’s because this limit is typically based on your deposit. If your deposit is a low one – say $300 – your credit limit will be low, too.
No perks
Secured cards rarely come with rewards programs. You typically won’t qualify for cash back bonuses or free miles when using a secured card.
How long before a secured card becomes an unsecured one?
The good news? You can transition from a secured credit card to a traditional card if you make your payments on time each month. Doing this will boost your credit score over time. And soon, you’ll have a strong enough credit score to ditch your secured card and apply for an unsecured credit card. The provider that issued your unsecured card might even upgrade you automatically after, say, six months to a year of on-time payments with your secured credit card.
Wendy Terrill, a retirement counselor in Burlington, North Carolina, understands this. She had cancer in 1999, and the financial struggles brought about by this caused her FICO credit score to fall below 400. Terrill rebuilt her credit by taking out a secured card, putting down a security deposit of $200. She used that $200 of credit to slowly rebuild her credit score, making small purchases and paying them off on time.
In fewer than six months, Terrill had improved her score enough to qualify for a traditional unsecured card.
“Some don’t understand why you’d pay someone $200 to get $200 of credit,” Terrill said. “You want to build your credit, that’s why.”
Best secured credit cards
Ready to build your credit and looking for the right secured card? Maliga recommends that consumers look carefully at the fine print when choosing a secured credit card. Some secured cards come with annual fees or monthly maintenance fees.
Here is a look at three secured cards that might meet your needs.
Secured Mastercard® from Capital One
One of the benefits of this card is that it comes with no annual fee, so you won’t have to pay to use it. Capital One requires a security deposit of $49, $99 or $200. Once you make your deposit, you’ll get a credit line of $200. Capital One will automatically consider you for a higher credit line in as few as six months.
Discover it® Secured Credit Card
This is a rare secured card that offers a rewards program. You’ll earn 2% cash back at gas stations and restaurants on up to $1,000 in purchases each quarter. You’ll earn 1% cash back on all other purchases. There’s also no annual fee with this card.
Citi® Secured Mastercard®
Looking for a higher credit limit? The Citi Secured Mastercard might be a good option. You can get a credit limit of up to $2,500, with a deposit of that same amount. This card also charges no annual fee.
Best unsecured cards for people with limited credit history
But what happens after you’ve properly used your secured card, making charges and paying them off in full? Doing this will help you build a credit history, and your credit score should steadily grow stronger.
Eventually – it might take about six months of on-time payments with your secured card – you’ll be ready to apply for an unsecured credit card. You might not have enough credit to qualify for the top credit cards, the ones offering valuable rewards and cash back bonuses. But you might qualify for one of the cards listed below, all available to consumers with shorter credit histories or average to good credit scores.
Capital One Platinum Credit Card
This is a no-frills card – but it doesn’t charge an annual fee, which is always a positive. And Capital One will review your payment history regularly. You’ll be automatically considered for a higher credit line in as little as six months. You’ll also gain access to your free credit score and credit profile through CreditWise from Capital One.
Capital One Quicksilver Cash Rewards Credit Card
This card offers a basic rewards program. You’ll earn 1.5% cash back on every purchase you make with the card. You can also earn a $200 cash bonus if you spend $500 within three months of opening your account. This card also charges no annual fee.
Petal credit cards
The Petal credit card pitches itself to applicants with little to no credit. Instead of relying on a traditional credit score, Petal creates what it calls a Cash Score based on your income, spending and savings. Petal says this score could help you qualify for a better Petal card.
There are two versions – the Petal® 1 “No Annual Fee” Visa® Credit Card and the Petal® 2 “Cash Back, No Fees” Visa® Credit Card – that come with credit limits ranging from $500 to $10,000, depending on the card. You might also qualify for cash back bonuses of 1% to 1.5% of the purchases you make or 2% to 10% at select merchants.
Bottom line
Secured cards are an easy and accessible way to start building or rebuild your credit – and start earning cash back along the way, in some cases. Use them diligently, making sure to pay them in full, and in a few months, your credit will be strong enough to qualify for an unsecured credit card.
