11 Hacks for Finding an Affordable College Apartment

College is expensive and so are apartments. Finding a college apartment that fits into your budget is possible with a few simple tricks.

Your kid doesn’t want to stay in the dorms, so now what? In today’s real estate market, finding a place to live can cost a fortune. From negotiating tactics to gaining a leg up over the competition, real estate experts share 11 ways to save on your kids’ new pad.

How to Get Started

Where is the best place to look for off-campus housing? Sean Conlon, Real Estate mogul and host of CNBC’s The Deed: Chicago, recommends checking with your campus housing office first. “They will have information for nearby landlords that are looking for college students to rent out their units,” he said. He also said that most schools will display postings for apartments for rent and recommendations from past students on the best places to live in the campus housing office.

Use websites to conduct additional research. Paul Morris, realtor and co-author of Wealth Can’t Wait recommends sites like Zillow, Craigslist and Padmapper (a search engine that uses Craigslist data) in addition to local Facebook groups and popular local sites. He said, “It is critical to use the ‘alerts’ function for each of these online resources because most often they provide a text or email whenever there is a new post meeting your criteria.” He added that some of the local sites are private but will usually grant access if you request it.

Location, Location, Location

When determining where to look, Xavier Izquierdo, a real estate investor in the Los Angeles area suggests familiarizing yourself with the market rental rates in specific pockets close the campus, as even a three to four block difference can save you a few hundred dollars per month. He said, “Look at proximity to campus. Is there a campus shuttle, local bus or is it an easy bike ride or walk? Does the campus security patrol the area? Are there free rides from campus to your apartment late at night? Or, if you have a car, ask if a parking space is included.”

Victoria Shtainer, residential real estate expert at Compass, a real estate firm with listings in several cities in the US, suggests considering a new development. “These buildings might offer more incentives – free rent, gift card upon lease execution, etc. than other buildings, as they are looking to pull tenants in,” she said.

Morris suggests doing some local reconnaissance, if logistically possible. “Even though most rentals will be listed on the major services, it’s not true of every rental,” he said. “Stop by grocery stores, community centers, and other places where small landlords post openings. This can be time-intensive, but also can be where most of the ‘deals’ are found. He also suggested that you tell everyone you know that you are looking. “Maybe there is an available apartment next door to a friend and it has not been listed yet.”

Don’t Go at it Alone

Chad Kehoe, Co-Founder and CEO of Leaseful, a leasing platform, advises using a broker to help with your search. “Not only will they be able to show you a plethora of places, but they can also help you negotiate rent with the landlord – they want to lease the apartment just as bad as you do!” he said.

You will pay a fee when using a broker, but sometimes that fee can be negotiated. Allen Brewington, a broker with Triplemint, a real estate brokerage site, said, “When negotiating with a listing broker charging a 15% fee, show them how qualified you are by discussing the financials of your guarantor and then request a reduction in the broker’s fee. If you can assure them a quick, easy deal they may go for it.”

Compare Short Term vs. Long Term Rates

Brewington advised staying away from short-term rentals, as they tend to be more expensive. “Even if you are in school only for the fall and spring semester, it may be cheaper to rent an apartment for a full twelve months,” he said. “If your landlord lets you sublease the months you are not there, all the better.”

Another money-saving trick is to pay upfront — if you can afford it. Shtainer said, “Try to pay for the entire year of rent upfront…this is a very good tactic to give you leverage when negotiating the rent!”

Buy vs. Rent

It may sound a bit extreme, but an alternative to renting is buying. Shtainer said that parents should consider purchasing a unit for the duration of college, and perhaps longer if the student plans to stick around. “The student can pay the mortgage as the monthly ‘rent’ and contribute toward building equity in the property,” she said.

If you do happen to rent for a full year or purchase a property, consider leasing for the months you don’t need the place if it’s allowed.

Ask the Right Questions

When you meet with the broker or landlord, arm yourself with a list of questions that will help you find the place that is right for you. Ask whether it’s furnished, if Wi-Fi, trash collection and utilities are included, etc. Izquierdo said, “Finding a furnished apartment and having utilities included may be a little more on a monthly basis, but comparing this to buying furniture and putting deposits with utility companies to establish service needs to be considered when comparing total move-in and monthly costs.”

Make a Good Impression

Because competition can be stiff and apartments can go quickly, Morris suggests making sure you stand out as a solid candidate. Also, be prepared to commit on the spot if you find the place that’s right for you. “You should have a way to put the deposit down immediately-whether by check, or popular cash-substitutes like Paypal and Venmo,” he said. “Additionally, you should pull your own credit report and have a copy available. Great credit will open doors. If your credit is not perfect, be prepared to offer more in terms of a security deposit.” (Before apartment hunting, see where your credit stands with a free credit report snapshot from Credit.com). He also recommended writing a short statement about why you would make a great tenant, highlighting your strengths and even including references from former landlords, coaches or professors.

