We’ll explore all of Varo Bank’s features and take a look at how the Believe card can help you build your credit.

Who Is Varo Bank?

Varo Bank is an online-only bank that offers a full suite of banking features. This includes checking accounts, high-yield savings accounts, a credit building account, and more.

Established in 2015, Varo has been accredited with the Better Business Bureau since 2017. Varo is also a fully chartered, FDIC-insured bank. This is worth noting, as similar products (i.e., Chime Credit Builder) are often backed by separate banks.

In this review, we’ll be focusing on Varo’s credit-building account, Varo Believe. This account is a marriage of a secured card and a debit card. Your Believe card purchases are always secured by your deposit account balance.

This can help you build credit without risking overspending and going into debt.

Let’s dig deeper into this Varo Believe Card Review to learn how to use the card.

How Does the Varo Believe Card Work?

The Believe card works and builds credit in a unique way. This Varo Believe card review will explore the whole process, from application and funding to credit building and cancelation. 

How Do You Apply?

To be eligible for the Varo Believe account, you must meet two qualifications:

1. Have a Varo checking account in good standing.
2. $500 or more in deposits to your Varo checking within the last 90 days.

If you meet these two requirements, you can apply for the Varo Believe account. Applying does not require a credit check. There is also no minimum account balance.

How Do You Use the Varo Believe Account?

Once approved for the Believe account, you’ll gain access to a new Varo Believe deposit account. This deposit account is what funds your card. You can think of it like a security deposit.

Funding the Account

You can transfer money from your existing Varo checking account or another external account to fund your Believe account. The amount you transfer becomes your spending limit. You cannot spend more than you transfer.

Spending With the Card

Each time you swipe the Believe card, the corresponding total will be locked in your deposit account. For instance, if you buy a cup of coffee for $5.95, then $5.95 of your account balance will be locked. Locked funds cannot be spent.

Paying your Balance

At the end of the month, your locked balance (what you’ve spent) becomes your statement total.

You can set up autopay (SafePay), automatically paying your balance with your locked funds. Or you can manually pay the total with an external account, and the locked funds will be released within 3 days.

If you use autopay, you’ll also want to use Move Your Pay to refund your Believe deposit account every month.

How Does Believe Help You Build Credit?

Varo reports the following information to all 3 major credit bureaus each month.

1. Your statement amount
2. Your payment amount
3. Whether the payment was on-time or late

By paying your Varo Believe account on time, you can positively impact the payment history portion of your credit, which makes up 35% of your credit score. If you don’t pay your account on time, you will take a negative hit to your credit (and your account might be closed).

Varo does not affect:

• Credit utilization (they don’t report a credit limit, so there’s no basis for calculating credit utilization).
• New credit (there’s no hard inquiry when you apply).

You can view your credit score and receive notifications on changes to your score using the Varo app.

Cancelling Varo Believe

While the Believe card is great for building credit, the secured funds requirement makes it a poor long-term option.

In our Varo Believe card review, we noted that to cancel the card, you’ll need to reach out to customer service. Unfortunately, this will require you to use in-app support during business hours (Mountain Time). Varo has phone support but will not cancel your account over the phone.

If you are keeping your Varo checking account, your Believe funds can be transferred there, which will likely be quicker than waiting on a physical check.

Once you close your Varo Believe account, you cannot re-apply for the card in the future.

Additional Varo Services & Features

Another thing we wanted to focus on in our Varo Believe Card Review is the additional services aspect. The Varo Believe program comes with several features for building your credit, including:

• Setting a spending limit
• Autopay with SafePay
• Reporting to all 3 credit bureaus
• Vantage credit score updates

But this is just part of the whole Varo package. Varo also offers checking and savings accounts with their own unique features.

In addition to these specific account features, Varo offers general features such as the Varo Advance program, debit card security, a robust mobile app, and money management resources.

Considering the #VaroBelieveCard? Check out our Varo Believe Card review for all you need to know. #CreditBuilding

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Fees

Varo Believe is a zero-fee account. In this Varo Believe card review, we’ll highlight some common fees that other cards charge but Varo does not.

You are never charged a fee for a late payment. However, not paying on time could result in account closure.

Access to Varo Believe requires you to have a no-fee Varo checking account. You’ll only encounter a $3 fee if you use an out-of-network ATM.

Varo Advance, Varo’s low-limit cash advance program, is the only Varo feature with a fee.

It’s worth noting that you’ll need to meet specific qualifications before you can use Advance.

Customer Reviews

The majority of general reviews about the bank are great. People seem to enjoy all of Varo’s features.

For instance, this reviewer really loves the early pay feature.

And this customer compliments multiple services. 

Many reviews focusing on the Believe card are less complimentary. The biggest complaints revolve around the duration of locking funds (30+ days) and lack of customer service.

This review is from a Varo customer who was previously happy with the bank but not so happy with the Believe card.

Other reviewers indicate that customer service has recently changed for the worse.

Overall, Varo Bank has a 3.58 average rating from the Better Business Bureau (BBB) and a concerning 2.7 average from Trustpilot.

Varo Believe Alternatives

Varo Believe is one of many credit-building debit cards on the market. Below, we’ll highlight some alternative options and how they compare to Varo Believe. It’s worth noting that Varo and all these alternatives report to all 3 credit bureaus.

* can be waived
** can be higher or lower depending on your banking history

The biggest outlier here is Cred.ai. Their Unicorn card is the only one that has a credit limit and reports utilization.

Verdict

We hope this Varo Believe Card Review will help you choose the card that best aligns with your financial needs. Building credit with the Varo Believe card is pretty straightforward, but it won’t work for everyone. Varo states the following:

Some customers may not see an increase, but customers with bad or thin credit histories are likely to see the biggest positive impact on their score from using Varo Believe and making consistent on-time payments.

As further evidence, Varo quotes that 90% of their customers who did not previously have a credit score were able to generate one after just 1 month with Varo. And those with existing credit scores saw an average 42-point increase after 3 months.

If you are an existing Varo customer looking for credit building, then Believe could be a good choice. Or, if you are looking for a full-featured bank with a credit-building option, Varo might be a good fit.

But for those looking for maximum impact on their credit or readily available customer service, other banks/products will likely serve you better.

The post Varo Believe Card Review: Building Credit With Your Debit Card appeared first on FinMasters.

If you drive less than 10,000 miles a year, you can potentially save money using pay-per-mile car insurance. These policies let you pay premiums based on the mileage you drive.

Let’s take a look at some of the top pay-per-mile insurance options.

Pay-Per-Mile Car Insurance Providers

In this article, we’ll look at four pay-per-mile car insurance providers. All of these companies have policies that charge you based on the number of miles you drive.

1. Allstate Milewise – Best for Safe Drivers
2. Metromile – Best for City Drivers
3. Nationwide SmartMiles – Best for Program Availability
4. Mile Auto – Best for Data Privacy

These pay-per-mile car insurance programs have minor differences in how and when mileage is charged. There are also differences in what information is tracked and what features are offered.

We’ll highlight these differences as we explore each of these insurers.

Learn more: Wondering about Karma Drive or Root Insurance? Our reviews provide insights to help you choose the right one.

BEST FOR SAFE DRIVERS

Allstate Milewise

Allstate offers a pay-per-mile insurance plan with discounted rates that can be further discounted if you are a safe driver. In 10 states, information on your driving habits, such as acceleration and braking, will be calculated into your personalized daily and mileage rates. The safer your driving habits, the lower your rates.

Even in states where this driving data can’t be used to determine your rates, you can still earn Allstate safe driver reward points redeemable for gift cards, retail items, sweepstakes entries, and more.

Maximum daily miles charged	250 (150 in OR, IL, IN, OH & NJ)
Equipment needed	App & plug-in device
Additional discounts	Allstate rewards and rate discounts for safe driving
Program availability	20 states

Milewise FAQs

What Information Does Mileswise Track?

In addition to miles driven, Allstate tracks the following data

• Speed
• Time
• Location
• Events

Depending on the state in which you reside, this information can be used in your daily rate and mile rate calculations (AZ, FL, MA, MN, MO, OK, PA, SC, TX, WI).

How is Milewise Charged?

A Milewise policy is charged daily and consists of your daily rate plus your mileage rate.

For example, Allstate offers sample rates of $1.50/day and $0.06/mile. If you drove 16.7 miles a day, you would be charged approximately $2.50/day ($1.50 daily rate + $0.06 x 16.7). This totals $75/month if you drive the same amount daily.

When Do You Pay?

When you open a Milewise policy, you prepay a set amount to your account. Your base rate and mileage are deducted from your account funds daily. You can reload your account as needed or set up auto-reload.

Visit Allstate Milewise

BEST FOR CITY DRIVERS

Metromile

Metromile is the smallest insurer on our list, currently offering pay-per-mile insurance in only 8 states. As their name suggests, they can be a good fit for those living in major metropolitan areas.

There are 4 main reasons for this.

1. You can track your car if it is ever lost or stolen
2. Driving habits, which can be negatively influenced by rush-hour traffic, are not tracked in CA, NJ, or WA
3. Metromile provides free street-sweeping alerts to help you avoid being ticketed
4. Try before you switch to Ride Along

Maximum daily miles charged	250 (150 in NJ)
Equipment needed	Device only
Additional discounts	Multi-car, safe driving
Program availability	AZ, CA, IL, NJ, OR, PA, VA, & WA

Metromile FAQs

What Information Does Metromile Track?

In addition to mileage, Metromile’s plug-in device tracks

• Average speed
• Time of day
• Day of week
• Trip duration

This information cannot affect your rates in California, New Jersey, or Washington.

How is Metromile Charged?

This insurance policy is charged in two parts: your base rate and mileage.

On its website, Metromile features a real customer base rate of $29/month and a mileage rate of $0.06. If you drove 500 miles in one month, your final total would be $59 ($29 + $0.06 x 500).

When Do You Pay?

Metromile policies are charged monthly. Each month, you’ll pay that month’s base rate plus your total mileage for the previous month.

Visit Metromile

BEST FOR NATIONWIDE AVAILABILITY

Nationwide SmartMiles

The biggest downside to pay-per-mile insurance programs is that they are often only available in a limited number of states. This is where SmartMiles excels, as the program is offered across 44 states, including California.

You can also mix and match your insurance, having traditional policies on some vehicles and pay-per-mile policies on others. This can be great if there is a significant usage discrepancy between the vehicles in your household.

Maximum daily miles charged	250
Equipment needed	Plug-in device or connected car
Additional discounts	Safe driving
Program availability	44 states

SmartMiles FAQs

What Information Does SmartMiles Track?

In addition to mileage, SmartMiles tracks the following information

• Hard braking
• Acceleration (above 7.7 miles per second)
• Nighttime driving (midnight to 5 AM)

How this information can be used varies based on state. For example, California only allows mileage to be used in rate calculations.

How is SmartMiles Charged?

