Honeydue App Review: A Way to Help Couples With Their Finances?

iStock

Honeydue is an app intended to help with one of the most common sources of conflict in relationships: money.

According to a study by SunTrust bank, finances are a major point of stress and conflict in relationships. The study goes on to say that couples with different money personalities — spender versus saver, for instance — must grapple with even more stress, but communication can lessen the impact of the differences.

Eugene Park, co-creator of the money management app, found that managing finances with his fiancee after she moved in was painful. The pair were using totally different tools to track and manage their finances from day to day. Eugene’s co-founder, Thien Tran, was going through the exact same thing at the same time with his fiancee.

That’s when the idea for Honeydue was born. It officially launched in August for 2017, and the user base has been growing every since.

Through Honeydue, couples can share information like bank accounts and bills to limit confusion and miscommunication around their finances. The app aggregates information like bill payments and transactions via bank feeds to help couples get a true picture of their combined (or separate) finances in real time.

It’s true that there are a lot of financial apps out there that offer similar services — Mint, YNAB and Personal Capital, to name a few. But Eugene insists that Honeydue isn’t just a financial app.

“We think of ourselves as a collaborative tool first and a financial tool second,” he says. “The goal is to create a collaborative environment for couples to develop both financial habits and literacy together.”

The creators of the app noticed that there’s asymmetry among couples when it comes to money. Usually only one partner manages the finances. When this happens, the other partner may feel as if he or she lacks of firm grasp of where their earnings are going, setting the stage for conflict.

For this review, MagnifyMoney decided to put Honeydue through a true stress test — my husband and I used the app for two weeks straight to see if actually helped us manage our money better.

What I liked about the Honeydue app

After having used the app for some time, what stands out most is the convenience of having all bills and accounts in one place.

If you are the kind of person who likes to stay on top of your entire financial situation at a glance, this app does the job. To me, it’s like having a financial health assistant that scans all your accounts and gives you updates like these:

If you’re a busy person and want to stay on top of your finances, but can’t check every account daily, then Honeydue works. Indeed, it works even for the person not managing money with a significant other.

But once you do add a partner, things get interesting. You both can see everything that’s happening in the world of money that affects you as a couple.

For example, I was able to add a brokerage account that my husband can now see updated daily. Once he sees it, it’s a constant reminder that investing is a worthwhile activity with real returns. It’s more motivation to curb our spending and attempt to save and invest more when the numbers are there, at our disposal and updated in real time.

I also like the idea that we both can see all bank account balances and transactions. If I know that my husband will see my financial life and potentially question my spending or account balances, I’m more apt to “behave” and think a little more about my spending choices. The extra layer of accountability is a welcome change for me.

The alerts, notifications and email updates from the app serve as prompts to help us discuss finances with some regularity. There are many times I want to talk about finances and financial decisions with my husband, but it simply slips my mind. Honeydue reminders help make money discussions happen more frequently.

To me, the app sets the stage for a healthy financial relationship for couples struggling with money: Transparency, collaboration and communication are all improved with use.

What I didn’t like about Honeydue

The concept of the app itself is amazing. The execution is pretty top-notch, too. The app didn’t seem to be buggy or prone to inexplicable crashes.

Still, I noticed a few things.

The first issue: how the app interacts with institutions that use two-factor authentication. Many bank protocols ask different security questions or require you to re-authenticate with security codes if a connection needs to be refreshed.

However, I’ve used other apps with the same issue. So I am not sure there is a way around this. It’s a safety measure that I welcome to keep my data secure. However, it’s usually barely noticeable and just takes a few moments to correct.

Further, the transaction history for all accounts only goes back a couple of months. Again, not a super big deal, but something I did notice.

Finally, the budget categories are not that extensive and you could potentially spend a lot of time recategorizing transactions it does assign. That is to say, right now the budget categories are not “smart.” They don’t “learn” from the updates you make to transactions like most financial softwares and apps. Eugene says that the development road map does include plans to make the budget categories more automatic once you edit them.

The Complete Magnifymoney Honeydue App Review

  • What is Honeydue?
  • How do you sign up?
  • Fees
  • Benefits
  • Who should consider using Honeydue?
  • App drawbacks

What is Honeydue?

Honeydue allows couples to share financial information, but the partners can select what that information is and the level of detail that is included. So if one person has a bank account he or she doesn’t want visible to a partner through the app, it’s possible to choose not to share those banking details or give a limited view of them (“balance only”).

Here are some additional capabilities of the app:

Track balances

Couples can see all bank balances in one place in the app. They can track both credit card and bank balances, along with individual transactions related to each account. Transactions and balances are updated in real time so there’s always a complete, accurate snapshot of where these accounts stand.

The nice thing about this feature: that ability to choose which accounts your partner can see and at what level of detail. Eugene says many partners feel like it isn’t necessary to share at the transaction level. In his words, “trust doesn’t always mean transparency.” According to a 2014 poll in the magazine Money, surveying more than 1,000 married adults, 55 percent of respondents said finance arguments in their relationships were over purchases. This is exactly why Honeydue built these privacy features into the app.

Categorized spending

This feature allows a couple to see how all of their money is spent. As transactions are completed and updated in the app, Honeydue gives them a category: cash & checks; family & pets; getting around; gifts & charity; miscellaneous; personal & wellness; home & utilities; food & drink; trips & occasions; shopping & fun. If the app assigns a category incorrectly for a transaction, it can be fixed with a quick edit.

Secure banking

Honeydue uses military-grade encryption.

Share expenses

You can share expenses with your partner using Honeydue. Once a transaction appears in your bank feed, you can mark it for sharing and add comments. The app will send the share notification to the partner, as well as periodic reminders to settle up a balance owed with his/her mate.

Bill reminders

You can enter bill due dates and amounts with Honeydue. It will keep a running log of coming bills, so they are not lost in the shuffle of life. In the Settings areas of the app, you can create push notifications for bills as well.

How do you sign up for Honeydue?

The sign-up process is extremely simple. After downloading the Honeydue app for iOS or Android devices, you’ll open the app and enter information it will use for your account settings. Then, you’ll enter your partner’s information so he/she can receive an invite to join the app and view all of your combined financial information.

The rest of the process involves connecting your bank account and setting up bill reminders. The app connects with most major banks. You can even include a PayPal account in your bank feed.

Honeydue fees

At the moment Honeydue is totally free to use for both partners.

There is an “offers” tab in the app where you can apply for credit cards and explore bank new accounts. The app also allows you to look for deals on things like Hulu, Starbucks and Gobble. All the categories in the offers tab include bank accounts, credit cards, loans & insurance, savings and investments and money savers.

According to Park, this monetization model will remain in place to keep the app free to use.

Who should consider using Honeydue?

As my husband and I found, Honeydue gives couples a springboard for constant discussions about money. It gives them practice with communicating, negotiating and saving in money conversations they may not otherwise have.

Final words

Honeydue is another app in the sea of fintech innovation. There are so many tools out there that it might be difficult to add another to the mix for couples already overwhelmed with financial issues.

However, the branding and features that cater to couples can’t be underestimated. When was the last time you were able to stamp bank transactions with a smiley face or a comment for your partner to see? Honeydue let’s you do just that. For the price (free), I think it’s at least worth a try.

The post Honeydue App Review: A Way to Help Couples With Their Finances? appeared first on MagnifyMoney.

BB&T CD Rates and Review

Trying to find BB&T CD rates
Source: iStock

As you may know if you’ve done a search for BB&T CD rates, their website is not a helpful place to turn for information. Beyond a basic overview of their CDs on their website stating that they have CDs with terms ranging from seven days to five years, they do not give details on their current rates. BB&T did not respond to email and phone inquiries from MagnifyMoney asking why the bank does not publish its CD rates online.

When we called their customer service number, a representative said BB&T’s CD rates change on a daily basis and said the best way to learn about CD rates is to call or visit a local branch.

So that’s what we did.

We called BB&T branches on Oct. 3 and, on the same day, compared their CD rates to other banks and the national averages. After conducting this research, it’s not surprising BB&T makes their CD rates hard to find — they’re terrible.

BB&T CD rates and products

BB&T offers CD terms ranging from as short as seven days to as long as five years. They have eight CD options, each with different investment goals.

7-day to 60-month

For short-term investments, BB&T offers CDs ranging from seven days to 60 months. These personal CDs offer a fixed rate of return along with the flexibility to focus on developing either a short- or long-term investment.

BB&T CD Term

APY

Minimum Deposit Amount

3 Months

0.03%

$2,500

6 Months

0.05%

$2,500

1 Year

0.10%

$1,000

18 Months

0.15%

$1,000

2 years

0.20%

$1,000

3 Years

0.40%

$1,000

4 Years

0.45%

$1,000

5 Years

0.50%

$1,000

Rates as of Oct. 3, 2017

Not only can you find better CD rates at other banks and credit unions for each of the terms BB&T offers, you can get those better rates with smaller minimum deposits. BB&T’s offerings are far from the best in every term length above — you can see some of the top options in our monthly roundup of the best CD rates.

