Why You Should Stop Playing the Lottery and Open a Prize-Linked Savings Account

Why You Should Stop Playing the Lottery and Open a Prize-Linked Savings Account

excited-senior-couple-celebrating-victory-winning-online-auction-bid-picture-id1127572892

If you enjoy playing the lottery, you’re not alone. About half of all adults in the United States have played the lottery, and the average player throws about $600 a year on the long odds that they might hit it big.

For the vast, vast majority of people who play the lottery, that’s money down the drain. Right now, your chances to win Powerball’s Jackpot are 1 in 292 million. Even your odds of winning Powerball’s lowest prize, a $4 payout, are 1 in 38.2, on a $2 ticket. So, on average, you need to spend $76.40 to win that $4 prize.

Overall, state lotteries offer a negative return of $0.52 for every dollar spent. Spend $600 on state lottery tickets, and you’re likely to end up $288 in the hole.

Not a great investment strategy.

But of course, most of us know this, and still, we choose to play. Research shows that somehow, we believe that even though the odds are stacked against us, we’re going to beat them.

At the same time, many Americans aren’t saving nearly enough money. A study last year found that 40% of Americans don’t have enough savings to cover an unexpected $400 expense.

A new type of savings account—called a prize-linked savings account or PLS—takes advantage of our eternal optimism, while helping to boost your financial health. It combines savings money with the chance to win prizes.

How Prize-Linked Savings Accounts Work

The specifics of a prize-linked savings account can vary from account to account. But the basic idea of a prize-linked savings account is that the more money you deposit into your savings account, the more chances you have to win prizes—cash prizes.

Take the recently launched Big Prize Savings account from American First Credit Union in California. Under the program, every $25 in your average balance—once you’ve reached the $500 minimum for eligibility—earns you a shot at monthly giveaways of $1,000, quarterly giveaways of $10,000 and an annual drawing of $50,000.

The best part is that even if you’re not a lucky winner, you still win by building your savings account balance.

Let’s imagine you’re a lottery player who spends the average $600 per year on tickets. That’s just under $12 per week. Now, imagine if you took your $12 every week, and put it into a prize-linked savings account. After 5 years, you’d have almost $2,936 in your savings account thanks to the compound interest on your savings rate, instead of having donated it to your state lottery fund.1

You’d have also earned more than 3,400 chances to win prizes valued between $1,000 and $50,000. American First has a calculator that lets you do the math for how much you think you could save and how many chances you’d earn at winning.

The History of Prize-Linked Savings Programs

When it comes to prize-linked savings accounts, America is a bit late to the party. A study from the Harvard Business School mentioned that 20 countries beat the U.S. to the punch. Sometimes, by quite a while.

The first record of something like a prize-linked savings account was called the “Million Adventure,” and launched in 1694 to finance England’s fight in the Nine Years’ War against France. A £10 investment earned accountholders a 10-year return of 6.15%, along with a chance to win prizes of between £10 and £1,000 per year for the next 16 years. That’s a value of around $3 million in today’s dollars.

Instead of financing wars against Louis XIV, more recent prize-linked savings accounts have been targeted at promoting healthy savings habits. Starting as early as 1918, prize-linked savings accounts in countries like Sweden, the United Kingdom, Spain, New Zealand and Germany (among others) have been shown to promote savings in the citizens who need it the most.

What took the U.S. so long? The threat of legal trouble. In most states, it’s illegal for anyone but a state to run anything that might be deemed “a lottery.”

When early pilot prize-linked savings accounts were launched in the U.S. in 2007, researchers from the Harvard Business School collaborated closely with the credit unions launching the savings promotion products. What the collaboration found was encouraging. The research showed that prize-linked savings accounts are the most appealing to people who don’t have a regular savings plan as well as to people who regularly participate in some kind of gambling or lottery play.

In short, the research showed that prize-linked savings accounts are great tools for encouraging people to establish healthy financial well-being habits as a substitute for financially unhealthy gambling habits.

After the launch and success of early programs in Indiana and Michigan, states across the country changed laws to specifically allow prize-linked savings accounts to be offered by financial institutions in the state. Currently, around 30 states allow credit unions and banks to offer prize-linked savings accounts.

Who Can Open a Prize-Linked Savings Account?

If you live in one of the 30-plus states that now allow prize-linked savings accounts, you might have a financial institution near you where you can start saving.

While most prize-linked savings accounts are targeted at local customers, a few institutions make accounts open to potential savers around the country. American First’s Big Prize Savings is one such PLS.

The American First Credit Union offers accounts to individuals who live, work, worship or attend school in Orange County, California, or in the 16 qualified cities in southern California, or who may work at one of our national affinity group or are members of the Children’s Museum of La Habra.

Who Should Open a Prize-Linked Savings Account?

If you’re currently spending money on lottery tickets or thinking about starting a savings account, or you just enjoy the possibility of winning cash prizes, prize-linked savings can be a good option for you.

While a savings account now can earn dividends in the future, the future is a long time away. In contrast, depositing just a few dollars into a prize-linked savings account can boost your chances of winning money right away!

Of course, the benefit is that even if you don’t win today, you’re still building a savings balance for the future.

Other Savings Account Options

If winning prizes isn’t that important to you, consider a high-yield savings account where you can earn a higher annual percentage rate (APY) for your savings. Putting a similar amount in a personal savings account with a higher interest rate of 2.20% could net you almost $3,091 compared to the $2,936 in an American First PLS account mentioned above.2

However you decide to save your money, it’s a great idea to save money starting now.

About the Author

Jon Shigematsu is CEO and President of American First Credit Union Jon Shigematsu is CEO and President of American First Credit Union. He joined in 2011 and served as its chief financial officer until his appointment to CEO. He has extensive experience in finance, accounting and business management, and is a CPA. He lives in Southern California with his wife and young daughter.

1 Based on an opening deposit of $25 and monthly contributions of $48 and earning .15% APY after your balance reaches $500 and you make monthly contributions of $48 for 50 more months. After reaching a balance of $3,000, you earn an APY of .20%. www.amerfirst.org/WhatWeOffer/Savings/BigPrizeSavings.aspx

2 Based on an opening deposit of $525 and monthly contributions of $48 for 50 months at an APY of 2.20%.

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How Much Does Your Family Need in Savings?

How Much Does Your Family Need in Savings?

family-savings-money-for-their-new-house-picture-id646688522

Family savings is something you’ve probably thought about on more than one occasion. It can be tricky to save anything while you’re busy making sure your family has what it needs day-to-day. Aside from providing a house, clothing, and daily meals, you may also need to pay for higher education for your kids, next year’s family vacation and more. With all those considerations, how do you figure out how much your family needs to set aside in savings?

In the short-term, you want to have enough money saved up to pay for six month’s worth of expenses. That’s your emergency fund. But having extra money set aside for entertainment, retirement, a down payment on a home and other essentials and nonessentials is important too.

How Much Family Savings Do You Need?

Once you have your emergency fund, how much money your family needs to save comes down to what your family goals are. How will you pay for your next car? What if your current car needs a new transmission? Do you want to travel? Do you dream of a second home or vacation home for you and your significant other to enjoy?

These are all questions you want to ask yourself when budgeting for your family savings.

An Emergency Fund Is Your First Goal

When it comes to saving up for emergencies, the average American family needs approximately six months’ worth of living expenses set aside. This amounts to as much as $30,686 based on the median household income of $61,372 reported by the U.S. Census Bureau in 2018.1 Unfortunately the median American household falls short of that at just $11,700 in savings.2

To decide how much you need in your family emergency fund, consider how much you owe towards your bills each month. Include the amount of your rent or mortgage payment, utilities, car payments, insurance, groceries and anything else that requires money each month.

Once you have a total, multiply the number by six. That final number is what you want in savings so you’re prepared for life’s emergencies. That might come in the form of a job loss, an injury, accident or unexpected health problem.

