Hometap Vs Unison Vs Unlock: What Is The Best Way To Tap Home Equity in 2023?
By John Boitnott April 25, 2023 Illustration: The Dollar Digger Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. You’ve been making your mortgage payments for several years, and you’re at a point where you can harness the equity in your home to increase your purchasing power. But the thought of going into even more debt doesn’t exactly light you up with excitement. So what options are available for a homeowner who needs cash? There are more than you might think. Let’s look at Hometap vs Unison vs Unlock and see the kinds of homeowners who can benefit from them. Maybe you’ll want to jump on the deal and get started with one of them today. Table of Contents Hometap Vs. Unison Vs. Unlock Hometap At A Glance Unlock At A Glance Unison At A Glance What Is Hometap? How Does Hometap Work? Is Hometap Legit? What Is Unlock? How Does Unlock Work? Is Unlock Legit? What Is Unison Home Equity? How Does Unison Work? Is Unison Legit? Real Reviews From Real Users For Unison, Hometap, and Unlock Important Differences Between Hometap, Unison And Unlock What These Home Equity Loan Companies Excel At Hometap Pros And Cons Unlock Pros And Cons Unison Pros And Cons Bottom Line: Which Home Equity Option Is Best For You? FAQs Hometap Vs. Unison Vs. Unlock Company Hometap Unison Unlock Equity amount available Up to $600,000 or 30% of your home’s value Up to $500,000 or 17.5% maximum investment range Up to $500,000 Fees 3% of the investment amount plus appraisal, title, and government recording fees. 3% of the investment amount plus appraisal fees and settlement costs (title, taxes, recording fees) 3.9% of the investment amount plus appraisal and inspection fees Term 10-year term Flexible 30-year term 10-year term Max loan-to-value ratio (LTV) $15,000-$600,000 LTV maximum of 75% maximum of 75% $30,000-$500,000 LTV maximum of 70% $30,000-$500,000 LTV maximum of 70% Minimum credit score needed to apply 500 620 500 States available in Massachusetts Michigan Minnesota Nevada Ohio South Carolina Utah Arizona California Colorado Delaware Florida Illinois Indiana Kansas Kentucky Massachusetts Michigan Minnesota Missouri Nebraska Nevada New Jersey New Mexico New York North Carolina Tennessee Utah Virginia Washington D.C. Wisconsin Arizona California Colorado Florida Michigan Minnesota Nevada New Jersey North Carolina Oregon South Carolina Tennessee Utah Virginia Washington Other qualifications 25% equity in home – Own a single family home or condominium – Investment is 30% or less of total home value – Owner occupied primary residence with built up equity – Single-family homes, townhouses and condos – Plan to stay in your home for a recommended 5 years – Investment in a second home/vacation home is possible – 20% equity in the home – Single family homes or rental properties (with rent verification) are eligible Hometap At A Glance Fees 3% of the Investment amount, plus appraisal, title, and government recording fees. Qualifications Single family home or condominium; 25% equity in the home; investment amount is 30% or less of total home value. Minimum Payment Amount No monthly payments Available Equity Amounts 5% to 15% range Credit Score Requirements 620 or higher (can apply with a score as low as 500) States Where Service Is Available Arizona California Florida Maryland Massachusetts Michigan Minnesota New Jersey New York North Carolina Ohio Oregon Pennsylvania Virginia Washington Length of Loan Terms 10-year term Max loan-to-value ratio (LTV) $15,000-$600,000LTV maximum of 75% Tap Into Your Home’s Equity, Learn More Tap Into Your Home’s Equity, Learn More Hometap At A Glance Fees 3% of the investment amount plus appraisal and inspection fees Qualifications Homeowners need to have minimum equity of 20% of the home’s value. Single family homes or rental properties (with rent verification) are eligible. Minimum Payment Amount No monthly payments Available Equity Amounts 1% to 43.5% Credit Score Requirements 500 or higher States Where Service Is Available Arizona California Colorado Florida Michigan Minnesota Nevada New Jersey North Carolina South Carolina Oregon Tennessee Utah Virginia Washington Length of Loan Terms 10-year term Max loan-to-value ratio (LTV) $30,000-$500,000 Unlock Your Home’s Equity, Learn More Learn How To Unlock Home Equity, Learn More Unison At A Glance Fees 3% of the investment amount plus appraisal fees and settlement costs (title, taxes, recording fees) Qualifications House must be an owner-occupied, primary residence. Can include single-family homes, townhouses, and condos. In some cases, investment in second homes/vacation homes is possible. Minimum Payment Amount No monthly payments Available Equity Amounts 17.5% maximum investment range Credit Score Requirements 680 or higher States Where Service Is Available Arizona California Colorado Delaware Florida Illinois Indiana Kansas Kentucky Massachusetts Michigan Minnesota Missouri Nevada New Jersey New Mexico New York North Carolina Ohio Oregon Pennsylvania Rhode Island South Carolina Tennessee Utah Virginia Washington District of Columbia / Washington D.C. Wisconsin Length of Loan Terms Flexible 30-year term Max loan-to-value ratio (LTV) $30,000-$500,000 LTV maximum of 75% Hack Your Home’s Equity, Learn More Hack Your Home’s Equity, Learn More What Are Alternative Ways To Get Equity Out Of Your Home? There are several different ways homeowners can harness the purchasing power of the equity in their homes. And each has its benefits and drawbacks. You may have parents or grandparents who used a reverse mortgage to get the extra cash they needed for home renovations, vacation money, or paying off debt. Reverse mortgages are typically settled when the mortgage holder passes away and the house is sold. The balance was then paid and the remainder of the home’s proceeds from the sale went to the estate’s beneficiaries. The loan balance on the reverse mortgage may have grown over time, but the home also appreciated in value. This helped offset the balance owed. It benefitted the homeowner while alive, and the beneficiaries when the property was sold. The main drawback of a reverse mortgage is that if you’re not 62, the minimum age requirement for a reverse mortgage, you don’t qualify for one. If you need money now, you need to look elsewhere. Refinancing
11 Legit Ways to Start Making More Money