With the seven-day to 60-month BB&T CDs, there are no penalty-free options for withdrawing your funds prior to the CD reaching maturity. The early withdrawal penalty is the lesser of $25 or 12 months of interest for longer-term CDs. So with smaller initial deposits, early withdrawal penalties will negate any interest you may have earned.

Can’t Lose

As the name of this CD implies, whether rates go up or down, you can’t lose. Well, actually, you can: The APY is so low, you’re almost certainly going to lose money to inflation.

At the 12-month mark of the CD’s term, you may make one withdrawal without paying any fees. So if the market rate is higher than what you’re currently getting, simply withdraw the money and reinvest at the higher rate.

If, however, the interest rate you’re receiving is better than what’s currently available, you also have the option of making a second deposit into the Can’t Lose CD, up to $10,000. This locks in the rate for the new investment amount for the remainder of the term. So whether rates go up or down, you’ll lock in the higher rate.

CD Term

APY

Minimum
Deposit Amount

Withdrawal
Penalties

30-month "Can't Lose"

0.25

$1,000

No penalty for one
withdrawal after 12 months

As of Oct. 3, 2017

Still, you can find many CDs with better APYs than BB&T’s Can’t Lose, whether you’re looking for a 12-month investment or longer.

Stepped Rate

Laddering is a way to stagger your CD investments so you’re able to take advantage of increasing rates. With the Stepped Rate option from BB&T, laddering is built into the CD product. The initial CD starts out at a lower rate and increases each year. For example:

Months

APY

12

0.30%

24

0.40%

36

0.55%

48

0.75%

As of Oct. 3, 2017

This product also allows you to make an additional deposit each year (up to $10,000). So if the interest rate you’re receiving is better than the market, you can invest more money into your existing CD to make a higher return. But if the current CD market is offering better rates than your existing CD, you can simply take advantage of that offer and still make a higher return.

In addition, you may make a withdrawal from what you initially deposited into your Stepped Rate CD after two years. So, again, if the market changes dramatically, you may withdraw your money with no penalty and reinvest in a better option.

Or you could create a CD ladder on your own, choosing CDs with better rates than BB&T’s — higher rates are certainly available.

Add-on

The Add-on CD option from BB&T offers a 12-month CD at 0.10% and an opening deposit of $100. You’ll need a BB&T checking account and a $50/month automatic deposit from your checking account into the CD. To get a personal account, you’ll just need to set up direct deposit or maintain a $1,500 balance.

CD Term

APY

Minimum
Deposit Amount

Withdrawal
Penalties

12-month Add-on

0.10%

$100

Greater of $25 or
6 months’ interest

As of Oct. 3, 2017

Home Saver

If you’re in the market for a new home, and you want to earn a little more interest on the money you’re saving, consider the Home Saver CD. Starting with as little as $100, you’ll be able to deposit money earmarked for your new home every month and earn 0.40% APY. With this CD, as long as you’re withdrawing the money for use toward the purchase of your new home, you won’t pay any penalties for the withdrawal. But you will need a BB&T checking account set up for a monthly deposit of $50 into your Home Saver CD.

CD Term

APY

Minimum
Deposit Amount

Withdrawal
Penalties

36-month Home Saver

0.40%

$100

No penalty for
home purchase

As of Oct. 3, 2017

College Saver

Similar to the Home Saver CD, the College Saver CD is meant for parents or students saving for college. It offers the benefit of starting at a higher APY (0.40%) with the flexibility of withdrawing the money up to four times per year to pay for the cost of attending school. As with the Home Saver, you’ll need to have a BB&T checking account with an automatic monthly deposit of $50. The College Saver offers terms of 36, 48, and 60 months.

CD Term

APY

Minimum
Deposit Amount

Withdrawal
Penalties

36-month College Saver

0.40%

$100

No penalty for
school costs

48-month College Saver

0.45%

$100

No penalty for
school costs

60-month College Saver

0.50%

$100

No penalty for
school costs

As of Oct. 3, 2017

Treasury

This CD offers the ability to make additional deposits of at least $100 into your CD at any time and one monthly withdrawal without penalty. The CD has a six-month term with a variable interest rate tied to the U.S. Treasury Bill — if the rate goes up, you’ll make more money, but if the rate declines, you’ll make less. Right now, rates start at 0.05% and adjust quarterly. Throughout 2016, Treasury Bill rates increased almost every month and have continued to rise in 2017, reaching 1.035% in August. So this is a great option if you have the $5,000 minimum deposit amount and want a short-term investment with the option to add or remove funds from the CD.

CDARS

CDARS stands for Certificate of Deposit Account Registry Service and protects your principal and interest by making sure your money is placed into multiple CDs across a network of banks to keep your CDs insured by the FDIC (maximum limit for each CD is $250,000).

Other things to know about BB&T CDs

Does BB&T allow customers to take advantage of rising rates once they’ve opened a CD?

BB&T has two CD options that allow you to take advantage of rising rates: the 30-month Can’t Lose CD and the 48-month Stepped Rate CD. Both allow you to make a withdrawal before the CD comes to maturity in case rates increase (terms apply). They also allow additional deposits in case rates drop and you want to invest more at the existing rate of your CD. However, the current rates on those products are very low, negating the value of their flexibility.

About BB&T

BB&T (Branch Banking and Trust Co.) is a North Carolina-based bank with locations in 16 states and the District of Columbia, including Alabama, Florida, Georgia, Indiana, Kentucky, Maryland, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington and West Virginia.

BB&T offers a mobile app for both iOS and Android. While their website is easy enough to use, finding specific information, particularly about rates, is impossible. Their customer service number isn’t much help in that regard either, with most questions answered with a suggestion to visit a branch location. As a result, if you don’t live in an area with a branch, we don’t recommend using BB&T’s CDs. To find the BB&T branch closest to you, use their branch locator.

Pros and cons of CDs

A certificate of deposit (CD) may offer a higher return than you’ll get with your savings accounts, without the risk of loss that accompanies other investment options with higher return rates. The drawbacks associated with CDs are the inability to access your funds during the term of the investment without suffering a penalty and the risk of interest rates increasing while your money is locked into a CD for a specified term.

The bottom line: Are BB&T CDs right for you?

BB&T does offer some flexible deals to its customers, but in general, better CD rates can be found at both banks and credit unions with comparable terms. You can find them on our list of the best CD rates, which we update every month.

The post BB&T CD Rates and Review appeared first on MagnifyMoney.

PayPal Launches a 2% Cash Back Rewards Card: Double is the New Rewards Standard

Source: iStock

PayPal’s new Cashback Mastercard, launched Aug. 30, is packed with features that pin it head to head with the current highest no-fee flat-rate cash back credit card on the market.

The PayPal Cashback Mastercard® is a no-fee rewards card that offers users a flat 2 percent cash back upfront on all eligible purchases made using the credit card. The offer is a step up from the current leading cash back card, the Citi® Double Cash Card, which credits 1 percent upfront and another 1 percent on what cardholders pay off each billing cycle.

The digital and mobile payment company partnered with Synchrony Bank to launch the Cashback Mastercard, which grants users benefits exclusive to PayPal and Mastercard members.

Although it boasts a generous cash back offer, the PayPal Cashback Mastercard® has its drawbacks.

“The 2 percent cash back rate is a solid offer. But the PayPal Cashback Mastercard® falls short in three main ways: no sign-up bonus, high APR and no 0% introductory period,” says Chris Mettler, president of our sister site CompareCards.com.

How the PayPal Cashback Mastercard® works

PayPal is clearly targeting PayPal users with this new cash back rewards card. The application for PayPal’s new credit card is only open to existing PayPal customers. Access to the application is granted after users submit a username and password to log in to a PayPal account.

They are then redirected to an application on the Synchrony Bank website. After filling in sensitive information, applicants have the option to set the card as a default payment option in their PayPal wallet and purchase Synchrony Bank’s card security program before submitting the form.

If approved, customers are charged one of three variable interest rates — 16.99%, 24.99% or 27.99% — based on creditworthiness and other factors like income. PayPal doesn’t charge cardholders an annual fee.

Cardholders can earn an unlimited, flat 2 percent cash back on all eligible purchases made using the PayPal Cashback Mastercard®. The cash back rewards are credited directly to the user’s digital wallet on PayPal. The money stored on PayPal wallet can be used to make purchases where PayPal is accepted, sent to peers, or cashed out to a bank account.

Cardholders don’t need to wait for a physical card to show up in the mail before they can start earning rewards. Users have immediate access to the line of credit through their PayPal account. PayPal’s Cashback Mastercard will show up right away in their PayPal wallet, where it can be used to make purchases or pay bills online.

How to qualify for the PayPal Cashback Mastercard®

Borrowers with good or excellent credit scores are most likely to qualify for the PayPal Cashback Mastercard, but those working to better a poor credit score may qualify for a card, too.