Once you have an emergency fund set up, you can start saving for that family vacation, the down payment on a home or your next car, the big screen television or anything else on your “wants” and/or “needs” list. You also want to ensure you have enough for unplanned, but not every day, expenses—like that new transmission in your car or a new fridge or furnace.

Saving for a House, a Car or College

It can be tricky to decide how much to save for specific goals, like a new house. The price of the item you’re saving for makes a big difference. Some universities cost more than others, while a home may be pricier depending on its location, the size of your down payment and other factors.

While you want to research these items yourself to see how much they cost individually, there are some basic bits of information that apply to certain purchases. A conventional fixed-rate home loan, for example, typically requires a 20% down payment. Say you’re thinking of purchasing a home that’s listed at $500,000, you need a down payment of $100,000.

Cars cost a lot too. Your current car may or may not have a good resale or trade-in value. So while you add to your emergency fund, consider setting aside money for a car or car down payment to help offset the cost of your next car loan.

College, while it doesn’t require a down payment, requires you cover tuition each quarter or semester unless your kids have grants or a scholarship. You may also need to cover room and board and other costs. You want to research the colleges or universities your kids are considering and put together a list of costs you need to cover.

If your children are young and you have years left, that’s good, because you can start saving now. It’s also a good reason to save more. The cost of college is rising eight times faster than wages.

If your kids are close to starting college, hopefully, you have some funds set aside already. Whether you do or don’t, financial aid, such as student loans, can help cover costs.

Saving for Other Essentials and Even Nonessentials

Beyond the normal essentials of emergencies, housing, transportation and education, you want to save for other items—whether essential or not. This can include car repairs, home remodels, family vacations and more.

To set aside money for these items, you want to research certain things, such as when and where you’re likely to get the best hotel rates and airfare if a family vacation is your top priority. Or what the average kitchen remodel costs if that’s your goal. And you likely want a good chunk set aside for car repairs or home repairs, just in case. That funding needs to be in addition to your emergency fund that’s intended to cover daily living expenses for six months, not unexpected repairs.

When determining how much you need, consider that more is better. You can’t have too much set aside, but it’s totally possible, you could end up with too little.

Let Your Savings Make More Money for You

Another important element to consider is the interest rate your family savings account earns. You can earn more money on your savings with a high-interest savings account than you can with a standard savings account. Money in savings accounts accrues interest monthly instead of annually, so where your money is placed makes a difference. A higher interest rate equals more money in your pocket.

The HSBC Direct Savings account, for instance, offers a 2.25% interest rate. That’s more than double the rate of a standard account. The Marcus by Goldman Sachs High-Yield Online Savings Account and the Barclays Online Savings Account offer similar rates of 2.25% and 2.20% respectively.3

Let’s say you have $10,000 stored in an account. With a standard savings account with a .10% APY, you earn $100 a month in interest. However, putting your money into one of the above-mentioned accounts at a higher interest rate lets that $100 grow to $225. That’s an extra $125 each year. After 10 years, you have almost $1,250 more than if you were to leave the money in a standard savings account at the current national average APY of .10%.4

You want to research banks and financial companies further if you’re interested in examining interest rates, but there are savings account options available that pay you higher interest rates than others.

Saving for Retirement

Keep in mind, retirement savings are not part of your family savings. At least not the family savings covered in this article.

The Economic Policy Institute estimates that nearly half of American families have nothing saved for retirement. While some families enjoy working and hope to keep their jobs for the rest of their lives, others have nothing saved because they haven’t thought about it or keep putting it off. You want money set aside for your golden years when you no longer want to commit to an 8-to-5 job.

Consider taking advantage of a retirement plan offered by your employer or individual plans—or both.

Final Thoughts

To find out how much money your family needs in savings:

  • Start by calculating what you need in your emergency fund
  • Add funds to cover unplanned expenses beyond the costs of daily living—like car repairs, a new fridge, etc.
  • Pick a savings goal for essentials and nonessentials—like your next car, your kids’ college educations, a down payment on a house and a family vacation
  • Ensure you’re also saving for retirement
  • Consider taking advantage of health and other insurance plans to protect your finances and your savings

And when you’re ready to start your emergency fund or want your current savings account to earn more money for you, look into available high-interest savings accounts to get you started earning money for a financially secure future. You need money to survive, but more importantly, you need it to live.

Happy saving! Happy living!

 

1 Census.gov, “Redesigned Questions May Contribute to Increase,” www.census.gov/library/stories/2018/09/highest-median-household-income-on-record.html, Sept. 2018.

2 CNBC Make It, “Here’s how much money Americans have in savings at every income level,” www.cnbc.com/2018/09/27/heres-how-much-money-americans-have-in-savings-at-every-income-level.html, Sept. 2018.

3 Based on the available savings rate for the Wells Fargo Way2Save® Savings account as of April 2019.

4 National savings rate average from the FDIC.gov website as of 3/18/2019, www.fdic.gov/regulations/resources/rates/historical/2019-03-18.html

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3 Ways Health Insurance Protects Your Personal Finances

3 Ways Health Insurance Protects Your Personal Finances

black umbrella over yellow "health" street sign to convey health insurance protects personal finances

Medical care is expensive. And affordable health insurance can be difficult to find. But finding fund for the monthly premium in your budget can protect your finances in the long run.

Alternative solutions like urgent care and prescription discount finder tools have popped up to help people find more affordable prices. But these cheaper services don’t help reduce every medical bill or replace the need for health insurance.

The high costs of emergency care, medical procedures, hospital stays and prescriptions make health insurance an important investment in your health and in your financial stability. Health isn’t as predictable as we’d like it to be, so health insurance is a wise purchase even if you’re healthy. A single accident can result in thousands of dollars of medical costs.

Those costs can eliminate any emergency fund you’ve built up, drain your savings and may even lead to bankruptcy. And if medical costs end up in collections, it can hurt your credit score.

The savings offered by urgent care and discount finders are only enhanced when combined with health insurance. And if you maintain insurance, even though the monthly premium seems high, it can more than offset the dramatic medical costs from an accident or unexpected emergency.

Health insurance protects individual and family personal finances by:

1.  Financial Planning

Planning your monthly spending is a smart financial move because it helps you effectively track and direct where your money’s going. Unknown costs and unexpected expenses make planning your budget harder.

Health insurance helps with financial planning because it eliminates surprise costs and reduces recurring costs for prescriptions and preventive care. With health insurance, you have a known maximum out-of-pocket cost each year.

Prescriptions

The cost of prescription medications is rising and can add up quickly if you take medications every day. The out-of-pocket maximum, discounted rates and cost-sharing offered by health insurance can significantly reduce your monthly medication bill.

The discounts and cost-sharing help make medication more affordable and fit better in your budget. It also frees up money you can use for savings and other expenses.

As drug prices change, health insurance helps reduce the impact of rising drug costs on your wallet.

Preventive Care

Regular visits to a primary care provider are important for maintaining good health. These visits are also especially important for children as they grow and need vaccinations.

Because these visits typically occur annually, they’re an expense that you can plan for. Many health insurance plans cover preventive care, like immunizations and check-ups, fully or at a lower rate than other services.

This means that you don’t have to worry about finding money in your regular budget for these expenses. All you need to do is pay your monthly healthcare premium, which simplifies your financial planning.

2.  Emergency Costs

Emergency room visits, surgeries and other medical procedures can break any budget. Sometimes surgeries and procedures can be planned for, but emergency room visits can’t. And without health insurance, the costs of these services are exceptionally high.

Surgeries and Medical Procedures

When you have surgery or a medical procedure, you pay the doctor and the team of professionals, you pay for the use of the equipment, anesthesia and time in the recovery room.

Each item is expensive on its own. Combined, it’s a large sum.

Emergency Services

The cost of an emergency room bill depends on the services you receive. It’s estimated that an emergency room visit costs between $150 and $3,000 without insurance.