Refer a Friend

If you are looking at an apartment in a large housing complex, inquire about referral bonuses for bringing in tenants for the following school year. Kehoe said, “Big student apartment complexes usually have some sort of promotion to bring in new tenants. For example, the apartment buildings will sometimes offer the first month’s rent free as a signing bonus, or might have a referral program you could join where you and a friend can get discounts off of rent for signing a lease.”

Timing Is Everything

Most college students are looking for apartments towards the end of summer for the fall semester. If you happen to be looking mid-year or well in advance of the school year, this could be to your advantage. Brewington said, “For those looking to increase negotiating power, try to get off the summer search cycle. Look for an apartment in late September or October, after living somewhere temporarily for the first couple of months.”

Time to Move

When you’re working out your budget, don’t forget to factor in moving costs. Real estate expert, Ken Snee, said, “Many people underestimate the cost to move and the sticker shock can be overwhelming. It could be thousands of dollars with the moving truck handling and travel fees, packing services, and mover’s insurance.” Using sites like Unpakt, that let you compare the cost of movers and even book your move online can save you time and money.

Plan Ahead for Next Year

As soon as you get the sense that your student may want to live elsewhere next year, Izquierdo suggests looking now. He said, “Many locations are pre-leasing up to one year in advance. This will save time and money and it will give you the best chance at your desired locations.”

Image: Geber86

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8 Smart Purchases to Make in Your 20s

Don't just put money aside for books and food.

A smart purchase is just another way of saying awesome investment. You might feel strapped for cash in your 20s, but smart buyers will make purchases that will last them into their 30s and beyond. While it’s always tempting to spend your paycheck on a new pair of heels or drinks at happy hour, your future self will thank you for putting that money toward items that’ll pay for themselves over time.

Here are eight smart purchases to make in your 20s that can contribute invaluably to your bank account.

1. A Coffee Maker

Your morning and mid-day pick-me-up cups of coffee from Dunkin’ Donuts and lattes from Starbucks can quickly add up. In fact, you can make $100,000-plus by skipping your morning coffee and making it at home (Seriously. It’ll involve some strategy and take about 40 years, but, still. Go here to find out how).

Consider investing in a quality coffee maker that will withstand many uses. The machine will make your morning coffee more convenient and save you cash. (Some perspective: 72 Venti coffees from Starbucks will run you close to $200, depending on where you live, while a 72-pack of Starbucks French Roast K-Cups costs around $50.) A French press is another option.

2. A Nice Suit

It’s a good idea to invest in a nice suit or business apparel than can be worn to job interviews or important events. Ensure that it fits or get it tailored. A suit may not seem like the most exciting investment in the world, but it is a practical one. If you’ve got this item on your checklist, you can wait for a sale or at least find the perfect piece instead of rushing a week before the big event and splurging on an outfit you don’t love (or, worse, can’t really afford).

3. A Hard Drive

Again, this purchase may not seem particularly fun but it is an item your future self will thank you for. Hard drives are great for backing up important files and opening up more storage on your computer and phone.

4. A Reliable Laptop

A sturdy laptop can be an investment for your leisure time and work life. We do so much work online that it makes sense to invest in a laptop that will have enough storage, battery life and longevity to get the job done. Plus, if you’re still in college or are a very recent graduate with a student ID, there are discounts available for some tech products.

5. A Quality Mattress & Couch

Considering most people spend a large chunk of their day sleeping (or on their phone) in their bed, it makes sense to invest in a mattress.Test out options and sleep on it — literally and metaphorically. Before you invest in a mattress, be sure to read these four mattress shopping gotchas to ensure you get the best deal possible.

The same goes for a couch, another piece of furniture you’ll often spend time on. Kerri Moriarty, of Boston startup Cinch Financial, a financial planning software company, says investing in a quality couch was one of the best decisions she made in her early twenties. “Seven years later the couch has traveled with me to five different apartments, still looks trendy and modern in the space, and is in great shape,” Moriarty said. “I’m glad I invested when I did so I haven’t been uncomfortable and replacing it every couple years.”

6. A Filtered Water Bottle

While plastic water bottles often come in handy, they’re not great for the environment — or your wallet. A reusable filtered water bottle will allow you to stay hydrated on the go without having to constantly repurchase bottles of water. Water bottles generally aren’t expensive, but there will be costs associated with replacing the filter, which is done on a monthly to bi-monthly basis depending on how often the bottle is used. The process is simple: Fill up your bottle with tap water and the built-in filtration system will do the work.

7. An Online Course

If you’ve got a hunger for learning, seeking to pursue a passion project or trying to pick up new skills for a side hustle, an online course can be a great investment. There are endless courses to take that will enrich your life whether you’re learning social media marketing, a new language or even basic coding. Plus, if the course is something that can benefit your job and workplace, you may be able to get your company to pay for it. It doesn’t hurt to make a proposal full of the potential benefits that a particular course could have on you and, by default, your company.