Applicants are approved for one of three interest rates, based on creditworthiness and other factors. The lowest rate, 16.99%, is offered to applicants with the best scores, whereas the highest rate, 27.99%, is reserved for applicants who are a greater credit risk.There is a 24.99% APR that’s likely to go to anyone that falls in between.

What we like about the PayPal Cashback Mastercard®

2 percent cash back on all eligible purchases

PayPal’s Cashback Mastercard® is now the highest, no-fee rewards card on the market. The 2 percent cash back feature is the greatest value to credit card users who want a simple, straightforward way to earn rewards. This cash back card is ideal for users who make most of their everyday purchases on a credit card and pay off the card’s balance each month.

Cardholders will get 2 percent cash back on all eligible purchases made at Paypal.com, eBay.com and anywhere Mastercard is accepted using the PayPal Cashback Mastercard®.

Automatically added to PayPal Wallet

The credit card is automatically linked and added to the PayPal wallet, a digital wallet that lets users pay for purchases online with linked bank accounts, credit and debit cards, or money on the account balance. That means users opening the card to make a purchase can gain access to the line of credit and earn rewards for spending right away.

Redeem cash rewards to PayPal balance

To use any cash back earned, users must transfer the money to their PayPal balance. Once in the digital wallet, that money can be used to complete online purchases, pay bills, or send money to peers all over the world.

No cash back restrictions

PayPal doesn’t cap the amount of cash back users can earn or set a minimum on the amount of cash back a user can redeem. Plus, cash back rewards won’t expire, so users aren’t pressured to use the money or lose it by a certain date.

Mastercard benefits

PayPal Cashback Mastercard® users also gain exclusive Mastercard cardholder benefits. They include doubling the length of warranty coverage on purchases up to one year, 60-day price protection, and Mastercard’s identity theft protection service.

What we don’t like about the PayPal Cashback Mastercard®

For PayPal customers only

You must have a PayPal account in order to apply for a PayPal Cashback Mastercard® account and keep the account open to maintain the credit account.

If your PayPal account is closed, or you unlink the card from your PayPal account, your card account will be closed. If you have cash back available, you won’t be able to redeem those awards, and they will be forfeited.

If your PayPal account is suspended for any reason, you won’t be able to redeem cash back to your PayPal balance until the account is back in good standing.

No sign-up bonus

The PayPal Cashback Mastercard® misses an opportunity to offer users even more value by omitting a sign-up bonus. If users are looking to earn a boost in credit rewards after a few months of use, they may have more luck with a cash back card like Chase Freedom®, which offers 1 percent back on all purchases and a $150 signing bonus after cardholders spend $500 in the first three months the account is open.

No interest-free period

The card’s benefits also exclude an interest-free period. So while users can make a purchase with the line of credit immediately after opening the account using the PayPal wallet, they should avoid making large purchases as interest will begin to accrue right away.

Credit users should instead use a credit card with an interest-free period like the Discover it Cash Back® credit card, so they have more time to pay off the balance of the purchase before interest kicks in. The card offers an 0% introductory APR for 14 months on purchases and balance transfers.

A high APR

Cardholders should be careful not to carry a balance on this card to avoid getting hit with interest charges. For borrowers with a poor credit rating, the card charges a super high 27.99% APR, which trumps any 2 percent cash back earned that period. To avoid paying interest and make the most of the Cashback Mastercard, cardholders should make sure to pay off the card balance each period.

3 percent foreign transaction fee

It costs cardholders 3 percent to swipe the PayPal Cashback Mastercard® overseas. Even with 2 percent cash back, users end up paying 1 percent to make foreign purchases.

Who the PayPal Cashback Mastercard® is best for

The PayPal Cashback Mastercard® is best for existing PayPal customers who want a straightforward way to earn cashback on all of their everyday purchases.

If a cardholder is a heavy online shopper, the Cashback Mastercard may also be a good choice because they can easily earn cash back from using the card as a payment option when they pay online using PayPal, then credit the cash back to their PayPal balance for future purchases.

PayPal Cashback Mastercard<sup>®</sup>

LEARN MORE Secured

on PayPal’s secure website

Alternatives to the PayPal Cashback Mastercard

PayPal Extras MasterCard

If you prefer to earn credit card rewards in points instead of cash back, you can apply for PayPal’s other no-fee credit rewards option, the PayPal Extras MasterCard®. This card has a traditional points reward structure. It awards cardholders three times points on each dollar spent at gas stations and restaurants, double points on purchases made through PayPal or eBay, and one point per dollar spent everywhere else.

Unlike the cash back card, rewards earned on the PayPal Extras Mastercard expire® within two years if unused or if no purchases are made using the card for one year.

Citi® Double Cash Card

PayPal’s 2 percent Cashback Mastercard is only for PayPal account holders. If the benefits and 2 percent cash back upfront aren’t enough to rope you into creating a PayPal account, the Citi Double Cash Card® is a good alternative.

The card rewards 2 percent cash back on all purchases, but not all at once like PayPal’s Cashback Mastercard® does. Cardholders earn 1 percent cash back when they spend, and then 1 percent cash back when they pay, instead of awarding the entire 2 percent upfront. The Citi® Double Cash Card also omits an interest-free period for purchases and a sign-on bonus. However, it does offer a 0% introductory 18-month balance transfer.

PayPal Cashback Mastercard® FAQ

Cardholders receive 2 percent cash back on all eligible purchases made at Paypal.com, eBay.com and anywhere Mastercard is accepted using the PayPal Cashback Mastercard®.

No, cash back rewards don’t expire and can be redeemed to your PayPal balance at any time.

If you are unable to pay off your statement balance in full, you will be charged a variable interest rate of either 16.99%, 24.99% or 27.99% on purchases made in the billing period and be required to make a minimum payment.

Cardholders can redeem cash back by transferring the cash back balance to their PayPal account balance. The funds can then be used to make purchases anywhere PayPal is accepted or transfer money to peers using PayPal.

Use a cash back credit card that fits your day-to-day spending needs best, pay your bill in full each month, and spend only what you can afford to pay off.

The post PayPal Launches a 2% Cash Back Rewards Card: Double is the New Rewards Standard appeared first on MagnifyMoney.

Should You Use CareCredit to Pay for Medical Expenses?

Source: iStock

It’s no secret that medical expenses can be very costly in the United States. Since 2011, average family insurance premiums, even for people with employer-provided plans, have increased by 20 percent.

With out-of-pocket health care costs and insurance premiums skyrocketing, many people are turning to credit cards designated for medical expenses like CareCredit to help them pay for health care expenses over time.

But before you sign up for CareCredit to cover your next medical bill, here’s what you need to know.

A warning about those 0% financing offers

CareCredit is a credit card you can use at any of more than 200,000 health and wellness providers in the United States — from doctor’s offices to drugstores like Rite Aid.

Why turn to CareCredit instead of a regular credit card for medical expenses?

The biggest draw is the company’s frequent 0% financing specials for six to 24 months on qualifying purchases $200 or more, when you make the minimum monthly payments and pay the full amount due by the end of the promotional period.

The opportunity to put approved medical expenses on a 0% credit card and breathe easy for up to two years has huge appeal. But there’s one big caveat everyone should understand when it comes to CareCredit — deferred interest.

When you sign up for the CareCredit financing on a purchase of $200 to $999, deferred interest rate applies. This means that if you don’t have the full purchase paid off by the end of the promotional period, you will be charged retroactive interest at an APR of 26.99% from the date of your original purchase on the card. (We give an example of how the math works out below.)

Unfortunately, this is something customers could easily forget about, and it doesn’t help that the minimum monthly payment shown on your statement isn’t necessarily enough to get the entire balance paid off on or before the end of the special financing period. You should do the math yourself to make sure you’re paying enough each month to make the most of interest-free financing.

How CareCredit works

Now that you understand the risk that comes with a CareCredit account, let’s cover some of the details of what the company offers.

For larger purchases of $1,000 or more, CareCredit offers terms of up to 60 months with a reduced APR and fixed monthly payments until paid in full.

$200 to $999: Borrow at 0% for 6, 12, 18, and 24 months. Variable rate of 26.99% applies after promotional period ends.

$1,000 to $2,499: Borrow at 0% for 24, 36, or 48 months with an APR of 14.9%.

$2,500 and up: Borrow at 0% for 24, 36, 48, or 60 months with an APR of 16.9%.

How to apply

You can apply online on the CareCredit website or by phone at 1-800-677-0718. You can also apply at most health care providers’ offices if they are part of the network that accepts CareCredit to pay for services.

Like most credit card applications, you will need to supply your name, address, date of birth, Social Security number, net income and housing information. But unlike most credit card applications, you will also need to specify your doctor’s name and how you plan to use your CareCredit credit card if you aren’t applying in a doctor’s office. Once approved, you can use your CareCredit credit card again and again at participating health care providers.

CareCredit approvals are usually immediate, so you can find out right away if you can pay for your medical services with CareCredit. Synchrony, the bank that issues CareCredit, did not respond to phone and email requests for information on the credit standing needed to qualify for CareCredit.