This insurance is charged in two parts: your monthly base rate and your rate per mile driven.

Nationwide’s website offers a real-world example of a $60/month base rate and a $0.07 mileage rate. If you drove 500 miles in one month, your total charge would be $95 ($60 base rate + $0.07 x 500).

When do you pay?

Your SmartMiles policy is paid on a monthly basis. Each month, you’ll pay your base rate premium plus the total mileage charge from the previous month.

Looking to save on #car-insurance? Explore our top picks for #pay-per-mile car insurance plans.

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Visit Nationwide SmartMiles

BEST FOR THOSE CONCERNED WITH PRIVACY

Mile Auto

Your data can be very personal, and you may want to keep your insurance company from knowing where you go every day. If this is the case, Mile Auto may be a good pay-per-mile insurance fit.

Mile Auto does not require using an app or installing a device in your car. Instead, they simply ask you to snap a picture of your odometer each month and send it in. That is all they need to track your mileage.

Maximum daily miles charged	Not capped
Equipment needed	Smartphone camera
Additional discounts	none
Program availability	AZ, CA, FL, GA, IL, OH, OR, PA, TN, TX, & WI

Mile Auto FAQs

What Information Does Mile Auto Track?

Your mileage, that’s it.

How is Mile Auto Charged?

A Mile Auto policy comes with a base rate month charge plus a mileage rate.

On its website, Mile Auto presents a $48 base rate and $0.08 mileage rate as an example. If you were to drive 500 miles a month at this rate, you would pay $88 ($60 base rate + $0.08 x 500).

When Do You Pay?

Mile Auto is not very transparent with when/how payments are made. After repeated attempts to contact them, we were able to verify that they do, in fact, charge a deposit, and policies are paid monthly.

Visit Mile Auto

Comparing Pay-Per-Mile Car Insurance Companies

These pay-per-mile insurance policies have many similarities, but there are some key differences. Below, we compare them using the 4 points we think are make or break in choosing a pay-per-mile insurance provider.

Learn more: Find out how much car insurance typically costs for a 17-year-old with our detailed analysis.

Pay-Per-Mile Car Insurance Alternatives

Remote workers, retirees, city dwellers, students, etc., who don’t drive very much, can benefit from pay-per-mile programs, but they aren’t the only way to save money on your insurance. Here are some other solutions.

1. Check your current provider for a low-mileage discount.
2. Look at usage-based car insurance – mileage is one of the metrics these programs look at.
3. Explore pay-as-you-go plans. Insurers like Hugo let you turn your coverage on/off and purchase as little as 3 days at a time.
4. Sell your car. If you seldom drive, it may be cheaper to sell your vehicle and rent or borrow one as needed.

And remember, your insurance choice is not permanent. If you don’t like your policy or your driving needs change, you can always switch insurance providers later.

The post Best Pay-Per-Mile Car Insurance appeared first on FinMasters.

The safer you drive, the less you pay for insurance.

This type of policy is offered by some of the biggest names in auto insurance, as well as smaller, lesser-known companies. Let’s take a look at some of the most widely available options.

What Is Usage-Based Car Insurance?

Usage-based car insurance, also referred to as UBI is a discount program or policy that rewards safe drivers with lower insurance rates. This can come in the form of lower premiums, higher discounts, payment credits, etc.

Usage-based car insurance systems typically use an app on your phone to monitor your driving and record information about the way you drive.

Learn more: Dive into the most recent car sales statistics for 2024, including insights on popular models and EV market shifts.

What Information Do Usage-Based Car Insurance Programs Gather?

The information that is gathered for UBIs is referred to as telematics. This can consist of:

• Driving speed
• Acceleration
• Braking
• Time
• GPS location

Several insurers also collect data on phone usage.

While privacy can be a concern with the data collected, insurance companies do not share this data beyond settling claims or compiling with requests from law enforcement. Think about it this way: if the insurance company released the data, their competitors could access it, and they’d lose their advantage.

Learn more: Discover effective saving strategies for teens with our guide on ‘How to Save for a Car as a Teenager‘.

Who Is It Best For?

UBI programs are often best for those who don’t usually qualify for rate discounts. This includes those who are very young, old, have bad credit, or have a poor driving history.

These programs can also benefit single drivers (no multi-driver discounts) and those who don’t drive much (less driving equals safe driving).

These programs are not well suited to bad drivers, i.e., those who speed, brake hard, etc. Additionally, these programs can be a poor choice for those who drive at night, drive a lot, drive during rush hour, or are technology-averse.

Learn more: Get a fast answer to what credit score is needed for buying a car in our straightforward article.

Best Usage-Based Car Insurance Policies

BEST FOR LOCKED-IN DISCOUNT

Liberty Mutual – RightTrack

Best For Locked-in Discount

The biggest advantage of the RightTrack program offered by Liberty Mutual is the locked-in discount. Once you complete your 90-day evaluation, the discount you earn is locked in.

You will retain your percentage-based discount for the life of your policy with Liberty Mutual. Even if you get a new car, the discount will remain. No re-evaluation is necessary.

Pros:

• Automatic enrollment discount
• Discount locked in for life

Cons:

• Bad drivers are penalized
• Varying terms in different states

Quick Facts
Evaluation period	90 days
Discount	10% – 30%
Minimum device requirements	Android 7.0, iOS 14.0
App store reviews	4.6 Goolge, 4.8 Apple

Liberty Mutual has some additional restrictions and guidelines for different states. This can affect several factors:

• Driving information collected
• Minimum discount amount
• When the discount is applied

Additionally, depending on which state you reside in, you may be forced to have all drivers on your policy sign up for RightTrack.

What Information Does RightTrack Gather?

Once you sign up for RightTrack, the mobile app will begin tracking your:

• Braking
• Acceleration
• Night-time driving

In certain states, additional data is gathered, such as:

• Rush hour driving
• Low-speed driving
• Distracted driving (phone usage)

This information makes up your RightTrack score. You can view this information on the app and update it as needed (i.e., change driver).

You receive a 10% discount when you enroll, and your driving is tracked for 90 days. After this, your RightTrack score will determine your new discount. This discount is locked in for life.

Visit RightTrack

BEST FOR IMPROVING YOUR DRIVING HABITS

Nationwide – SmartRide

Best For Improving Your Driving Habits

SmartRide by Nationwide is a program that continuously monitors your driving habits; as long as you have a policy, the app will monitor your driving.

The upside here is the incentive to improve your driving habits. You receive personal feedback on your driving and an estimated discount updated weekly. So, if you have a bad week, you have time to improve your discount.

Pros:

• Rewarded for improving your safe driving
• Personalized driving suggestions

Cons:

• All drivers have to enroll
• You are monitored forever

Quick Facts
Evaluation period	4 – 6 months (as quick as 80 days)
Discount	15% – 40%
Minimum device requirements	Android 6.0, iOS 12.0
App store reviews	4.5 Google, 4.6 Apple

The RightTrack dashboard will update weekly with your potential policy discount based on your driving. Your discount is applied at policy renewal.

What Information Does SmartRide Gather?

Once you enroll and receive your 15% discount, the Nationwide app begins tracking the following driving habits:

• Miles driven
• Hard braking
• Acceleration (in excess of 7.7 miles per second)
• Nighttime driving (midnight to 5 am)

The initial evaluation period can be as short as 80 days or up to 6 months, depending on how often you drive. This information is used to calculate your new discount.

Your driving habits are monitored for the life of your policy, and your discount can change each renewal period accordingly.

Visit SmartRide

BEST FOR NEW CUSTOMERS

Progressive – Snapshot

Best For New Customers

If you have insurance with another company and are looking to switch, Progressive Snapshot offers some unique incentives.

You can try out the insurance before you switch using the 30-day Road Test program. This can give you a preview of what kind of discount you might qualify for.

Plus, as a new Progressive customer, you’ll receive an automatic enrollment discount that applies until your next policy renewal period.

Pros:

• Enrollment discount
• Try before you buy

Cons:

• Penalized for bad driving
• Your driving is continuously evaluated

Quick Facts
Evaluation period	Your policy period (6 or 12 months)
Maximum discount	$94 – $231*
Minimum device requirements	Android 7.0, iOS 13.0
App store reviews	3.6 Google, 4.4 Apple

* discount range based on average savings at sign-up and average savings after 6 months

Using the Progressive app with Snapshot, you can track your driving stats, view your discount, and view customized safe driving recommendations.

What Information Does Snapshot Gather?

Upon enrolling for Snapshot, you have 45 days to begin using the app or plug-in device to track your driving data. Information gathered will include:

• Mileage
• Hard braking
• Acceleration
• Late-night driving (midnight – 4 am)
• Phone activity (certain states only)

Your driving habits are monitored for the life of your policy, and your discount can increase or decrease for every policy renewal period if your driving habits change.

Visit Snapshot

BEST FOR THOSE WITH BAD CREDIT

Root Car Insurance

Best For Those With Bad Credit

All of Root’s auto insurance policies are based on driving habits. All policyholders are tracked, and rates are customized to your driving.

This is especially useful for those with bad (or no) credit. Insurance companies often penalize you for poor credit if they insure you at all. Root weighs driving history more heavily and is even working towards dropping credit scores from their calculations soon.

Pros:

• Try before you buy
• Doesn’t look at credit

Cons:

• Won’t insure bad drivers
• Continuously monitors your driving

Quick Facts
Evaluation period	As little as 3 weeks
Discount	Average $900 in savings a year
Minimum device requirements	Android 5.0, iOS 14.0
App store reviews	3.4 Google, 4.7 Apple

Through the Root app, you get access to your driver scorecard that details your driving behavior and what steps you can take to improve it.

What Information Does Root Gather?

Once you sign up for Test Drive through Root, your initial 3+ week evaluation will begin. According to Root’s website, they will track information “such as braking, speed of turns, driving times, and route consistency.”

You’ll receive your customized rate quote at the end of your evaluation. Your driving habits will continue being monitored for the life of your policy, and rates will increase/decrease accordingly.

Note: If your driving habits fall below Root’s safe driver minimum standards at any time, you can be dropped from the insurance program.

Explore our top picks for usage-based car insurance plans and save money based on your driving habits. #CarInsurance #SmartDriving

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Visit Root

BEST FOR LOW-MILEAGE DRIVERS

State Farm – Drive Safe & Save

Best For Low-mileage Drivers

The Drive Safe & Save program by State Farm may be best suited to those who don’t drive a lot. This is thanks to the odometer read requirement and separate low-mileage discount.

Mileage driven is also critical to the Drive Safe and Save discount. So the less you drive, the better your chances of scoring the maximum discount, which can be 30% or more.

Pros:

• Mileage-based discounts
• Beacon doesn’t record your location

Cons:

• Can increase your current rate
• Requires a separate Bluetooth device

Quick Facts
Evaluation period	Policy period
Discount	10% – 30%*
Minimum device requirements	Android 8.0, iOS 15.0
App store reviews	4.1 Google, 4.6 Apple

* After a trial period discounts can decrease below 10%. 30% is the maximum discount in NY, but can be higher in other states.

