Virtual Credit Card – What You Need to Know

credit card rewards

Virtual credit cards have been around in one form or another for years now, but their use has yet to truly take off among consumers.

A crop of new start-ups however, such as Pay With Privacy and Token Payments, are poised to change that.

These two companies may not be household names but perhaps they should be. Both are joining the effort to help consumers beat credit card fraudsters at their game at a time when the list of blockbuster data breaches seems to be growing longer by the day.

For those not familiar with virtual credit cards, they come in various forms but are typically temporary, randomly generated, credit or debit card numbers. Often the numbers link to a real payment account, such as a credit card, debit card or checking account.

In many cases, the cards are designed for a single use. They’re known as “burners” meaning they expire immediately after use (though some can be scheduled to last for up to one year). There are also virtual cards that can be created and locked for use with only a single merchant and virtual cards that allow for setting a maximum charge amount.

The beauty of such cards is that if a hacker gets hold of the information, it doesn’t matter, because the damage that can be done is minimal.

Originally developed to make online credit card purchases more secure, the cards are now also being used with increasing frequency in brick and mortar stores thanks to the rise of mobile wallets such Apple Pay, Google’s Android Pay and more.

Here are the pros and cons that experts say you should keep in mind with this payment technology.

Refunds and Disputes Can Be a Hassle

Most refunds for purchases made with a credit card are made directly to the account that was used for the original purchase, notes Chargebacks911 co-founder and COO Monica Eaton-Cardone.

However, with disposable credit cards that “account” will no longer exist if the purchase was made with a virtual card and the number has already expired.

“That can create headaches for users,” says Eaton-Cardone.

The solution to this issue can range from the merchant in question providing a cash refund to you being required to accept a store credit.

Another issue to keep in mind, said John Buzzard, an industry fraud specialist at CO-OP Financial Services, is that virtual cards offer little consumer protection in the case of a dispute for services not rendered or received. 

Associated Fees

Read the fine print when using virtual credit cards, and understand how they operate including the various fees charged.

For instance, some companies allow you to load money onto the card, explains Eaton-Cardone. But you may be charged a monthly fee if the balance dips below $25.

“There’s a bunch of things they do because they want to make sure you are incentivized to keep money on the card,” explained Eaton-Cardone

Some of the cards have expiration dates, (also noted in the fine print), which can lead to inadvertently allowing the card to expire while there’s still money on it.

Other disposable cards include foreign transaction fees or fees for paper copies of documents that have already been provided.

Verification May Be a Problem – Particularly for Travel Related Transactions

Virtual credit card numbers can certainly be used to book such things as car rentals and hotel rooms online through sites such as Expedia, Orbitz and more. But when you show up to pick up that rental vehicle, you’ll be required to have an actual credit card to swipe.

“With disposable credit cards, the account numbers won’t match,” says Eaton-Cardone.

When booking hotel rooms online with a disposable card, you may be able to request that the property in question charge the cost of the room to the card you used to make the reservation. However, you will still need to present an actual credit card to be swiped upon check-in to cover incidentals. 

Virtual Credit Cards and Mobile Wallet Technology

One of the growth spaces for virtual credit cards is in conjunction with mobile wallet technology such as Apple Pay, Android Pay and more.

A virtual card can be issued instantly, even while standing in line at a brick and mortar store, and some can be delivered to your Apple Pay account, explained Jason Gardner, CEO of Marqeta, a fintech firm that enables companies to issue and manage virtual cards.

The card can be preconfigured with a spending limit instantly, funded, unloaded, suspended or cancelled, all in real time, granting the cardholder complete control.

“These cards create a lot of choice for consumers, different products that fit different constituencies,” said Gardner. “You are seeing a significant decline in private label cards. The growth of these virtual credit card companies is undeniable.”

For the digital obsessed Millennial demographic in particular, it’s an option that is very appealing. If you look at Millennials and the top 50 brands they focus on, there’s not a single bank, or credit card company among the list. Companies like Facebook, Amazon, and Twitter are all taking over, making digital and virtual products more mainstream.

In such a world, virtual credit cards are a natural fit.

“Most millennials are not carrying credit cards now,” said Gardner. “But they all have mobile phones. And the ability to instantly make a credit decision and pay with the mobile phone is beautiful consumer experience and it also generates choice.”

One last downside however, is that mobile wallet payments are still not widely accepted by merchants. But that too may be changing in 2018 and beyond.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly,’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

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10 Places Where Home Ownership is On the Rise

Dallas, Texas cityscape with blue sky at sunset, Texas

For a significant number of Americans, home ownership remains an all too distant dream.

Between record levels of student loan debt, the challenges of squirreling away a down payment and skyrocketing housing prices in many parts of the country, it can be daunting at best to shift from renter to owner.

The U.S. Census Bureau reported in October that as of the third quarter of 2017 about 63.9 percent of Americans own a home. For those 35 and under, the figure is far bleaker, just 35.6 percent.

Home ownership has been on the decline in this country for several years, having peaked in 2004 at 69.2 percent.

A new report from, however, found that there are at least 10 cities around the country witnessing huge increases in ownership – places where the American dream appears to be alive and well.’s data team discovered that ownership is on the rise in the Rust Belt (think Michigan, Wisconsin, Indiana); small cities just outside of major metropolitan areas and also in some bustling southern hubs.

“What’s interesting about this is most of these places are relatively affordable,” said’s Clare Trapasso.

More than half of the cities on the list offer median prices under the national median of $274,492. Here are the cities to keep in mind if homeownership is on your 2018 agenda.

