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  • CNBC’s best balance transfer credit cards of 2022

    CNBC’s best balance transfer credit cards of 2022

    With credit card interest rates typically in the double digits, carrying a balance on your card can be costly. However, doing so is sometimes inevitable, and the right card can help you get that debt under control.

    If you think you may end up carrying a balance at some point, consider a credit card that offers no interest on balance transfers for a set period of time — this can range from six months to up to 21 months. During the introductory 0% APR period, you can pay off debt without paying costly interest charges.

    Below, CNBC Select rounds up some of the best balance transfer credit cards. When compiling this list, we analyzed over 100 popular balance transfer cards using an average American’s annual spending budget and credit card debt and dug into each card’s perks and drawbacks. We factored in each card’s transfer fee, the length of the 0% interest period and any interest you’d pay once the intro period ends. Read more about our methodology below.

    Best balance transfer credit cards of 2022

    Intro 0% APR for up to 21 months

    Wells Fargo Reflect® Card

    On Wells Fargo’s secure site

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% intro APR for 18 months from account opening on purchases and qualifying balance transfers. Intro APR extension for 3 months with on-time minimum payments during the intro period. 17.49% – 29.49% Variable APR thereafter

    • Regular APR

      17.49% – 29.49% variable APR on purchases and balance transfers

    • Balance transfer fee

      Introductory fee of 3% for 120 days from account opening, then up to 5% ($5 minimum)

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Long introductory APR period up to 21 months on purchases and qualifying balance transfers
    • 3% intro balance transfer fee ($5 minimum) for first 120 days
    • Access to Visa Signature Concierge
    • Get up to $600 cell phone protection (subject to a $25 deductible)
    • Access to My Wells Fargo Deals to earn cash back in the form of an account credit when shopping, dining

    Cons

    • No rewards
    • No welcome bonus
    • 3% fee charged on foreign transactions

    Citi® Diamond Preferred® Card

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for 21 months on balance transfers; 0% for 12 months on purchases

    • Regular APR

    • Balance transfer fee

      5% of each balance transfer; $5 minimum. Balance transfers must be completed within 4 months of account opening.

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Balances can be transferred within 4 months from account opening
    • One of the longest intro periods for balance transfers

    Cons

    • 3% foreign transaction fee

    Citi Simplicity® Card

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for 21 months on balance transfers; 0% for 12 months on purchases

    • Regular APR

    • Balance transfer fee

      Introductory fee of 3% ($5 minimum) for transfers completed within the first 4 months of account opening, then up to 5% ($5 minimum).

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Balances can be transferred within 4 months from account opening
    • One of the longest intro periods for balance transfers

    Cons

    • 3% foreign transaction fee
    • No rewards program

    BankAmericard® credit card

    • Rewards

      This card doesn’t offer cash back, miles or points.

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% Introductory APR for 21 billing cycles for purchases, and for any balance transfers made in the first 60 days.

    • Regular APR

      14.99% – 24.99% variable APR on purchases and balance transfers

    • Balance transfer fee

      Either $10 or 3% of the amount of each transaction, whichever is greater.

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • One of the longest intro periods

    Cons

    • 3% foreign transaction fee
    • No rewards program
    • Transfer timeline: Balances must be transferred within 60 days from account opening
    • Estimated total fees and interest on debt repayment: $404

    Intro 0% APR for 18 months

    Citi® Double Cash Card

    • Rewards

      2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for the first 18 months on balance transfers; N/A for purchases

    • Regular APR

    • Balance transfer fee

      For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies

    • Foreign transaction fee

    • Credit needed

    Pros

    • 2% cash back on all eligible purchases
    • Simple cash-back program that doesn’t require activation or spending caps
    • One of the longest intro periods for balance transfers at 18 months

    Cons

    • 3% fee charged on purchases made outside the U.S.
    • Estimated rewards earned after 1 year: $443
    • Estimated rewards earned after 5 years: $2,213

    Discover it® Balance Transfer

    On Discover’s secure site

    • Rewards

      Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, and gas stations, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.

    • Welcome bonus

      Discover will automatically match all the cash back you’ve earned at the end of your first year.

    • Annual fee

    • Intro APR

      0% for 18 months on balance transfers; 0% for 6 months on purchases

    • Regular APR

    • Balance transfer fee

      3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

    • Foreign transaction fee

    • Credit needed

    Cons

    • Bonus categories must be activated each quarter
    • Cash-back program limits 5% cash-back earnings to $1,500 a quarter
    • Fee charged on balance transfers
    • Transfer timeline: Balances must be transferred by a specific date, refer to your cardmember agreement for the exact date

    Chase Slate Edge℠

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for 18 months from account opening on purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Get an automatic, one-time review for a higher credit limit when you pay on time, and spend $500 in your first six months.
    • Lower your interest rate by 2% each year: Automatically be considered for an APR reduction when you pay on time, and spend at least $1,000 on your card by your next account anniversary