Drive Safe and Save is also available through select connected cars, such as 2020 or newer Ford vehicles. The program was previously offered through Onstar, but enrollment has since been discontinued.

What Information Does Drive Safe & Save Gather?

Once you enroll for Drive Safe and Save, you will receive an enrollment discount, and your Bluetooth Beacon will be shipped. Once installed, the device will begin tracking your:

• Mileage
• Acceleration
• Hard braking
• Sharp turns
• Speed (exceeding the speed limit by 8+ mph)

The app will also track your phone usage to determine distracted driving.

Your driving habits will be tracked for the life of your policy, and your discount will increase/decrease according to the changes in your habits.

Note: If you already have the low-mileage discount and the program records annual mileage over 7,500, you may lose your low-mileage discount.

Visit Drive Safe & Save

BEST FOR GETTING THE BIGGEST DISCOUNT

Bonus Option: Credit Karma – Karma Drive

Best For Getting The Biggest Discount

If you are unsure which usage-based discount program is best for you, then Karma Drive might be able to help. This tool, offered by Credit Karma, tracks your driving behaviors and uses the data to shop discounts at all their partner providers.

There is no risk with using the tool (your current insurance will not go up), and you can quickly see which insurance company will give you the biggest discount.

Pros:

• Shop discounts at multiple companies
• Can’t raise your current rates

Cons:

• No discount guarantee
• Records location data

Quick Facts
Evaluation period	Varies
Discount	Varies
Minimum device requirements	Android 8.0, iOS 14.0
App store reviews	4.7 Google, 4.8 Apple

Using Karma Drive also gives you access to all of Credit Karma’s other services, such as credit monitoring, credit product matching, and educational resources.

What Information Does Karma Drive Gather?

Once you sign up through the app, your driving information will be recorded. Information used will depend on matched partners but can include:

• Mileage driven
• Times of day
• Average speed
• Typical routes
• Acceleration
• Braking

This information forms your safe driving score, which is shopped around to UBI programs. You’ll see a preview of your potential discount with each partner and can request a customized quote.

The evaluation period varies from driver to driver, and there is no need to keep using Karma Drive once you receive your personalized offers.

Visit Karma Drive

Comparing Usage-Based Car Insurance Companies

It’s not easy to select the best usage-based car insurance plan for your needs. To help with this, we compare factors such as maximum discount and program availability to highlight the differences between programs.

The post Best Usage-Based Car Insurance Policies appeared first on FinMasters.

There are other ways to improve your ChexSystems report and score, such as disputing information and settling chargeoffs.

In this article, we’ll explore what ChexSystems is, how to clear your ChexSystems report, and what steps to take if you absolutely need to open a new account now.

What Is ChexSystems?

ChexSystems is a consumer reporting agency that collects information on your banking history.

While ChexSystems is not a credit bureau like Experian or TransUnion, the information they store can be used to make credit decisions. When a bank or lender pulls from ChexSystems, they receive the information from your report and your ChexSystems Consumer Score.

This information can be used to determine the risk you pose to a bank. The better your ChexSystems report and score, the less risk you pose.

What Information Does ChexSystems Collect?

ChexSystems collects various information related to banking history, primarily the opening and closing of bank accounts.

• Involuntarily closed accounts, which can be the result of chargeoffs or suspected fraud.
• Inquiries – both hard inquiries (when you apply for new accounts) and soft inquiries (that don’t affect your credit).
• Check activity – including returned (bounced) checks, check ordering, and inquiries related to check cashing.

ChexSystems does not collect information on your current checking/saving account balances nor store data on previously held accounts that were closed voluntarily (unless the account had suspicious activity before it was closed).

Who Uses Chexytems?

Nearly any bank, lender, or creditor can pull ChexSystems, but it is most often used by banks.

Banks pull this information when you apply for an account with them. Depending on the information and score they get back from a ChexSystems check, they can choose to deny your application or change the terms offered (i.e., remove a new account cashback promo).

Some lenders also use ChexSystems. This is most common with companies that offer debit cards that report like credit cards or cards advertised as having no credit check or minimum score. These companies often use alternative credit data, which can include pulling a ChexSystems report.

How to Check Your Report

As a consumer reporting agency, ChexSystems has to abide by the Fair Credit Reporting Act (FCRA).

This means you can obtain a copy of your report for free directly from ChexSystems once a year. You can also obtain a report if you have been hit with a negative action (i.e., denied a new checking account) because of information in your ChexSystems report.

To request a copy of your report, go to the ChexSystems Consumer Disclosure page and use the submit request tool. This tool gives you options for requesting a report online, by phone, or via mail.

You can also request your ChexSystems score through the Consumer Score page.

How to Clear Your ChexSystems Report

Unlike other credit bureaus that collect information on all of your credit activity, good or bad, the majority of the data that ChexSystems collects is negative data.

This means that the emptier your report, the better. But how do you clear your ChexSystems report?

Dispute The Information

If you’re wondering how to clear your ChexSystems report, especially when the negative items reflect fraud, mistaken identity, or other errors, initiating a dispute with ChexSystems is an effective first step.

To begin a dispute, use the ChexSystems Dispute page. Here, you can fill out your information, select the item you are disputing, and detail why the information is inaccurate. Depending on the reason for your dispute, you might need to attach documents to your dispute, such as:

• A death certificate
• Police report
• Account statements

According to ChexSystems, dispute investigations are usually completed within 30 days but can take longer.

If your dispute is denied, you may have the option of adding a statement to your ChexSystems report. With this 100-word max statement, you can describe your dispute issue. This statement will be visible to anyone who pulls your ChexSystems report.

Settle Charge-Offs

Another step you can take when thinking of how to clear your ChexSystems report is to settle charge-offs. If you have had a bank account involuntarily closed with a balance due remaining, this will appear as a charge-off on your ChexSystems report.

Charge-offs are not good for your ChexSystems score.

If the charge-off information is inaccurate, you can use the dispute process. Otherwise, your best option for score improvement is to settle the account.

Paying off the balance due will not result in the account being removed from your ChexSystems report. Instead, the account will be updated to show as paid in full or settled. If you pay off the account and your report is not updated, you can file a dispute.

You can try to negotiate with the financial institution to remove the account from your ChexSystems report after you pay off the balance, but they are under no legal obligation to do so.

Wait for Negative Items to Fall Off

The final strategy on how to clear your ChexSystems report is to simply wait for negative accounts and items to fall off your report. The time it takes for this to happen varies based on the type of item.

• 2 years – check cashing inquiries fall off
• 3 years – account inquiries fall off
• 5 years – closed account information falls off

If you have information that is getting ready to fall off soon, you might have better luck waiting a little while before opening a new account.

What to Do When You Have a Bad ChexSystems Report

If you have a less-than-stellar ChexSystems report, this can adversely affect your chances of successfully opening a new bank account or obtaining certain credit cards. But how can you clear your ChexSystem report when disputing, paying off accounts, or waiting are not options?

How to Open a Bank Account

If your ChexSystems report isn’t too terrible, you may be able to apply for some basic checking and/or savings accounts without issues. However, this may limit your access to certain promotions or APY rates.

Otherwise, you might want to consider looking for a second-chance account. These accounts are specifically designed for those who have a poor ChexSystems record. But beware, these accounts can come with hefty fees or limited features (i.e., no check writing).

Opening a second-chance account won’t necessarily improve your ChexSystems score, but they can offer you basic checking/saving services until your score improves enough to open a better account.

Facing issues with your #ChexSystems report? Learn how to clear it and smooth out your banking journey. #BankingTips

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Improve Your Credit

If your ChexSystems report is preventing you from opening a credit card account, then looking for different products that don’t use this option might be a good option. 

However, cards that don’t use ChexSystems may have higher credit requirements, so you’ll want to look at improving your credit score as needed.

You can do this in multiple ways, including:

• Opening credit builder loans
• Using services like Experian Boost
• Keeping your credit utilization low
• Using rent reporting services
• Opening a secured credit card

While your ChexSystems report is important, focusing on improving your credit report may be even more important for your long-term financial health.

FAQs

The post How to Clear Your ChexSystems Report: Essential Steps appeared first on FinMasters.

The answer is complicated. There are different rules guiding what you can do with an inherited IRA, based on the type of the IRA, the age of your loved one when they passed, and your relationship with them. Because an IRA is a tax-advantaged account, these rules are set by the IRS.

Below are the options available to you, as well as other issues worth considering.

What Is an Inherited IRA?

An inherited IRA is a retirement account passed to a beneficiary when someone dies. Because of this, inherited IRAs are often called beneficiary IRAs.

Any type of IRA can be inherited, including Roth IRAs, Traditional IRAs, SEP IRAs, etc. Each of these accounts can be inherited by one or more beneficiaries.

Who Can Inherit an IRA?

Anyone can inherit an IRA. The most common beneficiary is a spouse, but the person who owns the IRA can make anyone a beneficiary. This includes a child, distant relative, friend, or entity (i.e., a trust).

If the person who passed on did not set a beneficiary, then inheritance will be determined by your state’s estate laws. This can often result in multiple individuals inheriting a single account. For instance, three children could be equal beneficiaries of a deceased parent’s IRA.

Learn more: Planning for the future means understanding all outcomes; delve into our guide detailing what happens to your 401(k) when you die.

What to Do With an Inherited IRA as a Spouse

As the deceased’s spouse, you have a few extra options on what you can do with an inherited IRA. Here are the 4 main ones.

1. Transfer the IRA to Your Name (or Roll Over)

When considering what to do with an inherited IRA as a spouse, you have a unique option: treating the inherited IRA account as your own. This means you can either establish a new IRA in your name using its funds or roll over the inherited IRA into an existing IRA account you already have.

IRAs have to be rolled over to an IRA of the same type, i.e., traditional IRA to a traditional IRA or Roth IRA to a Roth IRA.

This solution can help you avoid paying taxes on the inherited account until you start taking disbursements when you reach retirement age.

There are two rules regarding this option:

1. You have to be the sole beneficiary.
2. At the time of death, your spouse was not required to take an RMD (required minimum distribution).

Warning: If your spouse was required to take an RMD the year they passed away, you will need to take a disbursement in that amount. If you are younger than 59 ½, this will result in a 10% early withdrawal penalty.

2. Open an Inherited IRA

Navigating through what to do with an inherited IRA can often present various paths, each offering unique financial implications. A great option is opening an inherited IRA, as it gives you more flexibility in when and how you want to take disbursements. There are 3 main options:

1. Start taking disbursements over the course of 10 years.
2. Take disbursements for the duration of your life expectancy.
3. Wait until your deceased spouse would have needed to take disbursements (age 73).

There are quite a few tax and budgeting benefits with these options.

Choosing #1 allows you to start taking money now and spread the tax hit over 10 years.