Change has to start somewhere, and for many people that change is easier to make if the starting point has some meaning. It can be a birthday, an anniversary, or any other date with some symbolic weight. Most commonly, people choose the beginning of the new year.
If you’re looking for some New Year’s resolutions that will truly change your life, consider adjusting your financial strategy. Here are five things you can do in 2021 to take your money game to the next level.
Refinance Loans
Interest rates are at near-historic lows, which makes this the perfect time to refinance your debt. Refinancing means switching your loans from your current lender to a new lender in order to take advantage of a lower interest rate. Refinancing can save you thousands of dollars, depending on the original interest rate and total balance.
 For example, letâs say you have a $200,000 30-year mortgage with a 5% interest rate, and you refinance to a 3% interest rate. Your monthly payment will be $244 lower, and youâll save $31,173 in total interest over the life of the loan.Â
You can refinance auto loans, personal loans, and even student loans. However, if you have federal student loans, you may want to hold off on refinancing. Refinancing a federal student loan converts it into a private student loan. This means youâll give up extra perks and benefits like income-driven repayment plans and deferment and forbearance options.
Transfer Credit Card Debt
If you have credit card debt, you can pay less interest by transferring the balance to a new card with 0% APR on balance transfers. These special discounts usually last between 12 to 18 months, during which time you wonât be charged interest on the credit card balance.
For instance, letâs say you have a $5,000 balance on a card with a 17% APR. If you only make the minimum payments, youâll pay $1,223.61 in total interest. If you transfer that balance to a card with 0% APR for 12 months and repay the balance in that time, you wonât pay any interest.
There is often a small fee associated with balance transfers, around 3% of balance transfers. For example, if you transfer $5,000, youâll pay a $150 fee. That still leaves a net savings of $1,073.61 in the scenario outlined above.
Decrease Your Fixed Expenses
One of the best things to do for your budget in 2021 is to decrease fixed expenses like your car insurance, internet, cable, and cell phone. Call those providers and try to negotiate a lower rate.
 Go through your transactions for the past few months and write down all the recurring subscriptions like Netflix, Amazon Prime, and DoorDash. Then, group them into categories like âfrequently use,â âsporadically useâ and ârarely useâ. Consider canceling anything you rarely use.
 See if you can get a better deal on your most popular subscriptions. For example, if you and your significant other both pay for Spotify Premium, get a Spotify Duo account instead, and save yourself $83.88 a year.
Open a Better Bank Account
Most people are missing out on an easy way to earn money through your bank account. You could be leaving hundreds of dollars on the table if you still have a traditional savings account.
According to the FDIC, the current average interest rate on a savings account is 0.05%. Many high-yield savings accounts offer rates between .40% and .60%.Â
Letâs say you have $10,000 in a savings account with .05% interest. After one year, youâll have earned $5.04 in interest. If you moved that amount to a high-yield savings account with .5% interest, you would earn $49.92 in interest over that same time period.
Start Investing
If you’re not investing for retirement yet, this might be the most important financial resolution you can make. Thanks to the power of compound interest, you can start investing now and see huge growth by the time youâre ready to retire.
IRAs and 401(k)s are the two main retirement accounts. Anyone can open an IRA, while only those who have access to an employer-sponsored 401(k) can open one.
 If you’re not sure how to invest in your retirement account, consider hiring a qualified financial planner through the National Association of Personal Financial Advisors (NAPFA).
If youâre not ready to work with a financial planner, you can use a robo advisor like Betterment or Wealthfront, which will create a portfolio based on your age, income, and expected retirement age. Robo advisors have low fees and are designed to help beginner investors.
How to Keep Financial Resolutions
First, start small. Pick one habit to change at a time. If you try to accomplish five goals at once, you’ll burn out quickly and give up.Â
When you decide on a resolution, break it up into smaller, more manageable tasks. For example, if your goal is to talk to a financial planner about investing, break it down into the following steps:
1) Research financial planners through NAPFA
2) Send introductory emails to three financial planners
3) Choose the one that seems like the best fit
4) Schedule a consultation
Give yourself a deadline to accomplish each of these tasks, and ask a friend to hold you accountable.