    Cons

    • 3% foreign transaction fee
    • No rewards program

    U.S. Bank Visa® Platinum Card

    On U.S. Bank’s secure site

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for the first 18 billing cycles on balance transfers and purchases

    • Regular APR

      18.99% – 28.99% (Variable)

    • Balance transfer fee

      Either 3% of the amount of each transfer or $5 minimum, whichever is greater

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Cell phone protection plan

    Cons

    • No rewards program
    • 2% to 3% foreign transaction fee
    • Balances must be transferred within 60 days from account opening

    Intro 0% APR for 15 months

    Chase Freedom Unlimited®

    • Rewards

      Enjoy 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases

    • Welcome bonus

      Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) – worth up to $300 cash back. That’s 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on dining and drugstores, and 3% on all other purchases.

    • Annual fee

    • Intro APR

      0% for the first 15 months from account opening on purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

    • Foreign transaction fee

      3% of each transaction in U.S. dollars

    • Credit needed

    Pros

    • No annual fee
    • Rewards can be transferred to a Chase Ultimate Rewards card
    • Generous welcome bonus

    Cons

    • 3% fee charged on foreign transactions

    Chase Freedom Flex℠

    Information about the Chase Freedom Flex℠ has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 5% cash back on travel booked through the Chase Ultimate Rewards®, 3% on drugstore purchases and on dining (including takeout and eligible delivery services), 1% cash back on all other purchases

    • Welcome bonus

      $200 cash back after you spend $500 on purchases in your first three months from account opening

    • Annual fee

    • Intro APR

      0% for the first 15 months from account opening on purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Generous welcome bonus
    • Opportunity to earn up to 5% cash back in select categories upon activation
    • Rewards can be transferred to a Chase Ultimate Rewards card

    Cons

    • Bonus categories must be activated each quarter
    • 3% fee charged on foreign transactions
    • Estimated rewards earned after 1 year: $852
    • Estimated rewards earned after 5 years: $2,844

    Rewards totals incorporate the cash back earned from the welcome bonus

    Wells Fargo Active Cash® Card

    On Wells Fargo’s secure site

    • Rewards

      Unlimited 2% cash rewards on purchases

    • Welcome bonus

      Earn a $200 cash rewards bonus after spending $1,000 in purchases in the first 3 months

    • Annual fee

    • Intro APR

      0% intro APR for 15 months from account opening on purchases and qualifying balance transfers; balance transfers made within 120 days qualify for the intro rate

    • Regular APR

      19.49%, 24.49%, or 29.49% variable APR on purchases and balance transfers

    • Balance transfer fee

      Introductory fee of 3% for 120 days from account opening, then up to 5% ($5 minimum)

    • Foreign transaction fee

    • Credit needed

    Pros

    • Unlimited cash rewards
    • $200 cash rewards welcome bonus
    • No annual fee
    • Introductory APR period for first 15 months
    • Access to Visa Signature Concierge
    • Get up to $600 cell phone protection (subject to a $25 deductible)

    Cons

    • 3% fee charged on foreign transactions

    How to use a balance transfer card

    Before you take advantage of a balance transfer offer, there are some things you should keep in mind:

    FAQs

    Do balance transfers hurt your credit?

    Applying for a new credit card will typically ‘ding’ your credit score (although the drop is usually small and temporary), but the balance transfer itself doesn’t hurt your credit. However, if the balance transfer card has a low credit limit and you transfer over a high amount of debt, your credit utilization ratio will go up, which could hurt your credit score. You typically want to keep your credit utilization ratio under 30%.

    Is it worth getting a balance transfer?

    Balance transfers are good options for consolidating credit card debt. However, be sure to calculate how much it will cost to transfer the balance versus how much in interest fees you’ll accrue by simply paying down the balance on your current credit card.

    How do you qualify for a balance transfer?

    Balance transfer credit cards are typically for consumers with good to excellent credit scores. If you’re approved for a balance transfer offer, be sure to take advantage of it quickly as they are limited-time offers.

    Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.

    Bottom line

    Our methodology

    To determine which credit cards offer the best balance transfer deals, CNBC Select analyzed 101 of the most popular credit cards that offer no interest on balance transfers issued by the biggest banks, financial companies and credit unions that allow anyone to join.

    We compared each card on a range of features, including: annual fee, balance transfer fee, rewards program, introductory and standard APR, welcome bonuses and foreign transaction fees, as well as factors such as required credit and customer reviews when available.

    For the cards that offered a rewards program, we also estimated how much cash back you might earn over a five-year period. Select teamed up with location intelligence firm Esri. The company’s data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.

    Esri’s data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.

    Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net of the annual fee.

    It’s important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)

    When choosing the best balance transfer card, we focused on the card that provides consumers with the cheapest way to pay off their debt rather than the number of rewards they could potentially earn. When you’re in credit card debt, your primary focus should be repayment. Earning rewards should be seen as a bonus, and you don’t want to spend beyond your means in order to earn points.