Milwaukee, Wisconsin

A city most famous for its breweries, Milwaukee has experienced decades of economic challenges. However, it is now witnessing a resurgence, reports and that includes the housing market. The current homeownership rate in the city is 68.7 percent, an 11 percent increase over the past three years. The median home price is $224,950.

Charlotte, North Carolina

A bustling southern financial hub, Charlotte’s homeownership rate has increased 10.5 percent over the past three years to its current 62.8 percent. At $327,050, the median home price here however is substantially more than the national median.

Memphis, Tennessee

A city made famous by Elvis Presley, Memphis is affordable by nearly any standard. The median home price $195,050. Over the past three years, homeownership has increased about 9.3 percent to the current 61 percent.

Baltimore, Maryland

Buyers getting priced out of nearby Washington D.C are finding a more affordable alternative in Baltimore, says Trapasso. The homeownership rate is a significant 68.4 percent. That’s an increase of 7.3 percent over the past three years. The median home price meanwhile hovers around $300,000 (30.2% less than in the D.C. metro area.)

Allentown, Pennsylvania

Singer Billy Joel made Allentown forever famous with his song about the city’s economic hardships. Fast forward to 2017 and it seems the city, which is not all that far from New York City or Philadelphia, is experiencing something of rebirth, says Trapasso. The upswing is due in large part to companies like Amazon, Walmart and Nestle moving in. Homeownership has increased 7.3 percent in recent years to an impressive 74.8 percent, far above national rates. The median home price is about $225,000.

Pittsburgh, PA

Pittsburgh is becoming the right coast’s version of Silicon Valley, according to (minus the sky high home prices). Local university grads are being snatched up by tech companies ranging from Google to Uber and Intel, all of which have local outposts. The homeownership rate, now at 74 percent, represents a 7.2 percent increase since 2014. And shockingly, the median home price is well below the national average at just $174,950.

Albuquerque, New Mexico

Think mild climate, affordable homes and an Old Town filled with historic adobe buildings. Those are just some of the attractions in Albuquerque, which has seen a 5.7 percent rise in home ownership in recent years to 66 percent. The median home price here is about $239,950.

Nashville, Tennessee

This legendary music city has also become one of the culinary hotspots in the south. That the city has so much to offer has not gone unnoticed. Home prices have increased a whopping 89 percent since 2012. Still, it remains a place that’s both comparatively affordable and where homeownership continues on its upward path. The average home price is $359,050 and there’s a 68.8 percent home ownership rate, an increase of 4.9 percent over the past three years.

Dallas, Texas

Texas has long been one of the more affordable places to live in the country (There is no state income tax for starters). That affordability has attracted a lot of big businesses. In Dallas, companies have been both moving to the area and expanding. The city’s desirability is leading to increased prices but for the time being the median is $339,950. The current homeownership rate is 60.7 percent, a 4.8 percent increase over the past three years.

Syracuse, New York

One last city to consider for those determined to become home owners, Syracuse’s median home price is the lowest on the list at $149,950. Buyers can even find single-family homes for between $80,000 to $100,000, says All of which is translating into a homeownership rate of 66.5 percent, a 4.6 percent increase since 2014.

If you’re wanting to buy a home and are concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly,’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.


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How Does Student Loan Forgiveness Work?

It's important you understand your student loans, and that starts with learning the meaning of the terms you're likely to encounter in the student-loan worl

The student loan forgiveness process can be murky at best.

Which loans are eligible for forgiveness—federal loans or private loans? And when are they eligible? Should you hire a lawyer to help you with the process of reducing or eliminating your student debt? Can all of your debt be forgiven or just some of it?

These are just a few of the questions faced by those who have mountains of student debt. And just to complicate matters further, there’s a lot of myths and misinformation out there about student debt forgiveness.

To help clear things up, we asked financial experts to walk us through the student loan forgiveness process—and answer some of the most common questions student loan holders have.

What Kind of Loan Do I Have?

When it comes to student loan forgiveness, the first challenge is often determining the source of your loan. It’s not unusual for people to be unsure about whether they have private loans, federal loans, or some combination of both.

Michelle Waymire, a financial advisor and founder of Young + Scrappy, has some advice for people in this situation: analyze your records.

“Most people need to go back and figure out what type of loans they have because a lot of people don’t know the difference,” she says. “And it isn’t necessarily easy to find out because loan servicing companies don’t have a lot of incentive to help you figure out how to get your loan forgiven.”

The easiest place to start is the National Student Loan Data System, which is a database of all federal student loans. This is where you can obtain a list of all the federal student loans you may have, Waymire explains.

If your loans aren’t listed here, they are likely private loans and not federal ones. If you’re seeking loan forgiveness, you should know that according to the experts, the overwhelming majority of student loan forgiveness applies to federal loans.

How Can My Credit Report Help?

After exploring the National Student Loan Data System, the next step is to pull your credit report, says Waymire.

This will allow you to identify any private student loans you may hold. Many sites or services will charge you for a credit report, but you can obtain a free credit report at

Does My Job Make a Difference?

There are two main approaches to loan forgiveness, depending on whether you’re employed in the private or public sector.

As a private sector worker, the road to loan forgiveness is longer and harder. You’ll need to make at least two decades of on-time payments through an income-driven repayment plan before you’re eligible for forgiveness of the remaining debt. However, according to Waymire, “if you still have anything you owe at the end of that period, the balance is forgiven.”

So if you work in the private sector, and you eventually want to apply for loan forgiveness, an income-driven repayment plan is the first step.

