The average couple has a number of topics to discuss on their to-do list before heading to the altar. The least romantic topics, if they even make the list at all, are probably concerning debt and the possibility of divorce. If you foresee a divorce in your future or are currently going through one, itâs safe to say that you have some burning questions about your finances. Perhaps you and your spouse acquired some debt during the course of your marriage and youâre now wondering who is going to be responsible for what. While itâs important to note that each situation is unique, there are some ground rules in the Divorced with Debt arena. In the below sections, weâll address the usual ways in which debt is divided up between each spouse.
Community Property vs. Common Law Property Rules
If youâre trying to figure out what debts you will be responsible post-divorce, you will first need to know if you live in an equitable distribution state that follows common law or if you live in a community property state. When it comes to debt and the divorce process, most states follow common law for property, meaning that following a divorce, each ex-spouse will be held responsible for the debt that they took on. In a community property state, both spouses, considered to be the âcommunity,â may both end up equally responsible for debt that incurred throughout the marriage, known as âcommunity debt.â The following states are Community Property States:
Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin
Most of the time, the banks arenât interested in how the courts decide to split up your debt. Even after a divorce, the original contract or credit card agreement will typically overrule a divorce decree. This means that if the original agreement was set up under your spouseâs name, the banks are going to expect the payments to be as such. As you can imagine, this could potentially cause problems with an ex-spouse who is being asked to pay off debt that is not under their name, or at least under a joint account.
To put it into perspective, letâs imagine that the court orders your ex-spouse to make payments on credit card debt under your name. If your ex neglects to make the payments on time, itâs going to have an effect on your credit report. The good news is that if this happens, you have a right to pursue legal action against your former spouse for not following court orders. However, itâs possible that by the time legal action is taken, your credit score may already be damaged.
Prenuptial agreements will affect these outcomes as well. Depending on yours and your spouseâs marital assets, the debt in question will vary. Here are the typical categories of debt that are affected during divorce proceedings:
Credit Card Debt
Mortgage Debt
Auto Loan Debt
Medical Debt
Credit Card Debt
Itâs possible that you could be responsible for your former spouseâs credit card debt, but itâs not likely. If you have a joint account, then the outcomes may vary. Usually, marital debt is considered to be any debt that was created during the time of the marriage. So if you racked up credit card debt under a joint account, expect that both of you will be equally responsible for paying it off.
Mortgage Debt
If both spouses have their names on the mortgage, the easiest way of solving the mortgage debt is to sell the house and divide the earnings between both parties. It might be tempting to keep the home for a multitude of reasons, but at the end of the day, selling the property and splitting the money is usually the least complicated solution for everyone involved.
Once the house is on the market, itâs time to start communicating with your former spouse about who is going to be responsible for what amount. Come up with an agreement on who will pay which portion of the mortgage, so that neither partiesâ credit score is negatively affected.
If selling the home and dividing the earnings isnât a viable option for you and your ex, then one of you will end up fully responsible for the debt. In most cases, mortgage debt following a divorce is assigned to:
The spouse with the higher annual income.
OR
The spouse who gains full custody of the children.
When this happens, one spouse will have to buy out the other spouseâs equity in the property.
Car Loan Debt
When it comes to car loans, things become more complicated. If the car loan has both names on it, here are the two best options:
Refinance the car without your ex.
Propose automatic payments to come directly from your former spouseâs account.
Letâs say one person ends up with the car loan debt, but the other person was also on the loan as a cosigner. Unfortunately, if one spouse is held responsible for picking up the tab on a debt, and they neglect their payments, both parties can suffer those consequences.
Medical Debt
Each state has different laws surrounding medical debt and divorce agreements. If you live in a Community Property state, you might have to pay for your former spouseâs medical debt. However, if you live in a state that follows common law, the court will ultimately make the decision about who is responsible for what debt.
Pay off your debt before the divorce is finalized
 If you and your spouse can find a way to work out the kinks of your debt issues before the divorce is finalized, itâll make things a lot easier in the long run. Work together to figure out who should be responsible for which debt, so that you can lower your chances of having to pay off a debt that isnât yours.
If youâre working with credit card debt, one of you may need to transfer your credit card balance to a separate card. Consolidating your credit card balances is another common option when dividing debts.
Generally, credit card debt is going to be easier to deal with than the big things, like home loans and car loans. In many cases, couples who are going through a divorce will have to consider refinancing their loans under one partyâs name.
Keep in mind that the original loan agreement supercedes the divorce agreement, so if you wait until your divorce is finalized, you might have a harder time moving things around. You can ask your lender to take your name off of an account and have it replaced with your former spouseâs name, but be prepared to provide the divorce decree as evidence. If it doesnât work out this way, then seek legal advice from your divorce attorney about your options. Another common solution is to sell the asset in question and use the earnings to pay off the debt.
How your former spouseâs bankruptcy can affect you
If your ex-spouse isnât able to keep up with the payments on their share of the debt, they might decide to file bankruptcy. This could cause problems for you if you didnât choose to file as well.
Filing for bankruptcy does not erase the debts, instead it erases your ex-spouseâs liability for the debt. In this instance, you could find yourself in a situation where the creditor is now pursuing you for the debt. Itâs also important that you check your credit report. Even if you werenât the one who filed bankruptcy, it could still end up on your credit report.
Be cautious about any joint accounts you may still have open post-divorce. If you leave joint accounts open and your former spouse has access to them, he or she could potentially transfer balances from other accounts onto those ones. Safeguard your credit by paying off any debts you can manage to pay off ahead of time, so that you donât have to worry about it later.
Marital Debt After Divorce: Who is Responsible? is a post from Pocket Your Dollars.
If you have bad credit and need a car loan, there are some challenges when compared to obtaining a standard car loan. However, pick your head up because there are a handful of great lenders that specifically tailor their programs to people with bad credit. We researched the landscape of lenders that can help you get a car loan even if you have a below-average credit score.
Based on our study, OneMain Financial and LightStream are two of the top lenders offering bad credit card loans. This is due to factors including loan options, requirements to qualify, and interest rates offered. Of course, we offer in-depth reviews of all the top lenders who offer bad credit car loans further down in this piece.
Apply now with our top pick: OneMain Financial
In this guide we also help you understand the factors that go into selecting the right auto lender, and how to get the best rate you can.
Most Important Factors for Bad Credit Car Loans
If youâre in the market for a bad credit car loan, there are a plethora of factors to consider and compare. Here are the main loan details we looked at in our study, and the ones you should prioritize as you select the best car loan for your needs.
Check your credit score. And understand what is in your credit report.
FICO scores under 579 is considered ‘poor’. But you may need a bad credit loan with a score as high as 669.
Interest rates and fees matter. These can make a huge difference in how much you pay for an auto loan each month.
Compare loan terms. Consider your repayment timeline and compare lenders with this in mind.
Getting prequalified online can help. Some lenders, including ones that made our ranking, let you get prequalified for a loan online without a hard inquiry on your credit report.
Watch out for loan restrictions. Some lenders impose restrictions on what car you can purchase. Keep this in mind to avoid unpleasant surprises later.
The Best Bad Credit Car Loans of 2021
The best bad credit car loans make it easy for consumers to qualify for the financing they need. The following lenders made our list due to their superior loan offerings, excellent customer service, and reputation in this industry.