Urgent care centers are an alternative to visiting the emergency room, and the costs are much lower. However, in the more severe cases, urgent care centers can’t help and may send you to an emergency room anyway.

Health insurance offers discounted rates for medical treatment and cost-sharing. Both of these features significantly reduce the cost of medical procedures and unanticipated hospital trips. This, in turn, eases the financial burden.

While you may still run into medical debt while having health insurance, the debt will be much smaller and easier to pay off. And it won’t exceed your annual out-of-pocket maximum.

3.  Future Savings

Some health insurance plans are high-deductible health plans (HDHPs), which are HSA-compatible. You can put money into an HSA tax-free to be used for medical expenses. Unlike flexible spending accounts (FSAs), the funds in an HSA don’t expire at the end of the year.

Because HSA funds roll over year to year, some people approach them as part of their retirement savings plan in addition to a Roth IRA or 401k.

Like retirement plans, HSAs can be invested. HSAs are actually savings accounts just as the name implies. Most earn interest—although not a lot—so there is potential to grow the funds in the account. This is especially true over time. And at 65, your HSA starts working like a traditional IRA when the balance can be used even for non-health expenses provided you pay taxes on the withdrawal.

Regardless of when unanticipated medical issues and expenses arise, you can use your HSA to pay for them. When you use the money in your HSA for medical expenses, you don’t pay taxes—ever.

And the HDHPs that come with HSAs usually have lower premiums. However, the higher deductible does put more responsibility on the insured to pay for medical costs before the full deductible is met.

An HSA-compatible plan can be a great choice for people in good health that don’t need a lot of coverage and will never reach the deductible but will grow the money in their HSAs for later use. Nonetheless, consider the overall cost-effectiveness of a plan for your health needs when choosing one.

Finding Health Insurance

Although health insurance shopping can be a frustrating process, it’s worth doing because of the financial protection health insurance offers.

If your employer doesn’t offer a plan or you’re self-employed, websites, like HealthCare.com, lets you see and compare individual health insurance plans from multiple carriers at once. These websites simplify the health insurance shopping process and help shoppers find a good deal on the coverage they need.

Consider your health needs as you evaluate the savings and financial protection offered by a health insurance plan. And remember, health insurance can help you save on medication, emergency services, and save for future health costs while protecting your financial present too.

About the Author

Alice Stevens, Content Manager, Best Company

Alice Stevens loves learning languages and traveling. She currently manages debt and tax relief, life and health insurance and car warranty content for BestCompany.com.

 

 

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What Is an International Credit Card?

What Is an International Credit Card?

Woman outdoors with foreign city in background using her international credit card

An international credit card you can use pretty much anywhere in the world. It’s a card that doesn’t charge foreign transaction fees and includes an international chip and PIN.

Not all cards that work in the U.S. work when your traveling internationally. So, a card you can use in Australia, Canada, Europe, Japan, Mexico and elsewhere means you won’t run into businesses that only accept specific types of payments or certain currencies when you’re traveling. If you want to avoid the hassles of carrying cash or traveler’s checks, getting stuck at a kiosk unable to finish a transaction or paying foreign transaction fees for your purchases, an international credit card is a must-have.

Credit Card Foreign Transaction Fees

A foreign credit card transaction fee is a fee charged when you use your credit card to make a payment in a different country. It used to be known as a foreign currency conversion fee.  It’s a fee is added on to the sale because you’re paying in a foreign currency. Typically, foreign transaction fees are roughly 3% of the total cost of the transaction. They are also charged in U.S. dollars.

If you purchase an item or souvenir in another nation’s currency and the total bill comes to $100, with 3% in a foreign transaction fee tacked on, you pay a total of $103.

Foreign transaction fees are charged on different types of transactions, including withdrawing money from ATM machines, reserving hotel rooms or even booking your airline flights. The terms and conditions for foreign transaction fees are usually included in the fine print of your credit card cardholders agreement. Make sure you review your agreement so you understand all rates and fees before using your card for purchases abroad.

The International Chip and PIN

The international chip and PIN are part of a system—referred to as Euro Pay, Mastercard, Visa or EMV chips. EMV chips started in Europe and are now integrated into credit cards worldwide. The chip replaced the traditional magnetic strip used on U.S. credit cards until recently. Many foreign merchants won’t accept standard magnetic strip credit cards, because the technology is considered unsafe and outdated.

U.S. merchants that accept magnetic strip cards now foot the liability of fraudulent transactions where the credit card company foots if it a chip card is used.

The PIN, or personal identification number, is a standard part of cards in Europe. The PIN associates a four-digit number with the card to identify the cardholder’s authenticity and authorize transactions—usually at self-serve kiosks, ticket booths, gas pumps, toll booths and phone booths. While uncommon, it’s useful to get a PIN for your international credit card so you don’t find yourself at a self-serve kiosk unable to complete your purchase when traveling.

So, you plan to travel outside the U.S., especially if your plans include Europe, when shopping for a travel credit card, look for one that features international chip and PIN capabilities.

International Credit Card Options

There are different international credit cards available, but some offer better benefits and interest rates than others. Some even offer a rewards program. The editors at Credit.com break down a few of the available cards here to help you see some of your options and start to find the best card for your travels.

An international credit card to consider is the Chase Sapphire Preferred card. This card was named the “Best Credit Card for Flexible Travel Redemption” by Kiplinger’s Personal Finance in June of 2018. This Chase card lets you earn 60,000 bonus point after you spend $4,000 on purchases in the first 3 months from your initial account opening. That equals $750 you can use towards travel when you redeem through Chase Ultimate Rewards. Better yet, this card doesn’t charge foreign transaction fees and there are no blackout dates or travel restrictions. It does have a somewhat higher variable annual percentage rate (variable APR) for both purchases and balance transfers. Nonetheless, if you don’t carry a high balance, this one is a nice all-around option.

Chase Sapphire Preferred® Card

Apply Now

on Chase’s secure website

Card Details
Intro Apr:
N/A


Ongoing Apr:
18.24% – 25.24% Variable


Balance Transfer:
18.24% – 25.24% Variable


Annual Fee:
$95


Credit Needed:
Excellent-Good

Snapshot of Card Features
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 toward travel when you redeem through Chase Ultimate Rewards®
  • Chase Sapphire Preferred named “Best Credit Card for Flexible Travel Redemption” – Kiplinger’s Personal Finance, June 2018
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
  • No blackout dates or travel restrictions – as long as there’s a seat on the flight, you can book it through Chase Ultimate Rewards

Card Details +

Another nice international travel card option is the Wells Fargo Propel American Express® card. Its intro bonus isn’t quite as much as the Chase Sapphire Preferred card, but it’s still a nice 30,000 bonus points when you spend $3,000 in purchase in the first three months, which is worth a $300 cash redemption value. This card also has an intro APR of 0% intro for 12 months on purchases and 0% intro for 12 months on qualifying balance transfers. And it has no annual fewe.

The Wells Fargo card also rewards you when you travel with 3X points for eating out and ordering in and 3x points for flights, hotels, homestays and car rentals. Plus, you get 1X points on all other purchases. And it has no foreign transaction fees or foreign currency conversion fee.

Wells Fargo Propel American Express® Card

Apply Now

on Wells Fargo’s secure website

Card Details
Intro Apr:
0% intro for 12 months


Ongoing Apr:
16.24% – 27.24% (Variable)


Balance Transfer:
0% intro for 12 months on qualifying balance transfers


Annual Fee:
$0


Credit Needed:
Excellent-Good

Snapshot of Card Features
  • Earn 30K bonus points when you spend $3,000 in purchases in the first 3 months – that’s a $300 cash redemption value
  • $0 Annual Fee
  • Earn 3X points for eating out and ordering in
  • Earn 3X points for gas stations, rideshares and transit
  • Earn 3X points for travel including flights, hotels, homestays and car rentals
  • Earn 1X points on other purchases
  • 0% Intro APR for 12 months on purchases and balance transfers (fees apply), then a 16.24%-27.24% variable APR; balance transfers made within 120 days qualify for the intro rate and fee
  • Select “Apply Now” to learn more about the product features, terms, and conditions

Card Details +

The Capital One Venture Rewards card is a credit card worth considering too. It offers a solid introductory APR and travel rewards points. It also rewards you with a sign-on bonus of up to 20,000 miles or $200 in travel when you spend $1,000 in your first three months. The only downside is that this card comes with an annual fee after the first year.