What can CareCredit be used for?

As mentioned earlier, there are more than 200,000 enrolled providers that accept CareCredit in the United States. These include many different types of medical and health care providers and procedures, such as:

  • Chiropractic
  • Cosmetic
  • Dentistry
  • Hearing
  • LASIK and Vision
  • Primary and Urgent Care
  • Weight Loss
  • Health Care Specialists

You might even be able to use CareCredit to pay for veterinary care for your four-legged family members, if your veterinarian participates and accepts CareCredit in their office.

Fine print alert

While there’s no application fee or fee for using the special financing offered by CareCredit, there are still some things you need to watch out for.

The first, which we covered previously, is the high interest rate charged if you don’t pay your balance off in full by the end of the promotional period. The interest rate of 26.99% is very high, and as mentioned, it will be charged in arrears from the time you made your purchase.

For example, if you charge $1,200 to your CareCredit at 0% for six months and only pay the minimum payment each month (between $39 and $33), your balance will be $982 at the end of the six-month period, plus accrued interest of $152, totaling $1,134. If you continue making only the minimum payment, it will take you 96 months (eight years) to pay off your balance and cost you $2,693. However, if you paid $200 a month, you’d pay off the $1,200 bill within six months at no extra cost.

Source: CareCredit

The late payment fee for CareCredit can be up to $38. Plus, paying late even once may result in you losing your promotional 0% interest rate.

Who is CareCredit best for?

Because of the fact that CareCredit will charge interest from the time of your purchase if your balance is not paid in full by the end of a promotional period, the only time you should use CareCredit to finance your medical costs is if you are 100 percent certain you can pay it off within or before the end of that time frame.

This might be a good idea if you have already saved up the cash for a medical procedure and you can continue earning interest on it in your savings account. By earning interest on your savings and paying 0% interest with CareCredit, you can actually save money on your medical bill. This could still be risky: You never know if something might happen that could cause you to no longer be able to afford to pay off your CareCredit balance as you had planned.

Alternatives to CareCredit

Ask the billing department for a payment plan

Many health care providers offer patients no-interest payment plans, but you may not know about it unless you ask. Tell the billing department what you can afford to pay monthly and see what your options are for spreading out the cost of your treatment.

Use your emergency fund

If you know you incur a lot of medical bills or don’t want to rely on credit when they come around, make saving for medical expenses or adding to your emergency fund part of your regular budget. That way, if an emergency happens, you’re much less likely to go into debt paying for it.

Open a credit card with 0% financing for purchases or balance transfers

There are many credit cards available with 0% interest rates from six months to 21 months that don’t require you to pay off your purchase in full to avoid interest from back when you first made the purchase. Even if you can’t pay off the entire purchase before the end of the 0% interest period, you could try doing a balance transfer to keep your interest rate low, but even if you leave your balance on that credit card, it probably has a lower interest rate than the 26.99% offered by CareCredit. Here are some of your best options for a 0% credit card.

Take out a personal loan

If you can qualify for a personal loan with a low interest rate, you’ll have fixed monthly payments, and you may be able to extend them longer than the terms offered by CareCredit. We’ve rounded up some of the places you can get the best personal loan rates online, and you can read about them here.

Don’t get caught at the checkout counter at your doctor’s office and end up making the wrong decision. Make sure you’ve carefully considered your options before you decide if you want to sign up for CareCredit to pay for your medical costs.

The post Should You Use CareCredit to Pay for Medical Expenses? appeared first on MagnifyMoney.

FS Build Card Review: Build Credit With This Payday Loan Alternative

Source: iStock

Credit cards for people with poor credit scores are few and far between, but FS Card is looking to change that with its first product, the Build Card, an unsecured credit card designed specifically for borrowers with subprime credit scores.

If you’re in need of a couple of hundred dollars and your credit score falls below 600, you’re not likely to get approved for an unsecured credit card. You’re considered a subprime borrower — a lending risk to banks, who worry they won’t get their money back.

But when banks refuse to lend to risky borrowers, those consumers turn to more expensive short-term borrowing options like payday loans, auto title loans, and pawn products. Annual interest rates on those products often exceed 300%, according to research from the Pew Charitable Trusts. Paying a high interest rate and a number of additional fees attached to those short-term products can trap consumers in a cycle of debt.

What is FS Card?

FS Card was founded by former Consumer Financial Protection Bureau Assistant Director of Card and Payment Markets Marla Blow in 2014 to fill what she says was a gap in the credit card industry. Blow says she began FS Card when she noticed — after the housing market crashed in 2008 — banks began “pulling back from subprime consumers in a very directed way,” because they were wary of tougher regulations on the financial industry. As a result, those consumers turned to more expensive products like payday loans, she says.

“I wanted to be able to put that consumer into a place where, rather than having to go out and get a payday loan, they could use a credit card,” Blow says. She designed the Build Card to offer subprime consumers access to something that “a lot of our economy assumes is already present” — a rotating line of credit.

Build Card overview

The Build Card is an unsecured credit card for borrowers with subprime FICO credit scores in the 550 to 600 range (on a scale of 300 to 850). The invite-only card charges a variable 29.9% APR. The rate is high for a credit card but about 10 times less expensive than some payday loans. However, it’s not a card you’d want to open unless you are seriously in need of the funds and are looking to build your credit score.

What we like about the Build Card

Payday loan alternative

Ideally, a payday loan is used to meet short-term borrowing needs — to hold you over until you receive your next paycheck. However, Pew research shows the average borrower uses them for five months at a time on average and has to pay an average $55 fee ($95 online) each time they extend the loan, which is what makes these loans so expensive. That’s $275 spent renewing a loan that’s on average $375. Furthermore, Pew research found seven in 10 borrowers use them for everyday expenses like groceries, rent, and utilities.

With access to a rotating line of credit, borrowers can extend the amount of time they have to repay borrowed money without having to pay renewal fees for a payday loan.

Unsecured credit card for subprime consumers

The Build Card is a rare unsecured credit card for those with poor credit scores. Most cards you can qualify for with a score lower than 600 are secured cards, which require a deposit to secure a credit line. For people who have a few hundred dollars on hand, a secured card is a great way to get access to credit, but many low-income Americans are not in a position to spend that kind of money.

Build your credit score

FS Card reports your activity to national credit bureau TransUnion so you can use the Build Card to improve your credit score if you maintain good credit management habits. Negative activity — like late payments and high credit card balances — will also be reported, so be sure to pay your balance on time and in full each month for best results.

Quick and easy approval process

Because you must be invited to apply for the Build Card, you are prequalified for approval. There is an excellent chance you will be approved for the Build Card, unless something on your credit report has drastically changed between the time FS Card mailed your invitation and when you apply.

No foreign transaction fees

The Build Card doesn’t charge you for using it overseas, so you don’t need to worry about racking up fees for swiping your credit card on vacation.

What we don’t like about the Build Card

Invite-only

As of this writing, the Build Card is invitation only and has more than 50,000 cardholders, Blow says. You’ll have to wait to receive a code in the mail before you can apply for the card online, which is unfortunate for anyone who is in need of short-term funds now.

FS Card selects borrowers using an algorithm to prequalify borrowers with subprime credit scores and sends invitations to potential customers monthly. The algorithm sifts through consumer credit reporting data to identify consumers who have recently done something that reflects better borrowing habits like paying off a payday loan or an account in collections.

Blow tells MagnifyMoney FS Card will offer an open application for Build Card in 2018.

Many fees

This card carries a lot of fees. If you’re trying to build your credit and have the funds to get a secured credit card that doesn’t charge an annual fee or has an interest-free period, you’re better off going that route, as it will be significantly less expensive.

  • Startup & membership fees: It costs Build Card customers $125 simply to open the account. FS Card charges the initial start-up fee ($53) and annual membership fee ($72) on your first statement. Although the card begins accruing interest immediately, Blow tells MagnifyMoney FS Card does not charge Build Card users interest on the start-up fees assessed to the credit card.After the first year, the annual membership is paid in $6 monthly installments, charged to the Build Card.
  • Authorized user fee: If you authorize another person to use your Build Card, you’ll be charged a $12 fee per authorized user.
  • Late/returned payment fee: Don’t miss a payment on this credit card, or you’ll be charged a whopping $35 fee.
  • Cash advance fee: Try your best not to take cash from this credit line — in addition to paying 29.9% interest, you’ll be charged the greater of $10 or 3% of the amount you take.

A $500 limit

If you need to borrow more than $500, you’re out of luck with this card. Everyone who opens a Build Card account starts off with a $500 limit. But remember, that limit is immediately reduced to $375 once you open the card and are charged $125 in fees. That also doesn’t leave you a lot of room to spend, considering it’s bad for your credit score to carry a balance close to your credit limit. Blow says the company may soon offer starting lines above and below $500.

Right now, FS Card checks every month to see if you’re managing the card wisely (read: making payments on time). If you are, you could qualify for a credit line increase to $750 in as soon as seven months. Blow says 59% of Build Card customers have gotten increases so far.