11 Legit Ways to Start Making More Money Today By Kenny Sokan October 2, 2023 FREE GIFT CARDS Get ready to boost your earnings! Explore our list of reliable money-making opportunities. Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. Feeling the pinch this month? We understand the struggle and want to help. That’s why we’ve curated a collection of easy, unique, and even enjoyable ways to supplement your income regularly. From investing to high-paying side hustles, and quick online hacks, we’ve got you covered. Scroll through and explore our handpicked selection of money-making opportunities so you can start boosting your income today! Never Miss A Deal At Your Favorite Online Stores And Always Earn Rewards Tired of missing out on sales and discounts for things you have on your shopping list? Wishing there was a way to get alerts for deals as you shop? Then download the Capital One Shopping browser extension. It’s the ultimate ally in the fight against overpriced online shopping. It has instant price comparison for the 30,000 plus stores it monitors. So, let’s say you’re looking at bluetooth headphones on Amazon. If those exact headphones are available at a cheaper price at another retailer, a friendly message will pop up alerting you to the savings. And if there are any discount codes available for a retailer, the one that will get you the most savings will automatically be applied to your shopping cart at checkout. But wait, that’s not all. You can also earn credits for your shopping that you can redeem for gift cards to dozens of popular brands. This browser extension helped shoppers save over $160 million in 2022 alone. Download the browser extension Get Up To $500 Whenever You Need It — No Credit Check Or Delays In need of some extra cash to get you through a tough spot? We’ve all been there, and sometimes all you need is just a few extra hundred dollars to hold you over until your next paycheck. When the going gets tough and money is tight, the app Dave is always there to help. Dave offers quick relief with cash advances up to $500 without all the complexities of a traditional bank loan. There are no credit checks, interest charges, or late fees, and it offers fast deposits — I’m talking in as little as a few minutes. Getting an ExtraCash™ advance from Dave is simple: Link your bank account, answer a few questions, and Dave will confirm your eligibility and borrowing limit. Choose the desired amount within your limit and submit your request. Get your advance instantly with a Dave Spending Account, pay a small fee for an external debit card transfer, or receive it free within one to three days to an external bank account. Dave provides a settlement date, typically your next payday or the nearest Friday after taking the advance, to repay the borrowed amount. Once the borrowed amount is repaid, the cool-off period ends, allowing you to borrow again. If you don’t end up spending all of the money you borrowed, you can transfer it over to your ExtraCash™ account, reducing the amount you’ll have to pay back next time. If you’re looking for a more steady way to boost your income, check out Dave’s side hustle listings. You can explore and apply for local and flexible jobs, including paid survey opportunities, from its network of partners. Since launching this feature in 2019, Dave has connected thousands of members with profitable gigs that have earned them millions. Whether you need help covering bills, money for groceries, or better earning opportunities, Dave’s got you covered. 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Minimum Credit Score for Credit Card in 2023: Credit Card Score Requirements #2
By Maddy Scheckel March 9, 2023 Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. Renting an apartment? Applying for an auto loan? You’ll need a good credit score! If you’re not applying for a credit card from fear of having a low credit score, don’t worry! Credit cards aren’t reserved for those with perfect credit scores. In fact, companies are releasing credit cards for consumers with low credit. So if you want to join the 191 million Americans who already have a credit card, read on. I’ll explain, in detail, the minimum credit score for credit card and more! What Credit Score is Required for a Credit Card? Some credit cards require high credit scores, but that doesn’t mean they all do! Are you wondering what the minimum credit score for credit card is? You’ll be glad to know that there is no minimum credit score requirement to get a credit card. Although with a higher credit score, your chances of qualifying will go up, interest rates will come down, and you’ll be eligible for cards with better perks. On the other hand, if you have ‘fair’ or ‘poor’ credit, you may have the option of a secured credit card. A secured credit card lets you pay a deposit and use it as your spending limit. Some lenders may even limit your spending to lower than your deposited amount. For example, if you deposit $300 as collateral, your lender will give you a $300 line of credit. You can use this to shop around, and if you’re making payments on time every month, you’ll build good credit. Some credit card companies also have specialized credit card plans for consumers with low or no credit. But do be aware these credit cards typically come with higher interest rates. So, while a higher credit score makes you eligible for a wider range of credit cards, it is still possible to get a credit card with little to no credit. What is a Good Credit Score? You’re probably thinking, “What is a good credit score?” According to many sources, anything above 670 is considered ‘good’ and will qualify you for a credit card with reasonable interest rates and benefits. Below are the FICO credit ranges to give you an idea of what category your credit score falls into. FICO Score Ranges Poor: 350 to 579 Fair: 580 to 669 Good: 670 to 739 Very Good: 740 to 799 Excellent: 800 to 850 Source: Credit scores (wa.gov) How Are Credit Scores Calculated?t Credit scores are calculated on a number of factors including credit payment history, new inquiries, and more! The FICO scoring method uses these five factors to determine your credit score: Payment history – 35% Credit utilization – 30% Credit history length – 15% Type of credit – 10% Credit inquiries – 10% 1 – Payment History The biggest contributing factor is your payment history, which makes up 35% of your credit score. So if you want to build good credit, always settle your accounts on time, whether it’s credit cards, personal loans, mortgages, or utilities. Late payments will lower your credit score and can stay on your credit report for up to seven years. This is because lenders want assurance of knowing you’ll pay your credit card balance on time. If you have a history of late payments, lenders will be more hesitant to give you a credit card. Pro tip: Most lenders and service providers are compatible with autopay, and I highly suggest using it as a tool to help you build a good payment history. Autopay allows the lender to collect money directly from your bank account, so you won’t have to make monthly payments manually. This reduces the likelihood of late payments. 