In contrast, choosing #3 can help you delay paying taxes until you are required to take disbursements in the year your late spouse would have turned 73. This can be particularly useful if your spouse was younger than you.

Note: If your spouse had reached RMD age when they passed, the only option available for opening an inherited IRA is #2.

3. Convert to Roth IRA

If you’re wondering what to do with an inherited IRA and anticipate being in a higher tax bracket when you retire compared to now, then converting the inherited IRA into a Roth IRA could be a good solution.

To do this, you must first put the IRA into your name (transfer IRA option). Then, you can convert the traditional IRA into a Roth IRA.

You will need to pay taxes on any amount you convert, but there is no early withdrawal penalty. The potentially hefty tax bill is why it is better to convert only if you expect to be in a higher tax bracket when you retire.

Learn more: Thinking of switching to a Roth IRA? Get insight into the potential tax cost of Roth IRA conversions from our recent post.

4. Lump Sum Disbursement

If you want access to all the money now, you can take a lump sum disbursement. The money cashed out of the IRA will count as taxable income for the year you take the disbursement.

It’s also worth noting that since this is an inherited retirement account, no early withdrawal penalty is assessed.

A lump sum disbursement may be the best option when wondering what to do with an inherited IRA if the account value is small or you really need access to the cash. If you only need a little cash right now, pursuing the 10-year disbursement plan might be the better option.

What to Do With an Inherited IRA as a Non-spouse

Not sure what to do with an inherited IRA as a non-spouse beneficiary, like a child, sibling, friend, etc.? Your options for using the inherited IRA are more limited. Here are the 3 main options:

1. 10-Year Disbursement

When you inherit an IRA, the IRS offers a 10-year disbursement plan. This allows you to withdraw the funds from the IRA over 10 years. You can draw out money every year or let it grow tax-deferred and then take it all out in year 10.

To do this, you’ll need to transfer the funds from the IRA to an inherited IRA account in your name. Disbursements will come from this new account. If you are one of several beneficiaries, you’ll want to separate out your portion into your own account.

The 10-year disbursement option can be best if you want to give the money a chance to grow tax-deferred or spread the tax bill over 10 years.

2. Lump Sum Disbursement

You can always take a lump sum disbursement when you inherit an IRA. And because it is an inherited IRA, there is no early withdrawal penalty, regardless of your age.

A lump sum disbursement may be the best option when pondering what to do with an inherited IRA if there are multiple beneficiaries and/or a small IRA balance. Just be aware that the money could affect your taxes, especially if it increases your tax bracket for the year.

3. Stretch IRA

When wondering what to do with an inherited IRA, another good option is a stretch IRA. This option lets you stretch disbursement payments over the duration of your life. However, since the passing of the SECURE Act, the use of this type of IRA is very limited. The only beneficiaries allowed to use this IRA method are:

• Minor children
• Disabled individuals
• Chronically ill individuals
• Those within 10 years of age of the deceased (i.e., a sibling)

These individuals can choose to take disbursements based on their own life expectancy or the deceased’s life expectancy. If the deceased had already reached RMD age, then you have to take disbursements based on their life expectancy.

Disclaiming the Inherited IRA

Both spouse and non-spouse beneficiaries have one final option for handling inherited IRAs: to disclaim them. Disclaiming means you are refusing the inheritance. You can reject all of your IRA inheritance or just a portion of it.

If you are the sole beneficiary, the alternate beneficiary will then inherit the account. When there is no alternate, the next person in line, according to your state’s estate laws, will inherit the account.

If you were one of multiple beneficiaries, your share of the inherited IRA will be split among the remaining beneficiaries.

This strategy can be beneficial if you want to avoid the tax implications altogether or if you feel another beneficiary could benefit from the inherited IRA more.

For instance, if you are the spouse and the next beneficiary is your minor child, you could disclaim the IRA. Your child could then choose to use the stretch IRA method, providing them income for many years.

Other Inherited IRA Considerations

Here are some other points that you should look into when you inherit an IRA.

How Much Will I Be Taxed?

This depends on how and when you take disbursements.

All disbursements are taxable income (except for certain Roth IRA withdrawals). The more you withdraw in one year, the higher your tax bill will be.

The good news is there is no early withdrawal penalty. The exception would be if you are a spouse beneficiary who transfers the inherited IRA into your own name. If you then withdraw from the IRA before reaching 59 ½, you’ll face a 10% early withdrawal penalty.

Learn more: Simplify your tax understanding with our post that breaks down the basics of “how do taxes work” for individuals.

Are Roth IRAs Different

If the IRA you inherited was a Roth IRA, then you may be able to avoid paying any taxes. Contributions to an IRA are made post-tax. This means they can be withdrawn tax and penalty-free because the money in them has already been taxed.

Navigating the complexities of #inheritance? Learn exactly what to do with an #inheritedIRA in our latest guide.

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Interest earnings are handled a little differently.

If the Roth IRA was more than 5 years old when the original owner passed, you can withdraw earnings from the inherited IRA tax-free. For younger accounts less than 5 years old, withdrawing earnings will be taxed as regular income.

If you are a spouse beneficiary, you can roll over the inherited Roth IRA into your own Roth IRA.

Are Inherited IRAs Protected During Bankruptcy?

Unlike regular IRAs, inherited IRAs are not protected when you file for bankruptcy.

This means that creditors can go after money held in an inherited IRA.

If you are a spouse beneficiary, the rules are a little different. Transferring the IRA into your name means you are fully protected during bankruptcy. But if you keep the funds in an inherited IRA account, those funds may not be safe.

Learn more: For clarity on bankruptcy types, our recent post breaks down the nuances between Chapter 7 vs. Chapter 13.

What Did the SECURE Act Change?

The SECURE Act made changes to how inherited IRAs can be disbursed. These changes went into effect for those who passed away starting in 2020.

If your loved one passed before 2020, then the rules for transferring and using the inherited IRA funds are slightly different. Here are the key differences.

• There was a 5-year option, not a 10-year option
• Non-spouse beneficiaries had the stretch IRA option
• The use of the 5-year plan was much more limited than the new 10-year plan is
• RMD age was previously 72

For further details on how IRA inheritance is affected by death prior to 2020, see the IRS’s Beneficiary page.

The post What to Do With an Inherited IRA: Most Common Scenarios appeared first on FinMasters.

If I pay for it in cash, it’s free.

“Girl math” started as a viral trend on TikTok and gained popularity as women (and men) share how they rationalize their spending habits. Many of the videos are just for laughs, but the ideas they present can have a significant impact on your finances, both good and bad.

So, let’s take a look at what girl math is and when you should and shouldn’t use it.

What Is Girl Math?

The term “girl math” is often applied to any technique used to rationalize or defend purchases. This can include big, expensive purchases and smaller ones. The term doesn’t have a fixed definition and is evolving as it is used.

While “girl math” is frequently used to defend unnecessary purchases, there are elements of legitimate budgeting and spending strategies within the method.

Applying Girl Math

Let’s look at an example to understand how girl math looks in the real world.

Expenses for a day
Top up your gas tank	$40
Get coffee	$8
Lunch with coworkers	$15
Snack from a vending machine	$2.75
New outfit	$120
Concert	$80
Total	$265.75

Now, let’s apply the ideas behind girl math to this day’s expenses.

Expenses for a day
Top up your gas tank	purchased with a gift card	free
Get coffee	purchased with the Starbucks rewards app	free
Lunch with coworkers	paid with your Venmo balance	free
Snack from a vending machine	under $5	free
New outfit
– Top	Returned for a different size	free
– Bottoms	50% off, original price $60	Made $30
– Shoes	Estimated use of once a week	$1.15 per use
Concert	Paid for 4 months ago	free
Total		+$28.85

The result is not just less money spent but an actual “gain” of $28. Yes, this scenario is a bit extreme, but it accurately illustrates the perception of how spending is perceived when using girl math.

What Are the Dangers of Girl Math?

The biggest danger of girl math is the disconnect with how much money you are actually spending.

The girl math way of thinking can make it challenging to come up with any kind of realistic budget and stick to it. How do you track your expenses if you view everything as free?

Another big sticking point is the inherent danger of cost-per-use breakdown. This is especially true with expensive purchases.

When Should You Use Girl Math?

While girl math may not be the best choice for everyday spending, there are some situations where it has advantages.

Discretionary spending would be the major one. Using girl math for purchases is fine if you have already budgeted X amount of money for discretionary spending.

This girl math purchase makes sense if you have at least $60 budgeted for clothing expenses.

Using gift cards or return items to make purchases can also be a valid way of stretching your budget. These purchases really are free, especially if the original item or gift card was given to you.

Another valid idea of girl math is the cost-per-use idea, but only when comparing purchases.

Looking at a purchase this way shows there is more value (at least financially) in purchasing the mani-pedi or the new pair of shoes than there is in dinner with friends.

Cost-per-use can also be a good way to compare different price points. For instance, you can buy $20 jeans that wear out in a few months and need to be replaced, or you can splurge on $50 well-made jeans that last you several years.

Diving into the #girlmath phenomenon: Is it a sound #budgeting method or a risky TikTok trend?

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“Girl math” is often lighthearted and can just be a way of joking about spending. If you’re keeping to a budget and not piling up debt, a bit of girl math won’t hurt and could help. If those “girl math” hashtags are covering up serious overspending and a growing pile of debt, the joke isn’t funny anymore. It’s time to make changes or even look for help.

Alternatives to Girl Math

If the girl math way of looking at your finances is not working for you, there are plenty of other budgeting methods you can try.

Envelope System

The envelope system consists of creating specific budget categories and setting aside cash in envelopes for each category. This method recently saw a surge in popularity and was rebranded as cash stuffing.

The envelope system has a few similarities to girl math. Preloaded rewards accounts are essentially a sort of digital discretionary spending envelope. This can make this budget method an easy-to-adopt alternative to girl math.

50/30/20

For those looking for a simpler budgeting method that provides overall guidance, the 50/30/20 method might be a good option.

This method breaks down your budget into

• 50% necessities
• 30% discretionary
• 20% savings/debt repayment

Using this method, you can still apply the girl math principles to your 30% discretionary spending while ensuring that your necessities like rent and utilities are paid.

Zero-Based Budget

This budget method is the opposite of the idea that purchases are free. This budgeting method helps you allocate each dollar you earn. Essentially, the goal is to end up with $0 unaccounted-for money each month.

If you’ve previously gotten carried away with spending or lost track of where your money is going each month, this method can help you get back on track.

DIY Budget

When looking for new budgeting ideas, you don’t necessarily have to pick a method right away. Instead, start tracking your spending now, determine your spending categories, and decide where you want to be.

Then, you can choose the budgeting method that works for you. To get a better idea of how to get started, check out our article on budgeting basics.

Learn more: Understand the impact of structured finance with our post outlining the core advantages of budgeting.