No 0% interest period

This card doesn’t come with an interest-free grace period. It will begin charging a 29.9% APR to your purchases immediately.

No balance transfer

The Build Card doesn’t come with a balance transfer offer, so you won’t be able to use the card as a debt consolidation tool. If you are in a large amount of credit card debt, you could try applying for a personal loan through online lenders like Lending Club or Prosper, which offer personal loans to people with credit scores below 600.

Who is the Build Card best for?

The Build Card is worth opening if you:

  • have a credit score between 550 and 600,
  • are ready to start rebuilding your credit score, and
  • want an alternative to payday loans in the event of an emergency but don’t have the cash on hand to open a secured credit card.

Beware: If your poor credit history resulted from poor spending habits like spending more than you could afford or making late payments, ask yourself if you’re ready to make a change. Opening this credit line won’t help your credit score any in the long run if you don’t.

How to apply for Build Card

You must be selected to apply for the Build Card. When you receive your invitation to apply, you’ll be given an offer code and application ID to enter into the application form on the Build Card website. Enter that information, your ZIP code, and the last four digits of your Social Security number to apply for approval. You should know if you’re approved or not within a few minutes.

Source: thebuildcard.com

Alternatives to the Build Card

The post FS Build Card Review: Build Credit With This Payday Loan Alternative appeared first on MagnifyMoney.

Chase Sapphire Reserve Review: Is the Annual Fee Worth It?

Looking for a travel rewards card with a big bang for your buck? Chase Sapphire Reserve may be right for you.It comes with a litany of benefits for frequent travelers including:

  • 3 points per dollar spent on travel and dining.
  • 1 point per dollar spent on anything else.
  • Your points are worth 50% more when you redeem through the Chase Ultimate Rewards portal.
  • Ability to transfer your points on a 1:1 basis to major airline and hotel rewards programs.
  • $100 statement credit after you pay for your TSA PreCheck or Global Entry application.
  • The first $300 you spend on travel during each 12-month period measured by your sign-up date will be automatically reimbursed through statement credits.
  • Currently, you can get 50,000 bonus points when you spend $4,000 within three months of opening your card.

These benefits do come at a cost. The card has a $450 annual fee — and it is not waived in the first year. While the benefits are top-notch, they’re only accessible to those who can float the $450 in upfront costs.

 Chase Sapphire Reserve<sup>SM</sup>

APPLY NOW Secured

on Chase’s secure website

Chase Sapphire ReserveSM

Annual fee
$450 For First Year
$450 Ongoing
Rewards
3X points on travel and dining, 1 point on everything else
APR
16.99%-23.99%
Credit required
excellent-credit

Excellent


The information related to the Chase Sapphire Reserve and Preferred has been collected independently by MagnifyMoney and has not been reviewed or approved by the issuer.

How to earn points

The best way to earn points with Chase Sapphire Reserve is by placing all of your travel and dining purchases on this card exclusively. These purchases will get you 3 points for every dollar spent on travel or restaurant dining, while all other purchases will get you a less competitive return of 1 point per every dollar spent.

What, exactly, qualifies as a travel purchase? The obvious things, like hotels and car rentals, are included. But don’t forget merchants like Airbnb, Expedia, or even your state DOT when you drive on toll roads.

Certain travel-related expenses do not count as travel purchases. Amusement park tickets, excursions purchased directly through tour companies, and that Starbucks latte you purchased at the airport will not be counted as a 3-point-per-dollar travel expense, for example.

If you’re making a big purchase, but you’re not sure if it will qualify as a travel expense, it’s worth it to call the company you will be purchasing from. You want to find out how they are coded to credit card companies. Do they come through as “travel” or is the business classified into another category? Finding the answer to this question can help you decide if you should make the purchase on your Chase Sapphire Reserve or if you should charge it somewhere else where you’ll get more than one measly point per dollar.

Best ways to redeem points

Whether you’re purchasing a plane ticket for a work trip or booking your next family vacation, you want to make sure you’re maximizing all those points you’ve earned.

One of the best ways to redeem your points at booking is by using the Chase Ultimate Rewards portal. Here, you’ll be able to find flights, hotels, and more with no blackout dates. Because you’re a Chase Sapphire Reserve holder, your points will be worth 50% more here. That means that instead of your 50,000-point bonus being worth $500, it will actually be worth $750.

Another potentially great way to book is by transferring your points to one of Chase’s partner airline or hotel rewards programs. This can be done in real time on a 1:1 basis. Sometimes, it may even be a better deal than booking through Chase’s Ultimate Rewards portal.

For example, a flight from New York City to Tokyo may run you $1,200. If you booked within the Chase Ultimate Rewards portal, that would cost you 80,000 points.

However, if you transferred your points to United MileagePlus miles, you could score a flight for 70,000 points if you booked at the “Saver Award” level in economy class. There is limited seating at this award level, so you would want to book far ahead, but doing so would save you 10,000 points.

Chase Ultimate Rewards has several transfer partners aside from United. The full list includes:

  • British Airways Avios
  • Flying Blue (Air France/KLM)
  • Korean Airlines Skypass
  • Singapore Airlines Krisflyer
  • Southwest Airlines Rapid Rewards
  • United MileagePlus
  • Virgin Atlantic Flying Club
  • Hyatt Gold Passport
  • IHG Rewards
  • Marriott Rewards/Ritz Carlton Rewards

How to qualify

Those with the best chance of qualifying for Chase Sapphire Reserve will have a credit score of 700 or above without a history of chronically late payments. Those with a credit score below 650 are unlikely to qualify.

This card is only for people with excellent credit. In general, that means your score should be above 700. In addition, Chase (and other credit card issuers) have been cracking down on people who go from one bonus offer to the next. If you apply for a lot of credit cards, don’t be surprised if you are declined.

What we like about the card

There are a lot of reasons to love Chase Sapphire Reserve if you’re big on travel.

The bonus is nothing to laugh at.

Fifty thousand points is on the high end of standard spending bonuses for credit cards, but when you book through the Ultimate Rewards portal, Chase’s offer is even more stellar.

Your annual fee is effectively lowered to $150 every year.

Because you will receive up to $300 in statement credits for travel reimbursements per year, the $450 annual fee is effectively lowered to $150 — as long as you actually spend $300 on travel.

Rewards points are generous on dining and travel purchases.

Three points per dollar is a large multiplier in the world of travel rewards credit cards.

No foreign transaction fees.

When you’re traveling, the last thing you want to deal with is foreign transaction fees. They can quickly eat away at any value you’re getting with your rewards points, so we’re glad to see that this card doesn’t have any.

Additional $100 statement credit specifically for Global Entry or TSA PreCheck.

Both of these programs can save you a ton of time and hassle, especially if you travel frequently. The $100 statement credit reduces or even eliminates the application fees, depending on which product you pursue.

Plentiful travel protection benefits. When you book your travel with your Chase Sapphire Reserve card, you automatically have a lot of coverage as long as 100% of the purchase goes on the card. Coverage includes:

  • Auto rental collision damage waiver. You won’t have to purchase collision insurance from your rental company as physical damages to the vehicle will be covered by this waiver provided via Chase.
  • Roadside assistance. You’re covered up to $50, four times per year. Covered services include locksmiths, tows, tire changes, jump-starts, and gas.
  • Baggage delay insurance. If the airline has issues locating your luggage at your destination airport for six hours or more, this insurance policy will reimburse you for essential purchases, like shampoo or slacks. The policy maxes out at $100 per day over the course of five days.
  • Lost luggage reimbursement. What if the airport never finds your bag? Or damages your belongings? Chase will reimburse the value of your belongings up to $3,000.
  • Trip cancellation/interruption insurance. Certain emergencies, such as severe weather or illness, will merit a reimbursement of up to $10,000 if they force you to cancel or cut your trip short.
  • Trip delay reimbursement. If your flight is delayed for over six hours and the airline is offering little to nothing in the way of reimbursement, Chase will pay you back $500 per ticket to cover things like food and hotel stays.
  • Emergency coverages. Chase provides coverage for emergency evacuations, emergency medical and dental services, and accidental death or dismemberment while you’re on a trip that you’ve paid for 100% with your Chase Sapphire Rewards card.

What we don’t like about the card

While Chase Sapphire Reserve’s rewards are out of this world, they do come at a steep price.

The annual fee is colossal.

A $450 annual fee is huge—especially since it is not waived in the first year. This limits the number of people who will even be able to afford to open a card, nonetheless justify the expense.

Rewards points are scant on everyday purchases.

While this card is generous with rewards points for dining and travel, purchases in every other category only earn 1 point per dollar. Even when you account for the 50% bonus when booking through the Ultimate Rewards portal, it would be wise to put these purchases on one of many other cards on the market that will earn you more points.

Travel hackers will have a hard time qualifying.

Banks (and not just Chase) are making it more difficult for people to jump from bonus offer to bonus offer. If that sounds like you, it will probably be difficult to get approved.