What Is Income-Driven Repayment?

There are four types of income-driven repayment plans offered by the federal government. Each is designed to offer some student loan relief during the repayment process.

These include the Revised Pay as You Earn Repayment Plan (REPAYE Plan); the Pay as You Earn Repayment Plan (PAYE Plan); the Income-Based Repayment Plan (IBR Plan); and finally, the Income-Contingent Repayment Plan (ICR Plan).

“Each of these has different characteristics and time horizons for forgiveness,” Waymire explains, but the bottom line is that all of these plans are designed to help those with federal loans whose payments are too high compared to their income. Most federal student loans are eligible for one of the four plans.

Am I Eligible for Income-Driven Repayment?

It’s also important to note that once you’ve participated in an income-based repayment plan for two decades or more, and you can apply for forgiveness, there are no restrictions on the type of job you hold in order to qualify for relief of the remaining debt.

Those wishing to apply for an income-driven repayment plan must complete an application with the Federal Student Aid office of US Department of Education.

Am I Eligible for the Public Service Loan Forgiveness Program (PSLF)?

Public Service Loan Forgiveness is designed for public service workers, or those who work for government organizations at any level (federal, state, or local), as well as those working for 501(c)(3) non-profit organizations. Those employed in the public sector can qualify for the Public Service Loan Forgiveness Program.

However, for your payments to qualify, you must meet certain conditions. This often involves the following:

  • Making payments in an income-driven repayment plan (ICR, IBR, PAYE, or REPAYE)
  • Having only Federal Direct Loans —Perkins loans obtained through your school and older FFEL loans do not qualify.
  • Working full time at a paying job for either the government or a nonprofit

How Can the PSLF Program Help Me?

The advantage of the PSLF program is that with it, loan forgiveness takes far less time for public service workers than it does for private sector workers. In fact, according to Waymire, “You just have to repeat the qualifying payments 120 times, but they don’t have to be consecutive.”

In other words, if for some reason you lose your qualifying government or nonprofit job and eventually you find another qualifying position, the gap in acceptable employment will not count against you. The key is to reach 120 payments total while working at any qualifying job, whether it is one consistent position or various ones throughout the course of your career.

What Kind of Payments Qualify for PSLF?

To get credit for qualifying payments, you must submit documents annually to the Department of Education verifying your income, family size, and employment, says Waymire.

If you want to qualify for this program now or in the future, you must submit an employment certification form as soon as possible. Too often, people wait to complete this form, only to learn the payments they’ve been making on their loans were not qualifying payments.

Qualifying payments, for example, must be on time (or no later than 15 days after the due date) and must be for the full amount shown on the monthly bill, not a percentage or portion of the total. In addition, payments made while your loan is in a grace period, deferment, or forbearance will not count as qualifying.

What Are My Options for Private Student Loan Forgiveness?

If you have private student loans, not federal student loans, then your options are more limited. But according to Joe DePaulo, CEO and co-founder of College Ave Student Loans, “some private loans do include forgiveness,” such as “if the student borrower dies or suffers a permanent disability after taking on the loan.”

However, he adds, complete forgiveness isn’t the only answer for those struggling with repayment. If you’re having difficulty repaying your loans, don’t ignore the problem or assume there are no options. Instead, DePaulo suggests reaching out to loan servicers to discuss your situation and develop a plan to get back on track.

Should I Get a Lawyer?

Unfortunately, most experts agree that an attorney can do little to help with the federal student loan forgiveness process.

“If it’s a federal loan, a lawyer might be able to help you understand the process,” says Galen Bargerstock, founder of Government & Civil Employee Services, “but they’re not going to be able to negotiate with federal government.”

Are Refinanced and Consolidated Loans Eligible for Forgiveness?

Another perplexing hurdle student loan holders often face is the lingering effect of consolidation and refinancing.

If you’ve consolidated student loans in the past, you may not be eligible for loan forgiveness in the future, but it depends on exactly what you consolidated and refinanced and with whom. Those who have refinanced student loans with a private lender, and in the process consolidated or bundled both federal and private loans, lose the ability to later seek forgiveness of the federal loans or even income-driven repayment plans.

Waymire says that “for this reason, it’s best to only refinance if you have high interest rates or you aren’t otherwise eligible for the benefits that federal loans provide.”

Can I Be Taxed on My Forgiven Loans?

If your student loans are successfully forgiven, be aware that your eliminated debt is typically considered taxable income—meaning you’ll owe more in taxes than you otherwise would.

“For example, if your salary is $45,000 per year and you get $35,000 in student loans forgiven, then you’re required to pay income tax on $80,000 rather than on your usual salary,” explains Waymire. “Many people don’t see this coming, aren’t prepared, and end up in debt with the IRS.”

The one caveat here is that for public employee student loan forgiveness, the eliminated debt is not considered income by the IRS, so it will not be taxed.

The big takeaway? If you’re planning on seeking student loan forgiveness, and you’re a private sector worker, it’s worth it to hire a tax professional who can conduct a financial analysis to determine how much money you should set aside for the eventual tax bill.

What Are My Next Steps?

If you’re feeling overwhelmed with your student loans, and you’re interested in student loan forgiveness, you can get started with a free credit report at You can also find more information on student loan forgiveness, including how loan forgiveness may impact your credit score, and some other loan forgiveness programs you may not know about.

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Thinking of Freezing Your Credit? Learn How and When to Talk to a Credit Bureau

credit bureau

Calling a credit bureau can be daunting. First, you have to hunt down the credit bureau’s contact information, then you have to make it through the dreaded automated customer service purgatory to reach an actual person—if it’s even possible to get a live person at all.