If you enjoy the Capital One brand but want to avoid an annual fee, consider the Capital One Venture One Rewards Credit Card. The card gives you all the advantages of Capital One without a fee every 12 months.

If you’re after a prepaid debit card that has no foreign transaction fees, consider the Kroger REWARDS Prepaid Visa card.

Things to Consider

Even with an international means of payment, your credit card may not be accepted at all locations. Recently, a Credit.com staffer who traveled to Amsterdam tried to use his World Elite Mastercard at some retailers and found that local merchants didn’t always accept a Mastercard branded card.

Before embarking on your trip, it’s beneficial to check either with stores (if possible) or the credit card issuer itself to see if any conditions exist that might prevent your card from being accepted by foreign merchants. Alternatively, you consider taking a few different brands of international credit cards with your and/or have some cash in the local currency or traveler’s checks on hand—just in case.

Check Your Credit

Before applying for an international credit card, it’s important to check your credit score and see what you qualify for. A low score or no score at all could get in the way of your dreams of traveling with an international credit card in hand. Most international credit cards that offer cash-back or miles require a good or even excellent score.

Checking your credit is easy and free depending on the site you use. You can get your free Experian credit score here on Credit.com. Checking your credit score never puts a hard inquiry on your credit file ever.

Regardless of your score, there are international credit card options out there available if your credit is just fair or poor. One such card is the Capital One Quicksilver One Cash Rewards Credit Card. It also has no foreign transaction fees.

Final Thoughts

International travel with a credit card is convenient, but it can also be tricky. If you’re planning a trip abroad, it’s important to research which international credit cards will serve you best. Having a credit card that can be used anywhere in the world and doesn’t charge foreign transaction fees is a great tool to have in your pocket but the terms and conditions of each card vary depending on several factors including your credit history, your spending habits and the places you plan to visit.

First, find your free Experian credit score from Credit.com. Then, use your score to see which travel rewards credit card you qualify for and that have the features you want and need so you’re sure to have the right credit card traveling companion on your journeys.


At publishing time, the credit cards shown here are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone and have not been reviewed, approved or otherwise endorsed by the issuer(s).

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What You Need to Know About the New Apple Credit Card

What You Need to Know About the New Apple Credit Card

Man in light green shirt shopping on a tablet with his apple credit card

The Apple credit card launches this summer, and it pairs the high-tech, app-based culture of the brand with some favorite credit card user perks. Before you join the flock likely to flood Apple with credit card applications, do your homework to make sure this card will meet your needs. Check out the details about the Apple credit card below, as well as some alternative credit cards you might apply for.

What’s the Apple Credit Card?

The Apple credit card is a payment card offered by Apple and issued by Goldman Sachs. Despite the Apple name on the card, whether or not a consumer is approved and the day-to-day financial management of accounts is handled by Goldman Sachs.

The design of the card and all its cash-back credit card perks, however, are courtesy of Apple and include:

  • Integration with Apple Pay and Apple Wallet
  • Integration with your iPhone or another iOS mobile device to support phone-based payments and access to accounts
  • Apple’s customary security and privacy levels
  • Cash back offers that are especially useful to Apple fans

Basic facts to know about the new Apple credit card include:

  • It comes with a 13.24 to 24.24% variable APR depending on your creditworthiness. (These numbers are current as of March 2019 and may vary as the prime interest rate in the nation and other economic factors change. Always check the details of any credit card offer to understand the interest rate.)
  • You earn 1 to 3% cash back on purchases.
  • The Apple credit card doesn’t come with any fees—that includes no annual fee, late payment fees, foreign transaction fee and over-limit fees.
  • Though you do receive a physical card whose number you can use in Google Wallet, the Apple credit card also comes as a virtual card number designed to live in your Apple Wallet.

The wide range APRs suggest so some that the card may be available to people with a fair credit score.1 No one will know until the card actually launches though.

Benefits and Perks of the Apple Credit Card

While interest rates and credit limits are important, most consumers also choose a card based on the perks its rewards program affords them. Intelligent use of perk-related cards, such as travel rewards cards, can help you save money or earn extra pennies on cash you already plan to spend. Here’s a look at how Apple credit card perks stack up for users.

Expense and Spending Organization in One Place

Apple is making a big deal out of the user experience element of this credit card, which involves heavy integration with iPhones. The card itself is housed in the Apple Wallet app on your iOS device. Since you can only use the digital version of the card where Apple Pay is accepted, you also get a unique physical card that’s as sleek and high-tech as any Apple device.

The card’s digital component offers specific benefits:

  • You can apply for the card and, if approved, it’s immediately in your Wallet app. You can start using it the same day without waiting for a card to arrive in the mail.
  • Without using a physical card, you don’t have a card number or other elements that can be stolen, which increases the security of your account.

Apple also provides an app that lets you manage your spending and account in a single location. You can view charges based on a map to figure out where money was spent, get a color-coded breakdown of your expenses to help you budget and view visual and numeric information about how various payment amounts impact the total owed. Log in to the app when you’re ready to make a payment on your account, and you’re also provided with estimates on how much interest you’ll be charged and can see how much interest you’ll pay if you pay your card off sooner than later and vice versa.

Cash Back and Daily Cash Back with Some Purchases

The card gives account holders the chance to earn cash-back rewards too. And you get even more cash back rewards when you spend with Apple.

  • You get 3% cash back on all purchases from Apple. That includes purchases at apple.com, Apple stores, iTunes and the Apple app store. You earn cash back on the game, app and in-app purchases, including music, storage plans and books.
  • You get 2% cash back on anything else you purchase and pay with using Apple Pay.
  • If you have to break out the physical Apple Card to make a payment, you still earn 1% cash back.

Cash back is always a great perk for a credit card, but it’s especially nice when the card doesn’t have an annual fee. The Apple credit card makes cash back even more of a perk by awarding it to you the day after you spend rather than waiting for the statement cycle to close.

To make use of cash back the next day, you do have to have an Apple Cash card, which is how Apple transmits rewards to you. If you don’t have an Apple Cash card, then the cash back rewards are applied as a statement credit on your Apple credit card account.

Who Benefits Most from This Credit Card?

Because of its heavy integration with iOS technology and the Apple Wallet, the Apple credit card is more likely to be useful to Apple customers. Individuals who carry Android or other devices won’t be able to access many of the features available with this card. And if you’re not shopping with Apple or using Apple Pay, you miss the top tier cash-back rewards.

You might benefit from this card if:

  • You have an iPhone, especially if you’re prone to or like the idea of handling your finances via a single app on your device.
  • You’re an avid user of Apple technology and have already adopted Apple Pay and Apple Wallet.
  • You make a lot of purchases at Apple’s stores or using Apple subscriptions or the Apple app stores.

Alternatives to the Apple Credit Card

The Apple credit card is obviously not right for everyone. If you don’t have an iPhone, prefer Android or aren’t interested in using any or much technology for your financial management, you may want to opt for a different kind of credit card account.

For those who don’t fit the target audience for the Apple credit card, plenty of other rewards cards are available. Here are a few you might consider.