    The five-year rewards total and the interest rate and fees estimates are derived from a budget similar to the average American’s spending and debt. You may earn a higher or lower return depending on your spending habits.

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    For rates and fees of the Discover it® Balance Transfer, click here.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • CNBC’s best 0% APR credit cards of 2022

    CNBC’s best 0% APR credit cards of 2022

    Credit cards can charge steep interest rates if you don’t pay off your balance in full each billing cycle. The amount of interest you’re charged is listed on your cardholder agreement as your annual percentage rate (APR), and it’s often a variable rate that changes with the prime rate.

    Luckily, there are options for those that can’t afford to pay their bill in full. Some of the best credit cards offer no interest on new purchases, balance transfers or both — for up to 21 months.

    If you have lingering debt on an existing card or plan on making a large purchase, it’s financially smart to open an intro 0% APR credit card, if you use it responsibly. Below, CNBC Select rounds up some of the best credit cards that offer no interest, so you can maximize your savings. (Read more about our methodology below.)

    Best 0% APR credit cards of 2022

    Intro 0% APR for up to 21 months

    Citi Simplicity® Card

    Citi Simplicity® Card

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for 21 months on balance transfers; 0% for 12 months on purchases

    • Regular APR

    • Balance transfer fee

      Introductory fee of 3% ($5 minimum) for transfers completed within the first 4 months of account opening, then up to 5% ($5 minimum).

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Balances can be transferred within 4 months from account opening
    • One of the longest intro periods for balance transfers

    Cons

    • 3% foreign transaction fee
    • No rewards program

    Who’s this card for? The Citi Simplicity® Card is a great option for someone looking to consolidate existing credit card debt from other cards. New cardholders have four months to complete balance transfers (longer than the typical 60 to 90 days).

    The only drawback is that it does not offer cash back or any other type of rewards.

    Wells Fargo Reflect® Card

    Wells Fargo Reflect® Card

    On Wells Fargo’s secure site

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% intro APR for 18 months from account opening on purchases and qualifying balance transfers. Intro APR extension for 3 months with on-time minimum payments during the intro period. 17.49% – 29.49% Variable APR thereafter

    • Regular APR

      17.49% – 29.49% variable APR on purchases and balance transfers

    • Balance transfer fee

      Introductory fee of 3% for 120 days from account opening, then up to 5% ($5 minimum)

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Long introductory APR period up to 21 months on purchases and qualifying balance transfers
    • 3% intro balance transfer fee ($5 minimum) for first 120 days
    • Access to Visa Signature Concierge
    • Get up to $600 cell phone protection (subject to a $25 deductible)
    • Access to My Wells Fargo Deals to earn cash back in the form of an account credit when shopping, dining

    Cons

    • No rewards
    • No welcome bonus
    • 3% fee charged on foreign transactions

    Who’s this card for? The Wells Fargo Reflect® Card is ideal for someone looking to either pay off large purchases over time or consolidate existing debt.

    This card doesn’t offer any sort of spending rewards, but it does offer cell phone protection.

    Citi® Diamond Preferred® Card

    Citi® Diamond Preferred® Card

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for 21 months on balance transfers; 0% for 12 months on purchases

    • Regular APR

    • Balance transfer fee

      5% of each balance transfer; $5 minimum. Balance transfers must be completed within 4 months of account opening.

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Balances can be transferred within 4 months from account opening
    • One of the longest intro periods for balance transfers

    Cons

    • 3% foreign transaction fee

    Intro 0% APR for 18 months on balance transfers

    Citi® Double Cash Card

    Citi® Double Cash Card

    • Rewards

      2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for the first 18 months on balance transfers; N/A for purchases

    • Regular APR

    • Balance transfer fee

      For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies

    • Foreign transaction fee

    • Credit needed

    Pros

    • 2% cash back on all eligible purchases
    • Simple cash-back program that doesn’t require activation or spending caps
    • One of the longest intro periods for balance transfers at 18 months

    Cons

    • 3% fee charged on purchases made outside the U.S.
    • Estimated rewards earned after 1 year: $443
    • Estimated rewards earned after 5 years: $2,213

    Who’s this card for? The Citi® Double Cash Card is a generous cash-back credit card to use on daily expenses that also comes with a great balance transfer offer.

    As you spend on the card, you will earn 2% cash back — 1% when you make a purchase and an additional 1% when you pay your credit card bill.

    U.S. Bank Visa® Platinum Card

    U.S. Bank Visa® Platinum Card

    On U.S. Bank’s secure site

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% for the first 18 billing cycles on balance transfers and purchases

    • Regular APR

      18.99% – 28.99% (Variable)

    • Balance transfer fee

      Either 3% of the amount of each transfer or $5 minimum, whichever is greater

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Cell phone protection plan

    Cons

    • No rewards program
    • 2% to 3% foreign transaction fee
    • Balances must be transferred within 60 days from account opening

    Who’s this card for? The U.S. Bank Visa® Platinum Card is useful for those looking to transfer existing credit card debt or finance new purchases at a great rate.