Another tip is to tie your resolutions to a bigger goal. Like dieting or starting a new exercise plan, changing your financial habits is hard. If you’re used to grabbing lunch with your co-workers every day, bringing leftovers from home instead will seem like a huge change.
The key is to imagine the future version of yourself who will benefit from the changes you make today. If your goal is to open and contribute to a retirement account, imagine yourself as a senior citizen living comfortably.
When youâre tempted to skip this monthâs retirement contribution to buy concert tickets, think about your future self, what youâd want for them and how they would appreciate your sacrifice. It can also help to remember some of the financial mistakes you’ve made in the past, and how much easier your life would be right now if you had made a different choice.
The post The 5 Best Financial New Year’s Resolutions appeared first on MintLife Blog.
Annaâs email requesting help with her finances began with a unique confession.
âFarnoosh, my money problem garners little sympathy,â the 32-year-old wrote. âMy issue is that I make too much of it.â
Now, THIS is interesting, I thought. I immediately followed up with many questions.
Hereâs what I learned through our conversation:
The Denver-based Mint user earns $220,000 per year as an engineer. Annaâs also benefited from years of big bonuses and her net worth, not including her home equity, is close to a million dollars.
After paying taxes and health benefits and maxing out her 401(k), Anna takes home between $8,000 and $10,000 each month. Her expenses mainly consist of a $1,200 mortgage payment, car insurance, gas, food and utilities, amounting to maybe a few thousand dollars per month.
The rest either goes into savings where she stashes about $5,000 to $10,000 for unexpected expenses or into a brokerage account where she has roughly $800,000 invested. A wealth management firm manages that portfolio and charges, she says, an annual 1% fee.
Anna has no consumer debt, besides her mortgage, which amounts to about $338,000. Itâs a 30-year fixed rate loan with a 2.85% interest rate. The home has appreciated in recent years with about $100,000 in equity (including Annaâs initial 20% down payment).
So, what is the problem, exactly?
âMy big worry is that I don’t have the habits to manage money well,â Anna told me. Her sizeable bank balance has her feeling financially free, although she worries about getting carried away with spending sometimes.
âWhen I see money in my bank account I rationalize that âyea, that vacation is doable. I donât hold back on the things that may seem frivolous,ââ she says. But It seems she wants more financial grounding and to be able to evaluate expenditures and price tags more critically.
Annaâs situation may be unique, but I think relatable in the sense that we all would like to feel more thoughtful with how we spend, save and invest. And while some may do well with earning money, it should not be assumed that they can also manage that money well.
I applaud Anna for wanting to be sure that, even with an impressive net worth, she is actually making wise financial decisions.
Hereâs my advice.
Take a Deep Breath
No need to panic when spending on things and experiences that you enjoy. From what I can tell Annaâs prioritizing the serious financial stuff first like contributing the max to her 401(k) and saving all of her annual bonuses in a brokerage account. She has no credit card debt and pays all her bills on time. Thatâs terrific.
Sometimes we just want to hear that weâre on the right track with our money and I have a very simple way to measure this:
If you manage each paycheck by saving, investing and paying all your bills first, then by all means, youâre entitled to have fun with whatever is left without any fear or regret. Am I right?
If youâve done the good work of taking care of your future with your money, then donât hesitate treating yourself and others with the remaining funds today. Splurge away and enjoy your hard-earned money. And remember to enjoy the moment.
Ditch Your Money Managers
I do think Anna could find a better home for her investments.
Paying one percent of her managed assets to this firm may not seem that high of an annual fee. But when you think about Annaâs balance of $800,000, thatâs $8,000 this year. What about next year and the decades after that as she contributes more to the account? That fee, compounded over the next 30 years, will amount to – conservatively – over one million dollars. Ouch.
That doesnât even factor in the expense ratios for each mutual fund thatâs in her portfolio.
If all Anna seeks is investment assistance, she may be better suited stationing her money with an automated wealth platform or robo-advisor where her money is largely invested in low-fee index funds or exchange-traded funds (ETF) and the portfolio management fee is typically 0.50% or less.
