Breaking Down S.M.A.R.T. Business Goals

S.M.A.R.T. goals are not a new concept. They’ve been around since the ’80s and have been used by countless organizations and individuals. Let’s review what the famous acronym stands for once again, this time focusing specifically on businesses.

Specific – setting broad and generic goals for your business, like “make a profit,” means setting yourself up to fail. Among 90% of studies about goal setting, specific goals were more likely to be met^[1]. When setting your goal, always ask yourself how achieving it will help your business.

Measurable – your goal will be more achievable if you assign a numerical value to it and create clear benchmarks to track your progress.

Achievable – set goals that can be accomplished through actionable steps are more practical than overly ambitious targets.

Realistic – your startup may have limited resources. Ask yourself if your goal is realistic given your current circumstances or if you need to adjust it. 

Time-based – set a deadline that will keep you motivated and accountable.

S.M.A.R.T. Business Goal Examples

I don’t know about you, but I’ve always understood a concept better when I see an actual example. That’s why we’ve compiled a list of 4 different examples of S.M.A.R.T. startup goals below.

The post How to Set S.M.A.R.T. Goals for Your Business (With Examples) appeared first on FinMasters.

Online banks offer perks that are frequently missing from traditional banks. They boast lower fees, higher interest rates, and, most importantly, convenience. The top digital banks merge these benefits and more.

We’ve put together a list of the best online banks on the market to help you find the right digital bank for you.

The Best Online Banks of 2023

The best online bank is the one that meets your unique needs. If you’re looking for a digital bank, we’ve put together a list of the best online banks out there to help you narrow your search.

BEST OVERALL

Discover

With stellar customer reviews, competitive rates, and excellent account offerings, Discover is our pick for the best overall online bank.

Pros: 

• No monthly fees 
• No overdraft or insufficient fund fees
• Competitive APYs
• High customer ratings

Cons:

• Doesn’t accept cash deposits 
• No physical branches

Discover is a digital bank that offers something for everyone. Its products include some of the best credit cards on the market and savings accounts that can earn you 5x the National Savings Average. 

Discover makes banking and managing money easy for its customers. Its highly-rated mobile app has an impressive 4.9 out of 5 stars on the App store and 4.6 out of 5 stars on Google Play. It also offers over-the-phone customer support available 24/7 — a significant benefit when there are no physical branch locations.

The checking and savings accounts have no monthly or maintenance fees and offer competitive rates and rewards. Discover’s Online Savings Account offers a 4.30% APY, while its checking account gets you 1% cash back on up to $3,000 in debit card purchases. 

The online bank also offers convenient, easy access to a large ATM network nationwide. However, cash deposits are not currently accepted, which can be a major downside if you intend to deposit cash frequently.

Fees	None
APY	4.30% APY savings account, 1% cash back checking account
Banking experience	High user ratings and 24/7 customer support
Accessibility (ATM networks)	60,000+ no-fee ATMs nationwide

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BEST FOR CHECKING ACCOUNTS

Quontic

Quontic is a strong choice if you’re looking for an online checking account that earns a very competitive interest rate at no extra cost.

Pros: 

• High interest on checking account
• No monthly maintenance fees 
• Quontic Pay Ring feature 

Cons:

• Minimum POS transactions required to qualify for high APY
• No customer support on weekends 

Quontic’s High-Interest Checking account can earn you up to 1.10% APY without charging any monthly or overdraft fees. To qualify for this high yield, you’ll need to make at least 10 debit card transactions of $10 or more each statement period. If you use your card regularly, this minimum requirement shouldn’t be a problem. However, if you’re an infrequent debit card user, failure to make the minimum number of transactions will result in a mere 0.01% APY. 

A unique feature offered by Quontic is the Quontic Pay Ring — a wearable payment ring that allows you to make contactless purchases by tapping it. For those who value convenience and don’t like to carry their debit card around everywhere, the ring may prove to be a game changer. 

Quontic also offers two other types of checking accounts, including a Cash Rewards Checking that earns 1.0% cash back on eligible purchases and a Bitcoin Rewards Checking that gets you 1.5% bitcoin on purchases. 

The online bank offers an extensive ATM network and 24/7 access to online and mobile banking. Apple users rate the Quontic app 4.4 stars out of 5, while Android customers are not as impressed, giving it only 3.3 stars. If you need assistance, their customer service agents can be reached by phone from 9 am-6 pm on weekdays, but they’re not available on weekends.

Fees	None
APY	1.10%
Banking experience	Monday-Friday customer support
Accessibility (ATM networks)	90,000+ no-fee ATMs nationwide

Visit Website

BEST FOR SAVINGS ACCOUNTS

CIT Bank

CIT’s savings account pays one of the highest yields in the country. And unlike some online banks, it doesn’t ask you to meet strict criteria or put down a large minimum deposit to qualify for it.

Pros: 

• High APY on savings account 
• No monthly service fees 

Cons:

• Doesn’t accept cash deposits 

CIT Bank has a range of savings accounts that offer competitive rates and don’t charge any service fees. The Savings Connect account pays you a high 2.10% APY and only requires a $100 minimum opening deposit. Its other savings accounts also have competitive yields, but they’re certainly not the best on the market. For instance, the Savings Builder account offers only 0.85% APY and requires a minimum balance of $25,000 or a monthly deposit of $100. 

Like other online banks, CIT is a great fit for people who like the convenience of banking on their phone or computer. The app receives 4.6 out of 5 stars on App Store and 3.0 stars on Google Play. If you have any banking questions, telephone support is also available with extended hours from Monday to Saturday and is closed on Sundays. 

Unlike other digital banks on our list, CIT doesn’t have a network of no-fee ATMs. However, you can use other banks’ ATMs and CIT will reimburse you up to $30 of those fees per month. If you use the ATM regularly to withdraw money, for example, any fees you incur above $30 will be an out-of-pocket expense.

Fees	None
APYs	2.10%
Banking experience	24/7 online access + Monday-Saturday telephone support
Accessibility (ATM networks)	No free ATM networks, but CIT will reimburse you up to $30 in ATM fees each month

Visit Website

BEST FOR CHECKING AND SAVINGS ACCOUNTS

SoFi

SoFi has a unique product offering — a 2-in-1 checking and savings account that comes with a competitive rate and a generous sign-up bonus.

Pros: 

• High APY
• No account fees
• Up to $250 sign-up bonus
• No overdraft fees
• No minimum deposit required
• 15% cash back at local establishments

Cons:

• Checking and savings accounts are combined
• Cash deposits cost $4.95 at Green Dot retail locations 

If you’re looking for checking and savings accounts that offer a competitive rate, SoFi is a strong candidate, as long as you’re okay with combining your accounts. 

SoFi’s new online banking account is a checking-savings account hybrid that earns a very competitive 4.40% APY. On top of that, you can get up to 15% at local establishments when you pay with your SoFi debit card. As a sign-up bonus, SoFi is also giving customers up to $250 when they set up a direct deposit. However, your direct deposit needs to be $5,000 or more if you want to receive the full $250 bonus. 

Like its competitors, it doesn’t charge any account fees or other hidden fees most traditional banks usually charge. 

SoFi is not an ideal choice for customers who make regular cash deposits to their accounts. Cash deposits are only available at participating retail locations and each deposit will cost you $4.95. 

The customer experience is something SoFi excels at. SoFi has a highly rated mobile app (4.8 and 4.1 stars on the App Store and Google Play respectively), and an exemplary customer support system. There’s a 24/7 virtual chat assistant, a Twitter account dedicated to customer support, and each product offering has a designated customer support line. 

Fees	None
APYs	4.40%
Banking experience	Strong customer support via phone, Twitter, and online chat.
Accessibility (ATM networks)	55,000+ no-fee ATMs nationwide

Visit Website

BEST FOR CASH DEPOSITS

Alliant Credit Union

Alliant’s cash-deposit ATMs aren’t the only feature that makes it a solid digital banking solution — it also offers competitive rates and excellent customer service support.

Pros: 

• Cash-deposit ATMs available nationwide 
• Competitive APYs
• No fees 
• $20/month in ATM fee rebates 

Cons:

• Cash-deposit ATMs are limited if you live in a rural area 

Online banks are not exactly known for making it easy to deposit cash. Alliant is one of the few digital banks (credit union to be exact) that allow customers to deposit money through one of their many cash-deposit ATMs. 

While Alliant has more than 80,000 ATMs nationwide, not all of them are cash-deposit friendly. 

You can find one near you by searching for deposit-taking ATMs through their website, but you may have trouble finding one if you live in a remote area or far from a big city. 

Alliant is a reputable credit union with a range of products, including online checking and savings accounts that earn above-average rates and don’t charge any fees. It also offers a user-friendly online banking platform, a highly rated mobile app (4.7 out of 5 stars on the App Store and 4.5 out of 5 stars on Google Play), and 24/7 customer support.  

Fees	None
APYs	3.10% APY for savings account, 0.25% for checking account
Banking experience	Highly rated digital experience & 24/7 over-the-phone customer support
Accessibility (ATM networks)	80,000+ no-fee ATMs nationwide

Visit Website

BEST FOR THE RANGE OF SERVICES PROVIDED

Ally

Ally is a top choice among online banks for a reason: it combines a robust product offering, strong rates, and a customer-centric digital banking experience.

Pros: 

• Robust product offering
• High APYs on checking and savings accounts
• No monthly fees 

Cons:

• No way to deposit cash

Ally offers customers a full range of banking products like checking accounts, Robo portfolios, auto loans, mortgages, and more. It also offers accounts with high interest rates, like its 4.00% APY online savings account. 

The online bank also doesn’t charge any monthly or overdraft fees and offers a chat option or 24/7 telephone banking support. The convenience of a 24/7 customer support line is a significant advantage, considering Ally, like most digital banks, doesn’t have any physical branches. 

Ally’s digital banking platform is very user-friendly and uses simple, jargon-free language to help customers navigate it. The app gets 4.7 out of 5 stars on the App Store and 3.6 stars on Google Play.