    The card doesn’t come with any spending rewards, but it has a solid cell phone coverage benefit and no annual fee.

    Intro 0% APR for 15 months

    Amex EveryDay® Credit Card

    Amex EveryDay® Credit Card

    Information about the Amex EveryDay® Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      2X Membership Rewards® points at U.S. supermarkets on up to $6,000 per year in purchases (then 1X), 1X Membership Rewards® points per dollar spent on all other purchases

    • Welcome bonus

      Earn 10,000 Membership Rewards® points after you make $2,000 in purchases in your first 6 months of card membership

    • Annual fee

    • Intro APR

      0% for the first 15 months on purchases from the date of account opening, N/A for balance transfers

    • Regular APR

      15.99% – 26.99% variable

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Competitive intro period on purchases
    • 20% extra point bonus when you make 20 or more purchases in a billing period

    Cons

    • 2.7% foreign transaction fee

    Who’s this card for? The Amex EveryDay® Credit Card is for someone interested in earning transferrable travel rewards, as well as having an interest-free financing option.

    As you spend on the card, you’ll earn 2X Membership Rewards® points at U.S. supermarkets on up to $6,000 per year in purchases (then 1X) and 1X Membership Rewards points per dollar spent on all other purchases. Terms apply.

    Capital One SavorOne Cash Rewards Credit Card

    Capital One SavorOne Cash Rewards Credit Card

    On Capital One’s secure site

    • Rewards

      Earn 10% cash back on purchases made through Uber & Uber Eats, plus complimentary Uber One membership statement credits through 11/14/2024, 8% cash back on Capital One Entertainment purchases, earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel; Terms apply, 3% cash back on dining and entertainment, 3% on eligible streaming services, 3% at grocery stores (excluding superstores like Walmart® and Target®) and 1% on all other purchases

    • Welcome bonus

      Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening

    • Annual fee

    • Intro APR

      0% intro APR on purchases and balance transfers for 15 months

    • Regular APR

      19.24% – 29.24% variable 

    • Balance transfer fee

      3% fee on the amounts transferred within the first 15 months

    • Foreign transaction fee

    • Credit needed

    Pros

    • 3% cash back on dining and entertainment purchases
    • Ability to redeem rewards at any amount, unlike some other cards with $25 minimums
    • Competitive special financing offer on both new purchases and balance transfers
    • No fee charged on purchases made outside the U.S.

    Cons

    • 3% balance transfer fee on the amounts transferred within the first 15 months

    Who’s this card for? The Capital One SavorOne Cash Rewards Credit Card is a great pick for tiered cashback rewards and interest-free purchases.

    The rewards rates are as follows:

    • 10% cash back on Uber and Uber Eats
    • 5% on hotels and rental cars booked through Capital One Travel
    • 3% on dining and entertainment
    • 3% on eligible streaming services
    • 3% at grocery stores (excluding superstores like Walmart® and Target®)
    • 1% on all other purchases

    Perks include access to presale and VIP tickets for concerts, sports games and exclusive events through Capital One Entertainment.

    Chase Freedom Flex℠

    Chase Freedom Flex℠

    Information about the Chase Freedom Flex℠ has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 5% cash back on travel booked through the Chase Ultimate Rewards®, 3% on drugstore purchases and on dining (including takeout and eligible delivery services), 1% cash back on all other purchases

    • Welcome bonus

      $200 cash back after you spend $500 on purchases in your first three months from account opening

    • Annual fee

    • Intro APR

      0% for the first 15 months from account opening on purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Generous welcome bonus
    • Opportunity to earn up to 5% cash back in select categories upon activation
    • Rewards can be transferred to a Chase Ultimate Rewards card

    Cons

    • Bonus categories must be activated each quarter
    • 3% fee charged on foreign transactions
    • Estimated rewards earned after 1 year: $852
    • Estimated rewards earned after 5 years: $2,844

    Rewards totals incorporate the cash back earned from the welcome bonus

    Who’s this card for? The Chase Freedom Flex℠ is a terrific option for someone looking for a card with rotating spending categories, as well as interest-free financing.

    You can earn solid cash back with the card, including up to 5% cash back on travel purchases through the Chase travel portal and 3% on drugstore purchases and on dining. However, the real value of this card is spending within Chase’s quarterly 5% cash-back categories, so if you regularly spend in different categories, this card may be a good fit.

    Chase Freedom Unlimited®

    Chase Freedom Unlimited®

    • Rewards

      Enjoy 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases

    • Welcome bonus

      Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) – worth up to $300 cash back. That’s 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on dining and drugstores, and 3% on all other purchases.