Of course, breaking up with your financial advisor is not always so simple. Itâs especially hard for Anna, as she equated her money managers to âfather figures.â
If I were Anna, I would just explain to my advisors over email something like, “I want be more conservativeâ¯withâ¯my money and that includes being extra mindful of the various fees that I’m paying. To that end, Iâve decided to manage my money more independently. Iâm sure you can understand. I appreciateâ¯yourâ¯help over the years. Please let me know next steps.”
Planners know the drill and are used to having clients end relationships.⯠Stay strong. Nobody can really argue with the fact that saving money is a good thing!
Establish Short and Long Term Goals
Anna wants to spend and save with more conviction. I think having some concrete, tangible goals can help.
For example, she shared that sheâd like to get married, have a family and own two homes â one near her office downtown and another in the mountains as a getaway.
So, the next step is to understand what these goals cost. What are, say, the going prices on a vacation home in her state? How much might she want to stash in a separate account for the future down payment on this property? Knowing the underlying costs of her goals can better direct how much to spend elsewhere.
Next time sheâs planning a vacation, she may be more inclined to price compare or hunt down better deals, as opposed to just judge whether the trip is financially âdoableâ by the amount of money in her bank account. Now sheâll have the image of that second home and its costs and will make a more informed choice.
Contribute to a Cause
Last but not least, when you feel you make more than enough, like Anna does, this is a great opportunity to be extra charitable. If sheâs seeking a way to give her money more meaning and feel purposeful in her financial life, this is a truly wonderful way to go about it. Discover a cause that youâre passionate about and make an impact as a volunteer and donor.
Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at farnoosh@farnoosh.tv (please note âMint Blogâ in the subject line).
Farnoosh Torabi is Americaâs leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, sheâs become our favorite go-to money expert and friend.
The post Mint Money Audit: Managing Money When You Make Enough appeared first on MintLife Blog.
It amazes us how quickly our girls are growing up. Next month when school starts up again, weâll have a fourth-grader and a kindergartener.
Even though we have some time before they are ready to move out of the house, we want to spend time now prepare them for the big transition. As a parent, you probably feel the same way too.Â
One crucial piece of a financial foundation kids and in particular, teens, need to master is learning to budget (and sticking with it),
While theyâre home now, you have a fantastic opportunity to get them comfortable with handling their money.
If youâre not sure where to start, here are some tips from fellow parents and experts in the personal finance space to make teaching this life skill a bit easier less stressful for you and your teen!
Teach Your Teen to Budget for Real Life
Teens or not, whenever most people hear the word budget, they also hear the word ânoâ. To them, budgets feel like a strict diet. Just as fad diets fail, an unrealistic or extreme budget will more than likely discourage your teen and they will quit.
The first step before you even talk about the numbers is to discuss exactly what a successful and sustainable budget should be. When done right, a budget is something that helps you move your money towards your goals. Explain to them that at its root, budget is simply a plan about what theyâd like to do.
You want a budget that can cover:
  Essential bills
  Future goals
  Discretionary expenses
When your teenâs budget covers those goals, theyâre not only putting their finances in a good spot, but theyâre moving closer to their specific long term dreams.
Creating a Doable Budget (Theyâll Actually Enjoy!)
Once your teen(s) understands how a budget works, itâs important for them to create a budget that they can use in the real world. You can honestly budget however you want, but an easy budget to get your teen started is the 50/20/30.
Quite simplify, the 50/20/30 budget puts money into those three main buckets:
  50% goes towards essentials
  20% towards savings (or investing)
  30% for fun and discretionary expenses
I appreciate how easy and flexible this budget can be. You can adjust the percentages for your teenâs needs, but it gives them some ballpark idea of how to portion their finances when they are out on their own.
How do you start them out on this budget?
With teens, you may have expenses like clothing or their cellphone bill count as essentials, or you may want to give your child the experience of being responsible for a small, shared family bill while they are still at home.
For older teens, you could even charge them a nominal ârentâ to offset their portion of the bills. In some cases, parents give that money back to their child as a gift to help with moving expenses (like for their security deposit) or use as additional savings.Â
However you decide, talk it over so your teen understands why youâre doing it this way.