2 – Credit Utilization The second most important factor is your credit utilization. This makes up 30% of your credit score. Credit utilization compares your available spending limit to your current balance. For example, if your limit is $10,000 and you only spend $1,000, your credit utilization is 10%. As a rule of thumb, you should keep your credit utilization below 30% to improve your credit score. This indicates creditworthiness because you’re handling credit responsibly. You’re not maxing out credit cards as soon as you get them. 3 – Credit History Length Your credit history makes up 15% of your credit score, and it simply refers to the length of time you’ve been using credit. The longer you’ve been borrowing money and paying it back on time, the better your credit score. For example, a consumer with a good credit history dating back ten years will naturally be seen as a less risky borrower than someone who received their first credit card three months ago. Unfortunately, there’s not much you can do about this factor. You’ll just have to make timely payments, keep below 30% credit utilization, and be patient. 4 – Type Of Credit Believe it or not, the type of credit you access contributes 10% to your credit score. This factor looks at the variety of credit you have, such as installment credit, revolving loans, and secured loans. If you have a healthy variety of credit, maybe you have a mortgage, car loan, and credit card, and you manage it responsibly, it’ll boost your credit score. 5 – Credit Inquiries When applying for new credit, lenders typically run a hard credit check, which temporarily lowers your credit score. This is why I suggest keeping your credit card applications to a minimum. If you apply for ten credit cards at once, for example, all these hard credit inquiries will count against you. Not to mention, it looks bad. It might seem like you’re in desperate need of cash, and lenders will view you as a high-risk borrower. But as long as you’re not applying for several credit cards within a short timeframe, you won’t have to worry about credit inquiries hurting your credit. It’s one of the
Are Credit Cards a Trap? (Real Talk)
By Maddy Scheckel March 6, 2023 Facebook Pinterest-square Envelope Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. Monthly payments. Interest rates. Piles of debt. That’s a lot of nastiness, and it comes from the same place: credit cards. So let’s get real here. Are credit cards a trap? Not necessarily – but they can be. That’s why you have to use them responsibly. There’s a lot to like about credit cards. It’s no coincidence that 84% of Americans have one. You just have to avoid costly mistakes. Here, I spell out exactly how credit cards can trap you and how you can use them wisely. Credit cards can be useful financial tools when used responsibly. Source: Unsplash A credit card allows you to buy items in stores, make online purchases, and pay bills – all with credit. Basically, it’s an easy way of borrowing money for everyday transactions. When you apply for a card, the credit card company gives you a credit limit. Let’s say your credit limit is $3,000. That means you can use the card to spend up to $3,000 dollars without actually dipping into your own savings. Every month, you’ll receive a credit card statement that shares your balance or how much money you owe. This statement will also give you the minimum payment you need to make in order to avoid penalties. Whatever money you pay will be removed from your balance. The remaining balance will remain as debt. Most credit cards charge interest (called an annual percentage rate, or APR) – meaning the debt in your balance will continue growing as long as you don’t pay it back. That’s why it’s always best to pay off your entire balance or as much of it as you can. What is a Credit Card Trap? A credit card trap is what you “fall into” when you use credit cards to spend more than you earn. Imagine you use a credit card – or multiple credit cards – to make purchases each month. You don’t earn enough to pay off the balance, and so your debt increases. That debt then increases further because of interest, which makes it even harder to pay off. See how it becomes a nasty cycle? The debt produces more debt, and all the while, you sink deeper and deeper. So are credit cards a trap? Not necessarily. But they can become one if you’re not careful. That’s why you need to be smart about how you use them. Common Credit Card Traps 1 – Overspending with Your Card When it comes to credit card debt, overspending is at the root of all evil. Think about it. No matter what financial strategies you employ, you’re bound to fall behind if you’re consistently spending more than you earn. 2 – Only Making the Minimum Payment With each credit card statement, you’re given a minimum payment. This is the amount you have to pay to avoid late fees. Making that payment might seem like a victory, but it’s actually far too little. Imagine: You use your credit card to spend $500, then make the minimum payment of $45. That leaves you $455 in debt – a number that will only rise with interest. A few more months of those habits and– bam! You’re in some seriously hot water. 3 – Going After Perks Without Considering the Downside Travel points! Discounts! Nights out with friends! Trips to the Bahamas! With so many perks on offer from credit card companies, it’s hard not to be seduced. But behind those flashy selling points, each credit card has a lot of fine print. Sometimes, the perks are actually worth it, but you need to look carefully at the fees and interest rates before making a decision. If you take out too many cards just to chase those rewards, you could find yourself with debt piling up all around you. 4 – Regularly Using Your Card at the ATM If your credit card has a PIN, you can use it to get cash from an ATM. It’s just like a debit card, right? Wrong! Unlike a debit card, which draws money that’s already yours, a credit card uses a “cash advance” to get money from the machine. So basically, you’re borrowing money, and the loan comes with interest rates and fees. Interest rates, fees – yup, just the things that totally kill your finances. How to Avoid Credit Card Traps 1 – Budget to Avoid Overspending Budgeting is the single best way to avoid falling into a credit card trap. Avoid overspending, and keep your credit card balances small. Keep those balances small, and you have an easier time paying them off. Pay them off, and you avoid falling into debt. It all stems from budgeting. Get that part down, and your financial health will improve across the board. 2 – Pay Off Your Entire Balance Each Month Credit cards themselves aren’t the problem. It’s the debt that’s harmful. So how do you avoid debt? By paying off your balance each and every month. This is where budgeting comes in again. Only spend what you can afford to pay off in full. And if you manage it? Goodbye, interest. Goodbye, growing debts. Goodbye, stress. Hello, better credit scores and a brighter financial future! 3 – Don’t Take Out Too Many Cards Life and debt are stressful enough without having 15 credit cards to worry about. The more cards you have, the harder it is to keep track of them all – and the easier it is to miss payments. Avoid the impulse to take out a credit card for every store that offers a deal. If you stick with just a few generic cards, you’ll actually be able to keep track of your finances. 4 – Avoid Credit Cards Altogether This is an extreme strategy – but it’s an effective one. You can’t misuse a credit card that you don’t even have. Now –