“A lot of people are afraid to call credit bureaus because they don’t want to get bogged down in bureaucracy or be on hold for hours,” says Zara Mohidin, co-founder of Fig Loans.

In addition, there’s often confusion about what answers credit bureaus can provide and when it’s important to call a bureau.

To help you wade through all of the uncertainty, we asked finance industry and credit experts to provide some insight on these topics.

Contact Information: Equifax, TransUnion, and Experian

To begin with, it’s important to understand that there are three major credit bureaus, and each is required by law to provide consumers with a toll-free number that’s staffed during regular business hours. The phone numbers for each of the credit bureaus are below:

When to Call a Credit Bureau

It’s a good idea to contact a credit bureau whenever you notice any administrative inaccuracies on your credit report, such as misspelled names, incorrect address information, or erroneous employment information.

Further, if there are credit cards, collections, missed payments, or anything else on your report that you don’t recognize, contacting the credit bureaus is critical.

“Always call the bureaus if you notice a sign of fraud on your credit report,” urges Mohidin, who says one in four consumers have an error on their report that could be pulling their credit score down. “And getting your identifying information correct is important so that you are rewarded for on-time credit payments.”

Under the Fair Credit Reporting Act, credit bureaus must investigate any items you dispute and correct the information if it cannot be verified.

“If you disagree with the results of a credit bureau’s investigation, you can ask the bureau to include a consumer statement (to that effect) in your file and your future reports,” explains Freddie Huynh, vice president of credit risk analytics at Freedom Financial Network. These statements allow you to offer extra explanation, such as why you missed a payment.

Additional Reasons to Call

Keep in mind that correcting inaccuracies with one of the bureaus does not mean it will automatically be corrected by the others. It’s important to review the individual reports of all three credit agencies.

Huynh, who was previously the lead data scientist at FICO, stresses that though information is largely similar across all the credit reporting agencies, there can be variations between the reports.

In addition, when disputing something on your report, the burden of proof is on you, says Greg Oray, president of Oray King Wealth Advisors.

“Gather any documents that may help your case and have them available,” says Oray. “If you’re having trouble working with a representative or the reporting bureau to resolve your case, consider hiring a legal service that specializes in these matters.”

If you’d like to freeze your credit, you’ll have no choice but to speak to a credit bureau.

How to Freeze Your Credit

Understanding what it means to freeze your credit is critical, particularly in light of the recent Equifax security breach that exposed the personal information of millions of consumers. 

A credit freeze, also called a credit lock, is a tool that restricts access to your credit report. Taking this step makes it far more challenging for identity thieves to open new accounts in your name.

“Placing a credit freeze is similar to putting your credit cards in a bowl of water in the freezer—no one can use the credit until you ‘thaw’ it,” explains Andrew Housser, CEO of Freedom Financial Network. “With a credit freeze, creditors cannot see your credit history. If a scammer tries to open credit in your name, the creditor is unlikely to issue credit without knowing the history attached to your name and Social Security number.”

However, it’s important to note that freezing credit requires contacting each of the three credit bureaus separately.

Freezing Credit with Equifax

Equifax provides detailed instructions about how to place, temporarily lift, or entirely remove a freeze on its site.

Consumers may also request a freeze in writing or over the phone. You can request a security freeze by calling 1-800-685-1111 (NY residents call 1-800-349-9960) or submit your request in writing to the following address:

Equifax Security Freeze
PO Box 105788
Atlanta, GA 30348

Putting a freeze on your account, or lifting one, requires some personal information, including your Social Security number, address, and more.

It’s also important to note that as part of initiating an Equifax freeze, you will be provided with a PIN during the process. This PIN will not be emailed to you, so make sure you write it down.

Freezing Credit with TransUnion

You can freeze your credit with TransUnion via its website. TransUnion offers two different services on this front—locking your credit and freezing your credit.

Locking your credit via TransUnion is a process controlled by you, and there is no fee. You have instant, independent control over who accesses your credit information. This approach also means you have online, real-time ability to lock and unlock your account as often as you want.

Freezing your credit file with TransUnion means the credit agency controls who has access to your information. There are fees associated with both freezing and unfreezing your credit with TransUnion. In addition, there is a waiting period for a freeze to be either placed or lifted via this approach.

Freezing Credit with Experian

Experian provides an online form to initiate a credit freeze on its website. You can also freeze your credit by calling Experian at 1-888-397-3742 or sending certified or overnight mail to this address:

Experian Security Freeze
PO Box 9554
Allen, TX 75013

While this bureau doesn’t charge victims of identity theft who’d like to initiate a freeze, there are fees for others seeking to take this step with their credit. The fees vary by state of residence and range from about $3 to $10.

What You Need to Know about Credit Freezes

When initiating a freeze, keep in mind that lenders need credit reports to determine if you’re eligible for credit. After your credit is frozen, no one can pull your credit report. That means it won’t be possible to get approved for a loan or credit card in your name.

Credit freezes, however, do not affect your overall credit score in any way and they will not prevent you from accessing an annual credit report.

While a credit freeze can keep identity thieves from opening new accounts in your name, it does not prevent thieves from using your existing accounts. So it’s important to keep monitoring your credit and accounts.

 The Downsides to Calling Credit Bureaus

Not all experts think calling a credit bureau is the best approach. Don Petersen, an attorney, recommends calling a bureau for only basic administrative questions—such as updating an address or asking if you’re affected by a recent data breach.

For most other issues, Petersen advises his clients to write to credit bureaus or submit disputes online.