Fees	None
APYs	4.0% APY for a savings account, 0.25% APY for checking account
Banking experience	Customer-centric online experience and 24/7 live agent support
Accessibility (ATM networks)	43,000+ no-fee ATMs nationwide

Visit Website

The Pros and Cons of Online vs. Traditional Banks

Both online banks and traditional banks are safe places to keep your money and handle your finances. Just like “old-school” banks, most digital banks are FDIC-insured, meaning your money is safe and secure. While both types of banks help you manage your money, they differ when it comes to features and capabilities.

Traditional banks have been around for much longer and offer in-person customer support through their nationwide network of branches. They also offer a wider range of financial products like mortgages or auto loans. As of now, many digital banks offer fewer options than big banks provide.

That being said, online banks offer plenty of other features that make them an increasingly popular choice among US consumers.

Pros of Online Banks

Fewer and lower fees compared to traditional banks — As we mentioned before, online banks don’t have the same overhead costs that traditional banks do. This advantage allows them to charge little to no monthly maintenance fees, overdraft fees, ATM fees, or any other pesky hidden fees.

Higher APYs — According to the FDIC, the national average interest rates are 0.13% on savings accounts and 0.03% on checking accounts. Online banks offer up to 5x the national average (sometimes even more), giving customers a chance to earn more on their savings.

A better quality online experience — Because online banks operate entirely online, they typically offer a better, user-oriented digital experience to customers than their brick-and-mortar counterparts.

Not convinced yet? Here are some other benefits of online banks:

• Convenience and flexibility
• Built-in features like automatic savings and budgeting tools
• 24/7 or extended customer support hours
• Easy and speedy account opening process
• Easy to keep track of your finances from anywhere in the world
• Little to no paperwork involved

If you’re comfortable in the digital world, an online bank may be the best choice for you.

Cons of Online Banks

Digital banks come with an array of advantages, but they’re not for everyone. Here are some of the major downsides of digital banking:

• Lack of cash deposit options
• No physical locations or face-to-face service
• Lack of personal relationships
• Limited range of products and services

If you’re someone that deposits cash frequently and values personal interaction, you may opt for the traditional bank route.

Bottom Line

Online-only banks offer a range of significant benefits that make them a great alternative to traditional banks. Before choosing a digital bank, consider what features are most important to you.

Ultimately, the best online bank for you is the one that offers the right combination of features and products that meet your unique needs.

The post 6 Best Online Banks of 2024 for Great Features and Services appeared first on FinMasters.

So what do you do?

Here’s what you’re not going to do: spend days researching every single card out there. It’s almost impossible (and a waste of time) to sift through hundreds of choices. 

All you have to do to find the best credit card for you is to narrow down your choices based on your financial goals and spending habits.

To make it easier for you, we’ve already done this. Read on to find out how to decide which credit card to get and what type benefits you the most.

Should I Get a Credit Card? 

In today’s increasingly cashless world, credit cards almost feel like a necessity. More vendors prefer digital payments over cash, while some businesses like hotels and airlines, insist on credit card payments to secure your booking. 

Although they can make life easier, carrying the responsibility of owning a credit card isn’t an easy decision.

Choosing the Right Credit Card: 8 Types to Consider

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If not carefully managed, credit cards can tempt you to overspend, accumulate debt, and damage your credit score. If you’re prone to spending beyond your means or struggling with debt, a credit card may not be a good choice at the moment.

However, when used responsibly, credit cards can be a useful tool to finance your purchases, build a strong credit score, and earn valuable rewards from your spending. 

If you’re shopping for a credit card, make sure you understand how to use it wisely and learn about credit before you sign up for one.

How Do I Pick the Right Credit Card?

The search for a credit card can be overwhelming if you don’t know where to start. Here are the steps that will guide you in the right direction.

Check Your Credit Score 

Before you look for a credit card, it’s important to understand how credit scores work and find out what your credit score is.

Many financial institutions offer their customers complimentary credit score checks. You can also request a free copy of your credit report from any of the three major credit reporting agencies – TransUnion, Experian, and Equifax.

Your credit score will determine what type of credit card you can qualify for. For example, you can get a basic credit card even with a poor credit score, but you need very good credit to qualify for a rewards-focused credit card.

With a high credit score, you can successfully qualify for almost any type of card. If your score is lower you can still get a card, but your options will be limited.

Consider Your Needs and Goals

The best credit card for you is the one that meets your unique needs. For example, a student who’s just starting to build credit will need a different credit card than a frequent traveler who wants to collect air miles.

Questions like these can help you figure out what you want to get out of your card and what features you want to prioritize when shopping for one. The more you understand your needs and goals, the easier it will be to find the right card for you.

8 Different Types of Credit Cards

The different categories below will help you narrow down your options when you’re credit card shopping. Consider choosing a card that aligns with your spending habits, lifestyle, and financial goals.

1. You Want an Affordable Credit Card: No Annual Fee Credit Cards

Owning a credit card doesn’t have to come with a price tag. If you only plan on using your card occasionally or you’re trying to save money, a credit card with no annual fee is a great option.

Many credit cards offer valuable benefits and features without charging a yearly fee, allowing you to get the flexibility of having credit without the upfront cost. Focus your search on credit cards with a $0 annual fee that offers robust rewards you value.

For example, if you like cash back rewards, choose a no-fee card with a generous cash back rewards rate.

OUR PICK

Chase Freedom Unlimited

Why we picked it: 

• No annual fee
• 1.5-5% cash back 
• Earn a $200 bonus + 5% gas and grocery store offer
• 0% intro APR for 15 months on purchases and balance transfers

Learn more

2. You’re a Student: Student Credit Cards 

Student credit cards are specifically designed for young college or graduate students. 

Since most students have little or no credit, the main purpose of this credit card is to help them build a solid credit history. A good credit score allows you to get pre-approved more easily when you apply for car loans, mortgages, better credit cards, or any other loans.

If you use your card responsibly, it’s a good way to learn how to use credit, manage your money, and build your financial literacy. The majority of student credit cards have no annual fees, making them an ideal choice for the price-conscious college student.

While student credit cards don’t offer the same robust rewards that regular credit cards do, many of them do come with great perks. Look for a student credit card with a good rewards program or other benefits, like a sign-up bonus.

OUR PICK

Discover it Student Cash Back

Why we picked it:

• No credit is required to apply
• No annual fee
• 5% cash back on rotating bonus categories
• Unlimited cash-back match at the end of the first year
• Flexible cash back redemption options

Learn more

3. You Have Poor Credit or No Credit: Secured Credit Cards or Unsecured Credit Cards for Bad Credit 

Your choices are limited when you’re credit card shopping with damaged credit or no credit history. Most credit card lenders will consider someone with bad credit or a thin credit file a risky borrower.

However, that doesn’t mean all hope is lost. Credit builder credit cards are a great alternative for people struggling with qualifying for credit.

Secured credit cards are the best option, followed by unsecured credit cards for bad credit. Both types of cards help you build credit from scratch or rebuild your credit score so you can qualify for a better credit card down the road.

Secured credit cards are a better alternative because they’re easier to qualify for, have lower annual fees, and reduce the risk of spending outside your means. With secured credit cards, you’re required to put down a cash deposit to secure credit. Because your own deposit secures the card, it prevents you from building up a big credit balance.

Tip: Most cards for poor credit or no credit will give you a low credit limit. Your credit utilization is an important part of your credit score, so you’ll have to watch your spending and keep your balance below 30% of your credit limit.

When building good credit is your top priority, look for a credit builder card that has low fees and rewards responsible usage over one that offers rewards. To help you find the right card, we’ve rounded up the best secured credit cards and best unsecured credit cards for bad credit.

OUR PICK: BEST SECURED

Discover it Secured Credit Card 

Why we picked it: 

• No credit score required to apply
• No annual fee 
• Convert to unsecured card with responsible use 
• 1-2% cash back rewards  

Learn more

OUR PICK: BEST UNSECURED

Petal® 1 “No Annual Fee” Visa®

Why we picked it: 

• Approval based on banking history, not credit score
• No annual fee
• 2-10% cash back rewards at select merchants

Learn more

4. You’re a Frequent Flyer: Travel Rewards Credit Cards

Credit cards that offer travel rewards are best suited for cardholders who travel often and have a good-to-excellent credit score.

These cards give you the chance to earn points or travel miles through everyday purchases and travel-related expenses that can be redeemed toward travel. For example, airline miles can be used to redeem free flights or make your next trip more affordable.

Besides points and air miles, many travel cards come with various rewards meant to enhance your travel experience such as:

• Airport lounge access
• No foreign transaction fees
• Travel insurance
• Early boarding
• Free checked bags
• Hotel room or seat upgrades

If you’re loyal to an airline or hotel, consider a loyalty program card that offers airline or hotel-specific rewards. Otherwise, a flexible travel rewards card is your best choice.

Although many travel credit cards come with an annual fee, the rewards that come with them often offset the price tag if you’re earning enough points. Look for a card with robust rewards, a sign-up bonus, and the travel perks you value the most.

OUR PICK

Chase Sapphire Preferred®

Why we picked it: 

• 60,000 points intro offer
• High rewards for spending on travel and other categories 
• No foreign transaction fees 
• Trip cancellation insurance, primary rental car coverage, and lost luggage insurance 

Learn more

5. You Like Cash Rewards: Cash Back Rewards Credit Cards 

The flexibility of cash back credit cards makes them some of the most popular rewards credit cards on the market.

Every qualifying purchase earns you a percentage of cash back that’s stored on your credit card account until you’re ready to redeem it. For example, a card offering 1.5% cash back gives you $15 for every $1000 you spend. Depending on the issuer, cash back rewards can be redeemed as gift cards, a statement credit towards your credit card balance, or even a direct deposit to your account.

Some cash back credit cards offer a flat percentage on every qualifying purchase, while others offer higher percentages of cash back on certain spending categories like dining, groceries, or gas.