The Gender Question

This article wouldn’t be complete without mentioning the elephant in the room: the idea that the term “girl math” supports the perception of women being bad with money.

In reality, women are not inherently worse at finances. In many ways, women are beating out their male counterparts.

For instance, credit scores between men and women are nearly identical. Men tend to carry more debt than women. Furthermore, women are more likely to use debit cards than credit cards and are better at following budgets when compared to their male counterparts.

The thing is, the rationale behind girl math isn’t exclusive to girls/women. Plenty of boys and men are out there using the same ideas to rationalize their purchases.

I.E., spending money on a golf course membership by defending how often you’ll use it or telling a significant other that an item only costs $100 when it really costs $130 (or much more).

The girl math videos on TikTok, YouTube, Instagram, etc., are not meant to be taken as an attack on gender differences, nor are they designed to impart actual financial advice. These videos are just light-hearted entertainment.

The post Girl Math: Valid Budgeting Technique or Dangerous TikTok Trend? appeared first on FinMasters.

Still, these decisions need to be handled. We’ve assembled 10 of the most important financial and credit steps to take when a loved one dies. Please use this list to help you and your family navigate this difficult time.

Financial Steps to Take When a Loved One Dies

When a person passes away, there is a lot they leave behind. This is especially true when it comes to financial issues and arrangements. Here is a list of the top financial and credit steps to take when a loved one dies.

1. Make final arrangements
2. Get Death Certificates
3. Compile a list of assets, debts, and bills
4. Explore benefits
5. Closing bank, credit card, and retirement accounts
6. Transfer or cancel bills
7. Finalize the estate
8. File taxes
9. Prevent fraud
10. Create a budget
11. Take time to grieve

We ordered the list above based on priority. While there is no set timeframe for when these need to be completed, sooner is usually better. Next up, we’ll detail how each of these tasks can be accomplished.

1. Make Final Arrangements

Do you know what your loved one’s wishes were? Did they want to be buried, cremated, or have a particular minister provide over services?

If you are unsure, the first financial and credit steps to take when a loved one dies is to check if they pre-purchased funeral/cremation services, bought a burial plot, or discussed their wishes with family or friends. If they didn’t put any plans in place, you’ll need to start making arrangements yourself, including paying for services.

The average funeral costs are just shy of $8,000, according to the National Funeral Director’s Association (NFDA). That’s a significant chunk of change^[1].

Thankfully, most funeral homes can work with you, including setting up payment plans as needed. You can also get with family and friends to see if they can chip in. Funeral costs can often be reimbursed from the estate once it is settled.

If you are struggling to come up with the money, you can look into alternatives for funding. Churches and charities are a good resource. Certain government programs may help as well. Crowdfunding is always an option.

If you are entirely out of options, you can always surrender your loved one’s remains to the state. Just be aware that you may have little say in what happens to your loved one’s remains.

2. Get a Death Certificate

A death certificate is an important document that is needed in order to take many of the financial and credit steps you’ll take when a loved one dies, including closing accounts, applying for benefits, and more. The certificate documents when and how your loved one died and provides key statistics, like date of birth and address.

As part of filing for the certificate, you may be asked personal questions, like the birthplace of your loved one and what their parents’ names were.

Usually, funeral homes help with filing and ordering copies of death certificates.

If you don’t receive copies of the death certificate or you need additional copies, you can request copies of the death certificate from your state’s vital records office.

A death certificate usually costs $5 to $25, depending on your state. For instance, in Texas, the first certificate costs $20, and additional copies are $3 each^[2]. While in New York, there is a flat fee of $15 (plus processing fee) for each death certificate^[3].

3. Compile a List of Assets, Debt, and Monthly Bills

Another one of the essential financial and credit steps to take when a loved one dies is documenting major assets, debts, and bills, as it helps you organize what payments need to be made and what financial institutions need to be contacted. It can also give you guidance on how the probate process needs to be handled (and if it can be skipped).

Some examples of major debts and assets include:

• A home
• Land
• Vehicles
• Retirement accounts
• Bank accounts
• Medical debts
• Loans
• Credit card debt

If your loved one had a will, this step may already have been taken care of, but you’ll still want to double-check that the information is current.

As part of listing out the debts and assets, you’ll want to make a separate list of household bills, especially the bills that will still need to be paid (mortgage, utilities, etc.) while you settle the estate.

4. Explore Benefits

Did your loved one leave behind a plan to provide for their family?

Many people take out insurance policies, especially if they have a young family, someone who depends on them for financial support, or when they are concerned about their family inheriting debt. According to a Forbes survey, 3 in 4 adults have some kind of life insurance^[4].

If your loved one didn’t have a plan in place and you or other family members depended on them for financial support, you may be stressed and worried about the future. But you should know that programs are in place to help with this.

Insurance Claims

If your loved one did have life insurance, you’ll want to contact the company to start the claim filing process. Filing will require a copy of the death certificate, and you may need to fill out several insurance forms. The claim will most likely be paid out within a few weeks.

Other types of insurance may also apply depending on how your loved one died. For instance, if death resulted from a car accident, you may need to work with the auto insurance company.

Employer Benefits

If your loved one was still actively working, you’ll want to contact their employer. First and foremost, to notify them of the death and to inquire about benefits and final paycheck.

Many employers offer various forms of life insurance to their employees. Some employers may even pay directly for limited benefits, like a small life insurance policy.

It will also be the employer’s responsibility to make notifications to any elective benefits your loved one utilized, like health insurance, retirement plans, etc.

Social Security Benefits

Social Security offers a wide variety of benefits available upon someone’s death. This includes a lump sum death benefit of $255, which goes to a living spouse, if there is one, or next of kin. You can initiate an application for this benefit in person or via phone.

Social security also offers survivor benefits, which focus mainly on dependent-age children and spouses. Below is a list of those who may qualify for benefits, but you should check the Social Security Administration’s website for a complete list.

• Minor children
• Spouses 60 or older
• Spouses caring for a child under 16
• Divorced spouses
• Children up to 19 who are still in secondary school
• Spouses 50 or older with a disability
• Adult disabled children (if the disability occurred before their 22nd birthday)
• Dependent parents 62 or older
• Dependent grandchildren or stepchildren

You can apply for these benefits in person or via phone and will likely be mailed several forms to fill out and return. Note: there is a family maximum for benefits.

Canceling Benefits

If your loved one was receiving social security benefits at the time of their death, these benefits must be terminated immediately. Failing to notify Social Security does not mean you get to keep benefit money. The Social Security Administration can and will claw back any overpayments.

Additionally, they may take back/hold the last month’s payment until they identify the proper beneficiary(i.e., a spouse or child).

Veterans Benefits

If your loved one served in the military, they may be eligible for VA burial benefits.

Those who died from a service-related injury are eligible for a maximum benefit of $2,000. Additionally, transport costs can be reimbursed if they are buried in a VA cemetery.

If the cause of death was not service-related, but they were in the care of the VA (hospitalized) at the time of death, you may be eligible for a $796 burial benefit. For those not hospitalized at the VA at the time of death, the benefit amount is $300.

A separate $796 interment benefit exists for those buried outside a national cemetery.

The VA details eligibility requirements and the claim process on the Burial Benefits page.

5. Closing Bank, Credit Card, and Retirement Accounts

Did your loved one have a bank account, credit card, or retirement account? If so, these financial institutions need to be notified so steps can be taken to close accounts and disburse funds as needed. These are the following credit steps to take when a loved one dies:

Banks

Upon notification, most banks immediately close or freeze any debit or credit cards associated with a deceased person’s bank accounts.

How the account closure is handled will depend on the type and ownership of the account.

If, for instance, you are the joint owner of the account, then full ownership will transfer to you. You do not have to worry about the account closing and losing access to your funds. This process is called the right of survivorship.

Accounts that are solely owned may have a designated beneficiary, making the account payable on death or POD.  If you are the beneficiary, the bank will issue you the funds upon notification of death. They’ll also close out the account at this time.

If your loved one did not specify a beneficiary, the account will become part of the estate. Once an executor is set, they can contact the bank and use the account funds to pay off creditors as needed and disburse the funds according to the will (or laws of inheritance).

Credit Cards & Loans

If your loved one had any credit cards or loans open, you’ll need to contact the lender and ask about the credit steps that need to be taken when a loved one dies.

The estate must continue paying the debt for vehicle loans and mortgages until ownership is settled.

For credit cards and other types of revolving debt, the account will need to be paid in full before it can be closed. This can include having the estate pay the bill or negotiating a settlement with the creditor. Some credit card companies may charge off the remaining debt.

Creditors can issue debt claims against the estate during the probate process.

Outstanding debt does not transfer to loved ones unless the debt was co-owned, co-signed, or your state has specific community property laws. Any late or missed payments will also not appear on any other individual’s credit report.

Retirement Accounts & Pensions

The company or broker handling the account(s) needs to be notified of the passing so that the accounts(s) can be closed and/or paid out. The process for closing out the account will depend on the type.

401ks and IRAs usually have a preset beneficiary. If you are the beneficiary, when you notify the account holding company (or your loved one’s employer), you’ll be given options for handling the funds, including rollovers and disbursements.

A rollover may set you up for your own later retirement and help protect you from a hefty tax bill. Annuities can also lessen your tax liability when compared to lump sum payments. (in a box)

If no beneficiary is set, the account will revert to the estate and must be disbursed according to the will or through probate.

Pensions are more complicated. Rules for processing these depend on the type of pension, how your loved one chose to be paid, and whether or not there is a surviving spouse.

Spouses may qualify for a survivor’s pension, while other beneficiaries may be eligible for lump-sum payouts.

Just be aware that some pensions can’t be transferred, and benefits will cease upon notification of death. And, just like social security, any excess payments made after death can be recovered.

Other Debtors & Assets

Other kinds of significant debt or assets to be on the lookout for include:

• CDs
• Brokerage accounts
• Reverse mortgages
• Retirement or life insurance loans
• Business loans
• Student debt
• Medical debts
• Real estate
• Safe deposit boxes
• HELOCs and home equity loans

To help locate all assets and debts, you may want to check your loved one’s bank statements, contact local banks, look at your loved one’s taxes, and/or contact a probate attorney.

6. Transfer or Cancel Bills

As part of finalizing the estate, many of your loved one’s bills may need to be transferred or closed out. If you haven’t already gathered a list of bills, try reviewing your loved one’s bank and credit card statements.

Changes might not need to be made for bills with a joint account holder, like a utility bill. Other bills will need to be updated. In some cases – like removing a loved one from a family mobile phone plan – this may save you money.

If a bill was only in your loved one’s name and you still need the service, you will need to transfer the account or might need to set up a new account. For instance, if the electricity bill was only in your deceased spouse’s name, you may need to close it and open a new one in your name.

Solo-owned accounts you no longer need can be canceled, often with a quick call or online chat. Some examples include:

• Subscription accounts
• Phone bills
• Internet
• Health insurance
• Cable

It is worth noting that you should avoid canceling certain solo-owned bills and insurance policies until you have opened new accounts in your name. For example, you don’t want to leave a car uninsured during a transition period.