Car Loan Company
Best For…
Get Started
Best for Flexibility
Apply Now
Best Personal Loan Option
Apply Now
Best Loan for Bad Credit and No Credit
Apply Now
Best Loan Comparison Site
Apply Now
Best Big Bank Loan for Bad Credit
Apply Now
Best for Fast Funding
Apply Now
Why Some Lenders Didn’t Make the Cut
While the lenders we are profiling are the best of the best, there are plenty of bad credit car loans that didnât quite make the cut. We didnât include any lenders that only offer auto loan refinancing, for example, since we know many people need a car loan in order to purchase a new or used car or truck. We also stayed away from bad credit car loans that charge outrageous fees for consumers with the lowest credit scores.
Bad Credit Auto Loan Reviews
We listed the top companies we selected in our study above, but we also aim to provide readers with more insights and details on each. The reviews below highlight the highlights of each lender that made our list, plus our take on who they might be best for.
OneMain Financial: Best for Flexibility
OneMain Financial offers personal loans and auto loans with interest rates that range from 18.00% to 35.99%. You can repay your auto loan in 24, 36, 48, or 60 months, and you can use this lender to borrow up to $20,000 for a new or used car. You can apply for your auto loan online and from the comfort of your own home, and itâs possible to get approved within a matter of minutes.
While OneMain Financial doesnât list a minimum credit score requirement, itâs believed they will approve consumers with scores as low as 600. You should also note that auto loans from OneMain Financial come with an origination fee of up to 5% of your loan amount.
Sign Up With OneMain Financial Today
Why This Lender Made Our List: OneMain Financial offers a lot of flexibility in terms of your loan terms, including the option to repay your auto loan over five years. OneMain Financial also has pretty decent reviews from users for a bad credit lender, and they have an A+ rating with the Better Business Bureau.
Potential Downsides to Be Aware Of: OneMain Financial charges some pretty high rates for its bad credit loans, and donât forget that you may need to pay an origination fee that is up to 5% of your loan amount. Their loans are also capped at $20,000, which means this lender wonât work for everyone.
Who Itâs Best For: This lender is best for consumers with really poor credit who need auto financing but canât get approved for a better loan.
Upgrade: Best Personal Loan Option
Upgrade is an online lender that offers personal loans with fixed interest rates, fixed monthly payments, and a fixed repayment timeline. You can borrow up to $50,000 in an unsecured loan, which means you wonât actually use the car you purchase as collateral for the loan.
You can repay the money you borrow over 36 to 60 months, which makes it possible for you to tweak your loan offer to secure a monthly payment you can afford. Upgrade has a minimum credit score requirement of 620 to qualify, although theyâll consider additional factors such as your income and employment history.
Sign Up With Upgrade Today
Why This Lender Made Our List: Upgrade lets you âcheck your rateâ online without a hard inquiry on your credit report. This makes it easy to shop around and compare this loan offer to others without having to fill out a full loan application. Also note that Upgrade has an A+ rating with the BBB.
Potential Downsides to Be Aware Of: Upgrade charges APRs as high as 35.89% for consumers with the worst credit, and an origination fee of up to 6% of your loan amount might also apply.
Who Itâs Best For: Upgrade is best for consumers with decent credit who need to borrow a larger loan amount. This loan is also best for anyone who wants an auto loan that isnât secured by their vehicle.
AutoCreditExpress.com: Best Loan for Bad Credit and No Credit
AutoCreditExpress.com is an online platform that lets consumers with bad credit and even no credit get the financing they need. Once you fill out some basic loan information, youâll be connected with a lender who can offer you financing as well as a dealership in your area. From there, youâll head to the local dealership and pull the pieces of your auto loan together, including the purchase price of the car you want.
Sign Up With Autocreditexpress.com Today
Why This Lender Made Our List: AutoCreditExpress.com has an A+ rating with the Better Business Bureau. This platform also makes it possible for consumers with no credit at all to finance a car, which is a welcome relief for people who are building credit for the first time.
Potential Downsides to Be Aware Of: This website is a loan platform but they donât offer loans directly to consumers. This means you wonât have any idea on rates and terms until you fill out an application and get connected with a lender.
Who Itâs Best For: This loan is best for consumers with no credit or minimal credit history who cannot get approved for a loan elsewhere.
MyAutoLoan.com: Best Loan Comparison Site
MyAutoLoan.com is a loan comparison site that makes it easy to compare up to four auto loan offers in a matter of minutes. You can use this website to apply for a new auto loan, but you can also utilize it to consider refinancing offers for an auto loan you already have. You can also use funds from this platform to purchase a car from a dealer or from a private seller.
Sign Up With MyAutoLoan.com Today
Why This Lender Made Our List: Comparing auto loans in terms of their terms, rates, and fees is the best way to save money and wind up with the best deal. Since MyAutoLoan.com is a loan comparison site, they make it easy to shop around and compare competing offers.
Potential Downsides to Be Aware Of: Loan comparison sites connect you with other lenders who have their own loan terms and minimum requirements for approval. Make sure you know and understand all the details of loans youâre considering before you sign on the dotted line.
Who Itâs Best For: MyAutoLoan.com is best for consumers who want to do all their auto loan shopping with a single website.
Capital One: Best Big Bank Loan for Bad Credit
Capital One offers online auto loan financing in conjunction with a program called Auto Navigator®. This program lets you get prequalified for an auto loan online, then work with a participating dealer to coordinate a loan for the car you want. Capital One also lets you search available vehicles at participating dealerships before you apply for financing, making it easy to figure out how much you might need to borrow ahead of time.
Sign Up With Capital One Today
Why This Lender Made Our List: Capital One offers the huge benefit of letting you get prequalified online without a hard inquiry to your credit report. Capital One is also a reputable bank with a long history, which should give borrowers some comfort. They have an A+ rating with the BBB and plenty of decent reviews from consumers.
Potential Downsides to Be Aware Of: You should be aware that Capital One auto loans only work at participating dealers, so you may be limited in terms of available cars to choose from.
Who Itâs Best For: Capital One auto loans are best for consumers who find a car they want to buy at one of the participating lenders that works with this program.
LightStream: Best for Fast Funding
LightStream offers online loans for a variety of purposes, including auto financing. Their auto loans for consumers with excellent credit start at just 3.99% with autopay, and even their loans for consumers with lower credit scores only run as high as 16.79% with autopay.
You can apply for your LightStream loan online and get approved in a matter of minutes. This lender can also send your funds as soon as the same business day you apply.
A minimum credit score of 660 is required for loan approval, although other factors like your work history and income are considered.
Sign Up With LightStream Today
Why This Lender Made Our List: LightStream offers auto loans with exceptional terms, and thatâs even true for consumers with less than perfect credit. You can also get your loan funded as soon as the same business day you apply, which is crucial if you need auto financing so you can get back on the road.
Potential Downsides to Be Aware Of: With a minimum credit score requirement of 660, these loans wonât work for consumers with the lowest credit scores.
Who Itâs Best For: LightStream is best for people with decent credit who need to get auto loan financing as quickly as possible.
What You Need To Know When Applying For A Car Loan With Bad Credit
Interest rates and fees matter.
If you think your interest rate and loan fees wonât make a big difference in your monthly payment, think again. The reality is that rates and fees can make a huge difference in how much you pay for an auto loan each month. Consider this: A $10,000 loan with an APR of 35.89% will require you to pay $361 per month for five years. The same loan amount at 21.99% APR will only set you back $276 per month. At 9.99%, you would pay only $212 per month for five years. The bottom line: Make sure to compare auto loans for bad credit so you wind up with the lowest possible APR you can qualify for.
Take steps to improve your credit score before you apply.
Itâs not always possible to wait to apply for a car loan, but you may be able to secure a lower interest rate and better loan terms if you can improve your credit score before you borrow money. The most important steps you can take to improve your score include paying all your bills early or on time, as well as paying down debt in order to decrease your credit utilization. You should also refrain from opening or closing too many credit card accounts in order to avoid new inquiries on your credit report and maintain the longest average length of your credit history possible.