“The consumer will not have a record of what was said when they called,” explains Petersen. “Most consumers struggle to understand the system and would be much better served by taking the time to memorialize their dispute in writing and, obviously, save a copy of their letter.”

If you do prefer to call a credit bureau to get to the bottom of a question or concern more quickly, Petersen urges consumers to follow up in writing after the telephone conversation. Include the name of the representative you spoke with in the letter as well as details of what transpired in your conversation.

And finally, send the letter via certified mail with a return receipt requested, Petersen instructs.

“Call with very simple questions,” Petersen says. “But if you’re trying to initiate a dispute, it’s best to do it in writing so that you have a record.”

Keep an Eye on Your Credit

Every now and then, pull your credit report and review it carefully—you can obtain your free credit report at Look for any inaccuracies or other issues in the report, and if you spot something unusual, make a few calls to the credit bureaus. Always investigate suspicious activity on your credit report, and if you’re worried about identity theft, mitigate the issue with a well-placed credit freeze.

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Consolidating Your Debt? Consider These 6 Downsides First

Your next debt collector may never say a harassing thing to you at all. That debt collector might also not be human.

Credit card debt among Americans is at an all-time high.

In June, it increased to $1.02 trillion, according to a report from the Federal Reserve. In other words, Americans now have more credit card debt than just before the 2008 financial crisis.

When facing such massive amounts of debt, it may be tempting to consider consolidation, one of the most popular ways for consumers to cope with mountains of bills. But before making such a move, it’s important to think about the potential downsides and drawbacks—and there are quite a few.

“Debt consolidation is rarely a good option,” says Holly Morphew, a certified financial health counselor. “Those looking to consolidate debt usually don’t understand what it is and are simply stressed about unmanageable debt and looking for a way out of it.”

Among the nuances to understand is how consolidation impacts your credit score, what your new interest rate will be, and what the repayment terms are—particularly when consolidating student loan debt, which can be dangerous, says Morphew.

Here are six of the biggest drawbacks to keep in mind when considering debt consolidation.

1. Transfer Fees

Consolidating credit card debt via a balance transfer to a new card can seem enticing, especially when there are so many 0% APR offers being presented to you at every turn. But Han Chang, cofounder of, warns that nothing is ever free.

“Offers like this usually come with a one-time balance transfer fee ranging from 3% to 10% of the total balance transfer,” says Chang. “That can really add up and, if you’re not careful, completely negate any savings that 0% APR offers.”

2. Government-Backed Program Losses

Another often-overlooked drawback of debt consolidation is the potential loss of government-backed programs, primarily pertaining to student loans. While there can definitely be some advantages to combining all of your student loans, be sure to read the fine print of your new agreement carefully.

In particular, determine whether you’ll still be eligible for common federal government perks.

Morphew says student debt consolidation is actually one of the most risky things to do.

“If you don’t choose the right company, or decide to consolidate federal subsidized loans into a private loan, you can lose those repayment benefits such as deferment, forbearance, and loan forgiveness,” she says.

3. Credit Score Dings

If you are working with a debt consolidation company or a financial institution to combine your bills, the company will likely conduct a hard credit inquiry. While the effects of this inquiry are temporary, says Chang, be prepared to see your credit score drop in the short term.

“If multiple creditors pull reports, your score could drop significantly,” he adds. You can keep an eye on your credit score by reviewing your credit report for free on

4. Unchanged or Increased Interest Rates

Often the goal of debt consolidation is to secure a lower overall interest rate. But that’s not always what happens, says Morphew. You can actually end up paying more because the company giving you the new consolidated loan will average the rates on your debt and round up based on its terms, she says.

In addition, if you have poor credit to begin with, you may not qualify for a lower interest rate, says Amber Westover of

“You may end up paying more for your debt over the course of your consolidation loan,” Westover says.

5. Expensive Debt Consolidation Costs

Debt consolidation companies don’t work for free. Many national companies offering this type of service charge a fee of 15% of the total debt, says Richard Symmes, a consumer bankruptcy attorney.

“This leads the consumer to pay much more than if they had negotiated with the creditor on their own. Many of these fees may even be fraudulent under individual state laws, which cap how much a company can charge for debt consolidation services,” he says. He instead suggests conducting such negotiations with the help of an attorney, who simply charges a flat fee.

6. Increased Overall Loan Costs

One last drawback worth noting: just because your monthly payments may go down under a debt consolidation program doesn’t necessarily mean your overall debt is going down.

“If you consolidate high-interest short-term debt for very long-term debt, then you may actually be paying more,” says financial analyst Jeff White. “For instance, paying $500 per month for one year (which translates into $6,000) is less than paying $75 per month for 10 years (which is $9,000).”

Consolidating could be a smart financial move, or it may just sound like it. To find out if consolidation or another debt management strategy is right for you, visit our Managing Debt Learning Center.

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5 Gig Economy Websites That Help You Make More Money


In the United States, the way people work is dramatically changing.

The proliferation of the gig economy is shifting the American worker’s view of nine-to-five employment and creating endless possibilities for earning extra cash to help pay the bills and make ends meet.

According to a recent analysis of gig economy and workforce data conducted by Nation 1099, about one-third of all US workers did at least some freelance work last year. What’s more, about 11% of all workers are full-time freelancers and about 22% have embraced side hustling or moonlighting.

Giant gig economy platforms such as Fiverr and Upwork may be well known, but there are quite literally hundreds of similar sites, with more popping up every day. A growing number of these sites specialize in offering niche services—ranging from voiceover work to dog walking, engineering, financial consulting, and website development.