Stay informed during challenging moments. Discover the #creditsteps to take when a loved one passes.#FinancialGuidance

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7. Finalize the Estate

Hopefully, your loved one had a valid will. In this case, if your loved one’s assets are probate-exempt or fall below a certain threshold, you may be able to skip the probate process and settle the estate yourself (if you are the executor).

If your loved one’s assets were significant, and/or they passed intestate, meaning without a will, the estate will need to go through a probate process. 

Probate processes differ by state and can tie up an estate for months or years. 

8. File Taxes

Have you heard the saying that the only certainties in life are death and taxes? Well, unfortunately, it’s true, and one doesn’t cancel the other.

If a loved one passes away, taxes will still need to be filed on their behalf for that year. If your loved one passed before filing the current year’s taxes, you’ll need to file these as well.

You may be able to skip tax filing if a loved one’s income was below a certain threshold for the year.  Check out the IRS’s interactive tool for more info.

9. Prevent Fraud

One of the financial and credit steps to take when a loved one dies that is sometimes overlooked is to prevent fraud. Scams are all around us, and preventing them is one of the key credit steps to take when a loved one dies. If you haven’t already done so, cut up all of a loved one’s debit cards and credit cards. Not only will this prevent someone from accessing their funds, but it can also help prevent identity theft.

Another good step to prevent identity theft is to report your loved one’s death to the credit bureaus. The credit bureaus are sometimes notified automatically through the Social Security Administration or via lenders.

You can also contact the credit bureaus yourself. Each credit bureau has its own process, but all will require a copy of the death certificate and proof that you have legal authority (i.e., executor).

• Transunion process
• Equifax process
• Experian process

It’s worth noting that credit profiles are not immediately deleted. Instead, they are flagged to prevent new inquiries and accounts from being opened. The credit profile will remain until all accounts have fallen off (usually 7 years).

You should also be on the lookout for scams targeting your family. Common scams include posing as Social Security or the IRS, offering to give you access to inheritance if you pay a small fee, or posing as debtors threatening legal action.

10. Create a Budget

If you depended on your loved one for financial assistance, crafting a new budget is critical. Are there expenses you need to cut or lifestyle changes you need to make? Even if you received a substantial life insurance payout, you’ll still want to take time to budget.

Individual bills might significantly increase or decrease. For instance, your car insurance. Removing a driver and/or vehicle may reduce your bill, but you may also lose discounts like multi-car or multi-driver.

Managing your financial affairs and understanding the crucial financial and credit steps to take when a loved one dies is essential, especially if you are set to receive a significant inheritance. This can include reevaluating your budget, speaking to a financial planner, planning for your taxes, etc.

Take Time to Grieve

These financial and credit steps to take when a loved one dies are important, but taking time to grieve is just as important.

When my mother passed away, I threw myself into organizing her finances and estate. It wasn’t until I had finished the process that I broke down. I hadn’t taken time to properly grieve before then.

Everyone reacts differently to grief. Some try to keep busy, while others need to step back.  There is no right or wrong way to grieve, nor is there a set timeline for finding your new normal. Pay attention to your feelings and look for help if you need it!

The post 10 Key Financial and Credit Steps to Take When a Loved One Dies appeared first on FinMasters.

There are hundreds of money-making apps available. In this article, we’ll explore some of the best money-making apps in key categories like rideshare & delivery, selling your stuff, taking surveys, and more.

Best Money-Making Apps for Selling Skills & Services

Selling your skills and services is probably the most basic and reliable way to make money. There are many apps that can help connect you with people who need what you can do.

Learn more: Just so you know, we’ve analyzed several methods for making money online in our post, highlighting the real scenarios behind them.

1. Upwork

Best for Freelancers

Upwork is one of the best money-making apps out there for freelancers. Whether you have skills in web design, editing, writing, marketing, etc., Upwork offers a chance for you to land freelance work on their platform.

Through their app and website, you can browse freelance jobs, bid on jobs, and work with clients. Upwork charges you 20% of your freelance fee.

How Much Can You Make?

There are tons of jobs offered through the platform, but also tons of freelancers. So, how well you market yourself will be essential.

When you first start out, you may have to settle for lower-paying jobs to build your portfolio. But the income potential here is high.

Redemptions

After Upwork takes their fee, the remaining funds can be cashed out to your bank account or through PayPal. You may have to wait several days for your client to release funds.

2. Fiverr

Best For a Wide Variety of Skills

Fiverr offers over 200 categories of services you can sell through their platform. This includes more common jobs like logo design and website development as well as more obscure tasks like poetry writing and gif creation.

How Much Can You Make?

You set your own prices for products and packages. Prices start as low as $5 and can go up to $1000+.

Many users report earnings as low as $0 to $200 in their first few months. But with persistence, there is decent potential for growing your income. Just be aware that Fiver charges a 20% fee on your earnings.

Redemptions

Client payments can be pending for up to 14 days. Once funds are posted to your account, you can cash out to your bank through PayPal or via your Fiver card.

Learn more: If you’re looking to find jobs online, our post offers a guide to numerous jobs and gig sites

3. TaskRabbit

Best for Household Tasks

If you are good at handyman or household tasks like assembling furniture, packing & moving, cleaning, etc., then TaskRabbit may be a good resource for finding jobs.

The app lets you list services and skills and set your own prices. Clients can then schedule you for projects and pay you through the TaskRabbit platform.

How Much Can You Make?

Unlike other freelance opportunities, this one will vary based on your location. If you live in a metropolitan area, more jobs will be available. Users report earnings ranging from a few hundred a month to $5k+ monthly.

TaskRabbit charges providers (you) a one-time $25 registration fee.

Redemptions

Funds are usually made available within 24hrs of invoicing and are automatically transferred to your bank account within a few days.

Other Freelancer Apps

1. Freelancer – Best Alternative to Upwork
2. Peopleperhour – Best Option for Entry-Level Freelance Work
3. Handy – Best Alternative to TaskRabbit
4. Rover – Best Option for Petsitting and Pet Walking
5. Care.com – Best Option for Providing Childcare Services

Learn more: Curious about dog sitting with Rover? Our post breaks down how one individual generates $1000 monthly from it.

Best Money-Making Apps for Selling Your Stuff

If you need money fast, putting something you own up for sale can solve your problem. These are the best money-making apps that will help you sell your items.

4. Poshmark

Best for Selling Clothes

If you have lightly used clothing items, you can look to Poshmark to sell them. You can use the app to sell a variety of clothing items from a variety of brands.

You can list your items for free, create special sales, and chat with potential buyers. Shipping labels are generated for you, and Poshmark handles all payment processing.

How Much Can You Make?

This depends on the demand for the items you are selling. Designer items, athletic shoes, and brand-name workout gear are a few of the better-selling items on the app.

Poshmark takes a commission on every sale. The commission is $2.95 for sales under $15 and 20% on all sales above $15.

Learn more: If you’re considering selling used clothes, our latest post shares the top platforms where you can make the most cash, both online and locally.

5. Etsy

Best For Selling Crafts

When it comes to the best money-making apps for those with a creative touch, Etsy stands out. From hand-knitted scarves to custom glassware, this platform is perfect for people who sell their unique creations. If you are crafty, Etsy can help you generate some cash.

Before launching your store on Etsy, you’ll want to set it up properly. This includes listing your products, gathering professional photos, customizing your page design, etc.

Note: you can only create a store through the website, not the Etsy Seller App.

How Much Can You Make?

This largely depends on what you make and how much time you can devote to this business.

Here are some common Etsy fees to watch for.

• $0.20 per item listing fee (charged every 4 months)
• 6.5% transaction fee on sales
• Variable payment processing fees
• Fees for ads (optional)

Redemptions

Funds become available for deposit 1-3 days after a sale. You can cash out via direct deposit or PayPal.

Learn more: For those who are crafty and handy with tools, our post provides practical insights on how to make money furniture flipping, offering avenues to earn $1,000 or more each month.

Other Apps for Selling Your Stuff

1. Offerup – Best Alternative to Letgo
2. Decluttr – Best for Selling Tech
3. Mercari – Best Marketplace for Protected Transactions
4. The RealReal – Best for Selling Luxury Items
5. Turo – Best for Renting Out Your Car

Learn more: For those curious about maximizing Turo car sharing, our article discusses building a lucrative venture.

Best Money-Making Apps for Cash Back Shopping

You can make money by spending money! You won’t earn a lot, but as long as you’re spending on items you’d buy anyway, it’s all profit. Here are some of the best money-making apps to earn cash back.

6. Ibotta

Best for Cash Back on Your Groceries

Ibotta is an app that lets you earn cashback on groceries, online shopping, travel, and more.

Each time you shop, simply select the store, choose your offers, and upload your receipt (or purchase through the portal). Your purchases are verified, and cashback is issued within 24 hours.

How Much Can You Make?

How much you can earn depends on how much you shop.

Many grocery offers are set amounts ranging from $.05 to $5+, while retail offers are a flat percentage, i.e., 2% cashback. Bonuses are offered for teamwork, number of products, etc.

Ibotta reports that the average user earns $10 – $20 monthly^[1]. From my own personal experience, I have earned $200+ a year.

Redemptions

Cashback earned can be redeemed for gift cards or cash sent to your bank account. The minimum cashout amount is $20.

7. Rakuten

Best for Online Shopping

Rakuten lets you earn cashback from over 3,500 retailers, including big names like Walmart, Expedia, Ticketmaster, etc.

When you visit the app (or use the browser extension), you activate the offer you want and then make your purchases. Cashback is added to your account in as little as a few hours.

How Much Can You Make?

Cashback offers range between 1% and 10% or higher. Rakuten also offers bonuses for signups and referrals, as well as select retailer discounts.

Rakuten claims they’ve paid members over $2.2 billion in cash back since 1999. However, they also state the average shopper only earns $63.50 a year (based on 2020).

Redemptions

you can transfer your cash through PayPal or redeem via check. The minimum cashout is $5.01.

Learn more: By the way, if you’re considering diversifying your portfolio, our latest vlog post offers a thorough analysis of Rakuten stock, which might interest you.

8. Receipt Hog

Best for Gamified Rewards

Receipt Hog’s model is different; there is no need to shop select retailers or pick offers beforehand.

Simply scan/upload your receipts and earn rewards on everything from coffee to home improvement.

How Much Can You Make?

Rewards are delivered in the form of coins, slot spins, or sweepstakes entries, depending on the retailer.

For stores giving coin rewards, this is the breakdown per receipt:

<$10 = 5 coins

$10-$50 = 10 coins

$50-$100 = 15 coins

$100+ = 20 coins

With each coin worth roughly half a penny, you likely won’t earn much using this app.