8. Plane Tickets

Yes, sometimes a “smart purchase” involves rewarding yourself — and, really, there’s no better time to spend on experiences than your 20s. Plus, your trip doesn’t have to break the bank. A good travel rewards credit card or airline loyalty program can help you rack up miles to pay for the flight. (Remember, credit cards that offer rewards for your travels tend to require excellent credit. You can see where your credit currently stands by viewing two of your scores for free on Credit.com.) Other ways to save on travel include signing up for fare alerts, traveling on off-peak days and looking into hostels or vacation rentals.

When traveling, don’t forget to invest in some great luggage. Marc Roche, co-founder of Annuities HQ, a retirement advisory network, emphasizes the importance of traveling while you’re young and getting the bang for your buck.”By choosing a well-crafted piece, you’ll be able to pass it — and your stories of adventure — on to the next generation,” Roche said. If you purchase quality travel gear, you’ll be able to use it long-term and have more extra cash for travel.

Image: elenaleonova

The post 8 Smart Purchases to Make in Your 20s appeared first on Credit.com.

11 Ways to Lower Your Monthly Student Loan Payments

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.

Student loan debt is a huge burden for millions of Americans, representing the second largest form of consumer debt in the country. A large monthly student loan payment can make it difficult to afford your other living expenses. Luckily, there are many ways to make that monthly payment more affordable.

Here are 11 ways to lower your monthly student loan payment.

1. Income-driven Repayment Plans

Federal borrowers with insufficient income should consider an income-driven repayment plan, which lowers your monthly payment based on your income and family size. There are several income-driven repayment plans, including the Revised Pay As our Earn Repayment Plan (REPAYE), Pay As You Earn Repayment Plan (PAYE), Income-Based Repayment Plan (IBR) and Income-Contingent Repayment Plan (ICR).

Each plan is different, but they all reduce your payments to a set percentage of your discretionary income. You can work directly with your loan servicer to determine which plan is right for you.

2. Loan Consolidation

If you have multiple federal loans, a direct consolidation loan will combine them and allow you to make a single monthly payment. Consolidation can also extend your repayment period up to 30 years, reducing your monthly obligation. Keep in mind that this would increase the amount of money you pay in the long run.

3. Pay Ahead of Time

If you’re still enrolled in school or you just graduated, it could be beneficial to start paying on your loan now. Many federal student loans do not accrue interest until the grace period after graduation expires. If you start making small payments now, you’ll reduce the principal of your loan and the overall interest you’ll pay.

4. Employer Student Loan Repayment Assistance

Many government employers have offered loan repayment assistance for some time, but even private companies are getting in on the game to attract millennial workers. Before you jump at a job offer from an employer with a student loan assistance program, you’ll want to check the details to see if the program actually reduces your monthly payment.

“About 4% of employers are now offering employer-paid student loan repayment assistance,” said Mark Kantrowitz, Publisher and VP of Strategy at Cappex.com. “However, the employer payments are almost always in addition to the borrower’s payments and the borrower may be required to make at least the standard monthly payment. So, the main impact is on shortening the repayment term, not in reducing the monthly payment amount. “

5. Graduated Repayment Plans

Graduated repayment plans will temporarily reduce your monthly payments, increasing them every two years. This is a good choice if you currently can’t afford your payments but have confidence that your income will steadily increase over the next ten years.

Graduated repayment “starts off with very low payments, just above interest-only, and increases the monthly payment every two years. No payment will be more than three times any other payment,” said Kantrowitz.

6. Extended Repayment Plans

Extended repayment plans increase the lifetime of your loan up to 25 years. This will drastically lower your monthly payment if you’re currently on a ten-year payment plan. You will end up paying much more over the life of the loan.

7. Refinancing

Refinancing your federal loans with a private lender can help you get a better interest rate, which could lower your monthly payment and save a lot over the life of your loan. For this option, you’ll need good credit. To see where your credit stands, you can check two of your scores for free on Credit.com.

You’ll also want financial stability. That’s because private lenders don’t offer income-driven repayment plans, deferment or forbearance and many other options available to federal borrowers. If you fall on hard times with a private loan, you’ll have fewer tools at your disposal.

8. Roll Your Loan into Your Mortgage

If you have a home with some available equity, you could roll your student loan into your home equity line of credit (HELOC). This can reduce your interest rate, but will likely require good credit.

9. Automatic Payments

Many lenders offer payment or interest reduction as an incentive to sign up for automatic payments. Check with your loan servicer to find out if they offer this option.

10. Use Credit Card Rewards

Some credit cards offer rewards that can be put directly toward your student loan. For instance, the Citi Thank You Preferred Card for College Students earns points that can be redeemed for a check that is issued to your loan servicer.

11. Deferment or Forbearance

If you’re desperate to reduce your payment, deferment or forbearance can pause or significantly reduce your monthly payments for a limited amount of time. Deferment also pauses interest, while loans in forbearance will continue to accrue interest.

You must work directly with your loan servicer to apply for deferment or forbearance. Qualifying circumstances may include financial hardship, unemployment or military deployment.