    • Annual fee

    • Intro APR

      0% for the first 15 months from account opening on purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

    • Foreign transaction fee

      3% of each transaction in U.S. dollars

    • Credit needed

    Pros

    • No annual fee
    • Rewards can be transferred to a Chase Ultimate Rewards card
    • Generous welcome bonus

    Cons

    • 3% fee charged on foreign transactions

    Who’s this card for? The Chase Freedom Unlimited® is another great cashback card with interest-free features and is similar to the Freedom Flex card above.

    The main difference is that this card doesn’t offer the rotating cash-back categories. Instead, you’ll earn 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% on drugstore purchases and on dining and a flat 1.5% on all other purchases.

    American Express Cash Magnet® Card

    American Express Cash Magnet® Card

    Information about the American Express Cash Magnet® Card has been collected independently by Select and has not been reviewed or provided by the issuer of the cards prior to publication.

    • Rewards

      Unlimited 1.5% cash back on all purchases

    • Welcome bonus

      Earn a $200 statement credit after spending $2,000 in purchases within your first 6 months of card membership.

    • Annual fee

    • Intro APR

      0% for the first 15 months on purchases from the date of account opening, N/A for balance transfers

    • Regular APR

      18.49% to 29.49% variable

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • 0% intro APR offer

    Cons

    • 2.7% fee on purchases outside the U.S.
    • Cash back comes in the form of a statement credit (with a minimum redemption of $25)

    Who’s this card for? The American Express Cash Magnet® Card is a solid cashback card for someone looking for simplicity, as well as a 0% intro APR period.

    As you spend on the card, you’ll earn 1.5% cash back on all purchases. Terms apply.

    Blue Cash Everyday® Card from American Express

    Blue Cash Everyday® Card from American Express

    On the American Express secure site

    • Rewards

      3% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%), 3% cash back at U.S. gas stations, (up to $6,000 per year, then 1%), 3% cash back on U.S. online retail purchases, on up to $6,000 per year, then 1%. Cash back is received in the form of Reward Dollars that can be easily redeemed for statement credits.

    • Welcome bonus

      Earn a $200 statement credit after you spend $2,000 in purchases on your new Card within the first 6 months.

    • Annual fee

    • Intro APR

      0% intro APR for 15 months on purchases and balance transfers, from the date of account opening

    • Regular APR

    • Balance transfer fee

      Either $5 or 3% of the amount of each transfer, whichever is greater.

    • Foreign transaction fee

    • Credit needed

    Pros

    • 3% cash back at U.S. supermarkets (up to $6,000 a year, then 1%)
    • 3% cash back at U.S. gas stations, (up to $6,000 per year, then 1%)
    • Amex Offers, which provide statement credits or opportunity to earn more rewards at select merchants

    Cons

    • 2.7% fee on purchases made abroad
    • Not great for people who don’t regularly go grocery shopping
    • Estimated rewards earned after 1 year: $547
    • Estimated rewards earned after 5 years: $1,935

    Rewards totals incorporate the points earned from the welcome bonus

    Who’s this card for? Depending on your spending habits, it might make more sense to get the Blue Cash Everyday® Card from American Express. The Blue Cash Everyday Card is similar to the Cash Magnet Card above, but the main difference is the earning rates.

    As you spend on the card, you’ll earn as follows:

    • 3% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%)
    • 3% at U.S. gas stations (up to $6,000 per year in purchases, then 1%)
    • 3% on U.S. online retail purchases (up to $6,000 per year, then 1%)
    • 1% on all other purchases
    • Terms apply

    Wells Fargo Active Cash® Card

    Wells Fargo Active Cash® Card

    On Wells Fargo’s secure site

    • Rewards

      Unlimited 2% cash rewards on purchases

    • Welcome bonus

      Earn a $200 cash rewards bonus after spending $1,000 in purchases in the first 3 months

    • Annual fee

    • Intro APR

      0% intro APR for 15 months from account opening on purchases and qualifying balance transfers; balance transfers made within 120 days qualify for the intro rate

    • Regular APR

      19.49%, 24.49%, or 29.49% variable APR on purchases and balance transfers

    • Balance transfer fee

      Introductory fee of 3% for 120 days from account opening, then up to 5% ($5 minimum)

    • Foreign transaction fee

    • Credit needed

    Pros

    • Unlimited cash rewards
    • $200 cash rewards welcome bonus
    • No annual fee
    • Introductory APR period for first 15 months
    • Access to Visa Signature Concierge
    • Get up to $600 cell phone protection (subject to a $25 deductible)

    Cons

    • 3% fee charged on foreign transactions

    Who’s this card for? The Wells Fargo Active Cash® Card is a great choice for earning cash rewards on your everyday purchases, as well as interest-free financing.

    As you spend on the card, you will earn 2% cash rewards on all eligible purchases.

    Bank of America® Unlimited Cash Rewards Credit Card

    Bank of America® Unlimited Cash Rewards credit card

    • Rewards

      Unlimited 1.5% cash back on all purchases, but you earn 25%-75% more cash back on every purchase if you’re a Preferred Rewards member

    • Welcome bonus

      $200 online cash rewards bonus after making at least $1,000 in purchases in the first 90 days from account opening.