“When it comes to freelancing and the gig economy, all signals show it’s growing even larger,” said trends expert and public speaker Daniel Levine, founding director of Avant-Guide Institute. “What’s so great about these sites is they’re bringing together people from around the world. Borders are disappearing. Before you had to be in the same country for an employee and employer to meet.”

Here are five gig economy sites that can help you earn a few extra dollars or provide a springboard to a full-time freelance career.


Phoenix resident Melanie Lewis works at home while she pursues a career in writing. About two years ago, she searched for a way to supplement her writing income and a friend helped her find

Through the site, she makes anywhere from $500 to $1,000 extra each month, by either boarding dogs or offering dog-walking and drop-in services.

“One of my favorite things about Rover is that you set your own rates for the services you offer, so you control what you charge and how much you earn,” said Lewis.

The site, which operates in dozens of cities across the US and Canada, connects dog owners with a variety of services—dog walking, doggy day care, dog boarding, drop-in visits, and house sitting. Note that background checks are required for those seeking to work through the site.

2. Fiverr

Launched in 2010, Fiverr has become one of the gig economy giants. The site has tens of thousands of users who generate steady secondary incomes by offering creative and professional services—everything from graphic design to writing, translation, illustration, and marketing.

Fiverr’s global community of freelancers now includes more than 100 service categories and people doing business in 190 countries.

The site is named Fiverr because the starting price for services is a mere $5, but that’s just a starting point. Advanced sellers can augment their services, charging more money for additional tasks. For example, a copyeditor might charge $5 for editing, but add higher fees for formatting, layout, or rush turnaround.

In addition, the site just introduced FiverrPro, a higher-end initiative that matches curated, talented professionals with those seeking services.

3. Upwork

Previously known as Elance-oDesk, Upwork enables businesses and independent professionals from around the globe to connect and collaborate. It’s another giant in the gig economy. The range of work available through the site is mind boggling—everything from web, mobile, and software development to writing, administrative support, customer service, sales and marketing, and accounting and consulting.

Hourly and fixed-price jobs are available through Upwork. And the beauty of the site is that Upwork processes all payments and invoicing, eliminating the hassle of chasing down clients to get paid through a third-party platform. For hourly jobs, Upwork even offers payment protection, ensuring you don’t get stiffed for any work completed.

4. Babierge

If you have piles of baby gear and toddler toys sitting unused around the house, Babierge is made for you.

Babierge (a combination of baby and concierge) is a sharing economy platform for baby gear. Think of it as the Airbnb for baby gear. The site’s baby gear entrepreneurs rent, deliver, and set up baby gear, games, and toys at hotels and vacation rentals, and then return to pick it up on departure day.

Though you may not have heard of Babierge, don’t underestimate it. It has workers in 82 markets, with new locations added each week.

“When you look at the money you can make at Babierge based on the hours you put in, the pay is about $40 per hour,” said Trish McDermott, vice president of community and communications for Babierge. “Not bad for gig work.”

Some of the site’s most active workers make as much as $700 per month.

5. Efynch

One last up-and-coming site worth noting is Efynch, a platform designed to connect professional and freelance contractors and maintenance workers with jobs.

Operating in Washington, DC, Baltimore, and northern Virginia, Efynch currently has about 3,000 users and plans to expand to at least ten more cities on the East Coast by spring.

“In addition to skilled workers, anyone with a truck is basically a valuable commodity and can easily make $50 or more per hour on our site,” said cofounder Teris Pantazes. “I’ve had some people make more than $5,000 per month on my site as full-timers. Freelance or side workers probably average between $500 and $1,000 if they work a few evenings or a couple Saturdays.”

Modeled after Upwork but tailored to the contractor and maintenance crowd, the site offers a range of gigs, from simple manual labor tasks such as mowing a lawn to far more complex jobs such as carpentry.

Anyone can join the freelance movement. It just takes a little paperwork and planning. If the lifestyle speaks to you, you should fill out a 1099 and be ready to navigate the financial ins and outs of self-employment. Start by getting your free credit report and gain insights into how you can build your credit while you freelance. Embrace the hustle while maintaining a handle on your finances, and you’ll be set up for success.

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5 Things to Consider Before Paying Off Your Student Loan Debt

Credit cards are a super convenient financial tool, but they can often be confusing.

Paying off debt is often a top priority. Not only can too much debt hurt your credit score, it can impact your ability to achieve other important milestones in life, such as buying a home.

But when it comes to student loan debt, obsessing over repayment and devoting every spare penny to paying down balances can actually have negative consequences, particularly when you become so focused on repayment that you ignore all other elements of a sound personal financial plan.

“I’ve seen a number of individuals who have devoted unhealthy amounts of time and money towards paying down their student debt, people who are pinching every penny,” says Michael Lux, founder of The Student Loan Sherpa, a website focused on student loan education, strategy, and borrower advocacy. “You can’t just look at your student loan debt in isolation. You need to consider all of the things that paint the complete financial picture.”

As Lux indicated, there’s a variety of reasons why devoting too much of your hard-earned income to repaying student loans can be an unwise approach. Here are the top five.

1. It’s Not Sustainable in the Long Run

Denying yourself all of the day-to-day extras that you enjoy in order to pay off your student loan is not likely to work forever, says Lux.

“The key to success is making it sustainable for years,” he explains. “First, you have to know yourself. When you make a budget, you have to make a realistic budget. If you’re someone who loves the movies, you have to budget money to go to the movies.”