If you use your credit card to pay for everything, a cash back card is a great way to put your spending to work. As long as you use it responsibly and pay off your bill each month, you can get a lot of value out of it.

To maximize your rewards, choose a card that has a high rewards rate, a generous sign-up bonus, and an annual fee that is worth the perks it offers.

OUR PICK

Discover it Cash Back

Why we picked it:

• No annual fee
• 5% cash back on rotating spending categories
• Unlimited cash-back match at the end of the first year
• 0% intro APR for 15 months

Learn more

6. You’re a Loyal Customer: Store Credit Cards

A store credit card is a type of credit card offered by a specific retailer like Walmart, Amazon, or Costco. Retailers use store credit cards to incentivize shoppers to spend more and build loyalty. In return, loyal shoppers receive rewards, ongoing promotions, and discounts that can be used in-store.

Some store cards can only be used at one specific retailer, while co-branded store cards that have a Visa, Mastercard, American Express, or Discover logo can be used everywhere.

According to experts, people should take caution before signing up for a store credit card. These types of cards have high interest rates and low credit limits. If you’re easily tempted to spend, it can be a dangerous slippery slope to accumulating debt and damaging your credit score.

While store credit cards have their drawbacks, you can still benefit from the rewards they offer as long as you use them responsibly.

OUR PICK

Amazon Prime Rewards Visa Signature

Why we picked it:

• No annual fee
• $100 Amazon gift card sign-up bonus
• 5% rewards at Amazon and Whole Foods
• 2% rewards at restaurants, drugstores, and gas stations

Learn more

7. You Want to Pay Off Credit Card Debt: Balance Transfer Credit Cards

If paying off credit card debt is your top priority, a balance transfer credit card with a 0 percent intro APR could be the tool you need.

This introductory offer lets you move high-interest credit card debt to another card with a lower promotional interest rate. Consumers can take advantage of an interest-free period of 12 months or longer which allows them to pay off their outstanding balance without being charged any interest fees.

With discipline, you can quickly chip away at your principal balance and save money on interest charges before the introductory offer expires.

Tip: Make sure payments are always on time. A late payment could cancel your interest-free promotion.

If you’re looking to consolidate debts using a balance transfer credit card, we recommend one that has the following features:

• No balance transfer fees
• A 0 percent intro APR
• No annual fee

OUR PICK

Wells Fargo Reflect®

Why we picked it:

• 0% APR for 21 months on purchases and balance transfers
• No annual fee
• $600 of cell phone protection

Learn more

8. You’re a Business Owner: Business Credit Cards

Business credit cards are specifically designed for business owners who want to keep their business and personal expenses separate.

Small business owners can use business credit cards to make the most of business transactions while earning rewards on their everyday spending. Using a separate credit card for business-related purchases also makes it easier to track business expenses during tax season.

Business credit cards can offer an array of benefits like cash back, 0 percent intro APR, welcome bonuses, and more. Identify which benefits you value the most and choose the card that offers the best value for your business.

OUR PICK

Ink Business Unlimited®

Why we picked it:

• 1.5% cash back on various categories
• No annual fee
• Bookkeeping software to manage business expenses and more
• 0% intro APR on purchases for the first 12 months

Learn more

Choose the Card That Gives You the Most Overall Value

There’s no such thing as “the perfect credit card”— each credit card has its strengths and weaknesses. But that doesn’t mean the perfect credit card for you doesn’t exist.

Before you begin your search, ask yourself the right questions and understand your credit score. When you’re ready, look for a card that helps you maximize rewards and aligns with your financial goals and spending habits.

The post Choosing the Right Credit Card: 8 Types to Consider appeared first on FinMasters.

Increasing numbers of states and cities are offering “reverse scholarships” designed to attract young, well-educated residents by helping them pay off their student loans. The only catch is that you have to live there.

While alleviating some of your debt is a tempting incentive, many of the states and cities that pay off student loans may not be the most desirable or exciting places to live. Many areas have been experiencing a declining population and a phenomenon known as “brain drain” — an exodus of highly educated professionals. Areas with a shrinking population have fewer economic opportunities and employment options.

In an attempt to bring back or retain young talent, college graduates who are willing to relocate there are being offered targeted loan forgiveness.

If you’re looking for a change of scenery and want to repay your student loans faster, here are eight states and cities that pay off student loans.

1. Counties in Rural Kansas

The 95 Kansas counties that make up the “Rural Opportunity Zone” (ROZ) offer up to $15,000 in student loan debt forgiveness to eligible applicants, and/or a state income tax exemption for up to five years.

To be eligible for this program, you must be a new, full-time resident of a participating ROZ county and have an active student loan balance. Unlike other participants on this list, you don’t need to specialize in a specific area to qualify, but you do need an associate’s, bachelor’s, or postgraduate degree.

Besides significant financial incentives, the cost of living in rural Kansas is 13.5% less than the national average, making it a more affordable place to live than metropolitan areas. For outdoor enthusiasts, it also offers plenty of access to parks and outdoor activities like hiking, biking, and more. If you enjoy living in a quiet, relaxed pace of life, and looking for a change of scenery, this opportunity may be the right fit for you.

Before you pack your bags, however, you should know that Rural Opportunity Zones were established as a way to incentivize new, well-educated people to move to communities that are experiencing depopulation. Relocating there may come with challenges like a lack of services or employment opportunities.

2. Hamilton, Ohio

If you graduated from a STEAM program (Science, Technology, Engineering, the Arts, or Mathematics) within the last 7 years, the Hamilton Community Foundation encourages you to apply for their Talent Attraction Program Scholarship.

Successful applicants could receive up to $15,000 awarded in $300 monthly installments to go towards the repayment of their student loans. To take advantage of this scholarship, you have to relocate to Hamilton, and work within the Butler County area or hold a full-time remote position. Those who move out early or stop working before the end of the program will lose out on any future payments.

Like other cities in the midwest, living in Hamilton is much more affordable than in other parts of the US. Lowering your living cost can help you control your finances, live a more comfortable lifestyle, and start saving for retirement.

3. Maine

If you graduated college after 2008 and you’re willing to live and work in Maine, the Pine Tree State will reimburse your student loan payments.

The Opportunity Maine Tax Credit gives qualifying graduates an income tax credit amount that can be applied to their student loan payments. The income credit amount and eligibility vary, depending on your degree and your graduation year.

For example, if you graduated after 2016 with a Bachelor’s degree in STEM (science, technology, engineering, or math), you’ll receive a fully refundable tax credit. After applying the credit to your income tax, the State of Maine will mail you a check for the remaining credit amount.

With a declining population and a predominantly older demographic, Maine is looking for ways to attract young, new residents. While places like Portland are more youthful and offer better access to jobs, other cities in Maine can feel more like retirement communities than vibrant hubs for young graduates.

However, if you’re a nature lover and don’t mind a slower pace of life, moving to Maine has its perks. The low cost of living, access to affordable housing, and picturesque scenery make it an attractive place to live. Maine is also known for its stunning coastline, forests, and delicious seafood.

4. Michigan

The state of Michigan offers one of the most generous reverse scholarships in the country. The Michigan State Loan Repayment Program (MSLRP) provides eligible applicants with up to $300,000 in tax-free funds to repay their student loan debt over a period of up to ten years.

To qualify for this program, you need to be a medical, dental, or health-care professional and work full-time in a Health Professional Shortage Area (HPSA) at a non-profit clinic for at least two years. Participants also need to work a minimum of 40 hours per week, for at least 45 weeks per year.

Living in Michigan comes with several benefits like an affordable cost of living, beautiful natural landscapes, the Great Lakes, festivals, and a recovering economy. You also have your choice between small-town living and urban living, depending on what you enjoy.

However, before moving there you should do your research and weigh the pros and cons. Michigan is also known for its harsh winters, poor transportation infrastructure, and high car insurance costs.

5. Maryland

Maryland SmartBuy 3.0  program helps homebuyers purchasing a property in Maryland pay off thousands of dollars in student debt. Eligible borrowers receive up to 15% of the home purchase price (up to a maximum of $20,000) to pay off their outstanding student loans.

To qualify, you must have existing student debt of at least $1,000, and purchase your home through an approved Maryland SmartBuy lender. Additionally, the program requires that the full student debt of at least one of the borrowers be paid in full at the time of purchase. There are other criteria you must meet to qualify, so make sure you check the full eligibility requirements.

The state of Maryland also offers eligible physicians and physician assistants up to $50,000 in loan repayment funds through the State Loan Repayment Program (SLRP). Recipients must commit to working 2 years in a health professional shortage area (HPSA) or a medically underserved area (MUA).

Maryland has one of the best healthcare systems in the country, making it an appealing place to work for physicians and other healthcare professionals with student loans. It’s also close less than 200 miles away from major cities like New York, Washington DC, and Philadelphia.

6. Delaware

The State Loan Repayment Program (SLRP) in Delaware offers dental and medical professionals loan repayment assistance ranging from $30,000 to $100,000. The amount each applicant is eligible to receive depends on their qualifications, with advanced-level applicants receiving up to $100,000 in loan assistance.

Applicants must commit to working full-time for at least two years in a medically underserved area of Delaware to take advantage of this program.

Delaware is among the many areas in the US that are experiencing a shortage of healthcare professionals. Filling these vacancies helps you cover the cost of your education loans while you’re gaining valuable experience in the healthcare field.

If you’re considering relocating to the Diamond State, there are plenty of incentives apart from financial ones. Living in Delaware gives you access to its many national parks, beaches, and major cities like Washington DC, and Philadelphia. Delaware is also known for its low property taxes and it’s one of the only five states with no sales tax.

7. Texas

Texas has a number of loan assistance programs designed to attract lawyers, teachers, and health care providers. There are several programs to choose from, depending on your profession:

• Physician Education Loan Repayment Program (PELRP)
• Nursing Faculty Loan Repayment Assistance Program
• Teach for Texas Loan Repayment Assistance Program

The amount eligible participants are entitled to, varies between $2,500 and $60,000, depending on your profession and other criteria.