Share Your Family Budget
Creating a budget isnât complicated, but it can difficult if your teen has no idea what to expect. Knowledge can be empowering.
While we may take it for granted since have to deal with the numbers, but your teen may not be aware of how much it takes to keep the lights on and roof over their heads. If you havenât already shared your own budget already, now is the time.
Not knowing also puts them at a disadvantage when they start searching for a place or are comparing prices on expenses. Being armed with the numbers makes your teenager a more informed consumer.
When Your Teen Breaks Their Budget
Will there be times where your teenager will mess up with their budget? Probably so. However, thatâs not necessarily a bad thing. As parents, we tend to want to protect our kids, but we also have to prepare them for the real world. As Ron Lieber, author of The Opposite of Spoiled, pointed out we should let our kids make financial mistakes.Â
Wouldnât it be better for your child to break the clothing budget while theyâre still at home allowing you to help guide them through rather than having break their monthly budget while they are on their own and have bills to pay?
Mistakes will happen, theyâre a part of life so giving your teen time to work those them and adjust their budget is a blessing for their future selves.
Essential Accounts for Your Teen to Have
Since weâre talking about budgets, we should also mention some essential accounts youâd want your kid to have so they can practice managing their money.
Opening up student checking and savings accounts (usually free low on fees as well as not having minimum balance requirements) are good foundational accounts for your teen. They can deal with real-world situations pending charges, automatic transfers, and direct deposits.
As Family Balance Sheet founder Kristia Ludwick pointed out, teens should have the skill of balancing a checkbook even if they decide to go all-digital with their banking.
If they work, talk it over together and see if they can open up an IRA and start contributing. It doesnât have to be much. The idea is to get them familiar and comfortable with the basics of investing.
Even if they put in $25 a paycheck, having them practice setting aside money in their budget for both long and short term goals is an invaluable lesson. You can also encourage them to contribute by offering a match for what they put in.
How Teens Can Easily Stay on Top of Their Money
With several accounts to keep tabs on, your teen is going to need an easy system to track their budget and goals.
With Mint, they can link up their accounts in one secure spot. They can also add their budget along with any savings goals they want to hit and make sure they stick with them.
Hopefully, these ideas and tips will make it easier to help your teen transition into a self-sufficient adult.
The post How to Teach Your Teen to Budget Like a Pro appeared first on MintLife Blog.
If you have bad credit and need a car loan, there are some challenges when compared to obtaining a standard car loan. However, pick your head up because there are a handful of great lenders that specifically tailor their programs to people with bad credit. We researched the landscape of lenders that can help you get a car loan even if you have a below-average credit score.
Based on our study, OneMain Financial and LightStream are two of the top lenders offering bad credit card loans. This is due to factors including loan options, requirements to qualify, and interest rates offered. Of course, we offer in-depth reviews of all the top lenders who offer bad credit car loans further down in this piece.
Apply now with our top pick: OneMain Financial
In this guide we also help you understand the factors that go into selecting the right auto lender, and how to get the best rate you can.
Most Important Factors for Bad Credit Car Loans
If youâre in the market for a bad credit car loan, there are a plethora of factors to consider and compare. Here are the main loan details we looked at in our study, and the ones you should prioritize as you select the best car loan for your needs.
Check your credit score. And understand what is in your credit report.
FICO scores under 579 is considered ‘poor’. But you may need a bad credit loan with a score as high as 669.
Interest rates and fees matter. These can make a huge difference in how much you pay for an auto loan each month.
Compare loan terms. Consider your repayment timeline and compare lenders with this in mind.
Getting prequalified online can help. Some lenders, including ones that made our ranking, let you get prequalified for a loan online without a hard inquiry on your credit report.
Watch out for loan restrictions. Some lenders impose restrictions on what car you can purchase. Keep this in mind to avoid unpleasant surprises later.
The Best Bad Credit Car Loans of 2021
The best bad credit car loans make it easy for consumers to qualify for the financing they need. The following lenders made our list due to their superior loan offerings, excellent customer service, and reputation in this industry.