Alternatives to Credit Cards: 10 Best Options in 2023
By Maddy Scheckel March 9, 2023 Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. You’re checking out at your local grocery store, you insert your credit card into the card machine, and it’s declined. There’s a long line of people behind you. What are you going to do? You’ll be glad to know that credit cards aren’t the only way to pay for purchases. Personally, I’ve been trying to cut down my credit card usage because, like the average American, I struggled with over $5,000 in credit card debt in the earlier stages of my life. Below, I’ll review the best alternatives to credit cards while answering frequently asked questions and sharing some of my own experiences. Best Credit Card Alternatives Credit cards aren’t the only way to pay for everyday items. You have options. Here’s my list of the top alternatives to credit cards. 1 – Debit Card The most obvious alternative to a credit card is a debit card. It provides the same convenience because you can use it almost anywhere. According to the Nilson Report, over 83% of American adults have a debit card. Debit cards offer a few benefits that many credit cards don’t. Debit cards are an easy way to withdraw cash from ATMs Debit cards typically don’t allow you to spend a lot more money than you have, unlike credit cards Debit cards basically force you to pay now, so there is no bill coming later. Helpful for folks who aren’t all that organized! For me, I realized that using a debit card made it easier to stick to a monthly budget. This is because you can’t max out a line of credit or borrow more than you have. You can only spend the money that’s in your bank account. 2 – Personal Loans Personal loans are another handy alternative to credit cards. If you offer collateral like a bank account or property in your loan application, you can often gain access to lower interest rates than credit cards. This even works if you have bad credit. Collateral assures banks that if you can’t repay the loan, they can still collect something of value. Quick tip: Shop around when taking out a personal loan. The first bank that’s willing to give you money rarely has the lowest rates. Instead, gather offers from several banks and online lenders. Then choose the one with the best interest and lowest fees. 3 – Buy Now, Pay Later (BNPL) Buy now, pay later (BNPL) is another easy way to pay without credit cards! Buy now, pay later apps such as Klarna, Afterpay, and Affirm are becoming increasingly popular. They let consumers buy products and pay them off interest-free over a few weeks or months. But keep in mind that buy now, pay later lenders require a downpayment during checkout, usually around 25% of your checkout total. This differs from credit cards which allow you to borrow without putting money down first. 4 – Overdraft Some banks let customers set up what’s called an “arranged overdraft.” This is an agreement to allow the member to temporarily overdraw on their account up to a predetermined amount. Although only a short-term solution, an arranged overdraft might be just what you need. It works like this: Let’s say you have $500 in your account but need to pay an $800 utility bill. You reach out to your bank for an arranged overdraft, and your utility company takes the $800 out of your account. You then pay your bank the extra $300 over the next few weeks or months. But be aware that this isn’t offered at all banks and many charge high fees for arranged overdrafts. So, be sure to weigh your options first. 5 – Short-Term Loans Short-term loans are good alternatives to credit cards. They are similar to traditional personal loans, but the primary difference is the timeframe. As the name suggests, you’ll need to pay back your short-term loan quickly. This is perfect if you’re getting paid soon but need to settle a few bills in the meantime. The only significant drawback is that you typically can’t borrow large sums of money since you’re paying the loan back so quickly. It’s only a practical option for smaller expenses. 6 – PayPal PayPal has become a common form of digital payment. Users can send money, receive payments, and pay for items in-person and online. This makes it an excellent alternative to credit cards. In addition, PayPal has their own buy now, pay later option called PayPal Pay in 4. So, customers can spread out payments for goods over several weeks. PayPal also offers PayPal Credit which is a lending option where users pay installments typically over a few months. The amount borrowed determines the terms and interest. 7 – Prepaid Debit Card Prepaid debit cards are reloadable cards that allow you to deposit money and use it to pay for products and services in-store or online. You can load up a prepaid debit card online via electronic transfers or with cash when you purchase the card in person. I’m a big fan of prepaid debit cards because they keep you financially responsible. For instance, you can only spend the amount available on the card. There’s no borrowing, overdraft, or fees. So if you’re a person that struggles with spending more than they have, prepaid debit cards could be one of the best alternatives to credit cards for you! 8 – Gift Cards You probably receive gift cards from friends and family during the holiday season. It’s easy to think of these gift cards as coupons for small purchases. However, if you save up your gift cards, they can help you pay for even more. For example, a friend gave me an Uber gift card for my birthday a few years ago. My car broke down three months later, but fortunately, I still had this Uber gift card. I could take my car to the mechanic
Minimum Credit Score for Credit Card in 2023: Credit Card Score Requirements