  • The Chase Freedom® card. It comes with unlimited 3% cash back the first year you hold it. After that, you can earn 1% cash back on every purchase and 5% cash back on categorical expenses. The categories change each quarter, making this an ideal card for those who can budget large expenditures or stock up at certain times a year to maximize rewards.
  • The American Express® Gold card, which does require decent credit but offers some spectacular perks for those who love a fine dining experience or are always chasing the next fun foodie adventure. This card is also known as a great travel rewards card.
  • The Capital One® Quicksilver® card, which offers unlimited 1.5% cash back without limits. That makes this card an ideal daily swiper. And an APR of 0% intro on purchases for 15 months lets you double your rewards by making a large purchase and paying it off without interest in the first year or so.
  • The Credit One Bank® Platinum Visa® with Cash Back Rewards is a rewards card option for people with bad, poor or fair credit. It lets cardholders earn 1% cash back rewards on eligible purchase (some terms apply).

Apple isn’t the only—or first—company to enter the market of branded credit cards. If you like the idea of rewards that are brand-based, but you don’t use an iPhone or spend a lot at the Apple store, consider some of the options below.

Ultimately, there’s a credit card option for almost any spending or financial goal. Browse the selection of offers on Credit.com to find a card that works for your needs and preferences, including:

Whether or not you’re approved for the Apple credit card or any of these other card offers depends on your creditworthiness. Review the information about each credit card carefully, ensuring you understand the offers, fees and rewards structures. Then, check your credit score—for free—and apply for a credit card on Credit.com.

1 https://www.cnbc.com/2019/03/26/apple-credit-card-read-the-fine-print.html

At publishing time, the cards mentioned here are offered through the Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for one of the cards. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone and have not been reviewed, approved or otherwise endorsed by the issuer(s).

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The Top 5 Hiding Spots to Find Unclaimed Money That’s Yours

The Top 5 Hiding Spots to Find Unclaimed Money That’s Yours

woman with money in hand excited to find unclaimed money

Did you know that according to the National Association of Unclaimed Property Administrators, state governments collected $7.763 million in unclaimed property or money in 2015? And only $3.235 billion made it back to its rightful owners. That left $4.528 million unclaimed.

That begs the question, is some of that unclaimed money yours? And while the process of getting your hands on your long-forgotten money might seem daunting, it’s actually pretty easy once you know the right places to look.

Here are five top places you can find unclaimed money:

1. Find Unclaimed Money by State

The first place you can look for your unclaimed funds is on the treasury or unclaimed property office website of the state you live in or state(s) you previously lived in. The National Association of Unclaimed Property Administrators (NAUPA) offers a link to each state’s unclaimed property website on the NAUPA website where you can search for unclaimed money.

When searching, check under your married and maiden names if you married and took your spouse’s last name.

You may also want to search for funds owed to deceased relatives on the states’ sites.

2. Old Bank Accounts

Old bank accounts can hold a range of unclaimed funds from insurance premiums, dividend payments, and utility account deposits. Those accounts are sometimes listed on states’ unclaimed property websites.

If you opened an account but forgot to close it once you moved to a new area, contact the bank to ask about any unclaimed money.

Even if the bank closed down, you can still get your money back as long as the bank was insured by the Federal Deposit Insurance Corporation (FDIC). You search the FDIC database to find money owed you.

And if you ever had an account with a credit union that went under, you may want to check with the National Credit Union Administration (NCUA) for any money you may have left behind.

3. The Internal Revenue Service

If you failed—or didn’t need—to file your tax returns in the past few years, you can still file now. And if you are owed a refund, you can and collect that unclaimed money now too. The IRS may also owe you money if you filed a return and were owed a refund and moved before receiving your refund check or if you didn’t get the check for some other reason.

Note though, that you only have three years to claim a refund from the time of default. Otherwise, the money is claimed by the Federal Treasury.

4. Life Insurance Policies

An insurance company may owe you money from unclaimed insurance benefits left by a relative who passed away. The insurance may have been thru an employer-sponsored life insurance plan. So, contact your relative’s former employers to ask about any relevant insurance policy coverage or contact the relative’s executor who oversaw his/her will.

Unclaimed life insurance money may also be available if an insurance company changed its name or location. In this case, contact the insurance department in the state where the company was located.

5. Savings Bonds

The best thing about the savings bond is that they don’t expire—ever. Apart from the guaranteed financial security that bonds offer, most bonds stop earning interest after more than 30 years.

Therefore, if you had an old savings bond account that no longer earns interests, this may be the time to reclaim your money, or better still reinvest it in a savings account that does earn interest.

You can cash most bonds at a local financial institution. To learn more, visit the U.S. Treasury’s TreasuryDirect.gov site.

Other Places to Find Unclaimed Money

If the top five places to find unclaimed money didn’t pan out for you, you can also try the following places.

Pension Plans

If you changed your career or even retired, your previous employer may owe you unclaimed pension benefits. You can claim this money by visiting the Pension Benefits Guarantee Corporation’s (PBGC) search and running your first, last or company name to find out if a former company owes you any pension.

Unpaid Wages

Sometimes paychecks are lost in the mail or sent to the wrong address. When this happens, chances are you have some unpaid wages sitting in the labor department waiting for you to claim them. To find out, simply, visit the Federal Labor website and check by your former employer’s name under the Workers Owed Wages search.

Federal Housing Association (FHA) Mortgage

Refunds from FHA mortgage loan include a partial refund of the mortgage insurance premium you paid, excess earnings from the fund, or even both. If you’ve ever had an FHA mortgage loan, check for unclaimed money from the Federal Department of Housing and Urban Development.

Class Action Lawsuit

In some cases, you may be one of the defendants entitled to a settlement on a case involving a company whose products caused problems to consumers. Even if you didn’t know about the case, you may still be entitled to compensation.

Class action suits can also involve banks or other financial institutions that deceived customers in some way. Or, an employer who discriminated or sexually harassed employees.

Usually, the lawyers pushing the class-action lawsuit are required by law to contact everyone owed a refund. However, it may not be possible for them to contact everyone. So consider looking for lawsuits you could have been a part of, through sites such as ClassAction.org.

Find Unclaimed Money the Right Way—Without Getting Scammed!

The best way to find unclaimed money is by using verified sources, including the sites listed here. Although the process may a bit time-consuming, it’s worthwhile since there are minimal chances of fraud.

Refrain from using third-party sites that promise you faster results in exchange for a fee. Nonetheless, if you choose to use third parties, ensure they’re endorsed by the relevant bodies, such as NAUPA or other organizations, that work with the government.

Make Any Unclaimed Money You Find Work for You

If you do find unclaimed money, consider using it first to pay down debt. Then, consider making it make more money for you by putting it in a high-interest savings account. You didn’t expect this money anyway, so what better way to use it than to deposit it in an account that earns interest.

The post The Top 5 Hiding Spots to Find Unclaimed Money That’s Yours appeared first on Credit.com.

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The Complete Guide to Buying a Vacation Home in Retirement

The Complete Guide to Buying a Vacation Home in Retirement

couple on beach thinking about buying a vacation home

It’s been a goal for decades—a vacation home—and now it’s time to realize that goal. And while you should absolutely seize this opportunity, there are a lot of details to figure out before buying a vacation home during retirement. Here’s what you need to know about owning a vacation home from start to finish.

Paying for a Vacation Home

The first question anyone should ask before buying a vacation home is, “Can I afford it?” Your vacation home may be smaller than your primary residence, but if it’s in a desirable destination it could be more expensive.

If you need to pull money from retirement savings to afford a vacation home, think twice. But if your primary residence is paid off and you have a substantial down payment for a second home, a vacation property may be within your budget.

Your cost for a vacation home includes more than the purchase price. You want to account for additional expenses in your calculations, including:

  • Taxes: In addition to property taxes, you’ll pay higher taxes on the sale of a second home. Second homes aren’t eligible for the capital gains exemption.
  • Homeowner’s insurance: This may be higher if the vacation home has a pool, waterfront, or is in a flood zone. You need additional coverage if you plan to use the property as a rental.
  • Property management: If your home is vacant for long periods or you rent it out, you may want a property management agency to oversee maintenance, marketing and other logistics for you.
  • Moving expenses: While it’s a one-time cost, moving is costly, especially interstate moving. Compare the cost of moving furniture against buying new furnishings where your vacation home is located. For the items, you intend to move, use a moving cost calculator to understand what you can expect to spend.