Compare loan terms.
Some lenders let you borrow money for up to 84 months, while others let you repay your loan over 36 or 60 months at most. If you need to repay your loan over a longer timeline in order to secure an affordable monthly payment, make sure to compare lenders based on this factor. If youâre having trouble figuring out how much can you can afford, gauging affordability based on the monthly payments you can handle can also help in that effort.
Getting prequalified online can help.
Some lenders, including ones that made our ranking, let you get prequalified for a loan online without a hard inquiry on your credit report. This makes it considerably easier to compare rates and shop around without formally applying for an auto loan. Getting prequalified with more than one lender can also help you determine which one might offer the lowest rate without having to fill out a full loan application.
Watch out for loan restrictions.
As you compare the lenders on this list, keep in mind that not all lenders extend loans for any car you want. Some only let you finance cars with participating lenders in their network, which can drastically limit your options and make it impossible to purchase a car from a private seller. If you hope to purchase a car from someone you know or a website like craigslist.org, you may want to consider reaching out to your personal bank or a credit union you have a relationship with.
Bad credit car loans donât have to be forever.
Finally, you should know that a car loan for bad credit doesnât have to last forever. You may need to borrow money for a car right now regardless of the interest rate and terms you can qualify for, but it may be possible to refinance your loan into a better loan product later on. This is especially true if you focus on improving your credit score right away, and if you use your auto loan as an opportunity to prove your creditworthiness.
How to Get the Best Rate
1. Check your credit score.
Your credit score is one of the most important defining factors that dictate loan costs. Before you apply for an auto loan, it can help you check your credit score to see where you stand. Your score may not be as bad as you realize, but it could also be worse than you ever imagined. Either way, it helps to know this important information before you start shopping for an auto loan.
2. Improve your credit over time.
If your credit score needs work, youâll want to take steps to start improving it right away. The most important steps you can take to boost your credit score include paying all your bills early or on time and paying down debt to decrease your credit utilization. Also, make sure youâre not opening or closing too many credit accounts within a short amount of time.
3. Check your credit reports.
Use the website AnnualCreditReport.com to get a free copy of your credit reports from all three credit bureaus. Once you have this information, check over your credit reports for errors. If you find false information that might be hurting your score, take the steps to have the incorrect information removed.
4. Compare loan offers from at least three lenders.
A crucial step to get the best rate involves shopping around and comparing loan offers from at least three different lenders. This is important since lenders with different criteria might offer a lower APR or better terms than others.
5. Be flexible with repayment terms.
Also consider a few different loan terms provided you can afford the monthly payment with each. Some auto lenders offer better rates for shorter terms, which can help you save money if you can afford to repay your loan over 24 or 36 months instead of 60+.
How We Chose the Best Auto Loans
The lenders on our list werenât plucked out of thin air. In fact, the team behind this guide spent hours comparing auto lenders based on a wide range of criteria. Hereâs everything we considered when comparing the best bad credit car loans of 2021:
Interest Rates and Loan Terms: Our team looked for loans that offer reasonable rates and terms for consumers with poor credit. While higher APRs are typically charged to consumers with a low credit score, we only considered lenders that offer sensible rates that donât seem out of line for the auto loan market.
Ratings and Reviews: We gave preference to lenders who have decent reviews online, either through Consumer Affairs, Trustpilot, or another third party website. We also gave higher marks to lenders who have a positive rating with the Better Business Bureau (BBB).
Online Availability: Lenders who offer full loan details online were definitely given top priority in our ranking, and lenders who let you get prequalified online without a hard inquiry on your credit report were given the most points in this category. But since not everyone wants to apply for a loan online, we also included some lenders that let you apply over the phone.
Approval Requirements: Finally, we looked for lenders that extend credit to consumers with low credit scores in the first place. Not all lenders offer specific information on approval requirements, but we did our best to sort out lenders that only accept borrowers with good or excellent credit.
Summary: Best Bad Credit Card Loans of 2021
Best for Flexibility: OneMain Financial
Best Personal Loan Option: Upgrade
Best Loan for Bad Credit and No credit: AutoCreditExpress.com
Best Loan Comparison Site: MyAutoLoan.com
Best Big Bank Loan for Bad Credit: CapitalOne
Best for Fast Funding: LightStream
The post What Are the Best Car Loans When You Have Bad Credit? appeared first on Good Financial Cents®.
The new year is right around the corner and if youâre like most people, youâve probably got a running list of resolutions to achieve and milestones to reach. If getting out of debt ranks near the top, nowâs the time to starting thinking about how youâre going to hit your goal. Developing a clear-cut action plan can get you that much closer to debt-free status in 2016.
1. Add up Your Debt
You canât start attacking your debt until you know exactly how much you owe. The first step to paying down your debt is sitting down with all of your statements and adding up every penny thatâs still outstanding. Once you know how deep in debt you are, you can move on to the next step.
2. Review Your Budget
A budget is a plan that sets limits on how you spend your money. If you donât have one, itâs a good idea to put a budget together as soon as possible. If you do have a budget, you can go over it line by line to find costs you can cut out. By eliminating fees and unnecessary expenses like cable subscriptions, youâll be able to use the money you save to pay off your debt.
3. Set Your Goals
At this point in the process, you should have two numbers: the total amount of money you owe and the amount you can put toward your debt payments each month. Using those two figures, you should be able determine how long itâs going to take you to pay off your mortgage, student loans, personal loans and credit card debt.
Letâs say you owe your credit card issuer $25,000. If you have $500 in your budget that you can use to pay off that debt each month, youâll be able to knock $6,000 off your card balance in a year. Keep in mind, however, that youâll still need to factor in interest to get an accurate idea of how the balance will shrink from one year to the next.
4. Lower Your Interest Rates
Interest is a major obstacle when youâre trying to get out of debt. If you want to speed up the payment process, you can look for ways to shave down your rates. If you have high-interest credit card debt, for instance, transferring the balances to a card with a 0% promotional period can save you some money and reduce the amount of time itâll take to get rid of your debt.
Refinancing might be worth considering if you have student loans, car loans or a mortgage. Just remember that completing a balance transfer or refinancing your debt isnât necessarily free. Credit card companies typically charge a 3% fee for balance transfers and if youâre taking out a refinance loan, you might be on the hook for origination fees and other closing costs.
5. Increase Your Income
Keeping a tight rein on your budget can go a long way. But thatâs not the only way to escape debt. Pumping up your paycheck in the new year can also help you pay off your loans and increase your disposable income.
Asking your boss for a raise will directly increase your earnings, but thereâs no guarantee that your supervisor will agree to your request. If youâre paid by the hour, you can always take on more hours at your current job. And if all else fails, you can start a side gig to bring in more money.
Hold Yourself Accountable
Having a plan to get out of debt in the new year wonât get you very far if youâre not 100% committed. Checking your progress regularly is a must, as is reviewing your budget and goals to make sure youâre staying on track.
The major difference between Fingerhut and credit cards that cater to low credit scores is that Fingerhut credit is exclusively available for use with its own companyâs products and authorized partners. Youâll also find that the companyâs products are pricier than they would be through most other retailers, while also bearing the weight of higher interest rates. While it might seem like a good idea if you donât have good credit, itâs best to familiarize yourself with the ins and outs of the company beforehand so that you know what youâre signing up for.Â
How Fingerhut credit works
When you apply for a Fingerhut credit account, you can get approved by one of two accounts:
WebBank/Fingerhut Advantage Credit Account.
Fingerhut FreshStart Installment Loan issued by WebBank.