By Maddy Scheckel March 9, 2023 Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. Renting an apartment? Applying for an auto loan? You’ll need a good credit score! If you’re not applying for a credit card from fear of having a low credit score, don’t worry! Credit cards aren’t reserved for those with perfect credit scores. In fact, companies are releasing credit cards for consumers with low credit. So if you want to join the 191 million Americans who already have a credit card, read on. I’ll explain, in detail, the minimum credit score for credit card and more! What Credit Score is Required for a Credit Card? Some credit cards require high credit scores, but that doesn’t mean they all do! Are you wondering what the minimum credit score for credit card is? You’ll be glad to know that there is no minimum credit score requirement to get a credit card. Although with a higher credit score, your chances of qualifying will go up, interest rates will come down, and you’ll be eligible for cards with better perks. On the other hand, if you have ‘fair’ or ‘poor’ credit, you may have the option of a secured credit card. A secured credit card lets you pay a deposit and use it as your spending limit. Some lenders may even limit your spending to lower than your deposited amount. For example, if you deposit $300 as collateral, your lender will give you a $300 line of credit. You can use this to shop around, and if you’re making payments on time every month, you’ll build good credit. Some credit card companies also have specialized credit card plans for consumers with low or no credit. But do be aware these credit cards typically come with higher interest rates. So, while a higher credit score makes you eligible for a wider range of credit cards, it is still possible to get a credit card with little to no credit. What is a Good Credit Score? You’re probably thinking, “What is a good credit score?” According to many sources, anything above 670 is considered ‘good’ and will qualify you for a credit card with reasonable interest rates and benefits. Below are the FICO credit ranges to give you an idea of what category your credit score falls into. FICO Score Ranges Poor: 350 to 579 Fair: 580 to 669 Good: 670 to 739 Very Good: 740 to 799 Excellent: 800 to 850 Source: Credit scores (wa.gov) How Are Credit Scores Calculated?t Credit scores are calculated on a number of factors including credit payment history, new inquiries, and more! The FICO scoring method uses these five factors to determine your credit score: Payment history – 35% Credit utilization – 30% Credit history length – 15% Type of credit – 10% Credit inquiries – 10% 1 – Payment History The biggest contributing factor is your payment history, which makes up 35% of your credit score. So if you want to build good credit, always settle your accounts on time, whether it’s credit cards, personal loans, mortgages, or utilities. Late payments will lower your credit score and can stay on your credit report for up to seven years. This is because lenders want assurance of knowing you’ll pay your credit card balance on time. If you have a history of late payments, lenders will be more hesitant to give you a credit card. Pro tip: Most lenders and service providers are compatible with autopay, and I highly suggest using it as a tool to help you build a good payment history. Autopay allows the lender to collect money directly from your bank account, so you won’t have to make monthly payments manually. This reduces the likelihood of late payments. 2 – Credit Utilization The second most important factor is your credit utilization. This makes up 30% of your credit score. Credit utilization compares your available spending limit to your current balance. For example, if your limit is $10,000 and you only spend $1,000, your credit utilization is 10%. As a rule of thumb, you should keep your credit utilization below 30% to improve your credit score. This indicates creditworthiness because you’re handling credit responsibly. You’re not maxing out credit cards as soon as you get them. 3 – Credit History Length Your credit history makes up 15% of your credit score, and it simply refers to the length of time you’ve been using credit. The longer you’ve been borrowing money and paying it back on time, the better your credit score. For example, a consumer with a good credit history dating back ten years will naturally be seen as a less risky borrower than someone who received their first credit card three months ago. Unfortunately, there’s not much you can do about this factor. You’ll just have to make timely payments, keep below 30% credit utilization, and be patient. 4 – Type Of Credit Believe it or not, the type of credit you access contributes 10% to your credit score. This factor looks at the variety of credit you have, such as installment credit, revolving loans, and secured loans. If you have a healthy variety of credit, maybe you have a mortgage, car loan, and credit card, and you manage it responsibly, it’ll boost your credit score. 5 – Credit Inquiries When applying for new credit, lenders typically run a hard credit check, which temporarily lowers your credit score. This is why I suggest keeping your credit card applications to a minimum. If you apply for ten credit cards at once, for example, all these hard credit inquiries will count against you. Not to mention, it looks bad. It might seem like you’re in desperate need of cash, and lenders will view you as a high-risk borrower. But as long as you’re not applying for several credit cards within a short timeframe, you won’t have to worry about credit inquiries hurting your credit. It’s one of the
Personal Loan Vs. Credit Card: 5 Biggest Differences
By Maddy Scheckel March 9, 2023 Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. I’ve been getting tons of offers for personal loans and credit cards in my inbox. If you’re in the same boat, you might be wondering which is the better option, between a personal loan vs credit card. Fortunately, I have quite a lot of experience with both credit cards and personal loans. I use credit cards to pay for everyday purchases, and in the past, I’ve relied on personal loans to help me pay off debt. So if you’re planning on contributing to the $312.5 billion increase in spending by Americans this year, continue reading. Below, I’ll compare personal loans vs credit cards to help you make your own confident financial decisions. Biggest Differences Between a Personal Loan Vs. Credit Card Choosing between a personal loan vs credit card can be complicated. Make sure to weigh all the risks and rewards prior to signing any contracts. Personal loan vs credit card. Which option is more beneficial for your financial health? They both offer unique pros and cons, and there are a few differences to watch out for. 1 – Amounts A major difference between a personal loan vs credit card is the amount of money you can borrow. Typically, personal loans are for big, once-off purchases like a car, home renovation, or debt consolidation. Credit cards, however, are mainly used for smaller, everyday purchases like groceries, clothes, and dining out. And this makes sense. Considering that the average interest rate on a credit card is around 20%, you won’t want to use it for large purchases. Pro tip: If you’re struggling to get approved for the amount of money you need, consider a secured personal loan. This is a loan for which you put up something (like a house or savings account) as collateral. Your collateral lowers the lenders’ risk by giving them a way to recoup their losses if you fail to pay back the loan. 2 – Repayment Personal loans come with a strict repayment plan. This amount and timeline will be outlined in your loan agreement. Since you know how much money you need to pay every month for the entire repayment period, it’s easy to budget without any surprises. Credit cards offer more flexibility. When you buy something with your