Besides its famous barbeques and live music, moving to Texas comes with a pretty significant perk: tax-free income. Texas is also home to some of the biggest and most vibrant cities in the US, like Austin, Houston, and San Antonio. The cost of living in Texas is another incentive to move there if you’re trying to save money — it has the 18th lowest cost of living in the country.

8. Niagara Falls, New York

The City of Niagara Falls offers graduates up to $6,984 in student loan assistance.

In exchange, applicants must live in a targeted neighborhood in Niagara Falls for a two-year period and show proof of good standing with the loan agency and their landlord or mortgage company. The target neighborhood is within walking distance of Niagara Gorge and Niagara Falls State Park.

Eligible candidates must have a bachelor’s degree, a two-year technical degree, or be pursuing a postgraduate degree at the time of application.

Niagara Falls has a suburban feel, affordable housing, and a lower cost of living than many other cities in the country. However, the city’s population has been declining for several years. Make sure to carefully research job opportunities and other important factors before moving there.

Other Tips to Pay Off Your Student Loan Debt

As financially enticing as it may be, moving to one of the states and cities that pay off student loans is not the only way to pay off your student loan debt faster. If these destinations aren’t attractive to you, you have other options.

The post 8 States and Cities That Help Pay Off Your Student Loans  appeared first on FinMasters.

Many TikTok users are vouching for the effectiveness of cash stuffing in managing finances, reducing debt, and boosting savings. In this post, we’ll delve into the benefits of this method, guide you through getting started, and help you determine if cash stuffing is the right financial strategy for you.

What Is Cash Stuffing?

Cash stuffing is similar to the envelope method, a budgeting technique championed by personal finance guru Dave Ramsey. 

Just like the envelope system, cash stuffing is the process of tucking away cash into different envelopes labeled for specific budget categories like rent, gas, groceries, utilities, savings, and more.  

You decide the amount of money that goes into each envelope based on your spending and savings goals. For example, you might allocate $150 for gas, and $50 to your emergency fund envelope. When you need money for a specific category, you can only use the money that’s in its designated envelope and nothing more, until the next budgeting cycle. 

The cash stuffing method relies entirely on cash, removing the need for credit cards and debit cards. This helps users track their spending more easily and eliminates the temptation of impulse buying.

How Cash Stuffing Works

The videos under the popular TikTok hashtag “cash stuffing” are admittedly satisfying to watch. Users, mostly women, meticulously count their cash and place it in colorful envelopes, neatly labeled with their respective budget categories.

It’s no surprise this budgeting method exploded in popularity: the videos are usually aesthetically pleasing and have an almost addictive quality to them. 

While the videos are satisfying to watch, there’s a lot more to it than putting cash into pretty envelopes. Cash stuffing requires self-discipline and commitment to work. Here’s how to do it: 

1. Determine your budget

The cash stuffing “ritual” begins on payday. When you receive your paycheck, subtract any fixed expenses. Fixed expenses are costs that don’t change from month to month, like rent or mortgage payments, car payments, insurance, and utilities. 

Once you subtract your expenses, withdraw whatever’s left in cash. This amount will be divided among different budgeting envelopes, as we’ll see below. 

Some people choose to withdraw their entire paycheck and use envelopes even for their fixed expenses. While it works for some, it can be cumbersome, especially since a lot of these bill payments are electronic or automated, eliminating the need to put them in envelopes. 

2. Figure out your spending categories

Each envelope represents a different budget category. The categories you choose will depend on your needs, lifestyle, and savings goals. Here are some of the most popular categories among cash stuffing aficionados on TikTok, to help you get started: 

Necessities – these envelopes should be prioritized when you’re distributing your budget, as they’re important expenses you have to pay: 

• Groceries
• Gas
• Car maintenance and repairs 
• Taxes 
• Child care 
• Debt repayment 
• Home maintenance 

Savings goals –  you can choose to keep it simple with an envelope labeled “Savings” or have multiple savings envelopes. Here are some ideas: 

• Wedding fund 
• Vacation
• Emergency fund  
• Christmas gifts 

Discretionary expenses – these are nonessential expenses, but that doesn’t mean they shouldn’t be considered once you allocate money towards essential categories. 

• Eating out
• Entertainment 
• Beauty & haircare
• Gifts 
• Shopping 

While everyone will have essential cash stuffing categories like gas and groceries, other envelopes will look different from one person to the next. Think about the categories most important to you when you start creating your envelopes. 

3. Fill your envelopes

Divide your cash into stacks based on denominations — one-dollar bills, fives, tens, twenties, and so on. This will make it easier to distribute the amounts into their respective envelope.

Now comes the part you’ve seen on every cash stuffing TikTok video: you get to put the cash into separate cash stuffing envelopes, each marked with a different budget category.

The amount of cash you “stuff” into each one depends on your budget and spending goals for each category. For example, to estimate how much cash to deposit in your envelope labeled “gas”, look at the average amount of money you’ve spent on gas in the last few months. Some envelopes will get less cash than others if your goal is to curb your spending in that category. 

When in doubt, follow the 50/30/20 rule. This budgeting guideline allocates 50% of your cash to needs like groceries or child care, 30% to wants like eating out, and 20% to financial goals like savings or debt repayment. 

People who use the cash stuffing method keep track of their budget using a notebook. Writing down your expenses and savings helps you organize your spending and track your progress.

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4. Spend only what’s in each envelope

Remember how I mentioned you needed discipline and commitment for this to work? Here’s why: you’re only allowed to use the cash in each envelope for that specific category and nothing else. For example, when you pay for groceries, you can only pay for them from your designated “groceries” envelope. 

If you run out of cash in one envelope, you can’t “borrow” from a different one. You’ll have to cut back on spending and make some sacrifices until the next budgeting cycle. 

5. Replenish your envelopes

People typically replenish their envelopes and revisit their budget every payday, whether that’s bi-weekly or monthly.

If you have money left over in an envelope at the end of a budgeting period, rejoice! You can either reward yourself with a treat or put the leftover money towards a goal like savings or repaying your debts.

The Benefits of Cash Stuffing

The cash stuffing method helps you take control of your finances, especially if you struggle with compulsive spending and impulse buying.

Cash Stuffing: What Is It And Can It Help You?

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Paying for everything in cash makes you more aware of the money you’re spending. Cash is tangible, and parting ways with makes you think twice about what you’re spending it on. A credit card, on the other hand, is far too easy to swipe. Research done by Duncan Simester and Drazen Prelec of MIT found that shoppers’ willingness to spend goes up by 100% when using credit cards instead of cash. 

Cash stuffing also helps you stick to a budget and prioritize allocating money towards necessities like rent, bills, and groceries. Since each envelope has a designated purpose, it helps you to spend mindfully on things that align with your goals. When you’re intentional about each dollar you spend, you’re less likely to waste money on unnecessary things. 

The monthly or bi-weekly ritual of replenishing your envelopes gives you a chance to revisit your budget and savings goals and go over your finances. This helps you develop healthy financial habits and relieves financial stress because you don’t have to waste energy doing mental accounting every month. You know exactly what bills you’ve paid and where your money is going. 

Is Cash Stuffing Right For Me?

Cash stuffing is especially helpful for people who struggle to control their spending and credit card usage. Avoiding credit card use and only spending the cash you have available in your envelopes prevents accumulating credit card debt. 

But this method may not be the right fit for everyone. Relying on cash to pay for everything in an increasingly cashless society is not exactly practical. If you’re at the grocery store and realize you forgot your envelope, you need to go back home and get it, according to cash stuffing rules. 

Another cash stuffing challenge is the safety aspect. Some people are not comfortable carrying around envelopes full of cash every time they leave the house. If anything happens to it, you’re out of luck. Keeping your money in a bank account is a much safer option, as it’s insured by your bank. 

Speaking of bank accounts, having a cash “savings” envelope is the equivalent of hiding your cash under a mattress. Not giving your money a chance to earn interest and grow causes it to lose value over time, especially when inflation has soared to 8.5%.    

Cash Stuffing Alternatives

If you prefer to budget online, you can take the cash stuffing concept and put a digital twist on it. Budgeting apps and personal finance software like Mint or You Need A Budget can help you create custom budgets and link directly to your bank accounts. 

Mint, for example, tracks your spending and allows you to choose budgeting categories, mimicking cash envelopes without the need to keep and carry cash. 

Get Started With Cash Stuffing 

The newly rediscovered envelope system, now rebranded as cash stuffing, has helped countless TikTok users take control of their finances and keep up with the rising cost of living. 

Are you thinking of giving cash stuffing a try? Get yourself a few envelopes and a marker and you’re good to go. If you want to get more creative and have some fun with it, look for cash stuffing templates or fancy cash stuffing binders on websites like Pinterest or Etsy.

And remember, if it’s not the right fit for you, there are many other budgeting options out there you can try until you find the one that’s just right. 

The post What Is Cash Stuffing, the Viral TikTok Budgeting Method? appeared first on FinMasters.

We’ve all heard stories of romantic infidelity. One spouse cheats on the other, leading to a destructive breach of trust and in many cases, the end of a relationship.

But what happens when the cheating is financial?

Financial infidelity happens when someone deliberately lies about money to a spouse or partner with whom they share joint finances. This type of dishonesty can be as harmful to a relationship as romantic infidelity and it’s a lot more common than you may think.

In 2021, 2 in 5 Americans admitted to financial indiscretions^[1] against their partner.

In this article, we’ll look at the most common signs of financial infidelity, why it happens, and how to overcome it.

What Is Financial Infidelity? 

Just like romantic infidelity, financial dishonesty in a relationship includes certain transgressions that are done without your partner’s knowledge. These include lying about your financial decisions, debt, or hiding any financial information your partner should know about. 

For example, regularly swiping money from your joint savings account to fund a compulsive shopping addiction is a common example of financial infidelity. That doesn’t mean one pair of shoes you bought on sale and stashed in the back of your closet is a crime. However, repeated or large-scale financial infidelity can lead to a loss of trust, arguments, or the end of a relationship.