    • Annual fee

    • Intro APR

      Introductory 0% APR for your first 18 billing cycles on purchases and balance transfers made within 60 days of account opening.

    • Regular APR

    • Balance transfer fee

      Either $10 or 3%, whichever is greater

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Unlimited cash-back
    • $200 online cash rewards bonus

    Cons

    • 3% foreign transaction fee
    • Can’t receive a greater cash-back rate unless you’re a Preferred Rewards member
    • Estimated rewards earned after 1 year: $532
    • Estimated rewards earned after 5 years: $1,860

    Rewards totals incorporate the cash-back earned from the welcome bonus and 1.5% back

    Who’s this card for? The Bank of America® Unlimited Cash Rewards Credit Card is another solid option for someone looking for simple cash-back options as well as favorable financing options.

    As you spend on the card, you will earn 1.5% cash back on all purchases.

    How to get the most benefit from 0% APR cards

    A 0% APR card is most beneficial when you understand the terms of the offer and set up a plan to pay off your debt. Here’s what to keep in mind if you’re considering a 0% intro APR credit card for your wallet.

    Read the fine print

    Make sure you familiarize yourself with any fine print associated with the 0% APR offer, such as the expiration date, timeline for completing a balance transfer, any balance transfer fees and the interest rate once the intro period ends.

    Create a repayment plan

    You’ll need to come up with a plan to pay off credit card debt. The amount you need to pay each month in order to have a zero balance at the end of the intro period depends on the length of the intro period.

    For example, if you have a $4,500 balance on the Chase Freedom Flex, which offers an intro APR period of no interest for the first 15 months on balance transfers and purchases (after, 19.24% – 27.99% variable APR), you’ll need to pay $300 each month to pay off your old balance before the intro period ends.

    But if you have the Citi® Double Cash Card, with 0% intro APR for 18 months on balance transfers (then 18.49% – 28.49% variable APR), the monthly payment decreases to $250. Balance transfers must be completed within 4 months of account opening.

    Pay off your balance in full

    It’s very important to pay off any transferred debt or lingering new purchase balances before the intro 0% APR period ends. If you don’t, expect to be hit with the regular purchase APR. And if you have a store card, you could be hit with a bill for all the interest you accrued since the date you made your purchase or transfer (known as deferred interest). None of the cards on this list charge cardholders deferred interest.

    Learn more: 5 things to do once your balance transfer is complete.

    How to compare 0% APR and low-interest cards

    If you’re not sure whether a 0% APR card or a low-interest credit card is the right choice, ask yourself the following questions.

    After you determined which credit card you want to apply for, compare cards by these key factors:

    • Length of intro APR period: Cards can have intro periods anywhere from three months to 20 months. Many popular rewards cards offer no interest for 15 months, and non-rewards cards can have 18- and 21-month intro 0% APR periods. For new purchases or lingering debt, the longer the better, but if you’re completing a balance transfer, consider the cost of any balance transfer fees before applying.
    • Regular APR: Credit cards offering intro 0% APRs tend to have higher regular APRs than low-interest cards. Consider the regular APR before settling on a card if you think you may carry a balance once the intro 0% APR period ends.
    • Balance transfer fee: Many balance transfer cards charge a fee per transfer. This fee can be outweighed by the amount you save in interest, but make sure to do the math. If you want to avoid fees, check out the best no-fee balance transfer credit cards.
    • Annual fee: Most 0% APR cards and low interest cards have no annual fee, but some may. Make sure to review the annual fees associated with the cards.
    • Rewards and added perks: The best 0% APR cards also offer cash back, points and miles, in addition to added perks, such as purchase protection and exclusive entertainment access. While these are nice benefits, paying off debt should be your primary goal.

    FAQs

    How do 0% APR credit cards work?

    A 0% APR credit card offers no interest for a set amount of time, usually 12 to 20 months. During the intro 0% APR period, you won’t be charged interest on new purchases or balance transfers. These cards can help you consolidate credit card debt with a balance transfer, pay for new purchases over time without incurring interest charges or both.

    Balance transfer credit cards may set a limit on the amount of debt you can transfer, which is often less than your overall credit limit. Plus you may be charged a balance transfer fee, typically 3% per transfer.

    Learn more: How 0% APR cards work and how to complete a balance transfer

    What credit score is required for 0% APR credit cards?

    Most 0% APR credit cards are reserved for consumers with good (670-739) or excellent (740 and greater) credit. If your credit score is fair (580 to 669) or poor (below 580) you may have trouble qualifying for a 0% APR card.

    How does your credit score affect your interest rate?

    In general, the lower your credit score, the higher your interest rate will be. It’s important to have a good credit score for a variety of reasons: It affects your ability to get certain types of loans and/or credit cards, the size of those loans and the interest rate on your card and/or loan.