Car Loan Company
Best For…
Get Started
Best for Flexibility
Apply Now
Best Personal Loan Option
Apply Now
Best Loan for Bad Credit and No Credit
Apply Now
Best Loan Comparison Site
Apply Now
Best Big Bank Loan for Bad Credit
Apply Now
Best for Fast Funding
Apply Now
Why Some Lenders Didn’t Make the Cut
While the lenders we are profiling are the best of the best, there are plenty of bad credit car loans that didnât quite make the cut. We didnât include any lenders that only offer auto loan refinancing, for example, since we know many people need a car loan in order to purchase a new or used car or truck. We also stayed away from bad credit car loans that charge outrageous fees for consumers with the lowest credit scores.
Bad Credit Auto Loan Reviews
We listed the top companies we selected in our study above, but we also aim to provide readers with more insights and details on each. The reviews below highlight the highlights of each lender that made our list, plus our take on who they might be best for.
OneMain Financial: Best for Flexibility
OneMain Financial offers personal loans and auto loans with interest rates that range from 18.00% to 35.99%. You can repay your auto loan in 24, 36, 48, or 60 months, and you can use this lender to borrow up to $20,000 for a new or used car. You can apply for your auto loan online and from the comfort of your own home, and itâs possible to get approved within a matter of minutes.
While OneMain Financial doesnât list a minimum credit score requirement, itâs believed they will approve consumers with scores as low as 600. You should also note that auto loans from OneMain Financial come with an origination fee of up to 5% of your loan amount.
Sign Up With OneMain Financial Today
Why This Lender Made Our List: OneMain Financial offers a lot of flexibility in terms of your loan terms, including the option to repay your auto loan over five years. OneMain Financial also has pretty decent reviews from users for a bad credit lender, and they have an A+ rating with the Better Business Bureau.
Potential Downsides to Be Aware Of: OneMain Financial charges some pretty high rates for its bad credit loans, and donât forget that you may need to pay an origination fee that is up to 5% of your loan amount. Their loans are also capped at $20,000, which means this lender wonât work for everyone.
Who Itâs Best For: This lender is best for consumers with really poor credit who need auto financing but canât get approved for a better loan.
Upgrade: Best Personal Loan Option
Upgrade is an online lender that offers personal loans with fixed interest rates, fixed monthly payments, and a fixed repayment timeline. You can borrow up to $50,000 in an unsecured loan, which means you wonât actually use the car you purchase as collateral for the loan.
You can repay the money you borrow over 36 to 60 months, which makes it possible for you to tweak your loan offer to secure a monthly payment you can afford. Upgrade has a minimum credit score requirement of 620 to qualify, although theyâll consider additional factors such as your income and employment history.
Sign Up With Upgrade Today
Why This Lender Made Our List: Upgrade lets you âcheck your rateâ online without a hard inquiry on your credit report. This makes it easy to shop around and compare this loan offer to others without having to fill out a full loan application. Also note that Upgrade has an A+ rating with the BBB.
Potential Downsides to Be Aware Of: Upgrade charges APRs as high as 35.89% for consumers with the worst credit, and an origination fee of up to 6% of your loan amount might also apply.
Who Itâs Best For: Upgrade is best for consumers with decent credit who need to borrow a larger loan amount. This loan is also best for anyone who wants an auto loan that isnât secured by their vehicle.
AutoCreditExpress.com: Best Loan for Bad Credit and No Credit
AutoCreditExpress.com is an online platform that lets consumers with bad credit and even no credit get the financing they need. Once you fill out some basic loan information, youâll be connected with a lender who can offer you financing as well as a dealership in your area. From there, youâll head to the local dealership and pull the pieces of your auto loan together, including the purchase price of the car you want.
Sign Up With Autocreditexpress.com Today
Why This Lender Made Our List: AutoCreditExpress.com has an A+ rating with the Better Business Bureau. This platform also makes it possible for consumers with no credit at all to finance a car, which is a welcome relief for people who are building credit for the first time.
Potential Downsides to Be Aware Of: This website is a loan platform but they donât offer loans directly to consumers. This means you wonât have any idea on rates and terms until you fill out an application and get connected with a lender.
Who Itâs Best For: This loan is best for consumers with no credit or minimal credit history who cannot get approved for a loan elsewhere.