Image: Jacob Ammentorp Lund

The post 11 Ways to Lower Your Monthly Student Loan Payments appeared first on Credit.com.

I’m Still in College, Why Do I Need to Build Credit?

It may not seem important to build credit in college, but your future self will thank you.

College students already have a lot on their mind — career paths, majors, student loans, grades — but should credit be on that list? In college, your credit score is probably far in the back of your mind, if it’s there at all. But If you want to really get ahead and start post-grad life off on the right foot, consider starting to build credit in college. When you’re still in college, credit is often deemed a “future problem.” It’s a distant thing for real adults looking to buy houses. That’s all true, but it also plays a big role in anyone’s life, even college students.

Building History

Length of credit history is 15% of your credit score, which is a pretty big factor. The longer you have credit history, the higher your credit score is likely to be. It’s possible to build a good credit score in a year or two, but it can take years to build an excellent credit score. Starting early and being diligent can help you build credit history before you need to seriously worry about your credit score.

Choosing a Home

Many landlords require good credit to rent an apartment. Landlords use credit scores to predict whether tenants will make rent payments on time. Without a credit score, you’ll have to work extra hard to prove your trustworthiness and financial stability. Having a low credit score can lead to rejection or even a higher security deposit. It can also be easier to get a lease when you’ve got a few years of positive credit history under your belt.

Credit scores may be even more important when buying a home. The higher your score, the more likely you are to qualify for a mortgage and the better the terms you’ll receive. Kelan Kline, half of the personal finance blogging duo behind The Savvy Couple, can attest. He and his wife built their credit in college and at 23 years old, they bought a house. “The craziest part is I had just got my job and had no paycheck to show my income,” Kline said. “They used our credit scores and my job acceptance letter showing the income I would receive to get pre-qualified.” For the Klines, good credit scores made all of difference and they can make a huge difference for anyone entering the housing market.

Finding Employment

In most states, potential employers can check your credit report and even factor it into whether or not to hire. Having a good credit report is an indicator that you’re dependable. It can also be something that differentiates you from other candidates. While not every employer will check, it could potentially happen and it’s best to make sure your report is free of errors when applying to jobs.

Making Student Loan Decisions

If you plan on potentially refinancing student loans, it’ll be more difficult to do so without a solid credit score. Refinancing can help you lower the rates of your loans and potentially help you speed up the repayment process.

Saving on Insurance

At a certain point you’ll have to move off of your parent’s insurance plan and, when you do so, it’s in your best interest to have a good credit score. When your credit score is higher, you’re viewed as less of a risk to insurance companies, giving you lower premiums. This even applies to car insurance — many U.S. car insurance companies use credit scores to help determine risk.

Getting a Car

If you’re hoping to buy or rent a car down the line, having a good credit score is crucial. While you can likely find an auto loan regardless of how low your credit score is, a better credit score means a better interest rate and more options to choose from.

Starting a Business

When you build credit in college, you’re setting yourself on solid ground for future endeavors. If you’re a young entrepreneur or aspiring business owner, it can really pay off. If you need a business loan to launch your first business, you’ll need to have a decent credit score to qualify.

Overall

Even if your near future doesn’t immediately require an amazing credit score, starting now is a smart decision. Lenders and employers use your credit score as a sign of financial stability and reliability. In any situation — loans, rentals, employment or otherwise — it’s a valuable asset to have.

There’s good news for any college student who’s looking to embark on the credit building journey. There are plenty of ways for new users to build credit in college from being an authorized user to using a secured card. Building credit doesn’t have to be expensive and you can check two of your credit scores for free on Credit.com to keep track of your progress.

Image: Png-Studio

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5 Credit Cards to Take Back to College

College is even better with the right credit cards. Don't miss out on deals and cash back!

[DISCLOSURE: Cards from our partners are mentioned below.]

For many students, college offers the first opportunity to forge a path toward independence. It’s also a huge opportunity to learn how to manage personal finances. Credit cards can be a useful tool in that journey, as they require responsible management even as they’re used to build credit, make purchases and even earn rewards.

Many credit card issuers offer cards designed to meet the college student’s needs. Here are five credit cards to consider taking with you to college in the fall.

1. Discover it Chrome Card for College Students

Rewards: 2% cash back on up to $1,000 in combined gas and dining purchases per quarter, 1% cash back on everything else
Signup Bonus: Discover will match all cash back earned in the first year.
Annual Fee: $0
Annual Percentage Rate (APR): 0% for six months on purchases, then variable 13.99% to 22.99%; 10.99% for six months on balance transfers, then variable 13.99% to 22.99%
Why We Picked It: Students earn cash back on all purchases, with an extra incentive for dining and gas.
Benefits: Gas station and restaurant purchases earn 2% cash back and all other purchases earn 1% cash back. Discover will match all cash back you earn in the first year, and students will get a $20 cash back bonus every year they maintain a GPA of 3.0 or higher. There are no foreign transaction fees.
Drawbacks: If you don’t have a car and don’t dine out much the cash back value tanks.