    A 0% APR credit card can help you avoid interest charges for a certain period. Using the extra cash you save not paying interest can help you pay down your debt faster, lower your credit utilization and increase your credit score.

    When should I avoid a 0% APR credit card?

    A no-interest credit card is a great tool for financing new purchases, but you need to be careful how you use one. If you have a history of overspending, you may be tempted to spend more on a 0% APR card since you have upwards of a year to pay off your entire balance without interest, compared to a regular card that requires you to pay your balance in full each billing cycle to avoid interest charges.

    Learn more: How do 0% APR credit cards work? 8 things to know before applying

    What’s the best way to use a 0% APR credit card?

    Credit cards that offer no interest on purchases and/or balance transfers are a great asset for consumers looking to save on interest charges when they carry a balance month-to-month. The best way to use a 0% APR card depends on your individual situation, but typically falls into one of three ways:

    1. If you plan on making large purchases, such as a new iPhone or workout equipment, and need more time to pay them off, a 0% APR card can help you pay over time with no interest charges.
    2. If you have debt on a high-interest card, completing a balance transfer to a card with no interest for up to 20 months can help you pay it off faster and cheaper.
    3. If you fall into both categories, a card with no interest on new purchases and balance transfers can help you pay off large expenses and old debt at the same time.

    Remember that you’ll need to make minimum payments on your balance and pay it off in full before the intro period ends to avoid interest.

    How do I avoid interest on a credit card?

    The simplest way to avoid interest charges on a credit card is to pay your balance in full by the due date. However, there’s an exception with 0% APR cards. During the length of the intro period, you are only required to make the minimum payments on your balance, and you won’t be charged interest on new purchases and/or balance transfers. Once the intro period ends, any lingering balances or new purchases and transfers will incur the regular APR.

    Do 0% APR credit cards hurt your credit?

    When you apply for a credit card (including a 0% APR card), you’ll have a hard credit pull on your credit report, which typically comes with a dip of a few points in your credit score. However, this dip is temporary and you’re credit score should rise in a few months.

    However, if you use a large amount of your credit line on your card for either purchases or a balance transfer, your credit utilization ratio could rise and cause a more significant drop in your credit score. Experts generally recommend keeping your credit utilization ratio below 30% of your total credit line. For example, if you had a $10,000 credit limit you’d want to keep your monthly spending under $3,000 to keep your credit utilization low.

    Are there any 0% APR credit cards for 21 months?

    There are a few credit cards that offer 0% APR on new purchases and balance transfers for up to 21 months.

    • The Citi Simplicity® Card offers 0% intro APR for 21 months on balance transfers from the date of first transfer and 0% intro APR for 12 months on purchases from the date of account opening (after, 18.49% – 29.24% variable APR; an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies. Balance transfers must be completed within four months of account opening).
    • The Wells Fargo Reflect® Card offers 0% intro APR for 18 months from account opening on purchases and qualifying balance transfers. You can receive an intro APR extension from three months with on-time minimum payments during the intro. After the introductory period, the interest rate will increase to 17.49% to 29.49% variable APR thereafter. There’s a introductory fee of 3% for 120 days from account opening, then up to 5% ($5 minimum). Balance transfers made within 120 days qualify for the intro rate and fee.
    • The Citi® Diamond Preferred® Card offers 0% intro APR for 21 months on balance transfers and 0% intro APR for 12 months on purchases (variable APR is 17.49% – 28.24% after; balance transfers must be completed within four months of account opening). There’s a balance transfer fee that’s 5% of each balance transfer; $5 minimum.

    Bottom line

    0% intro APR cards are powerful tools if you need flexible financing. However, needlessly holding onto debt is never a good idea, so be sure to have a plan in place to pay off any debt you have.

    And if you’re considering a 0% intro APR card, be sure to also consider one that earns cash-back or travel rewards so you can get something back on your purchases.

    Our methodology

    To determine which credit cards offer the best value, Select analyzed 234 of the most popular credit cards available in the U.S. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.

    Select teamed up with location intelligence firm Esri. The company’s data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.

    Esri’s data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.

    Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net of the annual fee.

    While the five-year estimates we’ve included are derived from a budget similar to the average American’s spending, you may earn a higher or lower return depending on your shopping habits.

    Subscribe to the Select Newsletter!

    Our best selections in your inbox. Shopping recommendations that help upgrade your life, delivered weekly. Sign-up here.

    Information about the Bank of America® Unlimited Cash Rewards Card, Amex EveryDay® Credit Card, American Express Cash Magnet® Card has been collected independently by Select and has not been reviewed or provided by the issuers of the cards prior to publication.

    For rates and fees of the Amex EveryDay® Credit Card, click here.

    For rates and fees of the American Express Cash Magnet® Card, click here.

    For rates and fees of the Blue Cash Everyday® Card from American Express, click here.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • CNBC’s best high-yield savings accounts of 2022

    CNBC’s best high-yield savings accounts of 2022

    Editor’s Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC Select will update as changes are made public.