credit card, you’ll have to at least pay a minimum monthly installment. This is a small percentage of your credit card balance. The remaining balance is carried over to the next month, where it accumulates interest. By making the minimum monthly payment, you can purchase items and pay for them over several months. You can, of course, pay more than the minimum installment and reduce the amount of money that accumulates interest. For instance, if you pay your balance in full every month, you’ll pay zero interest. This helps you build your credit score at the same time! 3 – Fees Many people find that maintaining a credit card is generally cheaper than a personal loan. This is because there are plenty of credit cards available with no annual fees. Credit cards also charge fees for things like balance transfers and currency exchanges, but most people don’t do those often. So, you’ll usually only pay a fee if you miss an installment. On the flip side, most personal loans require origination fees, application fees, prepayment penalties, and payment protection insurance. You want to factor in these fees when taking out a personal loan since they can quickly eat into your budget. 4 – Interest Rates Both personal loans and credit cards come with interest rates. However, the convenience of swiping your credit card often comes at a higher interest rate than personal loans. The average credit card interest rate is around 20%, while personal loans are only 11.23%. This lower interest rate is a big reason personal loans are popular amongst consumers trying to consolidate credit card debt. It lets consumers pay off high-interest credit card debt and save money. Pro tip: Some credit cards run introductory offers with a 0% interest rate for the first few months after opening the card. This could be a good option for you if you don’t want to open a loan and plan on paying off the full balance. 5 – What They Are Best Used For Deciding between a personal loan vs credit card may depend on what you plan to use the money for. Personal loans and credit cards have different uses. Personal loans are better if you’re making big, one-time purchases and don’t want to pay a lot in interest. Personal loans are also handy if you’re stuck in thousands of dollars worth of credit card debt and want to streamline payments. You can consolidate credit card debt with a personal loan and save money on interest. But if you’re looking for a way to pay for everyday purchases while building good credit, credit cards are a better choice. The convenience allows you to shop almost anywhere (in person and online), and if you settle your balance every month, you can avoid paying interest. Pros and Cons of Credit Cards Pros Cons Most retailers accept credit cards High-interest rates Little to no fees Creates a cycle of debt if used irresponsibly Many have benefits such as cashback, travel points, fraud protection, and return protection Late payments can damage your credit Pros and Cons of Personal Loans Pros Cons Predictable and fixed repayment plans Comes with a host of fees, such as origination fees and prepayment penalties Typically lower interest rates No rewards or cashback Terrific option for large purchases such as a car or home improvement project Secured loans require collateral Is it Better to Have a Credit Card or a Loan? Still working on making your decision between a personal loan vs credit card? If you’re looking to borrow large sums of money, personal loans might be a better choice. Personal
Credit card Vs. Debit Card: What’s the Difference and Which Is Better in 2023?
By Maddy Scheckel March 9, 2023 Facebook Pinterest-square Envelope Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. Let’s play Jeopardy. The clue is: A rectangular piece of plastic that you keep in your wallet and use to make purchases. What is: a credit card! Wait, no. What is: a debit card! Wait –hmm. What’s the difference between those two, anyway? 84% of Americans have a credit card, and 83% have a debit card. But it’s still hard to tell them apart! That’s why I’m here to help. I’ve laid out the credit card vs debit card comparison in as simple terms as possible. So you’ll know which to use and when. What is a Credit Card? A credit card is a card you can use to make payments on credit, then pay for them later. Here’s how it works: Step 1: You (the consumer) apply for a credit card from a bank or other financial institution (the lender). Step 2: The institution looks at your credit history, then decides whether or not to give you a card. Step 3: You use the credit card to make purchases and pay bills. This creates a balance (debt) that you’ll have to pay back. Step 4: You receive a credit card bill that asks for a minimum payment. You can either pay off the entire balance or make only the minimum payment. If you make only the minimum payment, you’ll be charged interest on the remaining balance. This interest increases your debts. What is a Debit Card? A debit card is a type of payment card that draws money directly from an account. This is usually a checking account from a bank. If you open a checking account, you can expect the bank to give you a debit card. You can use this card to withdraw money from an ATM, make purchases in stores, and complete online payments. The money will come right out of your account, so there’s never any debt involved. Most debit cards are attached to bank accounts, but not all. Other types of debit cards include: Electronic benefits transfer (EBT) cards that allow you to spend government benefits Prepaid debit cards that come loaded with money, which you can use until the money runs out. Debit cards and credit cards both allow for easy online purchases.Source: Unsplash What is the Difference Between Debit Card or Credit Card? When people talk about credit card vs debit card, the main difference is where the funds come from when you make a purchase. With a credit card, you don’t actually use your own money to make the payment – at least not at first. The payment amount is simply added to your balance, and it’s up to you to pay off that balance later on. With a debit card, you use money that’s already yours to make the payment. In the case of a traditional debit card that’s tied to your checking account, the money comes out of your account. Got $1,000 in your account? Make a $200 purchase? You’ll end up with $800 in your account. It’s pretty simple. But this isn’t the only difference in the credit card vs debit card discussion. Credit cards also tend to have more purchase protections than debit cards. That means you can contact the credit card company if you buy something that’s damaged or ends up being stolen, and they’re more likely to refund your money. Another key difference is that credit cards often have reward programs. This means you can get travel points, cash back, and even perks like airport lounge access. Debit cards are great for making payments and taking out cash, but they don’t come with these “extras.” Advantages of Using a Credit Card There are several reasons why so many people have credit cards. In fact, both sides in the credit card vs debit card debate have a lot going for them. That’s why most people have both! Here are the main benefits of using a credit card. More Time to Pay for Purchases Sometimes you need to make a payment right now – but you just don’t have enough money in your bank account. With a credit card, you can make the payment, then pay off your balance when you can. This can be risky as debt has a nasty way of sneaking up on you, but it’s also a useful financial tool. Use it responsibly, and it can help you manage your finances. Helps Build Your Credit Score Your credit score is a magic number that shows potential lenders how trustworthy you are as a borrower. Want to get a loan? Take out a mortgage? Finance a new car? Your credit score will affect your chances. Having a credit card and using it responsibly is one great way to boost your credit score and increase your financial flexibility. Enjoy Rewards and Perks Credit cards often come with rewards and perks – like points you can use to pay for plane tickets and cash back on certain types of purchases. Don’t let these rewards seduce you. Many starry-eyed consumers have spent their way into oblivion in the dogged pursuit of points. But if you use the card for purchases you were planning on making anyway, the rewards can translate into serious savings. Great Backup Plan for Emergencies Sometimes, an emergency strikes, and you simply have to make a payment. Natural disasters, medical emergencies, and family issues can all demand an immediate outlay, regardless of whether you’ve got money in your bank account. With a credit card, you can make these necessary payments, then pay down the balance when you can. Credit cards often come with “travel points” and other rewards.Source: Unsplash Advantages of Using a Debit Card No credit card vs debit card discussion would be complete without recognizing the benefits of sticking with a debit card. There are no rewards, of course, and you won’t build any credit, but debit cards still have a lot to offer. Here are the
Credit card Vs. Debit Card: What’s the Difference and Which Is Better in 2023?
By Maddy Scheckel March 9, 2023 Facebook Pinterest-square Envelope Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. I’ve been getting tons of offers for personal loans and credit cards in my inbox. If you’re in the same boat, you might be wondering which is the better option, between a personal loan vs credit card. Fortunately, I have quite a lot of experience with both credit cards and personal loans. I use credit cards to pay for everyday purchases, and in the past, I’ve relied on personal loans to help me pay off debt. So if you’re planning on contributing to the $312.5 billion increase in spending by Americans this year, continue reading. Below, I’ll compare personal loans vs credit cards to help you make your own confident financial decisions. Biggest Differences Between a Personal Loan Vs. Credit Card Choosing between a personal loan vs credit card can be complicated. Make sure to weigh all the risks and rewards prior to signing any contracts. Personal loan vs credit card. Which option is more beneficial for your financial health? They both offer unique pros and cons, and there are a few differences to watch out for. 1 – Amounts A major difference between a personal loan vs credit card is the amount of money you can borrow. Typically, personal loans are for big, once-off purchases like a car, home renovation, or debt consolidation. Credit cards, however, are mainly used for smaller, everyday purchases like groceries, clothes, and dining out. And this makes sense. Considering that the average interest rate on a credit card is around 20%, you won’t want to use it for large purchases. Pro tip: If you’re struggling to get approved for the amount of money you need, consider a secured personal loan. This is a loan for which you put up something (like a house or savings account) as collateral. Your collateral lowers the lenders’ risk by giving them a way to recoup their losses if you fail to pay back the loan. 2 – Repayment Personal loans come with a strict repayment plan. This amount and timeline will be outlined in your loan agreement. Since you know how much money you need to pay every month for the entire repayment period, it’s easy to budget without any surprises. Credit cards offer more flexibility. When you buy something with your credit card, you’ll have to at least pay a minimum monthly installment. This is a small percentage of your credit card balance. The remaining balance is carried over to the next month, where it accumulates interest. By making the minimum monthly payment, you can purchase items and pay for them over several months. You can, of course, pay more than the minimum installment and reduce the amount of money that accumulates interest. For instance, if you pay your balance in full every month, you’ll pay zero interest. This helps you build your credit score at the same time! 3 – Fees Many people find that maintaining a credit card is generally cheaper than a personal loan. This is because there are plenty of credit cards available with no annual fees. Credit cards also charge fees for things like balance transfers and currency exchanges, but most people don’t do those often. So, you’ll usually only pay a fee if you miss an installment. On the flip side, most personal loans require origination fees, application fees, prepayment penalties, and payment protection insurance. You want to factor in these fees when taking out a personal loan since they can quickly eat into your budget. 4 – Interest Rates Both personal loans and credit cards come with interest rates. However, the convenience of swiping your credit card often comes at a higher interest rate than personal loans. The average credit card interest rate is around 20%, while personal loans are only 11.23%. This lower interest rate is a big reason personal loans are popular amongst consumers trying to consolidate credit card debt. It lets consumers pay off high-interest credit card debt and save money. Pro tip: Some credit cards run introductory offers with a 0% interest rate for the first few months after opening the card. This could be a good option for you if you don’t want to open a loan and plan on paying off the full balance. 5 – What They Are Best Used For Deciding between a personal loan vs credit card may depend on what you plan to use the money for. Personal loans and credit cards have different uses. Personal loans are better if you’re making big, one-time purchases and don’t want to pay a lot in interest. Personal loans are also handy if you’re stuck in thousands of dollars worth of credit card debt and want to streamline payments. You can consolidate credit card debt with a personal loan and save money on interest. But if you’re looking for a way to pay for everyday purchases while building good credit, credit cards are a better choice. The convenience allows you to shop almost anywhere (in person and online), and if you settle your balance every month, you can avoid paying interest. Pros and Cons of Credit Cards Pros Cons Most retailers accept credit cards High-interest rates Little to no fees Creates a cycle of debt if used irresponsibly Many have benefits such as cashback, travel points, fraud protection, and return protection Late payments can damage your credit Pros and Cons of Personal Loans Pros Cons Predictable and fixed repayment plans Comes with a host of fees, such as origination fees and prepayment penalties Typically lower interest rates No rewards or cashback Terrific option for large purchases such as a car or home improvement project Secured loans require collateral Is it Better to Have a Credit Card or a Loan? Still working on making your decision between a personal loan vs credit card? If you’re looking to borrow large sums of money, personal loans might be a