MyAutoLoan.com: Best Loan Comparison Site
MyAutoLoan.com is a loan comparison site that makes it easy to compare up to four auto loan offers in a matter of minutes. You can use this website to apply for a new auto loan, but you can also utilize it to consider refinancing offers for an auto loan you already have. You can also use funds from this platform to purchase a car from a dealer or from a private seller.
Sign Up With MyAutoLoan.com Today
Why This Lender Made Our List: Comparing auto loans in terms of their terms, rates, and fees is the best way to save money and wind up with the best deal. Since MyAutoLoan.com is a loan comparison site, they make it easy to shop around and compare competing offers.
Potential Downsides to Be Aware Of: Loan comparison sites connect you with other lenders who have their own loan terms and minimum requirements for approval. Make sure you know and understand all the details of loans youâre considering before you sign on the dotted line.
Who Itâs Best For: MyAutoLoan.com is best for consumers who want to do all their auto loan shopping with a single website.
Capital One: Best Big Bank Loan for Bad Credit
Capital One offers online auto loan financing in conjunction with a program called Auto Navigator®. This program lets you get prequalified for an auto loan online, then work with a participating dealer to coordinate a loan for the car you want. Capital One also lets you search available vehicles at participating dealerships before you apply for financing, making it easy to figure out how much you might need to borrow ahead of time.
Sign Up With Capital One Today
Why This Lender Made Our List: Capital One offers the huge benefit of letting you get prequalified online without a hard inquiry to your credit report. Capital One is also a reputable bank with a long history, which should give borrowers some comfort. They have an A+ rating with the BBB and plenty of decent reviews from consumers.
Potential Downsides to Be Aware Of: You should be aware that Capital One auto loans only work at participating dealers, so you may be limited in terms of available cars to choose from.
Who Itâs Best For: Capital One auto loans are best for consumers who find a car they want to buy at one of the participating lenders that works with this program.
LightStream: Best for Fast Funding
LightStream offers online loans for a variety of purposes, including auto financing. Their auto loans for consumers with excellent credit start at just 3.99% with autopay, and even their loans for consumers with lower credit scores only run as high as 16.79% with autopay.
You can apply for your LightStream loan online and get approved in a matter of minutes. This lender can also send your funds as soon as the same business day you apply.
A minimum credit score of 660 is required for loan approval, although other factors like your work history and income are considered.
Sign Up With LightStream Today
Why This Lender Made Our List: LightStream offers auto loans with exceptional terms, and thatâs even true for consumers with less than perfect credit. You can also get your loan funded as soon as the same business day you apply, which is crucial if you need auto financing so you can get back on the road.
Potential Downsides to Be Aware Of: With a minimum credit score requirement of 660, these loans wonât work for consumers with the lowest credit scores.
Who Itâs Best For: LightStream is best for people with decent credit who need to get auto loan financing as quickly as possible.
What You Need To Know When Applying For A Car Loan With Bad Credit
Interest rates and fees matter.
If you think your interest rate and loan fees wonât make a big difference in your monthly payment, think again. The reality is that rates and fees can make a huge difference in how much you pay for an auto loan each month. Consider this: A $10,000 loan with an APR of 35.89% will require you to pay $361 per month for five years. The same loan amount at 21.99% APR will only set you back $276 per month. At 9.99%, you would pay only $212 per month for five years. The bottom line: Make sure to compare auto loans for bad credit so you wind up with the lowest possible APR you can qualify for.
Take steps to improve your credit score before you apply.
Itâs not always possible to wait to apply for a car loan, but you may be able to secure a lower interest rate and better loan terms if you can improve your credit score before you borrow money. The most important steps you can take to improve your score include paying all your bills early or on time, as well as paying down debt in order to decrease your credit utilization. You should also refrain from opening or closing too many credit card accounts in order to avoid new inquiries on your credit report and maintain the longest average length of your credit history possible.
Compare loan terms.
Some lenders let you borrow money for up to 84 months, while others let you repay your loan over 36 or 60 months at most. If you need to repay your loan over a longer timeline in order to secure an affordable monthly payment, make sure to compare lenders based on this factor. If youâre having trouble figuring out how much can you can afford, gauging affordability based on the monthly payments you can handle can also help in that effort.