Let’s explore other common ways financial infidelity can manifest in a relationship:

• Making significant purchases without telling your partner or lying about the true cost of your purchases
• Accumulating debt without telling your spouse 
• Lying about how much you earn and keeping a large portion of it to yourself
• Keeping secret bank accounts, credit cards, or loans
• Hiding cash from your spouse
• Hiding an addiction like gambling or shopping
• Taking money out of your retirement funds or investment plans without consulting with your spouse 

You may have noticed that all these behaviors have one thing in common — your partner would probably not approve of them, which is why many people keep them a secret. 

Common Warning Signs of Financial Infidelity 

Unfortunately, it’s increasingly easy to hide debt, overspending, and many other financial wrongdoings. Sometimes, your intuition and a few telltale signs are all you have to help you spot financial infidelity. Here are some common warning signs to look out for: 

• Frequent cash withdrawals: Noticing consistent significant cash withdrawals from your joint accounts that your spouse can’t account for. 
• Defensive behavior: Your partner becomes defensive, silent, or changes the topic when you bring up finances.  
• Secretive behavior: Your spouse starts acting secretive about their banking information, bill payments, and anything else involving money. For example, if they rush to check the mail every time it arrives, they could be hiding a secret credit card bill or loan they don’t want you to know about. 
• A lifestyle change: Although there’s no change in their income, your partner is spending more than usual on trips, gifts, or other lavish discretionary purchases. 
• Removal from an account: Your partner has removed your name from a joint account or credit card without telling you.

All of these are indications that something is wrong, and financial infidelity is likely to be part of it.

Why Does Financial Infidelity Happen

Although financial infidelity hurts the person on the receiving end of it, most people don’t engage in this harmful behavior to hurt their spouse. People usually hide their financial transgressions because they’re ashamed of what their partner might think and want to avoid a potential confrontation.

Money has always been an almost taboo subject among many couples in the US. A 2018 Fidelity survey found that 34% of cohabiting couples didn’t know how much money the other earned^[2]. Another study found that married couples in particular talk about money the least^[3]. 

The discomfort of money-related conversations, especially when you’re ashamed of your actions, encourages financial dishonesty. And the deeper the hole you dig for yourself, the harder it is to come clean. 

Other times, financial infidelity can be a lot more toxic. According to a Journal of Financial Therapy survey, some people use financial manipulation to gain power over their partners. When this happens, financial infidelity can become financial abuse.

Financial abuse happens when one partner controls the other partner’s access to financial resources in an attempt to gain power or control. For example, one partner is in charge of all the finances and uses their spouse’s paycheck for their own benefit without asking. 

How Financial Infidelity Affects Relationships 

The moment you combine finances with your spouse or partner, you’re agreeing to tackle money as a team. This means you work together towards mutual goals like retirement, a household budget, or your children’s education fund.

Financial Infidelity: What Is It and How to Handle It 

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For this to work there needs to be total financial transparency. When you deliberately choose to hide your financial habits from your spouse, you’re no longer looking out for your mutual interests.

This breach of trust causes a lot of financial stress in a relationship. For example, if you have a gambling problem and accumulate a lot of debt, your debt also becomes your partner’s debt. Your financial infidelity will likely jeopardize their financial security too. 

Financial infidelity also puts a big strain on a marriage, leading to arguments and a loss of trust. According to the earlier Journal of Financial Therapy survey, 76% of married couples say financial dishonesty negatively affected their marriage and 10% got divorced over it. 

How Should Couples Deal With Financial Infidelity?

To overcome financial infidelity, the partner committing it has to come clean and take full responsibility for their actions. They also need to be willing to take the necessary steps to change their behavior and work through their problems. 

Some participants in the Journal of Financial Therapy survey said opening up to their partners and taking ownership of their financial mistakes led to more proactive communication and even brought them closer.

That being said, overcoming financial infidelity doesn’t happen overnight. If you’re the one who’s been lied to, you’ll feel deeply hurt and betrayed. You might begin to question your relationship. If they’ve lied about this, what else could they be lying about? Getting to a place of forgiveness and learning to trust your partner again takes time and patience.

Consider these steps if you’re decided to work together to overcome financial infidelity:

1. Have Regular Money Conversations and Check-Ins

The only way to repair the trust that was broken and build a solid foundation for your relationship moving forward is through regular and open dialogue. The more you do it, the less of a taboo the topic of money will become. 

Start with conversations about lighter financial topics and work your way up to more difficult conversations. Here are some topics to consider talking about: 

• How to budget money going forward 
• How to get out of debt 
• Your spending habits
• Short-term and long-term financial goals 
• Your relationship with money 

The goal is to get to a place where you’re both financially in sync. If you’re in the habit of being open about money you’re less likely to hide money issues.

2. Consider Counselling 

Moving past a financial betrayal and reconciling is often difficult. If you’re struggling to overcome this together, consider financial therapy. A financial therapist or counselor has the tools and expertise to help you and your partner work through your emotions together and repair the trust that was broken. 

Doing deep, introspective work with the help of an expert can help you make meaningful changes in your relationships and your behavior around money. 

3. Build a Recovery Plan Together  

If financial infidelity has caused some debt to accrue, you’ll need to work together and come up with a debt repayment plan. If your spouse has maxed out multiple credit cards, for example, you could use the avalanche method to pay off the card with the highest interest rate first. 

4. Have Full Transparency Moving Forward 

To move forward, you need to ensure you have access to all your unfaithful partner’s accounts and that there are no more secrets between you. 

If your partner was the only one in charge of the finances until now, it’s time to change that. You need to be aware of the money that’s going in and out and every other financial household matter.  

Should You Forgive Financial Infidelity?

Choosing to forgive a financially unfaithful partner is ultimately a personal decision. 

Your decision might depend on how severe the infidelity is. A partner with a shopping addiction is different from one that steals your personal identity, takes out loans in your name, and ruins your credit score. 

Or maybe you’ve already tried to forgive your partner but they continue to hide things from you and don’t show remorse or a willingness to change. 

If you can’t move forward and the relationship is irreparable, it’s perfectly acceptable to end things.

How Can Financial Infidelity Be Avoided? 

As we touched on earlier, not talking about money is one of the biggest financial mistakes couples make. 

To prevent financial infidelity from rearing its ugly head, experts suggest having an honest conversation about money before you tie the knot. 

In our article The #1 Money Question to ask Ask Before Marriage, we’ve asked a panel of relationship experts and finance professionals the best questions to ask your partner before marriage. Asking the right questions before the big day helps you build a strong foundation for your marriage and ensures you’re on the same page regarding finances. 

For instance, asking each other how much debt you have can prevent harmful secrets from being kept. Fidelity reports that 74% of millennial couples brought dept into the marriage, and 46% admitted debt hurt their relationship. 

Once you’re married, it’s equally important to continue having regular financial check-ins. Research has found that couples who talk about money regularly have a more satisfying relationship^[4]. For example, set a household budget to manage your finances and have monthly budgeting meetings where you go over everything as a team. If a problem arises, nip it in the bud before it escalates. 

Make financial conversations a judgment-free zone where open and honest communication is encouraged. People who are afraid of getting negative reactions or starting a fight are much more likely to hide a financial issue.

Final Thoughts 

Financial infidelity can be just as devastating as a romantic betrayal. 

The best antidote is honest and frequent communication around money. If you’ve decided to move on, start rebuilding a solid foundation for your relationship and break the taboo of money conversations.

The post Financial Infidelity: How to Spot It and How to Respond appeared first on FinMasters.

Whether it’s an unfamiliar charge or an unauthorized transaction, knowing how to spot and fix these mistakes on time can save you time and money. 

Let’s explore the most common types of billing errors, why they happen, and what you can do to fix them. 

What Are Credit Card Billing Errors? 

Have you ever checked your credit card statement and saw something that didn’t quite look right? 

Billing errors are any incorrect charges or fees on your credit card statement. These charges can be the result of a simple mistake or something more serious like a fraudulent transaction. Here are some of the most common types of billing errors: 

• Unauthorized transactions: any transaction you didn’t make or give permission to anyone else to make. These are usually fraudulent transactions made by someone who got access to your credit card details. For example, you may notice a charge from a store you’ve never been to or a recurring monthly payment you haven’t authorized. 
• Incorrect amounts: when you’re charged the wrong amount for a payment or purchase you’ve made. This commonly happens when a vendor accidentally overcharges you or charges you twice for a product or service. 
• Charges for undelivered items: a charge for a product or service that you didn’t accept or wasn’t delivered to you. 
• Failure to post a return: when a merchant fails to credit your card back after you’ve made a return. 
• An unclear charge: a charge that requires more information and isn’t clearly identified on your statement. 
• Charges for damaged goods: a charge for an item that was received damaged or of poor quality. 
• Failure to send a statement: when your creditor doesn’t send you a monthly statement. This error is justified only if you’ve given them your correct address. As more people are opting to receive electronic statements, this is easily preventable. 

Less common billing errors are mathematical errors. While not unheard of, it’s rare for a credit card provider to make a mistake when calculating your monthly balance or interest owing. 

Why Do Credit Card Billing Errors Happen? 

Most billing errors are simply just errors. For example, a duplicate charge on your credit card statement for the same amount on the same date could mean you double swiped your card at a restaurant or there was an error in the processing of an online purchase. 

If you’re a credit card owner, chances are, you’ll probably experience a billing issue at one point or another. 

Unfortunately, in some cases, billing errors are the result of unauthorized use that results from identity theft. In this case, identity theft refers specifically to credit card theft — someone gaining access to your credit card information and making fraudulent transactions. 

Credit Card Billing Errors: Why They Happen and How to Fix Them

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How to Spot a Billing Error

Keeping track of your finances is important. The easiest way to do this is by logging in to your mobile or online banking. The convenience of digital banking allows you to check your credit card activity in real-time. This way, you can spot a billing error as soon as possible. 