As it happens, by submitting your application, you are applying for both credit accounts. Applicants will be considered for the Fingerhut FreshStart Installment Loan issued by WebBank as a direct result of being denied for the WebBank/Fingerhut Advantage Credit Account. In other words, you wonât have a way of knowing which one you will be approved for prior to applying. Both credit accounts are issued by WebBank and are set up so that customers can purchase merchandise by paying for them on an installment plan with a 29.99% Annual Percentage Rate (APR). These are the only things that the different Fingerhut credit accounts have in common.
The WebBank/Fingerhut Advantage Credit Account
The WebBank/Fingerhut Advantage Credit Account works very much like an unsecured credit card, except that itâs an account that you can only use it to shop on Fingerhut or through its authorized partners.Â
This credit account features:
 No annual fee.
A 29.99% interest rate.
A $38 fee on late or returned payments.
A possible down payment; it may or may not be required. You wonât know prior to applying.Â
If you get denied for this line of credit, your application will automatically be reviewed for the Fingerhut FreshStart Credit Account issued by WebBank, which is both structured and conditioned differently.
Fingerhut FreshStart Installment Loan issued by WebBank
If you get approved for the Fingerhut FreshStart Installment Loan, you must follow these three steps to activate it:
Make a one-time purchase of no less than $50.
Put a minimum payment of $30 down on your purchase, and your order will be shipped to you upon receipt of your payment. You may not use a credit card to make down payments, but you can use a debit card, check, or a money order.Â
Make monthly payments on your balance within a span of six to eight months.
You can become eligible to upgrade to the Fingerhut Advantage Credit Account so long as you are able to pay off your balance during that time frame or sooner without having made any late payments. Keep in mind that paying for the entire balance in full at the time you make your down payment will result in you not qualifying for the loan as well as being ineligible for upgrade.Â
How a Fingerhut credit account helps raise your credit score
The fact that it can help you improve your credit is one of the biggest advantages of using a Fingerhut credit account.Â
When you make your payments to Fingerhut in full and on-time, the company will report that activity to the three major credit bureaus. This means that your good credit utilization wonât go unnoticed nor unrewarded. If you use Fingerhut to improve your credit score, you will eventually be able to apply for a credit card through a traditional credit card companyâone where you can make purchases anywhere, not just at Fingerhut.Â
Additional benefits of a Fingerhut credit account
Besides using it as a tool to repair your bad credit, there are a few other benefits to using a WebBank Fingerhut Advantage Credit Account such as:
No annual fee.
Fingerhut has partnerships with a handful of other retailers, which means you can use your Fingerhut credit line to make purchases through a variety of companies. Fingerhut is partnered with companies that specialize in everything from floral arrangements to insurance plans.
There are no penalties on the WebBank Fingerhut Advantage Credit Account when you pay off your balance early.
How to build credit with Fingerhut
Fingerhut credit works the same way as the loans from credit card companies work: in the form of a revolving loan.Â
A revolving loan is when you are designated a maximum credit limit by your lender, in which you are allowed to spend. Whatever you spend, you are expected to pay back in full and on-time through a series of monthly payments. This act of borrowing money and paying off bills using your Fingerhut account causes your balances to revolve and fluctuate, hence, its name.Â
Your credit activity, good or bad, gets reported to the three major credit bureaus and in turn, will have an effect on your credit report. Revolving loans play a large role in your credit score, affecting approximately 30% of your score through your credit utilization ratio. If your credit utilization ratio, the amount of available revolving credit divided by your amount owed, is too high then your credit score will plummet.Â
When using a Fingerhut account, the goal is to try to keep your amounts owed as low as you possibly can so that you can maintain a low utilization ratio, and as a result, have a higher credit score.
Alternatives to Fingerhut
If youâve done all your research and decided that Fingerhut isnât the right choice for you, there are other options that might serve you better, even if you have bad credit. There are a variety of secured credit cards that you can apply for such as:
The OpenSky Secured Visa Credit Card: You will need a $200 security deposit to qualify for this secured credit card, but you can most likely get approved without a credit check or even a bank account. It can also be used to improve your credit, as this card does report to the three major credit bureaus. While this card does come with an annual $35 fee, you can use it to shop anywhere that will accept a Visa.Â
Discover it Secured:Â For all those opposed to paying an annual fee of any sort, this card might just be the one for you. With a $0 annual fee and the ability to earn rewards through purchases, thereâs not much to frown about with this secured credit card. One of the best perks, is that it allows you the chance to upgrade to an unsecured card after only eight months.Â
Deserve Pro Mastercard: This card is a desirable option for those with a short credit history. There is no annual fee and no security deposit required and, if your credit history isnât very long-winded, thatâs okay. The issuers for this card may use their own process to decide whether or not you qualify for credit, by evaluating other factors such as income and employment. This card is especially nifty because you can get cash-back rewards such as 3% back on every dollar that you spend on travel and entertainment, 2% back on every dollar spent at restaurants, and 1% cash back on every dollar spent on anything else.Â
Final ThoughtsÂ
Fingerhut is an option worth looking into for those with bad credit or a short credit history. If you want to use a Fingerhunt credit account to improve your credit score, be sure to use it wisely and make all of your payments on time, just as you would with any other credit card.
Even though it might be easy to get approved, the prices and interest rates on items sold through Fingerhut are set higher than they would be at most other retailers, so itâs important to consider this before applying.Â
There are a ton of options available, regardless of what your credit report looks like, if you are trying to improve your credit. If the prices of Fingerhutâs merchandise are enough to scare you away, you might want to consider applying for a secured credit card.Â
How to Build Credit with Fingerhut is a post from Pocket Your Dollars.
Editorâs note: This is a recurring post, regularly updated with new card offers and information. Credit card welcome offers and sign-up bonuses are the fastest way to top up your points and miles stash. Thereâs nothing quite like the thrill of seeing a massive bonus post to your account and realizing how much of the â¦
Credit card debt is on the rise. Millions of Americans are in over their heads. Theyâre losing sleep, losing control, and worried about what the future will hold. But there are solutions, and consolidation is one of the best.
Consolidation works by âconsolidatingâ multiple debts into one. Itâs the perfect solution for mounting debt, one that doesnât destroy your credit score, liquidate your assets, or make it difficult to acquire mortgages and personal loans in the future.
With that said, letâs look at some of the best ways to consolidate credit card debt.
Option 1: Do It Yourself
The idea of debt consolidation essentially boils down to acquiring a large, low-interest loan and using that to repay multiple high-interest debts. If your credit score is high enough, you can get that loan yourself, clear your credit card debts, and then focus on repaying the loan.
Do It Yourself Consolidation Explained
The average credit card APR is close to 20%. If you have a balance of $10,000 and a monthly payment of $300, this APR will cost you over $4,700 in total interest and your debt will be repaid in just over 4 years. If you were to acquire a $10,000 personal loan at a respectable rate of 8% over the same 4 years, youâll pay just under $1,800 in interest.
Thatâs a saving of nearly $3,000 over 4 years, and itâs based on an 8% rate (lower rates are available) and on the assumption that you donât accumulate any credit card penalty fees or penalty APRs, which are very common on rolling balances.
Pros
You Will Save Money: As noted above, this process could save you a lot of money over the long-term and will also free up some additional cash in the short-term.
Complete Control: You donât have to worry about company fees and service charges; you donât need to concern yourself with hidden terms. With this credit card consolidation option, you are in complete control.
Easy on Your Credit Score: While your credit score will take an initial hit because of the loan inquiry and the new account, as soon as you use that loan to clear your credit card debts you should see an improvement. Just remember to keep those cleared cards active, otherwise, your credit utilization ratio will drop.