Getting prequalified online can help.
Some lenders, including ones that made our ranking, let you get prequalified for a loan online without a hard inquiry on your credit report. This makes it considerably easier to compare rates and shop around without formally applying for an auto loan. Getting prequalified with more than one lender can also help you determine which one might offer the lowest rate without having to fill out a full loan application.
Watch out for loan restrictions.
As you compare the lenders on this list, keep in mind that not all lenders extend loans for any car you want. Some only let you finance cars with participating lenders in their network, which can drastically limit your options and make it impossible to purchase a car from a private seller. If you hope to purchase a car from someone you know or a website like craigslist.org, you may want to consider reaching out to your personal bank or a credit union you have a relationship with.
Bad credit car loans donât have to be forever.
Finally, you should know that a car loan for bad credit doesnât have to last forever. You may need to borrow money for a car right now regardless of the interest rate and terms you can qualify for, but it may be possible to refinance your loan into a better loan product later on. This is especially true if you focus on improving your credit score right away, and if you use your auto loan as an opportunity to prove your creditworthiness.
How to Get the Best Rate
1. Check your credit score.
Your credit score is one of the most important defining factors that dictate loan costs. Before you apply for an auto loan, it can help you check your credit score to see where you stand. Your score may not be as bad as you realize, but it could also be worse than you ever imagined. Either way, it helps to know this important information before you start shopping for an auto loan.
2. Improve your credit over time.
If your credit score needs work, youâll want to take steps to start improving it right away. The most important steps you can take to boost your credit score include paying all your bills early or on time and paying down debt to decrease your credit utilization. Also, make sure youâre not opening or closing too many credit accounts within a short amount of time.
3. Check your credit reports.
Use the website AnnualCreditReport.com to get a free copy of your credit reports from all three credit bureaus. Once you have this information, check over your credit reports for errors. If you find false information that might be hurting your score, take the steps to have the incorrect information removed.
4. Compare loan offers from at least three lenders.
A crucial step to get the best rate involves shopping around and comparing loan offers from at least three different lenders. This is important since lenders with different criteria might offer a lower APR or better terms than others.
5. Be flexible with repayment terms.
Also consider a few different loan terms provided you can afford the monthly payment with each. Some auto lenders offer better rates for shorter terms, which can help you save money if you can afford to repay your loan over 24 or 36 months instead of 60+.
How We Chose the Best Auto Loans
The lenders on our list werenât plucked out of thin air. In fact, the team behind this guide spent hours comparing auto lenders based on a wide range of criteria. Hereâs everything we considered when comparing the best bad credit car loans of 2021:
Interest Rates and Loan Terms: Our team looked for loans that offer reasonable rates and terms for consumers with poor credit. While higher APRs are typically charged to consumers with a low credit score, we only considered lenders that offer sensible rates that donât seem out of line for the auto loan market.
Ratings and Reviews: We gave preference to lenders who have decent reviews online, either through Consumer Affairs, Trustpilot, or another third party website. We also gave higher marks to lenders who have a positive rating with the Better Business Bureau (BBB).
Online Availability: Lenders who offer full loan details online were definitely given top priority in our ranking, and lenders who let you get prequalified online without a hard inquiry on your credit report were given the most points in this category. But since not everyone wants to apply for a loan online, we also included some lenders that let you apply over the phone.
Approval Requirements: Finally, we looked for lenders that extend credit to consumers with low credit scores in the first place. Not all lenders offer specific information on approval requirements, but we did our best to sort out lenders that only accept borrowers with good or excellent credit.
Summary: Best Bad Credit Card Loans of 2021
Best for Flexibility: OneMain Financial
Best Personal Loan Option: Upgrade
Best Loan for Bad Credit and No credit: AutoCreditExpress.com
Best Loan Comparison Site: MyAutoLoan.com
Best Big Bank Loan for Bad Credit: CapitalOne
Best for Fast Funding: LightStream
The post What Are the Best Car Loans When You Have Bad Credit? appeared first on Good Financial Cents®.