Who the Chase Sapphire Reserve best for

Those who travel frequently, spending a good portion of their budget on related purchases including dining, will benefit most from this card. These applicants have a solid credit history and score and are more likely to have a higher income as they have the funds available to front the $450 annual fee without hurting their budget. Their travels enable them to get the most out of not only the rewards points but also the statement credits that make this offer so attractive.

Chase Sapphire Reserve vs. Chase Sapphire Preferred

If you have the $450 to spend up front, and know that you will be able to take advantage of the annual $300 travel reimbursement, Chase Sapphire Reserve is likely a better card for you than the Chase Sapphire Preferred.

While the Preferred’s annual fee of $95 is waived for the first year, in subsequent years its annual fee is only $55 less than the Reserve’s effective $150 fee after travel reimbursements.

For an additional $55, your Reserve points are worth 1.5 points each when you book through the Ultimate Rewards portal versus the Preferred’s 1.25 points. Let’s look back at our trip from New York City to Tokyo. With the Reserve, you would need 80,000 points to book your $1,200 flight. With the Preferred, you would need 96,000 points. That’s a 16,000-point difference. In order to make up the difference, you’d have to spend $6,400 on travel or dining on your Preferred card.

Fifty-five dollars starts to look like a deal.

You also earn 3 points instead of the Preferred rate of 2 points on each dollar you spend on travel and dining.

Given the increased point values, making up the $55 difference is easy. Having the income to support opening the Reserve in the first place is the challenge. Not only do you need to have $450 on hand up front, but you’ll also need to have an income that justifies a credit line of $10,000+. If you will have trouble achieving either of these things, the Preferred may be a better card for you. Read the Chase Sapphire Preferred Review for more details.

Alternatives

While Chase Sapphire Reserve offers fantastic benefits, it’s not for everyone. If you want a credit card that offers travel rewards without such large impositions, you do have other options.

 Chase Sapphire Preferred® Credit Card

Annual fee

$0 For First Year

$95 Ongoing

Rewards

2 points on travel and dining, 1 point on all other spending

APR

16.99%-23.99%

Variable

Chase Sapphire Preferred is much like the Reserve option, except its $95 annual fee is waived for the first year. It doesn’t have all the same perks, but it does offer 2 points per dollar spent on dining and travel while offering 1 point on all other purchases. When you redeem points in the Ultimate Rewards portal, they’ll be worth 25% more instead of Reserve’s 50% incentive.

Barclaycard Arrival Plus™ World Elite MasterCard<sup>®</sup>

Annual fee

$0 For First Year

$89 Ongoing

Rewards

2X miles on all purchases

APR

16.99%-23.99%

Variable

While the bonus in the Ultimate Rewards portal is attractive, earning 1 point per dollar spent on everyday purchases is not. The Barclaycard Arrival Plus World Elite MasterCard offers 2 miles per dollar spent on any purchase, which may make it more valuable for those planning one or two trips per year rather than getting away every other month for work or leisure. The annual fee is waived in the first year, and it currently comes with a 50,000-mile bonus when you spend $3,000 in the first three months. Barclaycard also gives you back 5% of the miles you redeem. For example, if you redeem 50,000 miles, you’ll get 2,500 back.

Venture® from Capital One®

Annual fee

$0 For First Year

$59 Ongoing

Rewards

2 miles per dollar spent

APR

13.99%-23.99%

Variable

Similar to the Barclaycard Arrival Plus World Elite MasterCard, the Capital One Venture card offers 2 miles per dollar spent on any purchase, with each mile worth one cent when redeemed against a past travel purchase. The annual fee is waived in the first year, and the current sign-up bonus is 40,000 miles when you spend $3,000 in the first three months.

FAQ

Yes, though you should keep in mind the credit requirements above. If you currently have Chase Ultimate Rewards points, it’s wise to transfer them to the Reserve so you can take full advantage of the 1.5-point redemption rate in the Ultimate Rewards portal.

Yes. As long as you share the same address, you will be able to transfer points one to another instantaneously. You cannot combine or share points with a family member who lives at a different address.

No. Once you transfer points to another program, you cannot convert them back to Ultimate Rewards points. Be sure you understand the redemption process for each program before you transfer to ensure you’re getting the maximum value for your points.

No. As long as you keep your account open, your points will not expire. If you have other Chase cards that are eligible for the Ultimate Rewards program, you could close your Reserve account and transfer them to your other card, but as of today Reserve offers the best redemption rate in the Ultimate Rewards portal, so this may not be the best move.

The post Chase Sapphire Reserve Review: Is the Annual Fee Worth It? appeared first on MagnifyMoney.

Blue Cash Preferred® Card Review: The Perfect Cash Back Card for Grocery Shoppers?

If you’re looking for a cash back program that will reward you handsomely for grocery shopping, the Blue Cash Preferred® Card from American Express is one to check out. Although this card has an annual fee, the amount of cash back you have the potential to earn can easily cover the fee.

Blue Cash Preferred® Card from American Express

APPLY NOW Secured

on American Express’s secure website

Blue Cash Preferred® Card from American Express

Annual fee
$95 For First Year
$95 Ongoing
Cashback Rate
up to 6%
APR
13.99%-24.99%

Variable

Credit required
good-credit

Good

How to earn cash back with the Blue Cash Preferred® Card

1. Earn 6% cash back at U.S. supermarkets with a cap.

The supermarket category excludes superstores and warehouses. Specialty retailers like wine stores and convenience stores likely won’t earn 6% cash back either. The annual cap for the supermarket category is $6,000.

2. Earn 3% cash back at gas stations and select department stores, 1% cash back on everything else.

There’s no annual spending cap for the 3% and 1% cash back categories. The following department stores are examples of those that qualify for 3%:

  • Bealls
  • Belk
  • Bloomingdale’s
  • Bon-Ton Stores
  • Boscov’s
  • Century 21 Department Store
  • Dillard’s
  • JCPenney (JCP)
  • Kohl’s
  • Lord & Taylor
  • Macy’s
  • Neiman Marcus
  • Nordstrom
  • Saks Fifth Avenue
  • Sears
  • Stein Mart

3. Earn an extra introductory bonus.

You get a bonus of $150 in cash back if you spend $1,000 within the first three months of card signing.

How redeeming cash back works

Cash back earned converts into Blue Cash Rewards Dollars. You can redeem Blue Cash Rewards Dollars for a statement credit in increments of $25.

Word of warning: A cash back statement credit does not get applied to your minimum payment. To keep your card in good standing, you need to make at least the minimum payment each month even if you redeem cash back.

Overview of card benefits

These are the American Express perks:

  • Car rental loss and damage insurance. You can decline the rental agency’s collision damage waiver because you’re covered if your rental car is damaged or stolen when you pay with this card, though some countries like Australia and Italy aren’t covered.
  • Global assist hotline. When traveling you get 24/7 access to legal, emergency, and financial assistance.
  • Travel accident insurance. You get coverage for accidental death or dismemberment during travel.
  • Extended warranty of up to an additional year after your manufacturer’s warranty expires.
  • Roadside assistance for emergencies if your car needs to be towed, you need to fix a flat, or you need a battery jump. Third-party service costs may apply.

What we like about this card

6% cash back on groceries up to $6,000.

Despite the annual fee and category restrictions, we’re still big fans of the Blue Cash Preferred® Card. You only need to spend $1,583 per year (or $132 per month) on groceries to earn enough cash back to cover the $95 fee.

Since the supermarket spending cap is a generous $6,000 per year, you still have plenty of room to earn cash back beyond this break-even point, and if you spend a full $6,000 on groceries in a year, you’ll earn $360 in cash back before the annual fee is deducted.

Unlimited 3% cash back for gas.

You’ll be able to earn 3% cash back in the gas category without any cap, which can serve you well on your commute.

No revolving categories.

This card is simple to use. You don’t need to enroll in the bonus categories quarterly or annually. You just need to remember to pull out this card when you shop at major grocery stores, gas stations, and department stores.

What we don’t like about this card

Store restrictions in 3% and 6% categories.

Category restrictions are common for most cash back cards, but still a piece of fine print you should be aware of. American Express uses merchant codes to determine how much cash back you get on each purchase.

Stores like Amazon, BJ’s Wholesale Club, Target, and Walmart won’t qualify as supermarket spending.

Furthermore, you can’t earn 3% cash back by pumping gas just anywhere. You have to buy gas at places with a gas station merchant code. Gas purchases at supermarkets or warehouse clubs will not qualify unless otherwise noted.

This restriction on gas spending may be the biggest deal-breaker for savvy gas shoppers since supermarkets and warehouses often have competitive gas prices with minimal markup.

Before you apply for the card, contact American Express if you pump at discount locations to see if the spending qualifies. American Express has a short list of example stores that fall into each cash back category here.

Who the Blue Cash Preferred® Card is best for

Whether the Blue Cash Preferred® Card is or isn’t for you will depend on how much you spend in the bonus categories.

Here’s why:

The Blue Cash Preferred® Card has a sister card that comes with no annual fee called the Blue Cash Everyday® Card.