2. Citi ThankYou Preferred Card for College Students

Rewards: Two points per dollar spent on dining and entertainment, one point per dollar spent on everything else
Signup Bonus: 2,500 bonus points when you spend $500 in the first three months. These points can be redeemed on $25 gift cards at select providers.
Annual Fee: $0
APR: 0% for six months on purchases, then variable 14.99% to 24.99%; variable 14.99% to 24.99% on balance transfers
Why We Picked It: Students can earn points on all purchases, with extra incentives for dining and entertainment.
Benefits: You’ll earn two points per dollar spent on dining and entertainment (including restaurants, bars, concerts and sporting events) and one point per dollar spent elsewhere. Points can be redeemed for merchandise, travel, cash and more. Citi also provides price and purchase protection, trip cancellation insurance and many other consumer-friendly benefits. (Full Disclosure: Citibank advertises on Credit.com, but that results in no preferential editorial treatment.)
Drawbacks: If you don’t spend much on dining and entertainment, you may want to keep looking.

3. Journey Student Rewards Credit Card from Capital One

Rewards: 1% cash back on all purchases, with a .25% boost when you pay on time
Signup Bonus: None
Annual Fee: $0
APR: Variable 24.99%
Why We Picked It: Students get extra motivation to make timely payments.
Benefits: All purchases automatically earn 1% cash back, but that rate is boosted to 1.25% for every month you make your payment on time. After making your first five timely payments, you can access a higher credit line. There are no foreign transaction fees.
Drawbacks: The APR is extremely high.

4. BankAmericard Travel Rewards Credit Card for Students

Rewards: 1.5 points per dollar spent on all purchases
Signup Bonus: 20,000 bonus points when you spend $1,000 in the first 90 days
Annual Fee: $0
APR: 0% for 12 months on purchases, then variable 15.99% to 23.99; variable 15.99% to 23.99% on balance transfers
Why We Picked It: Students can redeem their points for travel.
Benefits: All purchases earn 1.5 points per dollar. Points can be redeemed for flights, hotels, cruises, car rentals and other travel purchases, with no blackout dates or restrictions. There’s no foreign transaction fee.
Drawbacks: Those who don’t travel should look elsewhere.

5. Citi Simplicity

Rewards: None
Signup Bonus: None
Annual Fee: $0
APR: 0% for 21 months, then variable 14.49% to 24.49%
Why We Picked It: Students get a long time to pay off purchases and balance transfers interest free.
Benefits: The card’s primary appeal is its 21-month 0% APR offer. That’s a long time to pay down a balance or make purchases with no interest.
Drawbacks: There are no rewards.

How to Choose a Credit Card for College

If this is your first time with a credit card, your best choice is likely a simple card with minimal fees and an easy way to earn rewards. You may also want to look for a card that’s forgiving on late payments in case you slip up.

If it’s rewards you’re after, choose a card that matches your spending habits and provides rewards you’ll actually use. For instance, frequent diners might choose a card with special rewards for restaurant purchases.
Some cards offer 0% intro APR offers that let you avoid interest on purchases or balance transfers for a limited time. Remember, the best way to use a credit card is to pay your balance off in full each month before interest is applied.

What Credit Is Required for a College Credit Card?

Credit cards designed for students tend to have looser credit requirements and may be available to students with average or good credit. You should check the credit requirements before you apply. If you aren’t sure about your credit, you can check two of your credit scores for free at Credit.com.

Image: Mixmike

At publishing time, the Discover it Chrome Card for College Students, Citi ThankYou Preferred Card for College Students, Journey Student Rewards Credit Card from Capital One and Citi Simplicity credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

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

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How to Choose Your First Credit Card

Picking your first credit card can seem overwhelming, but by keeping in mind a few key tips, you'll be able to make the right decision with confidence.

Whether you’re a teenager without credit history or an adult who’s familiar with loans and debit cards, choosing your first credit card can be tough. The prospect of finding a card may seem overwhelming, but with the right knowledge, you’ll be able to choose the right card and begin building your credit. Here are several things to consider when choosing your first credit card.

1. Do Your Research

Be aware of what getting a credit card entails, especially because credit mistakes can negatively affect your life and financial standings for a long time. Whether you’re scouring the Internet, speaking with a credit expert or reading our site, it’s important to learn as much as you can before taking the plunge. Being well-versed in the process of applying for and using credit cards will benefit you in the long run. Don’t skimp on research.

2. Ensure You Have Steady Income

Credit card issuers typically require a verifiable income when someone is looking to apply for their first credit card. After all, being able to repay your balance is the key to getting approved for a credit card. Lenders need to know that you’ll pay them back and that they can trust you. Federal law requires that adults under age 21 have income before they can be approved for a credit card without a cosigner. So if you’re a young adult, consider getting a part-time job so you don’t have to find someone to cosign.