Katapult Review: Lease-to-Own Financing [2023]
Katapult Review: Lease-to-Own Financing [2023] By Maddy Scheckel September 26, 2023 SPENDING Shop debt-free, get instant approval, and boost your credit with Katapult – it’s not too good to be true! Buy products without putting yourself in debt, get approved in five seconds, and potentially build your credit along the way. I know what you’re thinking, “That has to be too good to be true?” I’m here to tell you it’s not! Katapult is a fantastic alternative to credit cards and personal loans. You don’t need a good credit score to qualify, and they won’t charge you interest. With the current credit card interest rates sitting at 16.27%, Katapult can help you save money. Continue reading my full Katapult review to find out more! What is Katapult? Katapult’s lease-to-own user app is easy to use and lets you shop with hundreds of retailersSource: Katapult Previously known as Zibby, Katapult is a lease-to-own service. It lets you lease and eventually own products such as laptops, furniture, and even tires! Example: Let’s say you want to buy a new gaming setup, but it costs $2,000. When you sign up for Katapult, they’ll buy the gaming setup and lease it to you. Once you’ve made all the lease-to-own payments, you own the gaming setup! So feel free to shop at over 200 stores, including: Sears Lenovo Wayfair Motorola According to Katapult, approval only takes five seconds, and you can spend up to $3,500. If life gets in the way and you can’t make a payment, don’t stress because there are zero late fees. How Does Katapult Work? Thinking about getting a new phone? Or maybe you need a statement piece for your apartment. As part of my Katapult review, I’ve included this five-step guide that’ll allow you to make purchases without cash or credit: Apply for an account Shop in-store or online Choose a payment plan that fits your needs Checkout and review your lease Pay the lease and enjoy your purchase Step 1: Apply For An Account There are two ways you can apply for a Katapult account. Visit the Katapult website and in the upper right-hand corner, click “Apply.” Enter your phone number, and Katapult will send you a verification code to continue the application process. Here’s a summary of the information you’ll have to enter: Address within the U.S. Your Social Security number (SSN) or Taxpayer ID Number (TIN) Valid email address Credit or debit card details Government-issued ID proving you are over 18 years of age Your mobile phone number Alternatively, you can walk into any store that partners with Katapult and apply in person. Step 2: Shop In-Store Or Online Once Katapult approves your account, you can lease to own up to $3,500 worth of items from over 200 participating stores. Step 3: Choose A Payment Plan That Fits Your Needs Katapult has three payment plans that’ll suit the needs of various consumers: Pay in 90 days Pay after 90 days Purchase items at the end of your lease term If you want to save the most money, paying your lease within 90 days is the best option. This plan will only have a markup of 5% and some additional fees, so you aren’t paying a steep markup. But if you made a larger purchase and need a little more time, you can either pay it off after 90 days or wait until the end of your lease term. However, I always suggest paying your lease as soon as possible because you’ll save money. Step 4: Checkout And Review Your Lease Your first lease-to-own payment is due during checkout. You’ll find a summary of your lease agreement, including the markup, any fees, and your lease period. Katapult will also notify you about return policies and what to do if your product is damaged. Step 5: Pay The Lease And Enjoy Your Purchase When receiving your purchase, I highly recommend downloading the Katapult mobile app because you can track future payments there. You can also update your payment date if you’re not sure whether you’ll be able to make the next payment. But be aware that payment dates can only be changed once during a lease agreement. They must be changed prior to the scheduled date, and the number of days you can delay payment varies based on your current payment frequency. Is Katapult Legit? Katapult is a legit lease-to-own service. It partners with hundreds of top brands, including Lenovo, Motorola, and Sears. Most online reviews are positive, as Katapult has a 4.4-star rating on Trustpilot and over 10,000 downloads on Google Play. To back up their service, Katapult also makes it easy for customers to contact their support team. For assistance, users can contact customer service via phone, email, or live chat. Pros and Cons of Katapult Pros Cons You can buy big-ticket products without credit It’s expensive if you don’t pay your lease early Katapult charges zero late fees Katapult isn’t available in Minnesota, New Jersey, Wisconsin, and Wyoming Good credit isn’t necessary The selection of online stores is quite limited Katapult Reviews Most Katapult reviews are positive, with customers complimenting the easy signup process and helpful customer support. For example, in this Katapult review, customer Elisa says that everything was spelled out up front, and the customer support team is great. Using Katapult is super easy and there are no hidden fees or fine print.Source: Katapult A Katapult review by user Adrian mentioned that he could buy a Macbook Air without a credit check. There was a slight hiccup with the customer service, but nothing that stopped him from enjoying his new laptop. In this Katapult review, Adrian says that he was able to buy a new Macbook using Katapult.Source: Trustpilot However, not every Katapult review was positive. For instance, customer Katelynn wrote a Katapult review saying that Katapult froze her account, even though she was making regular payments. This might’ve been a mistake on Katapult’s part, so it’s good to see the customer support team reaching out and offering assistance. Katapult