Renting Out Your Vacation Home

Many vacation homeowners use their property as a short-term rental to offset the costs of ownership. Renting out your vacation home can be a smart call, but don’t underestimate the time and money involved. Unless you live nearby, you want to hire professionals to manage the property for you, including a:

  • Property manager to market the unit, handle tenant relations and coordinate maintenance.
  • Cleaning service to deep clean the unit before renting it out and between renters and your own return.
  • Landscaping company to maintain the exterior of the property.

It’s also important to be realistic about how renting a second home affects your own use of the property. You may not be able to use your vacation home during the most popular travel weekends if your goal is to maximize rental income. Know your priorities and whether you want to use your second home as an investment or just subsidize the mortgage payment. How frequently you rent your second home also affects your tax obligation.

Security for a Second Home

Whether you rent out your second home or leave it vacant, you need extra security to protect against vandalism and burglary. Vacation homes are susceptible to criminal activity; if burglars notice your home frequently sits empty, they’ll consider it an easy target for property crime.

Home security deters crime and protects you if something does happen. A monitored security system is best because it notifies authorities automatically if a break-in is detected. Self-monitored systems require you to react and call for help instead.

Up-front costs and monitoring subscription fees vary widely for home security systems, so research home security systems and set a realistic budget based on your security needs. Keep in mind that a strong security system may get you a cheaper rate on homeowners insurance.

These are other security features to consider for your vacation home:

  • Smart keypad locks: Smart keypad locks are especially convenient for short-term rentals because you can change the code between tenants. And vacation homeowners appreciate the ability to let maintenance workers and cleaning staff with the click of a button.
  • Smart smoke detectors: Traditional smoke detectors aren’t helpful if no one’s home. But smart smoke detectors send push notifications to your phone, so you or your local property manager can call the fire department in the event of a fire.
  • Smart leak detector: If your vacation home is in a flood-prone area or has aging plumbing, buying a leak detector is a small price to pay for peace of mind. These devices alert you when water is detected, so you can take action before serious damage occurs.

Maintaining a Vacation Home

This article covers how to keep an eye on your vacation home from afar, but what about when something goes wrong? It’s easy to keep up on maintenance when you live in a home and notice every strange noise, but problems in a second home easily go undetected. And the longer a problem sits, the bigger it can grow.

Proactive maintenance is necessary to prevent your vacation home from turning into a money pit. Start with listing your home’s major systems and when they’re due for service. Then, prepare for minor repairs by screening handymen now—before you need one. That way you know exactly who to call when something goes wrong and can trust that you’re getting a fair price. You can find handymen—as well as cleaning services and landscapers—at online sites, such as Home Advisor and Angie’s List.

If you can’t get your eyes on your vacation home on a regular basis, hire someone else to manage maintenance. Many property management agencies include inspections and maintenance coordination in their service plans. Before taking a hands-off approach to second home maintenance, double-check your contract. If you think maintenance is covered and it’s not, you could be in for an expensive surprise.

Owning a vacation home in retirement can be an amazing reward after decades of hard work. But if you do it wrong, it can also be a major burden. Before investing in a vacation home, make sure you understand what you’re signing up for, from the mortgage payments to the maintenance. As long as you’re prepared for the realities of owning a second residence, buying a vacation home could be the best choice you ever make.

Taking the Plunge into a Mortgage for Your Vacation Home

Just like with your primary residence, you’ll likely need a mortgage for your new vacation home. You can look at mortgage loans right here on Credit.com and use the Credit.com mortgage calculator to investigate options for different loan rates and terms.

You may also want some helpful advice if it’s been a while since you took the plunge on the loan for your current home. You can find helpful articles in the Credit.com Mortgage Resource Center, including a look at how your credit score affects your mortgage.

About the Author

Jim McKinley is a retired banker with almost 30 years of experience. He created MoneywithJim.org to share his advice and other resources on a variety of financial topics. In his spare time, Jim spends time with his family and his dogs and he maintains his website. It’s a very lovely life that he’s grateful for every day.

Image via Rawpixel

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How Does Google Wallet Work and Is It Safe?

How Does Google Wallet Work and Is It Safe?

hand holding cut out of shopping card over mobile phone to show how does the google wallet work

Mobile payments—rather than a credit card, or check—are becoming more and more popular and more and more common. In fact, globally, mobile payments are expected to be almost $50 billion by 2021.

Being able to use your smartphone or smartwatch to make payments makes a lot of sense. We carry them almost everywhere and adding more credit cards to your mobile payment provider of choice doesn’t take up any more space in your pocket.

Mobile payment options include Google Wallet, Apple Pay, Amazon Pay, Visa Checkout and PayPal among others. And regardless of which one you choose, there are a lot of questions. How secure is your information? Do the places I shop accept digital payments? How complicated is it to pay for something?

To answer some of your questions, the Credit.com team drills down here into Google Wallet, what it is and how it works.

Google Wallet vs Google Pay

Google’s digital wallet system is actually made up of a few different parts. Google Wallet was Google’s original peer-to-peer payment system for sending and receiving money. While the service still exists, the name changed to Google Pay when the previous Android Pay and Google Wallet services merged in January of 2018.1

Google Pay is a digital wallet and payment system. It lets you:

  • Send and receive money
  • Store your credit card and debit card information
  • Use the information stored in your phone to pay for items in apps, online and in-person

The in-person option requires the merchant to support near field communication (NFC) or “contactless” payments. This is the same system used by EMV chip technology in credit cards, which is still somewhat new in the U.S., but “old hat” in other countries.

Electronic wallets like Google Pay and Apple Pay, which is Google’s biggest competitor, have helped push banks and merchants to move to support chip technology faster and acceptance is now widespread.

How Does Google Wallet Work?

Google Wallet, now Google Pay, is an app that you download to and install on your smartphone or smartwatch that uses the Android operating system. You can find the app in the Android Market on your android phone. You can’t use it on an iPhone.

You can use the app to send and receive money from others

Once you’ve downloaded the app, adding a credit card or debit card—or multiple cards—to Google Pay is pretty simple. In the app, you tap the “add credit or debit card” link and use the phone’s camera to take a picture of your credit card. The app scans the picture for your credit card number, expiration date and other details it needs.

Once you enter your card details, you need to verify it. You can do this a few different ways and you can pick your method of choice:

  • By having your verification code sent by email or text and entering the code in the app
  • By calling your bank or credit card issuer to get your verification code
  • By signing in to your credit card’s app or bank’s app to verify your payment method
  • By permitting a small temporary charge to be made to your account and verifying the payment in the Google Pay app

After verifying your card, it gets loaded into Google Pay.

  • You can now use the Google Pay option at checkout when making a purchase online.
    • You’ll see a Buy with G Pay or similar option.
    • You can even add your card at checkout and have it saved for later use with Google Pay.
  • If your phone is Play Protect Certified and has NFC and it’s turned on, you can now use your phone to make payments at physical stores that accept Google Wallet or Pay.
    • All you have to do is unlock your phone, hold it over the terminal and wait for a checkmark to appear.

You can also add bank account information. Your bank account can be used only to send and receive money from others—friends and family—not for making purchases in apps, online or at physical store locations.

Is Google Wallet Secure?

The most common concern people have about digital wallets is security. Putting all your credit card and debit card information into your smartphone and having it stored on a server somewhere seems like risky business.

Google takes measure to protect your information in several ways. First, Google stores your information on its secure servers using strong encryption. Cloud storage and data security are cornerstones of all of Google’s businesses, and if anyone should be able to keep your data safe, it’s Google.