3. Choose Wisely

There are plenty of credit cards to choose from. It can be overwhelming to sort the possibilities. While searching, focus on your main concerns and struggles. Are you worried about paying bills on time? Consider a card with a low annual percentage rate. Aren’t sure you’ll have enough self-control for a credit card? A secured credit card could be a great option. There’s a credit card that works for everyone. Don’t choose a credit card because of a cool design or dreamy rewards without checking all of the details.

4. Read the Fine Print

Before you choose your first credit card, make sure you’ve read the terms and checked the fees, rewards and interest rates. A bad combination of card features could come back to bite you if you aren’t careful when signing up for a card. 

5. Consider a Secured Credit Card

Speaking of secured cards, they’re a great option for your first card for several reasons. (Not sure what a secured card is? This article explains it all.) As long as you pay responsibly, your score goes up, and you can switch to an unsecured, card. Some secured cards give you cash back, or offer no annual fees. Your deposit acts as your credit limit, so if you can only pay a security deposit of $200, you’ll have a $200 limit. Having a lower limit shouldn’t be an issue, though, because you’re just starting out with credit. 

Barry Paperno, a credit expert who writes for Speaking of Credit, says a secured card is the way to go for first-time credit card owners. “You can build a really good credit score with just a secured card,” Paperno said. “Plus, because of the security deposit, you won’t have an unpaid charge-off at the end.”

6. Avoid Cards That Require Excellent Credit

Being denied credit doesn’t affect your credit score, but your score is still affected by lenders looking into your credit history. If you apply for your first credit card and it’s out of reach, you’ll end up stuck in a loop of hard inquiries and rejections. “Most card lenders won’t even give you an unsecured card if you have no history,” Paperno said. If you’re not sure where your credit stands, check out your free credit report snapshot on Credit.com.

7. Use Loans to Your Advantage

Essentially, a positive loan history can show card issuers that you’re low risk and are capable of paying them back on time. Loans count as credit, so if you pay them back responsibly that positive information will remain on your credit report for 10 years after being closed. Conversely, a negative loan history will stay on your report for seven years. A loan that’s closed won’t help generate a credit score, but it still looks good to lenders on your report. (For more on loans and their connection to credit, visit our Loan Learning Center.)

8. Become an Authorized User 

A great way to get your first credit card while limiting the responsibility and pressure is by becoming an authorized user. Paperno recommends this as a simple way to build your credit score. This way, you can have a credit score without actually having your own credit card. If you eventually want your own card, being an authorized user makes your score and report look significantly better to lenders.

But remember — if the person whose card you’re becoming an authorized user on falls behind on payments your credit will be impacted as well. Choose someone you trust with a good credit history.

Ultimately, choosing your first credit card is a big decision but an important one. Remember to take the time to research and find which option is best for you when opening your first credit card and every card that follows.

Image: PeopleImages

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When Your Student Loans Are Sold: What You Need to Know

Lenders can sell your loans whenever they want, so it’s important to have some safeguards in place. Here's what you need to know.

While I was working on paying off my student loans, I checked my account balances weekly. One day, I logged into my account and the $10,000 I had in outstanding loans had disappeared.

At first, I was elated. Had some generous benefactor swooped in to pay off my debt? Then I realized I couldn’t be nearly that lucky — so I tried to figure out what happened.

Many people, including a financial professional, told me not to look a gift horse in the mouth and ask too many questions. But I didn’t think loan servicers were likely to have forgotten about my debt.

Tracking Down My Loans

I tried emailing my loan servicer to find out what happened, but didn’t get a response for a few weeks. I was afraid my loan payments would become due and I wouldn’t know where to make payments, so I decided to check my credit report to see if I could find my loan. (You can view two of your credit scores for free on Credit.com.)

Sure enough, my credit report showed my loan had been moved to a new loan servicer. When I reached out to the issuing bureau, they said my old lender had mailed me a letter as notice of the change, but I never received a letter.

It’s possible they had an old address on file, or I accidentally tossed it in the trash, but I’m glad I pursued it. If I hadn’t continued digging, I never would have found out and could have defaulted on my debt.

What Happens When Your Student Loan Debt Is Sold

My situation is not unique. Federal and private student loans can be sold to other lenders at any time. There’s a market of organizations that specialize in buying and servicing student loans.

When your loan is sold to a new lender, you’re indebted to the new owner of the loan. You have no more contact with the old one. While the new servicer might offer some new benefits, the basics of your loan — such as the interest rate or repayment term — will not change.

The original lender will send you a letter notifying you of the upcoming switch. Then, you’ll get a second letter from the new lender that explains why your loan was sold, who your new loan servicer is and how to make payments.

How to Protect Yourself

Because lenders can sell your loans whenever they want, it’s important to have safeguards in place. You don’t want to miss a notification and end up falling behind on your payments. Here’s what you can do to protect yourself:

Update your contact information. If, like me, you’ve moved around, it’s important to make sure your lenders have your most recent contact information. Log in regularly and check to see they have the right mailing address and phone number.

Read all mail. Read every piece of mail that comes from your lender. Don’t just assume it’s a monthly statement and toss it. It could be an important notification.