If you’re not an online banking user, read through your monthly credit card statement as soon as you get it. 

When it comes to billing errors, time is of the essence. You have 60 days from the date your monthly statement is issued to notify your credit card issuer of an error. If more than 60 days have passed, the credit card company has no obligation to take action. 

How to Track and Fix a Credit Card Billing Error 

So you’re going through your credit card statement and you spot something that looks like a possible error. What are the next steps? Here’s what you should do. 

1. Ask For Clarification

When you’re unsure about a credit card charge, a quick call to your credit card company can help clear things up. A representative can give you more information about the charge and help you determine whether it’s a billing error. 

For instance, an authorization hold that looks like a double charge is a common misunderstanding. This is when it looks like you were charged twice after making a purchase, but it’s actually just an authorization hold. An authorization hold is when your bank puts a hold on your account to check if you have the funds to pay for the purchase. This causes the same amount to appear twice under “pending transactions”, making it look like you were double-charged for the same transaction. 

In reality, you weren’t charged twice. Your authorization hold will eventually disappear, and your account will only be billed once.

2. Contact the Merchant 

If a billing error concerns a merchant, you must contact the merchant first and try to resolve the transaction directly with them. In fact, credit card issuers will require you to attempt to resolve the issue with the merchant before you initiate a formal dispute. 

If the billing error is legitimate, the majority of merchants will correct the mistake. For example, you may have ordered something online that arrived in poor condition. In this case, sellers will likely offer you a refund once you bring it to their attention. 

If the merchant is unwilling to correct the mistake, your next step would be to dispute the transaction directly with your credit card company. 

3. Dispute the Transaction

Under the federal Fair Credit Billing Act, you have the right to dispute incorrect and inaccurate charges to your credit card. This includes billing errors and unauthorized use. Here’s how a typical dispute process works: 

• Contact the credit card company within 60 days of from the date of the statement. This is typically done by sending a written notification in the form of a dispute letter.

Tip: Contact your credit card issuer and ask about their dispute process. You may be able to file a dispute online instead of mailing a letter, which makes the process quicker and more convenient. 

• The dispute letter should contain the following information: your name, account number, the date and amount of the disputed transaction, and why you’re disputing the charge. 
• Keep any evidence of the transaction like receipts, photos, or correspondence with the merchant in case you need to back up your claims. 
• The credit card issuer or bank must acknowledge receipt of your dispute within 30 days and resolve the error in the next two billing cycles. 
• In the meantime, you still need to pay for the part of your balance that is correct while the investigation is ongoing, but you’re not required to pay the disputed amount. 
• Once the investigation it’s completed, the credit card company will let you know whether they accepted your claim or not. If they have, those charges will be removed from your account. If not, they will explain in writing why that is. 

Tip: Disputing a transaction doesn’t affect your credit score in any way. 

What to Do in Case of Unauthorized Use  

Credit card companies have developed sophisticated tools to monitor your activity and detect fraud. Many times, they’re able to prevent unauthorized charges and notify you of suspicious activity before you’re even aware of it. 

However, not all fraudulent transactions can be prevented. That’s why it’s important to regularly check your credit card activity. If you spot an unauthorized charge on your account, contact your credit card provider as soon as possible. The fraud department will likely cancel your card and issue you a brand new one while they investigate the fraudulent activity. You may also have to write a letter 

According to the federal Truth in Lending Act, your liability for the fraudulent charges is limited to $50. This means that you’ll only be responsible for covering $50 of the unauthorized purchases out of your own pocket, but you won’t be held responsible for anything above that. 

Tip: Before calling your credit card provider to report an unauthorized transaction, make sure the transaction was truly fraudulent. For example, check if it was a transaction you forgot you made, or ask your spouse or family members if they used the card without your knowledge. 

Conclusion 

Credit card errors happen. The best way to protect yourself against credit card errors is to regularly check your credit card statements. 

If you spot a mistake, don’t panic. As long as you act on time, there are multiple avenues you can take to resolve the problem. 

The post Credit Card Billing Errors: Why They Happen and How to Fix Them appeared first on FinMasters.

To help you make the best choice, we’ve narrowed down the best unsecured credit cards for bad credit. We’ll explore their features and whether or not they’re the best option for rebuilding your credit

What Is an Unsecured Credit Card for Bad Credit? 

An unsecured credit card for bad credit is a regular credit card, meaning it has the same features and works the same way as any other traditional, unsecured credit card. The difference is that it’s specifically designed for people with bad credit.  These credit cards have more lenient approval criteria, making it easier for people with damaged credit to qualify. They also tend to have high fees and high interest rates. Many have both annual and monthly fees, adding up to a hefty cost.

If you use one of these cards, you will probably want to treat it as a temporary credit building tool. Use it only when you need to, pay your bills in full and on time every month (so you don’t have to pay interest), and move to a card with lower fees as soon as your credit allows it.

5 Best Unsecured Credit Cards for Bad Credit

Let’s take a closer look at our top five picks.

#1

Indigo® Mastercard® Credit Card

The Indigo® Mastercard® Credit Card offers fast, easy prequalification and no monthly fee. The annual fee is still on the steep side and the initial credit limit is low. 

Fees
$0-$99

APR
24.9%

Initial credit limit
$300

Monthly fee
$0

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Learn more about Indigo® Mastercard® Credit Card

#2

Surge® Platinum Mastercard®

The Surge® Platinum Mastercard® offers a higher initial credit limit than most unsecured cards for bad credit, but watch out for those fees! 

Fees
$75-$125

APR
29.99%

Initial credit limit
$300 to $1000

Monthly fee
$10/month after the first year

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Learn more about Surge Mastercard

#3

Credit One Platinum Visa

The Credit One Bank Platinum Visa is one of the few unsecured credit cards for bad credit that offer borrowers cashback rewards. 

Fees
$75 first year, then $99

APR
29.24%

Initial credit limit
$300

Monthly fee
Annual fee is billed monthly

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Learn more about CreditOne Platinum Visa

#4

Milestone Mastercard® – $700 Credit Limit

The Milestone Mastercard® is specifically designed for borrowers with a challenging credit history. The $700 credit limit is high for cards in this category, but the fees are on the high side too.

Annual Fee
See terms

APR
See terms

Initial credit limit
$700

Monthly fee
$0 the first year (billed $0 each month); $150 annually thereafter (billed $12.50 each month)

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Learn more about Milestone Mastercard

#5

Destiny Mastercard®

The Destiny Mastercard’s fees are on the high side, but the card is accessible to people with bad credit and the foreign transaction fee is reasonable, making it one of the better travel options in this category.

Fees
See terms

APR
See terms

Initial credit limit
$700

Monthly fee
$0 the first year (billed $0 each month); $150 annually thereafter (billed $12.50 each month)

Visit Website

Learn more about Destiny Mastercard

Indigo® Mastercard® Credit Card

Summary: With no monthly maintenance fees and easy pre-qualification, the Indigo® Mastercard® Credit Card is one of the better unsecured credit cards for borrowers with bad credit. 

Description

Indigo® Mastercard® Credit Card can help people with challenging credit histories rebuild their credit. You can check if you pre-qualify within minutes for an initial credit limit of $300, with no impact on your credit score.

Unlike other unsecured cards for bad credit, Indigo doesn’t bury you in high monthly maintenance fees or program fees. It does have an unpredictable annual fee that can range from $0 to $75 during your first year and $99 every year after. The fee is based on your creditworthiness. If Indigo considers you a risky client, the fee will be on the higher end of the spectrum. 

Overall, it’s a fair price to pay to improve your credit, as most cards of its type have even higher fees. If you want to improve your credit without paying a fee and you don’t need an emergency loan, a secured credit card is a much better option. 

Indigo reports your activity to all three major credit bureaus. Using the card responsibly can improve your credit score and help you qualify for a better unsecured credit card in the future. As long you pay your balance in full every month to avoid paying the high APR of 24.9%, Indigo is one of the better options in this category. 

Surge® Platinum Mastercard®

Summary: If you have less than perfect credit and need access to a higher credit limit, the Surge® Platinum Mastercard® may be able to help you, but it will cost. 

Description 

Celtic Bank’s Surge® Platinum Mastercard® differentiates itself by offering borrowers potential access to an initial credit limit between $300 and $1000. The amount you’re approved for will depend on your creditworthiness at the time of application. 

Once you’re approved, you may be able to qualify for a limit increase in as little as 6 months. This can help you improve your credit score faster because it can lower your credit utilization ratio. Free monthly access to monitor your credit score is another perk. 

If you’re looking for an affordable way to rebuild your credit score, Surge is not the best choice. You’ll pay $125 annually during your first year ($75 after that), and $120 in monthly fees every year after. The monthly fees are waived if your credit limit is $750 or $1000. Surge also has one of the highest APRs on the market and no rewards. 

Overall, Surge is a decent short-term solution if you need access to funds. The high fees and APR mean you should focus on rebuilding your credit quickly and move on to a less expensive product.  

Credit One Bank Platinum Visa for Rebuilding Credit 

Summary: The Credit One Bank Platinum Visa is one of the few unsecured credit cards for bad credit that offer borrowers cashback rewards. 

Description

Credit One lets you rebuild your credit while earning 1% cashback rewards on eligible purchases like gas, groceries, and more. 

While cashback rewards may seem like a bonus worth the $75 to $99 annual fee, you’d need a higher limit than the initial $300 it offers if you want to make the most of your points. If earning points is important to you, this type of credit card is not the best option. There are better secured credit cards with no annual fee that offer better cashback rewards. 

Credit One regularly reviews your account to determine if you’re eligible for a limit increase and gives you free access to your Experian credit score. This will help you to rebuild your credit and eventually graduate to a better credit card. 

Milestone Mastercard®

Summary: The Milestone Mastercard® is specifically designed for borrowers with a challenging credit history and is one of the cards with a higher credit limit. 