You also have to set up security on your smartphone to use Google Pay. You have to have your phone set to lock automatically or the Google Wallet won’t work. If the lock is turned off, your account numbers are removed from Google Pay. Ensuring your phone is locked helps protect someone from gaining access to your phone and stealing your numbers.

Maybe most important is that when you buy something with Google Pay, your credit card details aren’t sent to the merchant. The system creates a virtual account number for every transaction and that’s what gets sent through the merchant’s payment system.

This is the same basic technology used for chip credit cards. It’s more secure than using a normal credit card with a magstripe. Like with chip credit card technology, the temporary number won’t work again if an unscrupulous merchant skims it or a hacker breaks into the merchant’s server and steals it. If you buy something with a magstripe credit card, the actual card number is used for every transaction.

Where Is Google Wallet Accepted?

For in-store purchases, Google Pay can be used with almost any contactless payment terminal. If the merchant’s terminal supports “chip” credit card payments, it most likely supports Google Pay payments as well.

You can also use Google Pay to pay for things online. Online Google Pay payments give you all of the same security and convenience benefits that Google Pay offers in-person.

The biggest roadblock to being able to use Google Pay isn’t whether the merchant supports it. It’s whether your credit card company supports it.

To add your card to Google Pay, the credit card company and the particular card you have with them have to support the Google Wallet system. The virtual account number feature is the biggest factor. The credit card company has to support these temporary numbers with their system, so adding a card to Google Pay that doesn’t work that way isn’t possible.

If your current credit card doesn’t support Google Pay, you’ve got lots of options for credit cards that do. If that’s the case, you can find a new credit card at Credit.com. Many of the cards offered here support Google Pay.

Chase Freedom®

Apply Now

on Chase’s secure website

Card Details
Intro Apr:
0% for 15 months on purchases


Ongoing Apr:
17.24% – 25.99% Variable


Balance Transfer:
Intro: 0% for 15 months


Annual Fee:
$0


Credit Needed:
Excellent-Good

Snapshot of Card Features
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 17.24-25.99%. Balance transfer fee is 3% of the amount transferred, $5 minimum
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
  • Enjoy new 5% categories each quarter
  • Unlimited 1% cash back on all other purchases – it’s automatic
  • Cash Back rewards do not expire as long as your account is open and there is no minimum to redeem for cash back.
  • Free credit score, updated weekly with Credit Journey℠
  • No annual fee

Card Details +

What About Other Mobile Payment Systems?

There’s not a lot of competition in the digital wallet space. Quite a few companies have tried to get traction, but it’s come down to two primary competitors—Google Pay and Apple Pay.

There’s not much difference between the two. Most of the features, including security protection, are virtually identical. The decision of which one to use comes down to what kind of smartphone you own.

If you’re an iPhone user, you’ll probably use Apple Pay. There is a Google Pay app for the iPhone and iPad but it’s U.S.-only and it isn’t as well-integrated with the operating system.

If you use an Android phone, you’ll use Google Pay. There’s no option to use Apple Pay with non-Apple Android phones.

Paypal is the other common service but it’s strictly a peer-to-peer payment system and online payment system. It can’t be used to make purchases at actual physical stores.  You can though, add a Paypal account to Google Wallet and get the best of both worlds.

We’re Living in the Future

It hasn’t been that long since the early days of Google Wallet, but it has come a long way since then. Both in the features, it offers and in the number of places you can use it for purchases.

With the level of security and convenience it offers and being associated with the Google brand, that growth isn’t going to stop any time soon. It won’t be long until the idea of carrying a bunch of cards in your wallet or purse will seem as strange as playing music from CDs or movies from DVDs.

Happy shopping.

1 https://en.wikipedia.org/wiki/Google_Pay

At publishing time, the cards mentioned are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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Avoiding Medical Debt After a Cancer Diagnosis

Avoiding Medical Debt After a Cancer Diagnosis

A doctor talks with a patient, as the considers avoiding debt from cancer.

Many Americans struggle with medical expenses. One in five Americans who have health insurance struggle to pay off their medical debt. For cancer patients with insurance, out-of-pocket costs can reach $12,000 just for one medication and average treatment costs can hit $150,000.1,2 And tragically, cancer patients are two-and-a-half times more likely to declare bankruptcy than people without cancer.2

For cancer and other diseases that require long-term care, that financial concern is too real. In order to stay ahead of your medical payments and keep treatment as your first priority, understanding what options you have and what your expenses may be can help protect against financial hardships during treatment.

Create a Budget

After your initial diagnosis, an unfortunate reality you have to face is how to pay for care. Creating a budget early lets you put more energy into treatment and recovery going forward. When you create your budget, start with a list of all possible charges, including:

  • Outpatient visits, such as regular provider visits, chemotherapy or radiation treatments, and consultations.
  • Inpatient visits, such as hospital stays and procedures.
  • Lab testing.
  • Prescription medications.
  • In-home caregivers.
  • Mental health therapy during treatment.
  • Transportation and travel costs.
  • Possible lost pay to due absence from work, if any.

Also keep in mind your insurance versus out-of-pocket costs, including your out-of-pocket maximum.

Most medical providers are developing a policy of transparency around how much treatments and doctor’s visits cost. As of January 1, hospitals in the U.S. are required to post a “machine-readable” list of all potential costs the hospital might charge. This lets patients compare costs at different medical centers and to budget for annual costs. Treatment for a cancer diagnosis may last months or years, so being able to plan ahead financially lets you and your family focus on the treatment and recovery processes.

If you don’t know where to begin with budgeting, there’s an abundance of online resources, communities and social workers that dedicate their work to cancer patients and their families. Many hospitals have social workers or financial professionals on hand that work with patients to put together a payment plan. Taking advantage of available resources can help ease your burden.

Go Over Your Health Insurance

For those who have health insurance, making sure you get the most out of your plan and coverage is important when dealing with multiple aspects of cancer care. When you go over your benefits, you want to look into what your copays are and if your insurance covers services, such as in-home aids, palliative care and experimental treatments.

When checking the terms of your policy you also want to keep a detailed folder of your medical bills and insurance information. Double check your charges to help maintain your budget and ensure you aren’t billed incorrectly by accident. If you don’t have a health insurance provider, check to see if you qualify for Medicaid or Medicare, for those over 65.

Should You Take Out a Loan?

When you go through cancer treatment, whether you have insurance or not, you can build up a considerable amount of medical debt. A personal loan or medical loan may be a good option for patients who’re looking to refinance what they owe.

Taking out a loan can help keep your debt out of the hands of medical debt collectors. Medical bills through the hospital don’t generally make an impression on your credit score, but if bills get passed to a collection agency there could be a more significant impact on your credit report.

Before looking into a personal loan, consider negotiating debt with medical providers to see if your bills can be lowered. Hospitals and doctor’s offices are often willing to work with patients who need assistance on payment plans and even have onsite financial advisors that can help with the process.

The most important thing to do is not ignore your medical debt. Whether it be through a medical provider or through your bank, ignoring your bills only makes your financial situation worse. Making decisions at the beginning of a diagnosis lets you focus on your treatment rather than creating more stress later on.

When to Utilize Legal Assistance

Family history and personal health play a role in the diagnosis of cancer, but there is a subset of cancers that are caused by exposure to dangerous chemicals, minerals or gases. It’s an unfortunate reality that an instance of unhealthy exposure can be due to the negligence of another person or group.

Recent publicized examples have circled around ovarian cancer caused by talc and mesothelioma caused by asbestos in the workplace. In cases like mesothelioma, the cancer can be aggressive leaving patients with 6 to 12 months to live. Utilizing legal assistance in these cases can help families with stability and support. While these situations are unfortunate, litigation is an option some patients may want to consider.