The Blue Cash Everyday® Card gives:

  • 3% cash back on groceries
  • 2% cash back at department stores and gas stations
  • 1% cash back on everything else

Pick the Blue Cash Everyday® Card (no fee) instead of the Blue Cash Preferred® Card ($95 annual fee) if you spend less than $3,200 per year on qualifying groceries (about $300 a month).

If you spend more than $3,200 on groceries per year (about $300 a month), the Blue Cash Preferred® Card with the $95 annual fee outperforms the free Blue Cash Everyday® Card.

Another thing to consider is where you do your shopping.

If you live in a city where major groceries stores are few and far between, neither the Blue Cash Preferred® Card nor Blue Cash Everyday® Card will serve you well. You won’t get 6% for food purchases at corner markets and specialty stores.

Shoppers who stock up for groceries at warehouse or superstores like Walmart will also get less use from these American Express cash back cards since that spending doesn’t qualify.

Consumers who’ll get the most out of the Blue Cash Preferred® Card are those who spend at places that are eligible for bonus cash back like Whole Foods, Safeway, and Kroger.

Approval chances

You have the best chance of getting approved for the Blue Cash Preferred® Card with good to excellent credit (a score that’s 670 or above).

American Express lets you prequalify for offers without a hard pull to your credit history here.

Alternatives

You can find our ultimate roundup of cash back cards for every category in this post.

Here we’ll cover four alternatives to compare against the Blue Cash Preferred® Card:

  • Blue Cash Everyday® Card from American Express
  • Chase Freedom®
  • Citi® Double Cash
  • Alliant Visa® Signature
Blue Cash Everyday® Card from American Express

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

up to 3%

APR

13.99%-24.99%

Variable

As mentioned, the Blue Cash Everyday® Card is the free version of the Blue Cash Preferred® Card. It offers:

  • 3% cash back at grocery stores
  • 2% cash back on gas and department store spending
  • 1% cash back on all other purchases

Again, this is the card to go with instead of the Blue Cash Preferred® Card if you spend less than $3,200 per year on qualifying groceries.

But, let’s be honest: $3,200 or $267 per month spent on groceries is a pretty small sum even for a one- or two-person household. For this reason, the Blue Cash Preferred® Card is what we prefer of the two supermarket cards.

Chase Freedom<sup>®</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

5% on certain categories, 1% on everything else

APR

15.99%-24.74%

Variable

A revolving category cash back card is an alternative if you spend pretty evenly across multiple areas. The Chase Freedom® card gives you 5% cash back in bonus categories that change quarterly.

There’s a $1,500 quarterly spending cap on the 5% category. You earn 1% cash back on all other spending. The bonus category for July through September this year includes restaurants and movie theaters, but categories change every quarter, and there’s no guarantee these will be a bonus category in the future.

Citi® Double Cash Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

1% when you buy, 1% when you pay

APR

14.49%-24.49%

Variable

An unlimited flat-rate cash back card such as the Citi® Double Cash is good to pair with any of the category cards we discuss above. The Citi® Double Cash offers unlimited 2% cash back on all purchases with no fee, making this a great card to earn a consistent cash back rate. Citi® also does not charge an annual fee for this card.

Alliant Cashback Visa® Signature Card

Annual fee

$0 For First Year

$59 Ongoing

Cashback Rate

Unlimited 3% cash back during the first year; 2.5% cash back afterwards

APR

11.24%-24.24%

Variable

The Alliant Visa® Signature offers 3% cash back on all purchases during your first year as a cardholder. After the first year, you will earn 2.5% cash back. There is an annual fee for this card, however it is waived the first year. A good rewards strategy is partnering a high cash-back rate category card with one of these unlimited cards for non-category spending.

FAQ

One disadvantage of American Express is it’s a card that some stores don’t accept. Why? American Express charges a higher merchant processing fee, which causes some smaller shops to avoid it. Most of the places eligible to earn 6% and 3% cash back from the Blue Cash Preferred® Card are big stores that will most likely take American Express anyway. Stick to these stores and your cash back potential won’t be impacted by limited acceptance.

Anything you spend over the $6,000 cap on groceries will earn only 1% cash back. Fortunately, the 3% cash back at gas stations and department stores is unlimited, so you’ll always get bonus cash back for that spending.

No, Blue Cash Rewards Dollars do not expire as long as your account remains open.

Yes, the minimum amount to redeem Blue Cash Rewards Dollars is $25.

Blue Cash Rewards Dollars can only be redeemed for statement credit. They can’t be redeemed for merchandise or gift cards.

Blue Cash Rewards Dollars are redeemable for statement credit, while Membership Rewards® Points are redeemable for statement credit, travel, gift cards, merchandise, or entertainment. With the Blue Cash Preferred® Card you receive Blue Cash Rewards Dollars. You would need a different American Express credit card, such as the Amex EveryDay® Preferred Credit Card, to receive Membership Rewards® Points.

The post Blue Cash Preferred® Card Review: The Perfect Cash Back Card for Grocery Shoppers? appeared first on MagnifyMoney.

Zelle Is Big Banks’ Response to Venmo — Here’s How it Stacks Up

Perhaps you’ve heard of Venmo, a PayPal-owned company that caught like wildfire among millennials and is currently the most popular way for people to split the bill. The digital peer-to peer (P2P) payment service is ubiquitous to the point of being a verb — “Venmo me” — but that’s not stopping the big banks from making a play for the market.

They’re responding with Zelle, a P2P transaction platform that says it can process payments between accounts at different banks within minutes, for free. When using apps like Venmo, PayPal, and Square Cash, consumers may have to wait up to two or three days to access deposits in their bank accounts or pay a fee for instant access.

What is Zelle?

Zelle is a P2P payment service that lets you send money directly to your friends’ and family members’ bank accounts using only an email address or phone number, even if their account is with a different bank. As of this writing, Zelle is only live at nine banks: Bank of America, Capital One, Chase, Fifth/Third Bank, FirstBank, PNC, U.S. Bank, USAA, and Wells Fargo. It lists 25 additional bank as “coming soon” on its website.

Parent company Early Warning says Zelle will reach about 86 million U.S. consumers through its partners’ mobile banking applications. If your bank isn’t partnered with Zelle, you can still create an account using clearXchange, the network that powers Zelle, to send and receive money using email addresses and phone numbers (much like other P2P payment services).

Before Zelle became available through banks’ mobile apps, it was already hard at work establishing itself in the P2P payments space. Early Warning reported in April the Zelle network processed more than 170 million P2P payments in 2016 totaling $55 billion. In the same year, Venmo processed $17.6 billion in payments on its free mobile app, a year-over-year growth of more than 140%.

How Zelle works

Zelle plays up its ease of use: Because it’s integrated into mobile banking apps, customers of banks using Zelle can use a single app to schedule bill pay, make deposits, and complete fee-free P2P transactions. That means there is no extra app to download, unlike stand-alone apps like Venmo and PayPal. (Zelle does, however, plan to release an app.)

Here are some examples of how Zelle has been integrated into mobile banking:

Where to find QuickPay with Zelle. Source: JPMorgan Chase.

 

Zelle payment options in the Bank of America app. Source: Bank of America.

To reach customers whose banks aren’t part of the Zelle network, Early Warning says it partnered with MasterCard and Visa to make a Zelle app that will allow transfers to those at nonparticipating banks and just about everyone with a U.S.-based debit card. Early Warning says they plan to release the app in the coming months.

Where Zelle has an edge on competitors

When you send money to a friend using Venmo, they instantly receive that amount in their Venmo account, but then need to initiate a bank transfer to access the funds. The same goes for PayPal and Square Cash. With Popmoney, a service that sends money directly between bank accounts, there’s no need to initiate a deposit, but it takes a couple of days for the transactions to clear. With these services, it can take one to three days for a deposit to become available in your bank account.

By leveraging its network of bank partnerships, Zelle claims consumers should be able to make transactions between different institutions within minutes. However, if your recipient does not have access to Zelle through their bank or credit union, or their partnered bank does not yet support real-time payments, Zelle loses its advantage. The same is true if you decide to send the money using clearXchange. Transactions would then take between one and three days to complete, no better than the likes of PayPal or Venmo.

Though Zelle touts transaction speed as one of its greatest strengths, its competitors aren’t far behind. Square Cash offers instant access to transferred funds for a fee of 1% of the deposit amount, and in June, PayPal started rolling out instant transfers to PayPal and Venmo users with eligible Visa and MasterCard debit cards. That perk will carry a 25 cent fee per transfer, so for now, Zelle has an edge by offering fee-free speed.