Check the notification for accuracy. If you receive a notice that your loan is sold, make sure the balance and terms of your loan are accurate.

Contact your lender with any problems. If you can’t find your loan or make payments, call your lender’s customer service line right away.

Track your loans with the National Student Loan Data System (NSLDS). The NSLDS is a database that tracks your federal loans. It will list which loans are under your name and the loan servicer for each one.

Check your credit report. If you aren’t sure if your private loan has been sold, you can find out by checking your credit report for free at AnnualCreditReport.com. It will list all your current loans and who owns each debt. Once you have the name of the lender, you can contact them to get your login information and start making payments.

By keeping your information up to date and checking your account regularly, you can prevent any confusion when managing your loans.

What to Do If You Hate Your New Loan Servicer

In my case, my new loan servicer was an improvement over the old one. Their online platform was easier to use and their customer service department was more responsive.

Some people don’t have the same experience. The Consumer Financial Protection Bureau reported there are thousands of calls each year from consumers about their student loan servicers.

If you have problems with your new loan servicer, such as delays in getting a response for an issue you reported, here’s what you can do:

Contact the student loan ombudsman. If you can’t get your problems fixed, you can contact the student loan ombudsman. An ombudsman is a neutral third party that will work with you and your lender to identify a solution.

Refinance your loans. If you’re simply looking for more features or want to reduce your interest rate, refinancing your student loans might be a smart approach. If you refinance, you’ll work with a private lender to take out a new loan for the amount of your old one. You can get a different repayment term, monthly payment and interest rate.

Managing Your Loans

The student loan system can be incredibly complex. Trying to navigate it can be difficult, especially since your loans can be sold to a new lender at any time.

You can protect yourself by being proactive and monitoring your credit report. If you hate your loan servicer, know that you’re not stuck with them. You can identify a resolution or get a whole new servicer who offers more favorable repayment terms.

For more information on shopping for a new loan, here’s what to do if you hate your loan servicer.

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10 Money Mistakes College Students Should Avoid

Most students don't have a ton of margin for financial error, so be sure to avoid these mistakes.

College is the first time many teenagers are in charge of their own finances, which can be a recipe for mistakes. I know I was definitely nervous to keep of track of my finances on top of being overwhelmed by school and making new friends.

Most students aren’t swimming in money when they head to college, so they don’t actually have a lot of room for financial errors if they don’t want to be stressed about money for the rest of the year, or even their entire academic career. If you’re going to college soon, are in college or have kids in college, read on to learn more about the solutions to the 10 common money mistakes college students make.

1. Overusing a Credit Card

While swiping a credit card all the time might feel painless, this method of spending money can become harmful. Failing to pay off your credit card balance can lead to high interest payments if you’re not careful. (See how your spending affects your credit with a free credit report snapshot on Credit.com)

2. Going Out Just Because Your Friends Go Out

In college you can make friends with people who come from different backgrounds. Some of your friends might be super wealthy, or they may just spend their money irresponsibly. Either way, “going with the flow” could end up costing you a lot. Find ways to say no to your friends’ constant requests to order pizza delivery, or try to get a job so you have some extra cash to use when you hang out with your friends who are a little more careless with money.

3. Not Looking for Scholarships

College counselors will tell you that scholarships are like free money. If you don’t take the time to apply for scholarships, you’ll never realize how much money (that you’ll never have to give back) you could be receiving. Even small scholarships can add up if you receive several of them. You can win scholarships even if you’re not a freshman.

4. Skipping Classes

Sleeping in every once a while or skipping class because you just don’t feel like going is actually costing you a lot of money. At some of the country’s most expensive colleges each hour of class can cost upwards of $150. Going to all of your classes helps diminish your chances of failing a class, which is ideal because if you fail you’ll only have to pay more to take the same class again.

5. Missing Out on Free Stuff

Going to college gives you a ton of perks — think of the libraries, gyms and cultural experiences all around you. Instead of leaving campus to go to a gym, the movies or a restaurant, you should use the gym at school, go to movie nights that clubs host and scout out free food to save money. (Here are 50 things you can get for free.)

6. Buying All Your Supplies at the Campus Bookstore

New textbooks already cost a ton, and after they’re marked up at the campus bookstore they cost even more. You should buy used versions of your school books if you can, but always check Amazon and other online marketplaces, as they might be even cheaper than anything at the bookstore. Renting books is another solution, too.

7. Not Doing Your Research When Shopping

Students need to learn the art of comparison shopping so they don’t just buy the first thing on the shelf at Target. If you take a few minutes to check the price of your favorite body wash on a couple of sellers’ websites, you’ll find it easy to always buy the cheapest products.

8. Spending All Your Money

Budgeting is something many college students neglect to do, and that comes back to bite them. If you finally have a supply of money and no parents telling you to what to do with it, the first thing to cross your mind probably isn’t “I should save half of my money!” You’ll probably be tempted spend it all. Think of all the things you want to do in the future: have a job, own a house and maybe have kids. If you don’t save your money, it’ll be harder to make those dreams a reality.