Connecting with the Cancer Community

Although the financial burdens of cancer and other long-term diseases are overwhelming, there are numerous organizations and health care providers dedicated to helping you find a support system within your community. Connecting with professionals who work with cancer patients every day can help you raise money and navigate expenses, leaving you to focus on the most important part of your diagnosis—getting healthy.

Places to start include your local hospital, the Cancer Support Community and the American Cancer Society.

More About Medical Debt

About the Author

Molly-McGuaneMolly McGuane is a writer and communications specialist for the Mesothelioma and Asbestos Awareness Center. Her main goal is to spread information for those with rare diseases and cancer. Molly has a degree in both journalism and English literature and enjoys reading, hiking and running.

 

 

1 https://www.kff.org/medicare/issue-brief/it-pays-to-shop-variation-in-out-of-pocket-costs-for-medicare-part-d-enrollees-in-2016/

2 https://www.aarp.org/money/credit-loans-debt/info-2018/the-high-cost-of-cancer-treatment.html

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What Is a Prime vs. Subprime Credit Score?

What Is a Prime vs. Subprime Credit Score?

A woman sits on the floor while looking at prime vs. subprime credit.

When it comes to credit, approval is all in the number—the three-digit number that’s your credit score. Most lenders and credit card issuers use this number to determine your risk level as a borrower. In general, credit scores are categorized as bad, poor, fair, good, good or excellent.

However, another important designation impacts whether you’ll get approved for a credit card or loan, the interest rate you pay and your terms. That’s the prime vs. subprime credit score designation. Really, It’s no different than bad, poor, fair, good, good or excellent, it just used different terminology.

Subprime encompasses bad, fair and poor credit. Prime covers good and excellent. And sometimes superprime is used to encompass the top tier of excellent. Table 1 shows how that breaks down.

Table 1: Credit scores, ranges and prime vs subprime designations

VantageScore  Score VantageScore Rating FICO Score FICO Rating Prime vs Subprime Designation
750-850 Excellent 800-850 Exceptional Superprime (800+)
740-799 Very Good Prime (750-799)
700-749 Good 670-739 Good Prime
650-699 Fair 580-699 Fair
600-649 Poor     Prime (620+)

Supbrime (< 619)

300-599 Bad 300-579 Very Poor Subprime

Learn more about VantageScore vs FICO.

Prime and superprime borrowers are more likely to qualify for credit cards and loans and access better interest rates, terms and perks, such as rewards, including points and cash back. That said though, there are credit cards for people with poor credit, bad credit and even no credit.

Is My Score Prime or Subprime?

Although each lender has its own criteria about which scores it considers prime and which scores it considers subprime, generally, you need a score of at least 740 to be considered a good risk by lenders. Scores of 620 to 799 are usually considered prime. Scores below 620 are subprime. And individuals with superprime scores have scores that exceed 800.

The Fair Isaac Corporation, the inventor of FICO scores, releases periodic data about score distribution among United States consumers. Their most recent average FICO score data, released in September 2018, gives the following breakdown of prime vs subprime credit scores:

  • 1% of Americans have a bad credit score (under 600).
  • 6% of Americans have a poor credit score (600-649).
  • 13% of Americans have a fair credit score (650-699).
  • 2% of Americans have a good credit score (700-749).
  • 42% of Americans have an excellent credit score (over 750), with 21.8% with scores of 800 or higher.

Based on these numbers, less than 28% of U.S. consumers fall into the subprime category. The remainder of Americans, up to 38.8%, are prime borrowers.

If you’re wondering where you sit, you can get your free VantageScore credit score from Experian here on Credit.com.

What Are the Effects of Prime vs. Subprime Credit?

A prime credit score makes it much easier and more affordable to get a credit card—especially if you want a rewards credit cardpurchase a home, buy a new car or finance home repairs or higher education.

A subprime credit score can make it more difficult to qualify for a credit card or loan. And if you do, you’ll likely end up paying a higher interest rate for the card or loan.

When you improve your credit score and get into the prime or super prime category, you get lower interest rates, higher loan amounts and credit lines and even special programs like rewards credit cards, low APR credit cards and sign-up bonuses like and 0% APR on purchases and balance transfers.

Subprime borrowers sometimes have to take additional steps to be approved for a loan. For example, a cosigner with good credit can improve your chances to qualify. However, he or she is responsible for payments if you default on the cosigned credit card or loan. If you’re buying a home or a car, the lender may require a higher down payment than it does for a prime borrower.

Although interest rates for a prime vs subprime credit score vary dramatically depending on the type of loan and the lender, you could pay tens of thousands less over the life of the loan if you have prime vs subprime credit score. For example, a subprime auto loan can have an interest rate of 10% or higher, while prime lenders can access rates of less than 5% or even 0% with special financing.

A credit card for subprime borrowers can carry an interest rate of more than 25%, compared to less than 10% or even an introductory rate of 0% for a prime or superprime credit score.

According to the federal Consumer Financial Protection Bureau, subprime mortgages are more likely to have an adjustable interest rate, which means your interest and monthly payment amount can increase over time. Prime mortgages are more likely to carry a fixed rate.

Keep in mind that a prime credit score isn’t necessarily a one-way ticket to loan approval. While lenders take your credit scores into account, they also consider factors like income, debt utilization and overall finances when deciding whether to extend you credit or a loan.

What Factors Impact My Score?

If your credit score falls into the subprime range, your credit history might not be long enough for lenders to make an astute judgment about your ability to repay a loan. Using credit responsibly by making payments on time and keeping a low balance on the cards you do have may slowly improve your score.

Other common characteristics of subprime borrowers include:

  • A high credit utilization ratiowhich is the amount of your available credit you’re currently using. Lenders generally like to see a ratio of less than 30% with 10% being ideal.
  • A history of late payments—Most lenders report late payments to the three major credit bureaus after 30 days, with additional reporting at 60 and 90 days late.
  • A history of defaulting on debt—These debts may be written off by the lender because they were not repaid after several years or sent to collections.
  • A history of legal judgments or bankruptcy—These are seen as serious black marks by lenders and remain on your credit report for seven to 10 years.

Learn more about “What Is a Good Credit Score?” and “Just How Bad Is My Credit Score?

How Can I Improve My Credit Score?

Moving from the subprime to prime credit score category has distinct benefits that put you on the path to a brighter financial future. You may be able to buy a home instead of renting. If you lease, you’ll have a better selection of properties to choose from. You’ll have lower interest rates on everything from your mortgage to your car loan to your credit cards, which means you’ll spend less money on monthly payments and more to put toward repaying debt, savings and meeting other financial goals.

Whether you’re working to exceed the 740 credit score threshold or want to maintain your already excellent score and become a superprime borrower, try these tips to improve your score:

  • Check your credit report and scoreIf you don’t know where you stand when it comes to prime vs subprime credit, you can’t be able to take steps to boost your rating.
  • Dispute any inaccuracies on your credit report that could be affecting your score.
  • Set up automatic payment reminders through your financial institution or on your phone or email calendar. You can receive a text or email so that you never miss a payment, helping you avoid late fees and dings to your credit score.
  • Pay down some of your debt to improve your credit utilization ratio. Lenders like to see borrowers using no more than 30% of your available credit. If you’re able to do so, opening a new line of credit will improve your utilization and subsequently, your credit score.
  • If you’ve missed payments in the past, bring those accounts current to improve your account standing, especially if some items have gone to collections. Once that happens, the black mark will remain on your credit report for seven years even if you eventually pay.
  • Keep old accounts open. The length of your credit history contributes to a healthy score, so even if you’re no longer using a card you avoid closing it.
  • Avoid applying for too many accounts in a short period of time. Lenders may see this as a red flag and the resulting hard inquiries have a negative impact on your score.
  • Create a budget and expenses you can eliminate or reduce to repay your debt. This not only boosts your score but also puts you on track to reach other financial goals—like building an emergency fund.

Learn more about how to improve your credit score.

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