Description

The card’s initial credit limit is a rather high $700, which is reduced once you subtract the annual fee. The credit limit is pretty high for this type of card. Even when you subtract the annual fee, it still has more buying power than most cards.

A high credit limit can help you keep your credit utilization down if you keep a low balance. It can also encourage you to run up a balance with a very high interest rate.

In the first year of using the card, the annual fee can be as high as $175, so it’s best to focus on building up your credit score and switching to a card with lower fees. Despite its annual fee and high APR of 35.90% (which you won’t have to pay if you make every payment on time and in full), it can still be one of the more affordable unsecured credit cards for bad credit on the market. 

*See terms

Destiny Mastercard®

Summary: The Destiny Mastercard® is available to people with bad credit. Fees are on the high side, but the card is accessible, and the foreign transaction fee is reasonable, making it one of the better travel options in this category.

Description

Like most credit cards of its kind, it has a very high APR (35.90%), so carrying a balance from one month to the next can end up costing you. 

The $700 credit limit could help you keep your credit utilization down but could also encourage you to carry a balance.

The best way to take advantage of this card or any other unsecured credit card for bad credit is to pay off your balance each month and keep your credit utilization low.  

While it doesn’t have any rewards, it gives borrowers with bad credit a chance to improve their credit history.

*See terms

Unsecured Credit Cards for Bad Credit vs Secured Credit Cards

Unsecured credit cards for bad credit and secured cards can both help you build a positive credit history. If you pay your bills on time and keep your credit utilization low you will improve your credit.

But which is better for rebuilding credit? 

Typically, a “bad” or poor credit score is anything under the 600 range. For example, Vantage considers a credit score between 500 and 600 poor, while FICO considers a score between 300 and 570 very poor.  

Secured credit cards are usually a better alternative. The best secured credit cards have no annual fee, offer good cash back rewards, and have a lower APR than most unsecured credit cards for bad credit. 

The only difference between secured and unsecured credit cards is the security deposit. Secured credit cards require you to use your own money to put down a refundable security deposit which will act as your new credit limit. 

Your security deposit is fully refundable, so you’ll get your money back when you close your account. Many secured cards will convert your card to an unsecured card if you establish a good payment history. 

If you can’t or don’t want to put down your own money as a deposit, unsecured credit cards for bad credit are your next best alternative. They don’t require a security deposit and give you emergency access to credit. 

Because lenders take on more risk by extending credit to someone with a spotty credit history, unsecured credit cards for bad credit have many disadvantages. They have high APRs, high fees, and little spending power. Many of them also have setup fees and other monthly maintenance costs. 

If you keep an unsecured card for bad credit for more than a year or two you will spend more on fees than you would for a deposit on a secured card, and you won’t get that money back.

The unsecured credit cards we’ve selected are better than most unsecured credit cards for bad credit. That being said, secured credit cards are a better way to improve your credit score. 

If you do use an unsecured card for bad credit you will usually want to replace it with a card that has lower fees as soon as your credit score allows it.

Bottom Line

Unsecured credit cards for bad credit can help you repair a history of bad credit while you enjoy the perks of a credit card.  

While they don’t require a security deposit, that doesn’t mean they’re better than secured credit cards. They’re expensive, have limited spending power, and most have no rewards. It’s often better to use a secured credit card with no annual fee to repair your credit and gain access to the advantages of a credit card.

The post 5 Best Unsecured Credit Cards for Bad Credit in 2024 appeared first on FinMasters.

Raising your credit limit lowers your credit utilization rate. If you have a card with a $1000 limit and a $500 balance, your credit utilization rate is 50%. That’s too high. A credit limit increase to $2000 will give you a decent credit utilization rate of 25% with the same balance.

If you’re having a hard time keeping your credit utilization rate low at your normal spending rate, a higher credit limit can help.

If you need a quick boost to your credit score, a higher credit limit can be a fast way to lower your credit utilization rate.

A credit limit increase can help your credit score. It can also hurt your finances if you are tempted to spend more money.

Let’s explore how to increase your credit limit, and the most important things to consider before you do. 

In this post:

• Pros and Cons of Increasing Your Credit Limit
• When Is the Best Time to Ask For a Limit Increase?
• When Is the Worst Time to Apply?
• Ways to Increase Your Credit Limit
• How to Increase Your Credit Limit With Major Issuers
  • Citi
  • Chase
  • Capital One
• What if I’m Denied?

Pros and Cons of Increasing Your Credit Limit

Think about why you want to increase the amount you can borrow. While getting a higher credit limit can help you, it can also be harmful. Here’s what to consider before making your final decision. 

The Benefits of a Higher Limit

Flexibility 

The main reason people want to increase their credit limit is, of course, the added wiggle room. 

Increasing your borrowing room makes sense if you frequently make large purchases. For example, business owners that charge large business expenses on their credit cards often benefit from having higher limits. Sometimes your old limit simply doesn’t fit your lifestyle needs anymore. 

Whatever the reason is, if you’re financially responsible and pay your credit card bill on time each month, a higher credit limit gives you that extra flexibility you need. 

Boost Your Credit Score 

Asking for a higher credit limit is a quick way to improve your credit score. A higher limit reduces your credit utilization ratio, the amount of available credit you’re using at any given time.  

An Emergency Cushion

Knowing you have access to funds in case of an emergency gives you peace of mind. Say you’re traveling and you need to change your plans at a moment’s notice. Instead of being stranded, you can rely on your credit to safely return home. 

The Disadvantages of a Higher Limit 

It Can Increase Your Spending and Debt

Access to credit does give you flexibility, but beware: it can be extremely tempting. 

Increasing your limit can push you further into debt, especially if you’re currently carrying a balance on your card or credit line. According to a Citizens Advice UK survey, 1/3 of people who received a credit limit increase increased their spending afterward. If you’re already struggling financially, applying for a credit increase often makes things worse. 

The reason for this is something called psychological ownership: looking at credit as money you own or will own at a future date, instead of borrowed funds. The more access you have to it, the more tempting it is, especially for those with a history of bad financial habits or a credit card addiction. 

It Can Hurt Your Credit Score 

An application to increase your credit limit can be harmful to your credit score. Many lenders do something called a hard pull when you ask to bump up your limit. 

A hard pull is when a lender requests to look at your credit file to determine if you’re eligible for a limit increase. Every hard pull shows up on your credit report. Too many hard pulls in a short period can make you look like a risky borrower. 

When Is the Best Time to Ask For a Limit Increase?

Timing is important. Let’s take a look at the best times to ask your lender to up your limit. 

You Have a Strong Credit Score 

If you have a very good to excellent credit score (740 to 850), your chances of getting approved are looking pretty good. Similarly, a good credit score between 670 and 739 lets your lender know that you can handle borrowed money. If you’re not sure what your score is, get a free credit report and find out. 

You’re Earning a Higher Income 

A higher income increases your chances of getting approved because it indicates that you have greater financial security. Just make sure you update your new income with your credit card issuer before you apply. 

When Is the Worst Time to Apply? 

As tempting as it is, you should avoid applying for a credit limit increase in the following situations: 

• You have a low credit score 
• Your credit is already maxed out
• You’ve recently applied for a credit card or limit increase 
• You have a bad track record of missed payments or going over your credit limit 
• If your account is less than 6 months old 

Having that extra access to credit may seem like a good solution in these situations, but you’re most likely not going to be approved. You might actually hurt your credit score if your lender does a hard pull. 

Ways to Increase Your Credit Limit 

There are two ways to increase your credit limit. Let’s take a look at both so you can decide what’s best given your unique situation. 

How to Increase Your Credit Limit

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Automatic Limit Increase

When you have a good track record, your credit provider usually increases your credit card limit automatically. A good track record usually means making payments on time, paying off your full balance each month, and not keeping a revolving balance on your card. 

Lenders usually pre-approve you for a limit increase once or a couple of times a year, depending on your profile. This is a great way to increase your limit because it doesn’t require an application on your part or a hard pull on your credit report. 

If you’re a responsible credit card holder and want to increase your limit but aren’t in a rush, the best thing to do is wait until your card issuer automatically bumps up your limit. 

Request a limit increase 

The second way to increase your credit limit is to ask your lender for one. The best ways to do it are online or over the phone. To make your life easier, we’ll tell you how to use each method with three of the most popular credit card providers in the US. 

Before You Request a Limit Increase

Your credit limit increase request will be processed automatically using an algorithm. The decision won’t be made by a person. These are some of the factors that will be considered.

• Your balance and payment history on the card.
• Your credit score and credit report.
• Your income and debt-to-income ratio.

Some issuers will use a soft credit check when you request an increase, which will not affect your credit score. Others may use a hard inquiry, which will affect your credit. Try to find out which before you make a request.

Before you request a limit increase, take these steps.

• Check the date of your last limit increase. Most issuers will only increase a credit limit once every six months.
• Check your own credit score and report. If your score has decreased and your credit report has recent negative entries a request is likely to be denied.
• Have proof of income or change in income ready in case it is requested.
• Honestly evaluate your financial status. Do you believe that you can handle a higher credit limit?

If you don’t think you’re ready for a credit limit increase, there’s a good chance that your card issuer will feel the same way!

How to Increase Your Credit Limit With Major Issuers

Requesting a credit increase is easy. With most major issuers you can do it online or over the phone.

How to Increase Your Credit Limit With Citi

Online 

This is the easiest way to request a limit increase with Citi. Once you’ve logged into your Citi online account, follow these simple steps:

1. Click “Credit card services”, located under the “Services” tab
2. Once you’re there, select the option “Request a credit limit increase” 
3. Enter the information required (like your income or monthly mortgage payments and  click submit. 

You should find out right away if you were approved or not. 

Over the phone 

You can also speak to a Citi representative over the phone. This alternative is useful if you’re not an online banking user or you would like to ask for a bigger credit limit increase. They will most likely ask you for details about your income or monthly payments so be sure to have those handy. Call the service number on the back of your card.