There are dozens of ways you can can send money to friends, family members, or the person you picked up your coffee table from on Craigslist. They range from social media options like Snapcash or Facebook Messenger, to full-fledged mobile and web apps like the PayPal app or Google Wallet. We asked Aite Group’s Banking and Payments industry analyst Talie Baker which big players in the P2P payments space to compare to Zelle. Here’s a breakdown of how they stand up to the financial industry’s P2P processor:

Click an icon below to see how Zelle compares to other payment applications

Feature Zelle Venmo PayPal Square Cash Popmoney Google Wallet Facebook Messenger
Who you can send money to Anyone whose bank offers Zelle (86 million consumers) or anyone who is set up with ClearXchange (25 million registered users) Anyone with a Venmo account (unknown, owned by PayPal) Anyone with a PayPal account (210 million customer accounts) Anyone with a Square account (unknown) Anyone at any of 2,400 financial institutions (70 million consumers) Anyone with a Google account; no need to have a the Wallet app Anyone with a Facebook account who is 18+ years old
Time it takes deposit to become available in recipient’s bank account Minutes, unless the recipient banks with a bank that doesn’t support instant transfers or isn’t a partnered institution 1 to 3 business days after transferring from Venmo account to bank. Instant access coming soon, for a fee of $0.25 per transaction. Up to 4 business days. Instant access coming soon, for a fee of $0.25 per transaction. Up to 2 business days. Instant deposits are available for a fee of 1% of the deposit amount. Up to 2 business days 1 to 3 business days after transferring from Google Wallet to bank Up to 5 business days
Has a stand-alone app No. Zelle is integrated directly into existing bank mobile apps. Yes Yes Yes No. PopMoney is integrated into existing mobile banking apps. Yes Yes
Has a web version Yes Yes Yes Yes Yes Yes Yes
Fees None Free to send money from a bank account or debit card

3% fee to send money from a credit card

Free when you send funds via a bank account

2.9% plus 30 cents (U.S.) of the amount you send using a debit or credit card

Free to send money from a bank account or debit card.

3% fee to send money from a credit card

Free when receiving money

$0.95 to send or request funds

Free Free
Accepts credit card transactions No Yes Yes Yes No No No
Transaction limits None, but your bank may impose transfer limits Send and receive up to $2,999.99 per 7 days after identity verification; receive up to $2,000 per transaction on Venmo. Send and receive up to $10,000 per transaction Send up to $2,500 a week after identity verification; receive more than $1,000 per 30 days after identity verification Daily transaction limit for a debit card: $500

Daily transaction limit for a bank account: $2,000

30-day transaction limit for a debit card: $1000

30-day transaction limit for a bank account: $5,000

Send up to $9,999 per transaction or up to $50,000 in 5 days. If you live in Florida, you can send up to $3,000 every 24 hours. Up to $9,999 within 30 days
Supports international transfers No No Yes – Fees to more than 200 countries vary. No No No No
Lets you store funds on an in-app account No Yes Yes Yes Yes Yes No

Other things you need to know about Zelle

Transfer limits: There are no limits to the amount of money you can receive, but there may be limits on how much money you can send, depending on your bank and the type of account you’re using.

Zelle allows banks to regulate your transaction limits. For example, Chase caps transfers from personal checking accounts at $2,000 per transaction, and customers can send up to $2,000 a day and $16,000 in a calendar month. However, customers sending money from a Chase Private Client or Private Banking client account can sent up to $5,000 per day and $40,000 per calendar month. Check with your bank to see if any limits apply to you before sending large amounts of money.

No credit card transactions: You won’t be able to send money using a credit card at all, even after Zelle rolls out a mobile app, like you can for a 3% fee on Venmo.

No international transfers: As of this writing, Zelle’s system doesn’t support international payments. The service only works with U.S.-based bank accounts, so you won’t be able to send money directly to family abroad. However, if you are traveling and have access to your bank account overseas, you can receive transfers made to your U.S.-based bank account.

The bottom line

If you’re sick of waiting one to three days to access your roommate’s $400 share of the rent, Zelle may be a solution — that is, if you and your roommate both have bank accounts on the Zelle network. And even though Zelle may not have the name recognition of Venmo or PayPal, it offers something they don’t: fee-free instant transactions. A 25 cent fee for instant access to your funds or a 3% fee for using a credit card can add unnecessary costs to using your own money. But if you’re simply looking for a way to pay friends for free, Zelle is an easy-to-use option — just like many other P2P platforms out there.

The post Zelle Is Big Banks’ Response to Venmo — Here’s How it Stacks Up appeared first on MagnifyMoney.

Discover it® Secured Card Review: Rebuild and Establish Credit

Secured cards are great if you have little to no credit history or have poor credit history. With proper credit behavior they are a great way to build credit. The Discover it® Secured card is an excellent secured card that lets you build credit while also earning cash back. There is no annual fee associated with this card, making it easier to put your money where it’s needed.

Discover it® Secured Card - No Annual Fee

APPLY NOW Secured

on Discover’s secure website

Discover it® Secured Card - No Annual Fee

Annual fee
$0 For First Year
$0 Ongoing
Minimum Deposit
$200
APR
23.99% APR

Variable

Credit required
zero-credit
No credit, 670 or less

How the card works

The Discover it® Secured card is meant to help you rebuild or establish credit. You need to make a $200 security deposit that will become your credit line. If you want a credit limit that is higher than $200, you will need to put down a larger security deposit.

Discover reviews your account monthly starting at eight months to see if you can be transitioned to an unsecured card. This is a feature that makes the Discover it® Secured card unique. If you have responsible credit management, you may benefit from this feature and be transitioned to an unsecured card. If moved to an unsecured card, you will receive your security deposit back. This is hassle free and another reason the Discover it® Secured card is a great option.

This card offers 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases. This is a great bonus, but the main goal of a secured card is not to earn rewards, but to be responsible and build credit. Don’t let the prospect of cash back lead you to overspending. That will only defeat the purpose of this card.

To get the most benefit from your secured card, keep a low utilization rate and pay your statements in full and on time every month. Utilization is the amount of your total credit limit you use. It is calculated by dividing your statement balance by your available credit. A low utilization is not spending more than 20% of your credit limit. So if you have a credit limit of $200, that means don’t spend more than $40.

By following these two practices, you will begin to see your credit score rise. You can even build credit with $10 a month using a secured card.

How to qualify

To qualify for the Discover it® Secured card, you need to be at least 18 years old, have a Social Security number, U.S address, and U.S bank account and provide all the required information in the online application. Be sure to have your bank routing number and account number ready when you apply as they will be needed for the $200 security deposit. Don’t worry if your credit history is nonexistent or unfavorable — this card is great for people who are new to credit or are looking to rebuild credit.

What we like about the card

Earn cash back

You will earn 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases. This is a great added bonus that most secured cards do not offer. Discover will automatically match all of the cash back you earned at the end of your first year as a cardholder.

Automatic monthly reviews after 8 months

Discover takes the guessing out of wondering when you will qualify for an unsecured card by reviewing your account monthly starting at eight months. If you have responsible credit management across all of your credit cards, you may be transitioned to an unsecured card. This is hassle free and another reason the Discover it® Secured card is a great option.

Free FICO Score

It is important to monitor your credit score and each month you will receive your FICO Score for free. If you practice proper credit behavior, you will see your score increase.

What we don’t like about the card

High APR

This card, like most secured credit cards, has a high APR. If you pay your statement balance in full and on time every month, the APR will not matter (because no interest will be charged). And if you do that every month, your credit score will improve over time — making it cheaper to borrow money (if you need to) in the future.

Who the card is best for

This Discover it® Secured card is best for people looking to rebuild or establish credit. In addition to an easy transition to an unsecured card when the time is right, the Discover it® Secured card provides a cash back program and has no annual fee. By using this card coupled with proper credit behavior you can see a boost in your credit score.

Alternatives

If you want a smaller security deposit

Secured MasterCard from Capital One Bank

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$49

APR

24.99% APR

Fixed

The Secured MasterCard from Capital One is made for people who want to rebuild credit. There are lower security deposit options than the Discover it® Secured card, making it a good alternative if you can’t afford a large security deposit. However, it’s important to note that the lower security deposit is not guaranteed. This card also has no annual fee and offers your free credit score; however, there are no rewards. Just remember: A lower security deposit also means a lower credit limit.

An unsecured card from a credit union

Visa® Classic from Georgia's Own Credit Union

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

-

APR

12.99%-17.99%

The Visa Classic from Georgia’s Own Credit Union offers a competitive APR that is lower than Discover. There is no annual fee associated with this card and no rewards, making this card strictly for rebuilding credit. Keep in mind you will need to join the credit union, and the application process is more complicated compared to Discover. This card is a good alternative if you prefer to have an unsecured card and don’t mind working with a credit union.

FAQ

No, your cash back does not expire as long as your account remains open.

If you pay your balance in full and close your credit card account, your security deposit will be refunded. This can take up to two billing cycles plus 10 days. Also, during Discover’s monthly automatic reviews of your credit card account starting at eight months, they will see if they can return your security deposit while you continue to enjoy your card benefits.

The maximum credit limit is $2,500. This will be determined by your income and ability to pay. Keep in mind your security deposit must equal your credit limit, so you will have to deposit $2,500 if approved for this credit limit.

The post Discover it® Secured Card Review: Rebuild and Establish Credit appeared first on MagnifyMoney.