Another tactic that helps create a more balanced and manageable approach is to create milestone repayment goals for yourself and then reward yourself in small ways when attaining those goals, says Lux. For example, when a loan is half paid off, treat yourself to a fancy dinner. Or, when one loan is completely paid off, find another affordable and meaningful way to indulge in some positive reinforcement. 

2. Retirement Savings Should Also Be a Top Priority

Paying off student loan debt should not come at the expense of getting started on a retirement plan. But unfortunately for some, that’s exactly what’s happening.

“Many people put paying off student loans ahead of retirement saving,” says Ryan Farnung of New York–based GPS Financial. “So while they are saving some interest on student loans, and ultimately freeing up some monthly cash flow, they may also be . . . missing out on the potential to tap into the power of compounding interest.”

Carrying some student debt is all right, says Farnung, if it means using your money elsewhere in ways that will provide a greater long-term benefit.

3. Establishing an Emergency Fund Is Also an Important Part of a Healthy Financial Plan

A sound personal financial plan also includes establishing emergency savings accounts, ideally two separate accounts—one with six months of living expenses and a separate liquid emergency fund.

“Student loan rates are so low right now, under 4 or 4.5%,” says Oliver Lee, owner of Michigan-based The Strategic Planning Group. “So I always recommend my clients pay the very bare minimum. Then, create a six-month or one-year living expense shelter so if something goes wrong when you get out of school or you can’t find a job, you have the money you need. And once you have that, you also need a liquid emergency fund—in case the tires go bad on the car or the transmission goes. This account should have $1,000 to $3,000.”

Those who don’t have such emergency funds are likely to rack up costly credit card debt in order to pay for life’s unexpected expenses. And the interest on a credit card is almost always far more than the interest on a student loan.

“You could have your student loans completely paid off and yet have $10,000 to $15,000 in credit card debt because you had no emergency funds,” says Lee. Making savings a priority can help prevent unnecessary credit card debt.

4. Real Estate Is a Better Investment

Devoting too much money to student loan repayment often leads people to put off other investments that come with valuable rewards of their own. Home purchases are a prime example.

Real estate has historically given returns far above the interest rate of student loans, says Lyn Alden, founder of Lyn Alden Investment Strategy. So it’s beneficial to prioritize building these sorts of investment assets, even if it means keeping low-interest student loan debt around for a while. 

5. Missed Life Experiences

There are many variables to consider when deciding how much money to devote to student loan repayment, but according to Farnung, they revolve around one primary question: what are you giving up today in order to improve cash flow tomorrow?

It’s easy to measure how much it costs to carry student loans by determining how much interest you pay annually and what that looks like after taxes. But what’s far more difficult to measure is the experiences you may miss out on or the opportunities for real financial growth you may be overlooking when focusing solely on student loan repayment.

“If you’re postponing funding and maintaining an emergency fund, contributing to your retirement savings, getting married, buying a home, or any number of other life goals and aspirations, you need to take a step back and really think about what the interest on your student loans is costing you,” says Farnung.

To learn more about smart strategies for managing debt, visit our Managing Debt Learning Center.

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How Changing Due Dates on Your Bills Can Help Shore Up Your Monthly Finances

Student loans are a huge burden but they don't necessarily have to be. It's possible to lower your monthly student loan payment with the right tips.

Nearly every financial adviser stresses the importance of creating a household budget, a practice that helps curtail spending and often prevents expenses from spiraling out of control.

If you’ve already taken this step and continue to struggle with the balancing act between monthly income and expenditures, it can start to feel hopeless. But there’s still hope: another approach to consider is changing the due dates of your bills.

It’s a tactic few people think to implement, but one that can help steady the monthly financial rollercoaster.

“Simply lining up bills with your income allows you to have a lot more control over your finances and where your money is going and when,” said Kyle Whipple, of Michigan-based C. Curtis Financial Group.

All you have to do is call up creditors, utility companies, or any other business in question and request a due date change. Most are willing to work with customers on this issue.

Still not convinced? Here are five ways that taking such action can improve your monthly finances.

1. Spread Big Expenses throughout the Month

Having multiple major bills (like mortgage or rent, car payments, daycare costs, and utilities) due at the same time of the month can translate into a serious cash flow problem.

Rather than be tapped out by paying several hefty bills all around the same time, try shifting the due dates for one or two bills to later in the month, after you’ve received another paycheck or two.

“Sometimes pushing one of those bills to the other part of the month allows you to have more cash flow on both sides of the month,” said Whipple.

2. Clarify Exactly How Much Free Cash You Have

Some people spend blindly—and when bills come due have little money left to pay them. To avoid such a scenario, arrange to have your bills due as close as possible to your payday. This also helps make it clear exactly how much free cash you’ll have to use for other things throughout the month.

“Lining up bills with your payday allows you to get that money out of your bank account as soon as possible, so you know how much money you have left for the rest of the month,” said Whipple.

In addition, rearranging your bills this way, especially when you’re living on a tight budget, ensures that the bills are a top priority, says Dawn-Marie Joseph, founder of Estate Planning & Preservation.

“The closer you can pay the bill to when you receive your paycheck, the better chance the bill will get paid,” said Joseph. “It’s just great discipline for yourself.”

3. Avoid Late Fees, Excessive Interest, and Lower Credit Scores

A 2017 study from the National Foundation for Credit Counseling reported that about one in five people (22%) do not pay their bills on time. And it’s no secret that paying a bill past its due date often involves a penalty in one form or another—whether it’s a late payment fee, an increased interest rate, or a lowered credit score. (You can check your credit score for free on

“When people miss a bill, over time those overage charges or the interest adds up,” said Whipple. “Between that and overdraft fees on your bank account when you don’t have enough money there to cover a bill payment, it can be dangerous.”