Cons
Good Credit Needed: For this option to be viable, you will need an excellent score. Anything less and you may struggle to be accepted for a low-interest loan. Letâs be honest, if youâre struggling with growing credit card debt, the odds of you having a flawless credit score are pretty slim.
On Your Own: While there are benefits to doing everything by yourself, it can also be a little time consuming, and if you donât know what youâre doing, it can be intimidating.
Option 2: Work with a Debt Management Company
Credit counseling agencies can help you manage your debt by working with your creditors. A new payment structure will be created, and your money will go straight to the agency, after which it will be released to your creditors.
Debt Management Consolidation Explained
To begin the process, search for reputable debt management services in your area. They will assess your situation and determine if you are a good fit for the program. Some charge fees, some donât, but all will serve as an intermediary between you and your creditors.
Every month you will make a single payment and the money will then go to your creditors. The agency will negotiate reduced payments by bringing the interest rates down and removing fees, therefore making these debts cheaper and more manageable.
ProsÂ
Professional Help: Get quality support from an experienced debt management company, one that will assume control and take the stress away.
Cheap: This is one of the cheapest and most cost-effective ways to clear your credit card debt, greatly reducing your total interest repayments.
Cons
Fees: Some debt management companies charge fees for their services, although these tend to be nominal and youâll still save more money in the long-term.
Canceled Contract: If you fail to make one of the agreed-upon repayments, your creditors may cancel the improved contract and revert back to the previous terms, erasing all the agencyâs hard work.
Option 3: Balance Transfer
A balance transfer is a promotion offered on new credit cards. It invites you to move your balance from your current card to a new one, and in exchange, it offers a period of 0% interest.Â
You will need to pay a balance transfer fee, and this is typically charged at between 3 and 5% of the total transfer amount, but itâs often one of the cheapest and easiest ways to consolidate credit card debt.
Balance Transfer Consolidation Explained
As an example of how balance transfers work, letâs imagine that you have three credit cards, each with a maxed-out balance of $10,000 and an APR of 20%. If youâre repaying $300 a month, thatâs $900 a month and in 4 years and 2 months, youâll pay around $14,000 in interest to clear the full $30,000.
Alternatively, you can move all three balances onto a single balance transfer card with a $30,000 limit. Immediately, that balance could grow to $31,500. If you continue paying $900 a month and the balance transfer period lasts for 18 months, the balance will be just $15,300 when interest begins to accrue again. And if you use that 18-month period to initiate a debt repayment strategy, you could clear it in full and avoid paying any interest.
ProsÂ
Multiple Balances Can be Consolidated: You can consolidate multiple credit card balances, providing youâre not moving them to the same creditor.
No Interest Repayment: If you plan it properly, you can repay your balance in full before accruing any interest.
Available to Everyone: Credit cards are generally easier to acquire than low-interest personal loans and you wonât need an excellent credit score to get a good one.
Cons Â
Higher Interest: The interest rate and fees may be higher once the 0% balance transfer period ends. If you use the intro period to avoid repayments and not to clear your debt, you could find yourself in serious trouble when interest begins to accumulate again.
Large Limits May be Difficult: The bigger your current credit card balances are, the harder it will be to get a balance transfer card with a large enough limit.
Fees: Although itâs a great option for consolidating credit card debt, itâs not completely free, as youâll pay an initial balance transfer fee.
Option 4: Debt Consolidation Loans
Some companies offer specific loans tailored toward debt consolidation. These options work a lot like personal loans, as they are large loans designed with consolidation in mind. However, there are a few key differences, including the fact you donât need an excellent credit score.
Debt Consolidation Loans Explained
The ultimate goal of debt consolidation loans is not to save you money in the long-term or to reduce the debt period. In fact, it does the opposite. The goal is to reduce your monthly payment and give you a smaller rate of interest, but it does this while increasing the loan period, which means you ultimately pay more money over the term.
Pros
Â
More Money Every Month: Your monthly payments will be reduced, freeing up some extra cash to use every month.
Cleared Debts: Your credit card debts will be cleared in one fell swoop, potentially giving you some financial breathing space.
Â
Cons
Longer Period: The total length of your debt will be extended, which means youâll be stuck with the debt for a prolonged period.
Cost: While youâll save some money every month, youâll do so at the cost of an increased overall balance. Depending on your credit score, you could find yourself paying thousands more in total repayments.
Other Credit Card Debt Consolidation Solutions
If you have a supportive and financially-free family, you can ask them for the money to clear your debts and then promise to repay them in time.Â
Of course, this option isnât without its problems. Firstly, thereâs the old adage that you should never lend money to friends or family. It may seem pretty heartless, but itâs a saying steeped in experience. It causes problems, as that debt is right at the bottom of the borrowerâs list of priorities and if theyâre skipping payments and begging for relief, while at the same time buying new clothes and going out every night, it can anger the borrower.
To avoid these issues, agree to pay them in monthly installments, offer a little interest, and get everything in writing. Make that debt your priority, because by skipping your payments youâll be hurting your finances and your relationships.
Donât guilt-trip a friend or family member into lending you money. Donât ask them unless you have a very close relationship with them, have known them a long time, and know they can easily afford to lend you money. The last thing you want is for them to leave themselves short or to acquire debt just to help you out.
Alternatively, if you own a significant amount of home equity, you can opt for a home equity loan. This will give you a sizeable loan charged at a small rate of interest. It will take longer to repay your mortgage, but by reducing your debt demands youâll save more money in the long-term.
How to Consolidate Credit Card Debt is a post from Pocket Your Dollars.
There’s nothing fun about declaring bankruptcy, but those who emerge from it can be thankful for the opportunity to rebuild their personal finances without the burden of debt. Unfortunately, bankruptcy also does damage to your credit, making it difficult to get approved for credit cards and other lines of credit. Since credit cards are a good way to build or rebuild credit, we have the details for some credit cards to get after bankruptcy.
Secured Credit Cards
Secured credit cards generally have lower credit score requirements and often can be obtained post-bankruptcy. While they do require an upfront security deposit to open, they otherwise work just like traditional credit cards and can help you rebuild your credit. When choosing a secure credit card, look for one that lets you build toward unsecured credit status and reports to all three credit bureaus so it helps you positively impact your credit.
Credit Cards for Bad Credit
Secured credit cards are often considered bad debt credit cards because they’re targeted to people with poor or no credit. But you can also find credit cards that are approved for people with less-than-stellar credit and don’t require a security deposit. In return for the chance to get positive reporting on your credit report via one of these cards, you might have to pay an annual fee or deal with a high interest rate.
Credit Card for After Bankruptcy
Thereâs no single best credit card to get after a bankruptcy, but there are many options to consider. Carefully review the details of relevant credit card offers before making a decision for yourself.
OpenSky® Secured Visa® Credit Card
OpenSky® Secured Visa® Credit Card
Apply Now
on Capital Bank’s secure website
Card Details
Intro Apr:
N/A
Ongoing Apr:
17.39% (variable)
Balance Transfer:
N/A
Annual Fee:
$35
Credit Needed:
Fair-Poor-Bad-No Credit
Snapshot of Card Features
No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
Build credit quickly. OpenSky reports to all 3 major credit bureaus.
99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search âOpenSky Cardâ in Facebook.)
OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.
*View our Cardholder Agreement located at the bottom of the application page for details of the card
Card Details +
Annual Fee: $35
APR: 17.39% (variable)
Why we picked it: This card helps you build credit while still offering a fairly low interest rate and a refundable deposit for as little as $200 (some restrictions apply; see cardholder agreement for details).