Redemptions

Coins can be redeemed for Amazon or Visa gift cards or as cashback through PayPal. Redemptions start at 1,000 coins for $5 and go up to 6,500 coins for $40.

Other Cashback Apps

1. Fetch – If You Prefer Earning Points
2. Checkout 51 – Cashback on Gas & Groceries
3. RetailMeNot – Great for Coupon Clipping & Discounts
4. Dosh – Automatic Cashback on Travel, Retail, and Restaurants

Best Money-Making Apps for Rideshare & Delivery

If you have a car, you have a side hustle. Here are some of the best money-making apps to help you make cash with your car.

Learn more: In case you’re exploring options to make money with your car, our post can guide you through several viable opportunities.

9. Uber & UberEats

Best for Versatility

You can deliver almost anything using the Uber app. This includes delivering people to their destinations (rideshare) and delivering food and products to people’s homes.

Uber is available in more than 6,000 cities, and the driver requirements are relatively easy to meet.

How Much Can You Make?

How much time you have to devote to driving and your current market saturation will impact your potential earnings. But Uber offers various ways to increase your pay, including Quests, Streaks, Boosts, Surges, and guarantees. And don’t forget about tips.

Find out which are the best #moneymaking apps in our recent post and take a step towards #financialgrowth. #MoneyMakingApps

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According to Glassdoor, the average hourly earnings range from $17 to $24^[2].

Redemptions

Earnings are automatically cashed out weekly via direct deposit or daily if you use the Uber Pro Card.

10. Instacart

Best for Grocery Deliveries

Instacart offers two types of earning options: in-store shoppers and full-service shoppers. The first is an hourly W2 position, and the second is an independent contractor position.

As a full-service shopper, you receive order requests (batches) through the app, shop for the items, checkout, and then deliver the items to the customer’s door.

How Much Can You Make?

Earnings consist of base pay + bonuses + tips. Instacart is not transparent about base pay, and limited bonuses/promos are available. Tips are the most significant source of income when it comes to Instacart.

According to Glassdoor, the average hourly shopper pay comes in at $15 to $21^[3].

Redemptions

Instacart pays weekly through direct deposit for the previous week’s earnings.

11. Amazon Flex

Best for Guaranteed Pay

If you don’t want to fight for tips and bonuses to guarantee an average hourly pay, then delivering packages (and groceries) through Amazon Flex might be a worthwhile option.

Signup is quick and easy. You can schedule your hours by choosing the appropriate block up to a week in advance. I.E., a 2-hour block versus a 4-hour block.

How Much Can You Make?

The Flex app offers delivery blocks with set hourly pay starting at $18 ($15 for groceries). Many of these blocks can surge in pricing, allowing you to lock in $20+ an hour earnings before you deliver the first order.

Plus, you can earn tips with grocery and Prime deliveries.

Glassdoor estimates that the hourly average sits between $16 and $22^[4].

Redemptions

Earnings are automatically cashed out via direct deposit on a weekly or daily basis (depending on which one you selected during account setup).

Other Delivery Apps

Looking for other great options? Check out our list of the best delivery services to work for.

Learn more: If you’re exploring how to succeed as a delivery driver, our latest post offers practical tips to excel in the role.

Best Money-Making Apps for Surveys and Odd Jobs

Surveys will not earn you enough to live on, but if you have idle time and an internet connection, there are some great money-making apps you can use to pull in a bit of extra cash.

12. Swagbucks

Best for Earning on Everyday Tasks

This rewards program lets you earn points for completing a variety of tasks. This includes watching videos, taking surveys, shopping online, searching the web, and more.

Using the mobile app or website, you can earn a little cash by doing what you already do daily.

How Much Can You Make?

This won’t be a way to bring in serious cash. Each Swagbucks (SB) point is worth $0.01. Still, if you are already searching the web or watching videos, why not do it through Swagbucks?

Redemptions

Once you reach 300 SB points, you can redeem them for gift cards or cash through PayPal.

13. SurveyJunkie

Best for Taking Surveys

SurveyJunkie lives up to its name by offering you the opportunity to earn cash in exchange for answering surveys. Surveys range in point payout and can take between 2 and 30 minutes to complete.

SurveyJunkie also offers other options for earning points, such as online shopping.

How Much Can You Make?

You are not going to get rich with this app. Surveys pay between 10 and 200 points, with each point being worth a penny. So, a 10-minute survey that pays 100 points would net you around $6/hour for your time.

Redemptions

Once you reach 500 points, you can cash out via direct deposit or PayPal. You can also exchange points for gift cards.

Other Survey/Odd Jobs Apps

1. Inbox Dollars – Best Alternative to Swagbucks
2. Pinecone Research – Best High-Paying Survey Offers
3. Mistplay – Best for Earning Gift Cards for Playing Games

Beware of Scams

Whether you are just looking for some beer money or need a significant source of income, the best money-making apps have you covered. Just be sure to watch out for scams.

Scams can come in many forms: too-good-to-be-true promises, scam buyers, and bogus clients, just to name a few. Read reviews and research any money-making opportunity before giving up any personal information.

Choose the app that works best for you and enjoy the freedom of earning money with your phone!

The post 13 Best Money-Making Apps That Are Worth a Try in 2024 appeared first on FinMasters.

What Is a Second-Chance Credit Card?

A second-chance credit card is one with low eligibility requirements designed to help you rebuild your credit after making financial mistakes. These cards often have limited features and benefits and can come with hefty APRs and fees.

The goal of opening a second-chance credit card is to add positive data to your credit reports, like on-time payment history and low credit utilization. Second-chance credit cards are meant to be held short-term. Once you qualify for a better card, you will want to upgrade.

What Is the Minimum Credit Score Needed?

Most card issuers do not post a minimum credit limit, though they may include stipulations about what kind of negative information can be on your credit reports. For instance, some second-chance credit cards permit you to have a bankruptcy, while others don’t.

Many second-chance cards also weigh other information, such as your income or banking history. This gives you better odds of qualifying when you have a low credit score.

Learn more: If you’re navigating the financial realm with a challenging credit score, our recent post delves into the best-unsecured credit cards for bad credit.

5 Best Second-Chance Credit Cards with No Security Deposit

BEST NO-FEE CARD

Capital One Platinum Mastercard

The Platinum card from Capital One is a no-fee, unsecured credit card available to those with less-than-perfect credit. Learn more

Annual Fee:
$0

APR:
30.49%

Apply Now

BEST CUSTOMIZABLE CARD

Credit One Platinum

The customizable Platinium card from Credit One has a reasonable APR and offers up to 10% cash back earnings from select merchants. Learn more

Annual Fee:
$99 ($75 first year)

APR:
28.99%

Apply Now

BEST LOW APR OPTION

Milestone Gold Card

Designed for bad credit, the Milestone Gold Card Mastercard offers a lower APR than most other cards in this category but has a tiny credit limit. Learn more

Annual Fee:
up to $99

APR:
24.99%

Apply Now

BEST FOR CASHBACK REWARDS

Petal 1 Rise

Petal 1 Rise is a card with a great cashback rewards program that caters to those rebuilding their credit. Learn more

Annual Fee:
$59

APR:
28.24% – 35.49%

Apply Now

BEST FOR IMPROVING YOUR CREDIT

Surge

The Surge card is a decent short-term credit-building card with limited features. Learn more

Annual Fee:
up to $125

APR:
29.99%

Apply Now

1. Capital One Platinum Mastercard

Best No-Fee Card

The Platinum card is among the best second-chance credit cards with no security deposit, zero fees and a decent maximum credit line. However, it’s worth noting that it might be the most challenging card on our list to qualify for.

Capital One advertises that you need fair credit to qualify for this card. They define this as “limited credit history” or “I’ve defaulted on a loan in the past 5 years.”

With the Platinum card, you get access to all of Capital One’s benefits, such as a solid mobile app, Capital One’s CreditWise service, fraud protection tools, and more.

Using This Card to Improve Your Credit

You can prequalify for the Platinum card without risking a hard inquiry that will hit your credit.

Once you have the card, Capital One performs automatic reviews of your credit starting at 6 months. If the review is favorable, they can extend a credit limit increase. You can also monitor your score progress using the CreditWise tools and resources.

Because this card has no monthly or annual fees, there is no cost to keeping the Platinum card long-term. Once you qualify for better cards (higher rewards, lower APR, etc.), you can simply sock drawer this card and/or continue using its benefits (i.e., no foreign transaction fees).

Learn more: For those weighing credit card choices, our recent post offers a comprehensive look at the Capital One Secured Credit Card and its features.

2. Credit One Platinum

Best Customizable Card

The second on our list of best second-chance credit cards with no security deposit is the Credit One Platinum card which has some unique customization features. This includes selecting your own due date, creating specific account alerts, and personalizing your card design.

The Platinum card is advertised for rebuilding credit. Unfortunately, this means some of the terms aren’t that great. I.E., there is an annual fee and a low starting credit limit. That said, there are some decent Credit One benefits, like cashback earnings and automatic credit limit reviews.

* The annual fee starting the second year is billed monthly at $8.25/month

Using This Card to Improve Your Credit

Before applying for the Platinum card, you can use Credit One’s prequalification tool to avoid an unnecessary hard inquiry.

Once you have the card, you can use Credit One’s credit monitoring tools to track your score progress. Credit One also performs periodic credit reviews and may extend you a credit limit increase.

While this card has attractive features, such as decent cashback rewards, the low credit limit and the annual fee make this card a poor long-term choice. Once you qualify for better cards, you should close this one.

3. Milestone Gold Card

Best Low APR Option

The Milestone Gold Card is an unsecured card with a reasonable APR. At 24.9%, this is far lower than other credit cards in the bad credit category. And while there is an annual fee, it could be as low as $35.

Although it is one of the best second-chance credit cards with no security deposit, this low-APR card comes with one significant drawback: the $300 credit limit. Remember that a low credit limit makes it hard to keep your credit utilization low, which can make it harder to improve your credit score.

Milestone offers other versions of the Gold Card, some with higher credit limits or cashback opportunities but often with higher APRs and hefty annual fees.

* A $99 annual fee is charged as $75 for the first year

It is worth noting that Milestone offers several variations of their Gold card, all with different terms. For instance, the Milestone Gold Card with a $700 limit comes with a $179 annual fee, 35.9% APR, and a monthly fee starting the second year.

Using This Card to Improve Your Credit

Milestone offers a prequalification tool for this Gold Card. Other versions may or may not offer a soft pull preapproval.

Once you open the card, the annual fee immediately hits. This could leave you with as high as 25% credit utilization in your first month without making any purchases.

Because it has a low credit limit with no opportunity to increase it and an over-limit charge, this card is best kept in your sock drawer and not used. You should close this card once you’ve used it to build your credit enough to qualify for better cards.

4. Petal 1 Rise

Best for Cashback Rewards

Petal offers three credit card programs, with Petal 1 Rise being the solution for those whose credit or Cash Score would not qualify them for Petal 1 or Petal 2.