Adjusting your bill due dates so that you know exactly when they’re due can help avoid overlooked payments or payments missed due to a lack of sufficient funds.

4. Eliminate Uncertainty about Monthly Due Dates

According to Whipple, most people pay bills when they get a notice that the due date is approaching and have no clue what the actual due dates are each month.

Requesting a specific date that you have decided upon, such as the first or the 15th of the month, eliminates such uncertainty. This helps you remember your due dates and pay those bills on time.

5. Prevent Unnecessary Credit Card Spending

It’s not unusual to reach for a credit card as a stopgap when living on a limited income or when your cash flow has run dry after paying bills. But it’s not a good long-term approach to balancing your monthly budget.

Rearranging due dates can help spread your bills out or align with paydays so that you have adequate cash flow to get by without relying on credit cards.

“If you’re on a single income or a tight budget, making sure you know when you need to pay bills is huge so that you don’t overspend and end up using a credit card,” said Whipple.

How to Request a Due Date Change

Most companies make it fairly simple to change a bill’s due date, even allowing customers to do it online. Many utility companies even call it out as an option on their websites.

“Most people don’t realize you have leverage to call up and ask to change the date,” said Whipple. “It doesn’t hurt to ask. The worst-case scenario is they say no.”

All that’s left now is to implement these tips and take control over your bill payments. Your wallet will thank you.

Image: Jacob Ammentorp Lund

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Earn Frequent Flyer Miles for Refinancing Your Student Loans? You Bet

Get a lower rate plus miles and get flying.

It used to be that rewards points and frequent flyer miles were primarily associated with credit cards. But those days went the way of the dinosaur long ago, and one of the most recent examples of that fact comes in the form of the new partnership between JetBlue and SoFi, a direct lender best known for student loan refinancing.

Members of JetBlue’s TrueBlue program can now earn one TrueBlue point for every $2 of student loan debt refinanced with SoFi. The offer, which caps at 50,000 points and is only available to new SoFi customers, was described by JetBlue as a first of its kind in the airline industry.

While airlines have long been creatively partnering with mortgage lenders, online retailers and others, the student loan market has remained largely untapped.

But with record levels of student loan debt, (the average 2016 graduate has about $37,172 in debt) and millennials putting off travel in some cases because of that debt, this partnership addresses a growing market opportunity.

“Members of the global legacy programs like United and American have been able to earn points for mortgages and other loans for decades, but their rosters of partners do not specifically include an education loan specialist like SoFi,” said Kate Hogenson, who designed loyalty programs for United Airlines and now works as a strategic loyalty consultant at Kobie Marketing. “Airlines have flirted with college and young adult programs in years past, but they’ve been shuttered; United closed down their College Plus program in 2010.”

For its part, JetBlue has been dipping its toe in the financial product space more and more over the past year, beginning with offering points for personal loans through Best Egg. And when looking at the demographics of their customers, moving into the student loan arena made sense, said JetBlue’s Director of Loyalty, Scott Resnick.

“We see this as a great opportunity for customers who have student loans to refinance them while doing something that benefits them in another part of their life,” said Resnick. “Any time there’s an opportunity for customers to earn points doing something they would be doing otherwise in life, there’s natural tendency to look for partnerships there.”

The other part of your life that benefits of course, is your travel habit. Here’s what you need to know about the offer.

The Fine Print

The program doesn’t have a lot of hidden details. There are no blackout dates for using the miles earned through the refinancing offer, and no expiration date either.

In addition, there’s no application or origination fee for refinancing through SoFi, officials said.

“You can apply for free in fewer than 20 minutes,” said SoFi’s Catesby Perrin, vice-president of business development. “Our borrowers save an average of $22,000 over the life of their loan.”

SoFi offers various refinancing options, including both fixed and variable rate interest and loan terms of five, seven, 10, 15 and 20 years.

The Drawbacks

There seem to be few downsides to the JetBlue offer. But there are some basic considerations to keep in mind.

“JetBlue’s route system is limited to the U.S., the Caribbean, and select destinations in Latin America,” said Hogenson. “You have to be in a major JetBlue city for this to make sense.”

Hogenson suggested visiting JetBlue’s website and researching the number of points needed to travel to a city you’re interested in visiting, to help determine whether this offer makes sense for you. And while perusing the site, spend some time reviewing the route you may have to travel on JetBlue to get to where you want to go.

“To get from New York to Las Vegas, you might find yourself routed through Fort Lauderdale,” she said.

Should You Refinance Student Loan Debt in Pursuit of Frequent Flyer Miles?

Obviously, you should never make student loan refinancing decisions based solely on earning frequent flyer miles. A serious financial decision like this should still be approached with the same amount of research, caution and common sense you would use otherwise.

“You should make your refinancing decision based on saving the most money, meaning finding the lowest interest rate,” said Brandon Yahn, founder of the website Student Loans Guy. “Additional perks like miles are great, but shouldn’t be the driving factor in which lender you ultimately choose, unless all else is equal.”

Put another way, student borrowers should look beyond the sparkle of free flights and focus on the student loan consolidation product itself, said Hogenson.

Qualifying for Refinancing

One last important point to keep in mind, in order to qualify for any refinancing program, it’s critical that you have a good credit score, have a history of paying your bills on time and have a solid, steady income. If you don’t know where your credit stands, you can get your two free credit scores on

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