9. Confusing What You Want With What You Need

Many students struggle to tell the difference between what they need and what they want. I sometimes feel like I need Starbucks, but in reality I’m just overspending by buying a shaken iced tea every day.

Instead of spending on things they only want, students should think before they buy, or find cheaper ways to get what they want—like making their own coffee or buying tea bags in bulk.

10. Staying in School Longer

Education is amazing, but the cost of staying in college for an extended period of time? Not so much. If you have student loans, your debt will only increase. On top of that, students with more debt are already putting themselves behind for life after college. Make sure you plan for the future, and try your best to graduate on time so you don’t have to lose extra money by staying in school longer.

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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 Credit.com.

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How Increasing Your Monthly Payments Can Slash Your Student Loan Balance

If you don’t want to wait a decade or longer to be debt-free, learn how paying a little extra on your student loans each month can slash years off your loan payments.

Student loans are designed to help college students afford an education and build their future. But they may also cause problems down the road.

The sooner you pay down your student loan debt, the better. Not only does it save you on interest if you make extra payments, it can also shorten your repayment term considerably.

The Standard Repayment Plan for federal loans is 10 years while private student loan terms can range from five to 25 years. Income-driven repayment plans also push your payoff date by 20 to 25 years.

If you don’t want to wait a decade or longer to be debt-free, learn how paying a little extra on your student loans each month can slash years off your loan payments.

Doing the Math

Using a student loan prepayment calculator, it’s easy to quickly find out how much time and money making extra payments can save you.

For example, say you just graduated with $20,000 in student loans and have a 10-year loan term. With an average 6% APR, your monthly payment would be $219.

If you were to add an extra $100 a month to your student loans, you’d finish paying them off more than three and a half years early. You’d also save $2,725 in interest along the way. You could do a lot with that extra cash.

If you can’t afford an extra $100 a month, even a small amount can make a big difference. For example, add only $25 extra each month — a couple of lunches or a cheap dinner with your significant other — to your payment. You’d still make a difference, reaching a zero balance 16 months early, and you would save $982 in interest.

No matter how much more you put toward your student loans every month, you’re doing yourself a favor. Unfortunately, not everyone has the means to do so. That doesn’t mean you can’t find other ways to save time and money as you try to dig yourself out of debt.

1. Make Interest Payments During the Grace Period

After you graduate college, you’ll typically have six months before you need to start making payments on your federal student loans. This grace period offers a much-needed reprieve to graduates who are still trying to figure out life after school (private loans usually do not offer a grace period).

However, if you have unsubsidized federal student loans, interest begins accruing as soon as you’re done with school.

Paying the interest as it accrues during the grace period keeps it from being added to the principal. This is known as capitalization — and it’ll result in a bigger balance to pay off once the grace period is over. If you start out with $20,000 and an average 6% APR, for example, you’ll be looking at a higher balance by the time your grace period is over.

That bigger balance will increase your monthly payment by nearly $10 per month, and you’ll pay more over the life of the loan. It’s almost as much as you’d save paying an extra $25 per month.

2. Consider Refinancing

There are several banks that offer student loan refinancing, each with different features that may suit your needs. For example, you can refinance at a lower interest rate and even a shorter repayment term.

Keep in mind that refinancing also gives you the option to extend your term and, most likely, lower your monthly payment. This can be a great way to ease the burden of your monthly student loan bill. However, doing so will mean staying in debt longer and paying more in interest.

If you can’t afford your federal student loan payments, a better option is to look into income-driven repayment plans. Note: These plans are not available to you if you refinance with a private lender.

3. Use Autopay

Setting up automatic payments is a great way to ensure you’re on time every month. Even better, many student loan servicers give you a 0.25% discount on your interest rate if you enroll in autopay.

Taking our previous example, if you decrease your 6% APR down to 5.75%, you’ll save in interest.

4. Avoid Deferment & Forbearance

Federal student loans are eligible for deferment and forbearance if you’re struggling financially. But while student loan payments off your plate for even a few months may sound refreshing, find other solutions if you can — deferment and forbearance should only be used as a last resort.

Deferring subsidized loans freezes interest accruement, but unsubsidized loans don’t offer this benefit. If you choose forbearance, interest will continue to accrue during the pause in payments regardless of the type of loan you have.

5. Claim Your Tax Deduction

Each year, you’ll receive a 1098-E form showing how much interest you paid the previous year on your student loans. You can deduct up to $2,500 of student loan interest on your tax return each year, which will lower your adjusted gross income. This can also boost your tax refund a bit, or, if you owe money, lower your payment.

Remember to Be Proactive & Save

There are quite a few ways to save time and money as you’re paying down your student loans. The best way to do it is to proactively add more to your payments each month. If you’re not able to make that work, though, there are plenty of other ways you can make your student loans less of a burden. (You can see how your student loans are affecting your credit scores by viewing your free credit report card on Credit.com.)

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