The details: There is no credit check necessary to apply, and you can apply in less than 5 minutes. Your responsible use of the card is reported to all three credit bureaus each month. And when you need extra credit, you may be eligible for a credit line increase.
Drawbacks: There is an annual fee, which isn’t necessarily bad in exchange for building credit.
Read Our Full Review
First Progress Platinum Elite Mastercard Secured Credit Card
First Progress Platinum Elite Mastercard® Secured Credit Card
Apply Now
on First Progress’s secure website
Card Details
Intro Apr:
N/A
Ongoing Apr:
19.99% Variable APR for Purchases
Balance Transfer:
N/A
Annual Fee:
$29
Credit Needed:
Poor-No Credit
Rates and Fees
Snapshot of Card Features
Receive Your Card More Quickly with New Expedited Processing Option
No Credit History or Minimum Credit Score Required for Approval
Good for Car Rental, Hotels; Anywhere Credit Cards Are Accepted!
Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
Credit Line Secured by Your Fully-Refundable Deposit of $200 — $2,000 Submitted with Application
Just Pay Off Your Balance and Receive Your Deposit Back at Any Time
Apply in just a few moments with no negative impact to your credit score; no credit inquiry will be recorded in your credit bureau file
Nationwide Program though not yet available in NY, IA, AR, or WI * See Card Terms.
Card Details +
Annual Fee: $29
APR: 19.99% Variable APR for Purchases
Why we picked it: With responsible use, this card can be a good place to start working to rebuild your credit. There is no minimum credit score required for approval, and it also reports to all three credit bureaus each month.
The details: You can secure your credit line by putting down a fully refundable deposit of $200 to $2,000 during the application process. When you pay off your balance, you can receive your deposit back. Its expedited processing option lets you receive your card more quickly, and you can apply in minutes with no negative impact to your credit score.
Drawbacks: While the APR isn’t super high for a bad-credit credit card, it’s still high enough to run up hefty interest charges. You’ll want to pay the balance off as often as possible to avoid that extra expense. The card is not yet available in all states.
Milestone Unsecured Mastercard
Milestone® Unsecured Mastercard®
Apply Now
on Milestone’s secure website
Card Details
Intro Apr:
N/A
Ongoing Apr:
24.90%
Balance Transfer:
N/A
Annual Fee:
$35 – $99*
Credit Needed:
Poor-Bad
Snapshot of Card Features
Easy pre-qualification process which does not affect your credit score
Choice of card image at no extra charge
Less than perfect credit is okay, even with a prior bankruptcy!
Mobile friendly online access from anywhere
Accepted nationwide, wherever Mastercard is accepted
Unsecured credit card, no deposit required
Protection from fraud, if your card happens to be lost or stolen
Card Details +
Annual Fee: $35 – $99*
APR: 24.90%
Why we picked it: It is possible to be approved with poor credit and a bankruptcy on your credit report, but you don’t have to start with a security deposit. Plus, you can choose your card image at no extra charge!
The details: Prequalification doesn’t require a hard credit inquiry, so you can find out if you’re a likely candidate for this card without impacting your credit. You can access your account via mobile to manage it, helping you stay on track with positive payment history and balance management, and the card comes with decent fraud protection.
Drawbacks: The annual fee can be pretty high depending on the terms you’re approved for. The interest rate is also fairly high, so you might not want to carry over large balances between statements.
Indigo Mastercard for Less Than Perfect Credit
Indigo® Mastercard® for Less than Perfect Credit
Apply Now
on Indigo’s secure website
Card Details
Intro Apr:
N/A
Ongoing Apr:
24.90%
Balance Transfer:
N/A
Annual Fee:
$0 – $99*
Credit Needed:
Poor-Bad
Snapshot of Card Features
Less than perfect credit histories can qualify, even with prior bankruptcy!
Choose your card design with chip technology at no additional cost
Quick pre-qualification available with no impact to your credit score
Easy pre-qualification process with fast response
24/7 access to your account, even on mobile!
Protection from fraud, if your card happens to be lost or stolen
Accepted nationwide wherever Mastercard is accepted
Card Details +
Annual Fee: $0 – $99*
APR: 24.90%
Why we picked it: You can prequalify for this card without impacting your credit, and thereâs no security deposit required.
The details: The APR is fairly steep, so you probably want to limit what balances you carry over each month. How much the annual fee is depends on your credit profile. However, it doesn’t require a security deposit.
Drawbacks: A potentially high annual fee and less-than-stellar APR make this a potentially expensive way to build credit.
Avant Credit Card
Avant Credit Card
Apply Now
on Avant’s secure website
Card Details
Intro Apr:
N/A
Ongoing Apr:
25.99% (variable)
Balance Transfer:
N/A
Annual Fee:
$39
Credit Needed:
Fair
Snapshot of Card Features
No deposit required
No penalty APR
No hidden fees
Fast and easy application process
Help strengthen your credit history with responsible use
Disclosure: If you are charged interest, the charge will be no less than $1.00. Cash Advance Fee: The greater of $10 or 3% of the amount of the cash advance
Avant branded credit products are issued by WebBank, member FDIC
Card Details +
Annual fee: $39
APR: 25.99% (variable)
Why we picked it: Thereâs no deposit required, no penalty APR, and no hidden fees.
The details: What you see is what you get with this card. With responsible use, you can strengthen your credit history.
Drawbacks: There is an annual fee and the variable APR can be a bit steep. You may also need fair credit to qualify.
Read Our Full Review
Surge Mastercard
Surge Mastercard® Credit Card
Apply Now
on Surge’s secure website
Card Details
Intro Apr:
N/A
Ongoing Apr:
See Terms*
Balance Transfer:
N/A
Annual Fee:
See Terms*
Credit Needed:
Fair-Poor-Bad
Snapshot of Card Features
All credit types welcome to apply!
Monthly reporting to the three major credit bureaus
See if youâre Pre-Qualified without impacting your credit score
Fast and easy application process; results in seconds
Use your card at locations everywhere that Mastercard® is accepted
Free online account access 24/7
Checking Account Required
Card Details +
Annual fee: See Terms*
APR: See Terms*
Why we picked it: All credit types are welcome to apply, and the pre-qualification process wonât impact your credit score.
The details: Surge can be used anywhere Mastercard is accepted. , and the card reports to all three major credit bureaus.
Drawbacks: You need a checking account to apply. Because the card is specifically for people with less-than-perfect credit scores, interest rates and terms may be a bit high.
Read Our Full Review
How to Choose a Credit Card After Bankruptcy
After a bankruptcy, improving your finances and rebuilding your credit should be a priority. Do some research and pick a credit card that helps you achieve that goal. If you feel that you can’t responsibly manage credit right now, you should wait until you’re in a better place to submit a credit card application.
Since secured credit cards require an upfront security deposit, you’ll need to determine how much money you can afford. Most secured cards will give you a credit line that equals the amount of your original deposit.
While high APRs and annual fees are common with all of these credit cards, you should compare rates across several cards to find the ones that are best for your spending habits.
Some cards for bad credit are designed to exploit people using unfair terms or policies that make it difficult to rebuild your finances. You may even start receiving multiple credit card offers in the mail after your bankruptcy is discharged. Watch out for red flags to avoid getting burned.
And remember: A credit card can only build credit if you use it correctly. You should keep your credit card balance below 30% of the available credit limit and make all your payments on time to help build your credit.
The post Easiest Credit Cards to Get After Bankruptcy appeared first on Credit.com.
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Using a credit card for all your regular spending lets you avoid carrying cash in your wallet, and you’ll also get an itemized bill of your charges at the end of each billing period. Beyond the convenience credit cards offer, using a credit card can also help you earn rewards on your spending, and some cards offer consumer protections and benefits you just can’t get with other forms of payment.