How to Increase Your Credit Limit With Chase 

Over the phone 

The only way to ask for a credit limit increase with Chase is by calling the customer service number on the back of your card. A Chase representative will ask you a few questions, including your income and employment status. You’ll also be asked how much you want to increase your limit, so be prepared. 

Once they have all the information, it will only take a few minutes to find out if you’ve been approved or not. 

How to Increase Your Credit Limit With Capital One 

Online 

Similar to Citi, Capital One’s online application system is the most efficient way to increase your credit limit. Here’s what to do: 

1. Log into your account and click on “Services”
2. Once you’re there, select the “Credit line increase” option
3. Fill out the form. You will need to provide your employment status, income, your monthly credit card spending, and your monthly rent or mortgage payments. 
4. Click submit and you’re done! 

You may have to wait a few days to find out if you’ve been approved.

Over the phone 

If you’d rather call in or don’t have access to online banking, you can also contact the customer service line. Chase gives you the option to submit a request using an automated system instead of speaking to a customer service agent. 

What if I’m Denied? 

Your lender may decline your limit increase request if they consider lending to you risky at the moment. Try to improve your financial health by: 

• Paying off your debt
• Making payments on time
• Using your credit card wisely
• Checking for errors on your credit report

Don’t re-apply for an increase over and over. Multiple credit pulls can seriously hurt your credit score.

Consider Another Card

Another way to decrease your credit utilization is to apply for another card. Your credit utilization is computed based on the total limit of all your cards, so a new card with a new limit will increase your total.

Credit scoring models also consider the utilization of each card. Spreading your purchases across two cards can improve this.

For example, if you have a card with a $5000 credit limit and a $3000 balance, your credit utilization is 60%, which is too high.

If you got a second card with the same limit, your total credit limit would be $10,000, so your credit utilization would drop to 30%. You’d still have 60% utilization on one card, which could hurt your credit.

If you split your purchases so you had a $1500 balance on each card, your credit utilization would be 30% on each card, which is better for your credit.

Of course, your best bet is to pay those balances off!

If you look for another card, consider one that complements your existing card. If you have a general-purpose card, consider a rewards card focused on your most common purchasing categories.

Getting a new card carries risks. Don’t let another card tempt you into spending more!

Think Carefully Before You Increase Your Credit Limit 

A higher credit limit can be useful when your spending habits change. It can also improve your credit score and give you peace of mind in case of an unexpected life event. 

However, if you’re struggling financially, you should ask yourself if a limit increase will help your situation or make it worse. Consider alternative solutions like financial therapy or budgeting instead.

The post How to Increase Your Credit Limit: Tips and Strategies appeared first on FinMasters.

Credit card or shopping addictions specifically are often overlooked or misunderstood. Yet, they affect almost 20 million people in the US^[1]. People who suffer from a compulsive buying disorder and are addicted to using their cards often experience serious debt problems and struggle with mental health issues.

Understanding and overcoming this addiction needs a little more than just financial advice. Let’s look at the warning signs of a credit card addiction, how it affects you, and where to turn for help. 

What Is Credit Card Addiction?

Credit card addiction is widely misunderstood, and that’s an understatement. 

How often do we jokingly refer to someone with this addiction as a shopaholic? Even in pop culture, movies like Confessions of a Shopaholic portray compulsive buying disorder as a quirky and maybe slightly problematic personality trait. 

In reality, it’s a much bigger problem than that. 

A credit card or shopping addiction is not the occasional “treat yourself” shopping trip. Instead, it’s a behavioral addiction: a compulsive drive to engage in an activity that makes you feel good despite the negative consequences. 

When you suffer from this condition, you respond to negative feelings and events in your life by chasing the temporary rush or relief of buying something. You also have a hard time controlling your urges, and you may not realize how this addiction is hurting you. You may be unable to stop even if you do see that it’s hurting you.

Because most people that suffer from a compulsive buying disorder rely on their credit card to feed their uncontrollable spending, it’s also commonly known as a credit card addiction.
Usually, this results in credit card debt because compulsive shoppers usually spend beyond their means to get their “fix”.

The Cycle of Compulsive Buying

Compulsive buying behaviour involves four phases: 

1. Anticipation: constant thoughts about buying things especially when sad, anxious, or angry.
2. Preparation: making shopping lists, planning where to shop, online research, or talking about it. 
3. Shopping: the temporary euphoria experienced from buying items online or in person. 
4. Spending: the act of paying for the purchase, often followed by guilt and regret.  

Multiple studies have found that compulsive buyers frequently suffer from depression, anxiety, and low self-esteem. This link between a shopping addiction and other psychological conditions is not surprising. Compulsive buyers use the act of shopping and swiping their cards the same way an alcoholic uses liquor: to relieve underlying issues temporarily. 

Retail therapy can be a way to occasionally uplift your mood when you’re feeling down. When it gets out of control, it can become a compulsive buying disorder. 

Warning Signs of Credit Card Addiction

Compulsive buying disorder is most common in developed countries like the US, UK, France, or Germany, where the culture of hyper-consumerism is encouraged, and people have easy access to credit cards.  

Compulsive buyers tend to use credit cards over cash because it makes spending money a lot easier. You can enjoy the high of shopping without the guilt of paying for it right away. Access to credit cards also enables addiction because you can give in to your impulses and go on a shopping spree even if you don’t have money in your pocket. 

Besides their reliance on credit, there are many other common traits and behaviors among people with a credit card addiction. These include:

• Inability to control shopping urges
• Carrying balances on multiple credit cards
• A desire to shop that increases when you’re sad, worried, unhappy, or lonely
• Falling behind on payments or only paying the minimum balance each month
• A bigger rush of excitement from the act of buying than from actually owning the item 
• Buying and hoarding items that you don’t need and rarely use
• Feeling ashamed of your behavior and hiding it from your family or friends 

Like every other addiction, people who suffer from credit card addiction often remain in denial until they are ready to deal with their problem.

How a Compulsive Buying Disorder Affects You 

Unfortunately, shopping addictions get taken less seriously because of a lack of research and understanding. A compulsive buying disorder can affect your life in several significant ways. 

Credit Card Addiction: The Danger of Compulsive Buying Disorder

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Financial 

The most obvious consequences of compulsive buying disorders are financial problems. Because compulsive buyers often spend beyond their means, they tend to carry large high-interest credit card balances that they can’t afford to pay. 

This eventually leads to debt and financial hardship. According to UK Rehab, 85% of shopping addicts in the UK have serious long-term debt problems^[2]. Inability to keep up with your debts also affects your credit score. A low credit score can prevent you from buying a car, a house, or even getting hired by an employer. 

While you can’t go to jail for consumer debt, compulsive buyers are at a high risk of being sued by debt collectors if they fall behind on their credit card bills and lose track of what they owe. 

Relationships 

Shopping addictions can also put a strain on your personal relationships. 

When compulsive buyers feel ashamed by their spending habits, they hide their credit card bill and spending habits from their loved ones. Keeping bad money habits a secret from your partner can cause serious issues in your relationship.  

The worse your credit card addiction gets, the more you withdraw from your seeing your friends and family to avoid being questioned or burdening them with this problem. You also prefer to indulge in your shopping sprees alone, which also isolates you from social interactions. 

Personal  

Like we mentioned earlier, research found that compulsive shopping is often used to keep deeper emotional issues like depression, anxiety, low self-esteem, or loneliness at bay. When you avoid dealing with these problems in a healthy way, they can become much worse over time. 

Similarly, the shame and guilt that you feel after a shopping spree also get worse the more you do it. These feelings cause a vicious cycle where you continue to use your credit card to cope with problems but end up making the problems worse, leading to more shopping and more spending. 

How Do You Overcome a Credit Card Addiction? 

Many people that want to help a compulsive shopper will often advise them to “just stop shopping” or “stop using your card.” That doesn’t help. Overcoming this addiction takes more than just willpower and improving your spending habits. In fact, 92% of compulsive buyers that try to fight this addiction are unsuccessful^[3]. 

Fortunately, overcoming a card addiction is possible. Here’s where to start: 

1. Acceptance

As with any addiction, admitting that you have a problem is the first step towards recovery. According to Recovery.org, this does not mean you’re weak, but that you’re strong enough to recognize that you can’t recover on your own and that you need help. 

2. Seeking Help 

Seeking help is the best way to overcome a compulsive buying disorder and a card addiction. There are many ways to get help, including: 

Friends and Family 

Speaking to your friends and family about addiction is never easy. But once you do, they can be a strong support network that can help you deal with the financial stress and make your recovery journey a lot easier. 

Counselling and Financial Therapy 

One way to seek professional help is through financial therapy, the bridge between traditional therapy and financial advice. 

Financial therapists are experts that can help you uncover unconscious mindsets and beliefs about money that can be causing your behavior. For example, people with a money worship mentality carry a lot of debt, overspend and shop excessively because they believe it will make them happier. Unfortunately, this feeling is very short-lasting. 

Licensed mental health counselors can also help you get to the root of what’s causing your addiction and give you the tools and strategies to overcome self-sabotaging habits like card addiction and compulsive shopping. 

Support Groups

A support group is a judgment-free zone where you can get advice, encouragement, and help from others that are struggling with the same problems as you. Online searches can help you find groups in your area.

3. Taking Action

Once you seek help, it’s time to also clean up your finances. Here are some steps you can take:

• Pay off your credit cards and learn how to stop using them. 
• Stay away from temptation: unsubscribe from marketing emails and delete your credit card information from every website you use for online shopping. 
• Sell things you no longer need to help pay your credit card debt.
• Learn how to budget and use cash when you shop.

A credit card addiction is both a financial problem and a mental health problem, and it has to be treated on both levels.

Don’t Be Afraid to Ask for Help

Compulsive buying disorder is treatable. Reaching out for help is the first step towards recovery. It may not always be the easiest thing to do, but it’s one of the bravest and smartest decisions you can make.

Where to get help:
The Shulman Center
Debtors Anonymous
Financial Therapy Association

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