The Petal 1 Rise card has a decent credit limit and a good rewards program. Shopping with select merchants can earn from 2% up to 10% cashback.

When you open the card, you’ll also get access to Petal’s unique features, like the Leap program for increasing your credit limit, credit monitoring, no foreign transaction fees, fraud protection, and more, making it one of the best second-chance credit cards with no security deposit out there.

Petal offers two other no credit/bad credit cards with fewer fees and better terms that you may also qualify for.

Using This Card to Improve Your Credit

Petal offers a preapproval process where they use a soft pull of your credit and banking information to determine if you qualify for one of their cards.

Once you open the card, you are enrolled in the Leap program. Completing a Leap challenge involves 6 months of on-time payments and hitting your Leap credit score goal. The result is a credit limit increase of at least $50.

To help you track your credit progress, you’ll get access to credit monitoring featuring your VantageScore.

The one downside to Petal 1 is that you cannot upgrade to Petal 2. So, if you want to avoid the $59 annual fee and $96 a year in monthly fees, you’ll need to close the card once you qualify for a better product.

Need a financial reset? Our recent post unveils the best second-chance #creditcards with no security deposit. #SecondChanceFinance

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5. Surge

Best for Improving Your Credit

The second-chance card offered by Surge gives you the opportunity to improve your credit score.

Among the best second-chance credit cards with no security deposit, Surge stands out with a commendable initial credit limit of up to $1,000. It sweetens the deal by promising to double your credit limit after a mere 6 months of on-time payments, offering a decent boost to your credit utilization rate. Additionally, Surge provides you with an updated credit score monthly to track your progress.

* The annual fee is $75 for your first year

Using This Card to Improve Your Credit

Through the application link, Surge offers a prequalification check that lets you check your eligibility without a hard pull.

Once approved, you will be extended a credit limit between $300 and $1000. After 6 months of on-time payments, your credit limit will double. To help you track your progress, Surge gives you access to your credit score, which is updated once a month.

With the high annual fee and monthly fees starting your second year (up to $200+/year), this card is best when canceled before the end of your first year.

Comparing the 5 Best Second-Chance Credit Cards With No Security Deposit

All of the unsecured cards on our list offer a range of features and fees. Below is a quick comparison of the key fees and benefits.

* An annual fee is charged monthly after the first year

Secured Credit Cards and Other Options

The go-to solution when you have bad credit and want to open a new credit card is usually a secured credit card. Secured cards require a hefty deposit, which can be difficult to swing, especially if you are working on paying down existing debt.

However, there are some key benefits to secured cards. With a secured card, you can often avoid an annual fee, although this varies from bank to bank. Also, many secured cards offer a path to upgrade, where you can move to an unsecured card after X amount of time.

Secured cards are just one alternative; here are a few more

• A credit builder card (usually tied to a credit builder loan)
• Credit cards with no credit check
• Student cards
• Debit cards that report like credit cards

The most important thing to consider when choosing a credit card when you have bad credit is to look for a card that helps you build credit. If the card doesn’t report to all 3 credit bureaus, it won’t help you escape your bad credit situation.

Upgrade When You Are Able

When searching for the best second-chance credit cards with no security deposit, it’s essential to consider whether you’re opting for a secured or unsecured card. Regardless of your choice, don’t hold onto a second-chance card for an extended period. A year or two max is recommended. This is because these cards often have high fees, low credit limits, and few benefits.

Once you’ve used the card to qualify for a better card, one that fully fits your needs, you should seriously consider closing your second-chance credit card.

The post 5 Best Second-Chance Credit Cards With No Security Deposit appeared first on FinMasters.

What Is ChexSystems?

ChexSystems is a consumer reporting agency that collects information on your banking history. Similar to credit bureaus, they compile this information into a report and generate a score.

This information is then provided to banks, credit unions, and other financial institutions when you apply for a new account. A poor banking history (overdrafts, forced closures, etc.) will limit your account options.

Learn more: Heads up: If you’ve been meaning to understand the intricacies of the banking system, find out how banking works in our recent post that breaks it down clearly for you.

What Is on Your ChexSystems Report?

ChexSystems primarily gathers information on your account applications, openings, and closures. This can include negative information, such as:

• Overdrafts
• Frequent applications
• Bounced checks
• Involuntary account closure
• Suspected fraud/identity theft

The report does not include active account information or accounts in good standing that were voluntarily closed.

Why Do Banks & Credit Unions Use ChexSystems?

Just as a lender uses your credit reports to determine if you are creditworthy, banks and credit unions use your ChexSystems report to determine the risk of you overdrawing your account or writing bad checks.

When the information on your report is negative, banks and credit unions can withdraw account promotions (i.e., free $100 when you open an account), offer you a different account with higher fees, or outright reject your account application. However, there are banks that don’t use ChexSystems, offering an alternative for those with past banking issues.

Can You Fix Your ChexSystems Report?

If you have negative information reporting to ChexSystems, there are a few steps you can take to remedy this.

First, you’ll want to obtain a copy of your report and score. By law (Federal Credit Reporting Act), ChexSystems has to offer you at least one free copy of your report a year.

Next, you can dispute any inaccurate information resulting from fraud, mistaken identity, etc.

You can also pay off any outstanding charges that resulted from involuntary closures, bounced checks, etc. This won’t remove the negative information from your ChexSystems report, but the report will be updated to show the account has been paid off.

9 Banks That Don’t Use ChexSystems

Here are some major credit unions and banks that don’t use ChexSystems. Smaller local institutions are also good possibilities.

1. Capital One

Among the banks that don’t use ChexSystems, Capital One stands out by offering their no-fee 360 checking account. Instead, they will perform a soft pull of your credit and collect other personal information to determine your eligibility.

*You need to make a deposit within 60 days, or the account will be closed. 

Learn more: If you’re exploring credit card options, our post gives an honest review of the Capital One Secured Credit Card, aiding in your search.

2. Chase

While Chase offers three checking accounts, only the basic account, Secure Checking, is a no-ChexSystems account. This account comes with a monthly fee and access to Chase’s resources for credit monitoring, budgeting, and bill payment.

*fee waived on new accounts for first 2 months

Learn more: If managing your credit score effectively is on your agenda, one of our posts reviews the Chase Credit Journey platform, offering insights into its functionalities

3. Chime

Chime is among the banks that don’t use ChexSystems and offer second-chance bank accounts. Their no-monthly-fee checking account doesn’t require a credit check. Plus, the account comes with great savings tools like auto transfer and round-up.

4. Go2Bank

This 100% mobile bank is among the banks that don’t use ChexSystems, offering a checking account that only necessitates simple identity verification. The account comes with access to Go2Bank’s other great features, like a high-yield savings account and a no-credit-check secured credit card.

*Overdraft protection is optional

**waived with direct deposit of $5 or more

5. PNC

The Foundation Checking account offered by PNC is advertised as a solution for those working towards better finances. Unlike its other checking account offerings, this account does not use ChexSystems.

*waived if you are a PNC employee or 62+

6. Sofi

When you’re searching for banks that don’t use ChexSystems, consider opening a Sofi checking account. Not only do you automatically receive a savings account, but there’s also no ChexSystems inquiry for either.

The accounts have zero fees, and you start building your savings from day one.

7. US Bank

The checkless Safe Debit account offered by US Bank is designed for teens but also works as a second chance account. There is no ChexSystems pull.

US Bank pulls ChexSystems on its Smartly Checking, but they are reported as lenient with bad reports. So, you may qualify for this account as well.

8. Varo Bank

This 100% online bank offers some unique features, including a high-yield savings account, a credit builder card, cash advance features, and more. All these come with quick sign-up and no inquiry on your credit or ChexSystems. Varo Bank is one of the few banks that don’t use ChexSystems and also doesn’t charge a monthly fee.

9. Wells Fargo

Wells Fargo is among the banks that don’t use ChexSystems for certain account types. While they offer four different checking accounts, only the Clear Access Banking account abstains from using ChexSystems. Advertised as a great option for teens and young adults, it is also an excellent 2nd chance checking account.

*waived if you are younger than 24 or have a linked campus card

6 Credit Unions That Don’t Use ChexSystems

1. American Airlines Federal Credit Union

Membership at American Airlines Federal Credit Union is open to many airport employees, including American Airlines employees, TSA employees, family members of employees, etc.

The Ascend Checking account they offer is the only one without a ChexSystems inquiry. The account is checkless.

*waived with a direct deposit of $250 or more

2. Consumers Credit Union

This open-to-the-public credit union offers a Rewards Checking account with great features and no ChexSystems pull. Opening an account will require becoming a member, but the membership fee is reimbursable.

There are mixed reports on Consumers Credit Union pulling from ChexSystems, but they do not seem to use it for decision-making.

*based on account activity. APY starts as low as 0.01%.

3. PenFed Credit Union

Free Checking offered by PenFed is just that, a zero-fee checking account. Membership at PenFed is open to anyone, plus there is no fee to join. There is no ChexSystems check, and you get 50 free checks when you open the account.

4. Premier America Credit Union

Premier America Credit Union offers a 2nd chance checking account called Fresh Start Checking that does not pull from ChexSystems. Membership at the credit union is primarily for those located in Los Angeles, CA, or Houston, TX, but is open to everyone through membership to TOArts.

*if you don’t meet location requirements, you must join the credit union by donating to TOArts.

**fee is $10 if you have a direct deposit of $200 or more

5. Navy Federal Credit Union

If you are a current or former military or the family of a military member, then you are eligible to become a member of the Navy Federal Credit Union. This credit union does not use ChexSystems for any of its checking accounts, so if you are a member, you’ll qualify for most accounts.

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Navy Federal may do a soft pull of your credit (usually TransUnion) when you apply for membership.

*$10 on Flagship checking if you don’t meet the required balance

6. Unify Financial Credit Union

The Right Start checking account offered by Unify doesn’t require a ChexSystems pull. The downside is that you can only open this account in person. Unify’s other accounts can be opened online and may or may not require a pull.

Membership at this credit union is open to anyone and free through Freinds of Hobbs.

Learn more: In case you’re exploring more inclusive banking options, our post highlights the top credit unions that anyone can join, simplifying your search.

Other Options for Avoiding ChexSystems

There are banks that don’t use ChexSystems, and even if you have a less-than-stellar ChexSystems report, you can still qualify for a new checking account. You still don’t want to just start applying for any and every checking account out there, as this could negatively impact your ChexSystems report and score.

It’s better to do some research, identify an account you’ll qualify for, and apply for that one.

In addition to exploring the options we listed above, try looking for accounts labeled “second chance or “fresh start”. Also, accounts that don’t come with checks/check-writing are more likely not to use ChexSystems.

You can also look into local banks and credit unions. These smaller institutions might not use ChexSystems and could be more willing to look past a bad report.

The post 15 Banks That Don’t Use ChexSystems (And Credit Unions) appeared first on FinMasters.