But, did you know you can use a Capital One credit card to get cash out of an ATM? You typically can, but you should make sure you understand the advantages and disadvantages involved in doing so.
In this guide, we’ll explain how to get a cash advance from a credit card from Capital One. We’ll also answer all your burning questions. For example: does Capital One charge for a cash advance? Also, which Capital One credit cards offer this option?
See related: Best rewards credit cards
What is a cash advance?
A cash advance is a credit card transaction that lets you get cash in exchange for new credit card charges. This means you’ll use your credit card at an ATM just like you would with your debit card, but the cash you get out will show up as a charge on your credit card bill.
You may be wondering why you would take cash out on your credit card instead of using your credit card for whatever you need to buy. However, we all know there are situations where cash is still king, and using a credit card as payment may not make sense. For example, you may find your debit card isn’t working, but that you need cash right away to repay a friend. Or maybe you want to make a purchase from an individual who doesn’t accept credit cards as payment (e.g. you want to buy a piece of furniture off Facebook Marketplace or Craigslist).
Just remember that you will have to pay fees to access cash using your credit card at an ATM. Not only is there an upfront cash advance fee you’ll have to pay no matter what, but the interest rate on cash advances is higher than the standard variable rate for purchases.
Not only that, but a Capital One cash advance doesn’t come with a grace period. This means the cash you access with your credit card will begin accruing interest from day one. That makes a cash advance significantly more expensive than a credit card charge for purchases, which won’t begin accruing interest until a grace period of at least 21 days ends.
How to get a cash advance with Capital One
To be eligible for a Capital One cash advance, you’ll need to have a Capital One credit card. From there, you’ll need to know if your credit card comes with a personal identification number or PIN.
How to get a cash advance if your credit card has a PIN
If your Capital One credit card has its own PIN, you can use your card to get cash out of an ATM. All you have to do is insert your credit card in any ATM just like you would with a debit card. From there, you’ll enter your pin and follow the instructions to execute a cash advance.
According to Capital One, you’ll need to understand any fees the ATM might charge if you choose these options. And remember, ATM fees charged for a Capital One cash advance will need to be paid on top of the Capital One cash advance fee.
How to get a cash advance if your credit card doesn’t have a PIN
If your credit card doesn’t have a PIN, you can still use your Capital One credit card to take out a cash advance in a brick and mortar banking location that displays the Visa and Mastercard logos.
According to Capital One, you will need to provide a government-issued photo ID (such as a driver’s license) along with your credit card if you go this route.
Also, keep in mind that your credit card may also send out “convenience checks” that can work similarly to a cash advance. All you have to do to use a convenience check is make it out to yourself. From there, you’ll head to your bank and deposit the check or ask for cash.
Which Capital One cards offer cash advances?
All credit cards from Capital One let you take out cash provided you have enough available credit on your card. However, Capital One credit card interest rates for cash advances can vary, so make sure you know your card’s cash advance APR ahead of time.
Cash advance offered?
Cash advance fee
Cash advance APR (variable)
Capital One Platinum Credit Card
Yes
3% (minimum $10)
26.99%
Capital One Venture Rewards Credit Card
Yes
3% (minimum $10)
24.49%
Capital One VentureOne Rewards Credit Card
Yes
3% (minimum $10)
25.49%
Capital One Quicksilver Cash Rewards Credit Card
Yes
3% (minimum $10)
25.49%
Capital One QuicksilverOne Cash Rewards Credit Card
Yes
3% (minimum $10)
26.99%
Capital One Savor Cash Rewards Credit Card
Yes
3% (minimum $10)
24.99%
Capital One SavorOne Cash Rewards Credit Card
Yes
3% (minimum $10)
25.49%
Journey Student Rewards from Capital One
Yes
3%Â (minimum $10)
26.99%
Secured Mastercard® from Capital One
Yes
3% (minimum $10)
26.99%
Capital One Spark Cash for Business
Yes
3% (minimum $10)
26.99%
Capital One Spark Cash Select for Business
Yes
3% (minimum $10)
26.99%
Capital One Spark Miles for Business
Yes
3% (minimum $10)
26.99%
Capital One Spark Miles Select for Business
Yes
3% (minimum $10)
26.99%
Capital One® Spark® Classic for Business
Yes
3% (minimum $10)
26.99%
Is a cash advance right for you?
When it comes to getting a cash advance from your Capital One card, just because you can doesn’t mean you should. At the end of the day, there are advantages and disadvantages to consider before you use your credit card to get cash.
Due to the fact that cash advances require upfront fees, you should probably only use this option if you can’t get cash out with a cheaper option like your debit card. Also, keep in mind that, if you can use your credit card to make a purchase directly instead of taking cash out, you’ll get a grace period that lets you avoid interest accruing right away.
Pros and cons of cash advances
Pros:
Get cash when you need it, or when a credit card can’t be used
Cover emergency cash expenses when money is tight or between paydays
Cons:
Cash advances require an upfront fee, usually 3% to 5% of the amount of cash you take out
Credit card interest rates are higher on cash advances than purchases
No grace period, so interest begins accruing right away
Alternatives to cash advances
Because taking out a cash advance isn’t cheap, you may also want to consider some alternative ways to access cash when you need it. For example, you can consider a personal loan if you are able to wait a few days to access your cash. Many personal loans can be applied for online, and you’ll get a competitive fixed interest rate, a fixed monthly payment and a fixed repayment timeline that will never charge.
You could also take out a 401(k) loan provided you save for retirement in this type of employer-sponsored account. Another alternative is taking out money you have deposited in a Roth IRA account, which you can do without paying any taxes or fees provided you are deducting contributions only.
Other alternatives like payday loans and car title loans exist, but you should steer clear of these options since they can be even more expensiveâand problematicâthan taking out a cash advance.
The bottom line
Your Capital One credit card comes with some important benefits, and it’s nice to know you could use it for a cash advance if you really needed to. However, there are cheaper ways to get your hands on the cash you need, so try not to fall into a cycle of taking out one cash advance after another.
Using your credit card to get cash from an ATM may be convenient, but it will cost you.
*All information about the Capital One® Spark® Miles Select for Business, Capital One® Spark® Miles for Business, Capital One Savor Cash Rewards Credit Card, Capital One Spark Cash Select for Business and Capital One® Spark® Classic for Business has been collected independently by CreditCards.com and has not been reviewed by the issuer.
Signing the back of your credit card is an important security step for protecting your cardâs information if it should fall into the wrong hands. Merchants are supposed to check that the signature on the card matches the signature on the sales receipt as a security precaution. If a card has no signature on the back, they arenât required to process the ensuing payment.
Should You Sign the Back of Your Credit Card?
Signing the back of your credit card is always better than not, without exception. Itâs another step provided by your credit card company to try and keep your personal information as safe as possible. When used in conjunction with the card verification value (CVV) on your card, it creates a line of defense should a fraudster try to swipe your plastic.
While the signature itself doesnât protect you, the ability for a salesman to match it to your existing official signatures is where its value lies. This is done most commonly with your driverâs license, or if youâre abroad, your passport is a fine stand-in. In other words, taking a few seconds to sign that little black or white strip could be the difference between your identity being stolen and not.
Hereâs a look at how the major credit payment networks handle unsigned cards:
Mastercard
Mastercard urges merchants in its payment network not to accept charges from customers with unsigned credit cards. On the back of every Mastercard, it even says ânot valid unless signed.â
The company tries to instill in merchants that they should not process customer transactions unless the customerâs signature appears in the signature space on the back of the card.
If the card has no signature, merchants are to request the customer sign the card. A merchant also will need to see a confirming form of identification.
Visa
At Visa, merchants must verify that the signature on the back of any card matches the customerâs signature on the transaction receipt and any identification. They want to know you are who you say you are and recreating the same signature on demand when you sign for a credit card transaction is one way to do it.
Visa considers an unsigned credit card to be invalid. The words âNot Valid Without Signatureâ appear above, below or beside the signature panel on all Visa cards. Turn over the card and youâll see it. And like Mastercard, Visa urges merchants not to accept unsigned credit cards.
When a customer presents an unsigned Visa card to a merchant for payment, Visa requires a merchant to check the customerâs identification by requesting a government-issued form of ID.
Where permissible by state law, the Visa merchant may also write the customerâs ID serial number and expiration date on the sales receipt. (Beginning in California in 1971, the recording of personal information during credit card transactions has become illegal, with the passage of the Song-Beverly Credit Card Act.)
Visa also instructs merchants to ask the customer to sign the card, within full view of the merchant. They then check that the customerâs newly written signature on the credit card matches the signature on the customerâs ID. If a customer refuses to sign a Visa card, the card is considered invalid and cannot be processed. Merchants will then be forced to ask the customer for another form of payment.
Discover
Discover keeps things very simple. The company urges its cardholders to sign the backs of their Discover cards as soon as they activate them. This is because the signature makes the card valid and a cashier may decline the transaction if the card is not signed.
American Express
American Express also urges retailers to compare a customerâs signature on the back of an American Express card with the transaction sales receipt. And if an American Express card is presented unsigned, the clerk is to request a photo ID of the customer with a signature. Following this, they must request the customer sign the back of the American Express card and the sales receipt while the clerk is holding on to the customerâs photo ID.
Writing âSee IDâ on a Credit Card
Writing âsee IDâ or âcheck IDâ on a credit card might seem like a great way to protect from fraud. But it actually may invalidate the card. This is because only your valid signature that a merchant can match with a signature on a sales receipt is acceptable. In some cases, the merchant may ask you for another card to make your purchase. To save yourself from a slower-than-needed transaction at the cash register, sign your credit card as intended.
Tips for Protecting Against Credit Card Fraud
Only carry the credit cards you need. When you travel, keep a list of the credit cards that you have with you. Make note of their full account numbers and expiration dates, as well as contact numbers for the issuers. It will come in handy if something should happen to your wallet, phone or both when traveling.
Go paperless and start checking your credit card statements online to avoid having to keep and shred your paper statements. Just be sure to keep your online passwords in a safe place and to update them from time to time.
Check your credit card transactions each month to check for errors or suspicious activity. Quickly report any transaction you donât recognize to your card issuer.
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If youâre serious about your credit score, you need to pay your bills on time. One late payment can have a devastating effect on your credit score. Hereâs what you need to know about late payments and your credit score, and what you can do to protect yourself.
How Late Payments Affect Credit Scores
Your payment history is the biggest factor in determining your credit score, so itâs imperative that you pay your bills on time whenever possible. If you do make a late payment, there are three factors that determine how much it will affect your credit score.
Your credit score and credit history
How long ago the late payment was
How severe the late payment was
According to FICOâs credit damage data, one recent late payment can cause as much as a 180-point drop on a FICO score, depending on your credit history and the severity of the late payment.
Your Credit History and Late Payments
The impact of a missed payment on your credit score varies significantly depending on your circumstances. The better your credit, the more you may feel the sting of a late payment. In fact, that 180-point drop mentioned earlier is most likely to happen to an individual with excellent credit who is 90 days late on a payment. Because individuals with good and excellent credit donât have a history of risky behavior, one mistake sends up a red flag that can drop their score more dramatically.
Individuals with a shorter credit history will likely see a dramatic decrease in their score after a late payment as well. Because there is less information available on your financial behavior, a late payment is a bad sign. On the other hand, individuals with lower credit scores already have a history of risky behavior, so one more late payment wonât drop their score as much.
How Time Affects Credit
The more recent a late payment is, the more severely it will affect your credit score. A missed payment remains on your credit report for up to seven years from the date it occurred. The overall impact of the late payment diminishes over time and goes away completely when the missed payment ages off your report.
Your score won’t necessarily jump 100 points simply because a late payment ages off or is removed. Even though a late payment might have originally dropped your score by a good number, the impact of that late payment changes over time. How much your score goes up when a late payment is removed depends on a variety of factors, so youâll want to continue practicing smart financial habits like making payments on time and keeping your credit utilization low.
How Severity Affects Credit
If you missed your credit card payment by one day, you probably don’t need to sweat it. In most cases, lenders and creditors have grace periods that can range from a few days to up to 10 days. Grace periods are meant to account for minor mistakes and lag in mailing or posting payments. If your payment arrives within that time period, the lender may not count it as late.
Most lenders donât report missed payments until your account is 30 days past due. After 90 days, the effect on your credit score will be even more drastic.
Make sure to read the fine print on your account agreement, though, to know if you have a grace period. And avoid falling into the habit of relying on the grace period. If you’re used to paying your bill five days after the actual due date, you could miss the grace period if you experience a personal emergency. Also keep in mind that interest and fees may still apply during the grace period, even if your payment isnât reported as late to the credit bureaus.
How to Protect Your Credit History Against Late Payment Impact
Payment history is a huge part of your credit score. It accounts for around 35% of your scoreâover a third. Take action to ensure late payments aren’t impacting your score when they don’t need to. Here are three tips for doing so.
1. Check Your Credit Score and Report Regularly
Check your credit reports frequently to ensure late payments aren’t being reported inaccurately. A simple clerical error is enough to cause your score to go down. If you see inaccurate information on your credit reports, you can and should challenge it and ask for verification.
You can get a free credit report annually from each of the three credit bureaus. Due to the COVID-19 crisis, you can get your free credit report once a week through April 2021. When you request your credit report from AnnualCreditReport.com or the individual credit bureaus, you wonât also see your credit score. If you want to see both at the same time, consider signing up for ExtraCredit. Youâll see 28 of your FICO scores from all three credit bureaus, plus your credit reports from each.
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2. Use Tools to Help You Make Timely Payments
Avoid late payments by using resources that ensure you make payments on time each month.
Sign up for auto payments. Your lender may offer this option, letting you enter a credit or debit card or checking account and taking payments out of that account each month. The benefit is that you can set and forget your payments, never worrying that they’re late. The disadvantage is that you have less flexibility in when you pay each month, and you have to ensure you keep a balance in your account to cover the charges.
Use apps or phone alarms. Remind yourself to make payments with app notifications that let you know the payment date is arriving soon. Many credit card companies and other lenders offer options for receiving such notifications directly from them.
Make smaller, more frequent payments. If you’re struggling to save enough to cover a large bill each month, pay a portion of what’s owed every week. This can help simplify your budget, though you do need to ensure you’re not being charged convenience fees or other amounts every time you make a payment.
3. Ask for One-Time Late Payments to Be Forgiven
Life happens, and creditors are aware of this. So if you do find yourself making a one-off late payment, contact your creditor.
Apologize for the late payment, let them know it’s not a normal occurrence for you and point to your previously pristine payment history. Ask the creditor to waive late fees and interest charges as a courtesy and not report the late payment to the credit bureaus. It’s a tool you must use sparingly, but creditors may to oblige if you really do normally pay on time.
Your Credit Score Will Thank You
Making all your bill payments on time is one of the best ways to keep your credit score happy and healthy. Keep track of how youâre doing by signing up for ExtraCredit.
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The post How Much Does One Late Payment Affect Credit Scores? appeared first on Credit.com.