    High-yield savings accounts reward you with higher interest rates than traditional savings accounts and allow your money to grow faster thanks to compound interest — which lets you earn interest on interest. The higher your annual percentage yield (APY), the faster your money grows and you get a better return than you would with a traditional savings account.

    While rates can fluctuate over time, high-yield savings accounts generally offer APYs over 10 times greater than the national average on savings accounts. So, if you’re building an emergency fund or saving up for a large expense, putting your money in a high-yield savings account can help you reach your goals quicker.

    To determine which high-yield savings accounts are the best overall, CNBC Select analyzed and compared dozens of savings accounts offered by online and brick-and-mortar banks, including large credit unions. We considered factors like the account’s APY, its ease of use, account accessibility, monthly fees and minimum balance requirements. The savings accounts selected offer an above-average APY to all customers (no matter their balance), are FDIC-insured, have zero monthly maintenance fees and low (or no) minimum balance requirements. (See our methodology for more information on how we choose the best high-yield savings accounts.)

    Best high-yield savings accounts of 2022

    Best overall

    LendingClub High-Yield Savings

    LendingClub Bank, N.A., Member FDIC

    • Annual Percentage Yield (APY)

    • Minimum balance

      No minimum balance requirement after $100.00 to open the account

    • Monthly fee

    • Maximum transactions

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance required
    • No monthly fees
    • Free ATM card and no ATM fees

    Cons

    • $100 minimum opening deposit required, though there’s no minimum balance after that
    • No physical branch locations

    Who’s this for? The LendingClub High-Yield Savings account stands out for offering one of the highest returns on your money, charging no monthly maintenance fee and not having a minimum balance requirement. You just need an initial $100 deposit to open the account.

    Unlike many savings accounts, LendingClub provides customers with a free ATM card and never charges any ATM fees. This makes it easy to access your savings account and withdraw money whenever you want. You can also use your funds to pay bills, send money to friends and family and make internal and external transfers.

    To add money to your savings account at LendingClub, you can deposit cash at select ATMs, deposit checks via the mobile app, do a direct deposit, make an electronic transfer from an external bank or make a wire transfer.

    Best for no fees

    Marcus by Goldman Sachs High Yield Online Savings

    Goldman Sachs Bank USA is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

      None to open; $1 to earn interest

    • Monthly fee

    • Maximum transactions

      At this time, there is no limit to the number of withdrawals or transfers you can make from your online savings account.

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • No minimum balance (just $1 to earn interest)
    • No monthly fees
    • No limit on withdrawals or transfers per statement cycle
    • Easy-to-use mobile banking app
    • Offers no-fee personal loans

    Cons

    • No option to add a checking account
    • No ATM access

    Who’s this for? Marcus by Goldman Sachs High Yield Online Savings offers no fees whatsoever, no minimum deposits and easy mobile access. It’s the most straightforward savings account to use when all you want to do is grow your money with zero conditions attached.

    The Marcus account also stands out thanks to its mobile banking app, which is simple to use and allows you to set up recurring deposits, track your savings goals and see how much interest you’ve earned this year. The bank’s U.S.-based contact center is open 24/7 for live customer support over the phone or through online chat.

    Account holders can withdraw money from their Marcus savings account online and by phone through ACH or by free wire transfer to a linked account at another bank. You can also request a withdrawal by check mailed to you.

    To add money to your account, you can transfer funds, make direct deposit payments, deposit a check or make a wire transfer. Marcus doesn’t charge a fee if you link other bank accounts for incoming and outgoing transfers, but keep in mind that your other bank might.

    While there are no ATM cards or checking account options available through Marcus, the bank does offer a variety of no-fee personal loans as well.

    Best for checking/savings combo

    Ally Bank Online Savings Account

    Ally Bank is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

      No monthly maintenance fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

      Yes, if have an Ally checking account

    Pros

    • Strong annual percentage yield on all balance tiers
    • No minimum balance
    • No monthly maintenance fee
    • Up to 6 free withdrawals or transfers per statement cycle*
    • Option to add a checking account
    • ATM access if you have a checking account

    Cons

    • $10 fee per transaction if you make more than 6 in a statement cycle
    • $25 overdraft fee

    Who’s this for? Ally is a good choice for anyone looking to do all their banking in one place. While the Ally Online Savings Account is a good high-yield account on its own, account holders can enjoy even more benefits if they also have an Ally checking account.

    In addition to a solid APY, no minimum account balance and no monthly maintenance fees, an Ally checking and savings account also gives you access to over 43,000 free Allpoint® ATMs, making it easy to withdraw cash when you need to. If you only have an online savings account, you won’t have access to a debit card.

    If you use an out-of-network ATM, Ally doesn’t charge a fee and if the ATM provider does, Ally will reimburse those fees up to $10 per month.

    Not all online banks also offer a checking account option. Saving your money with a bank that doesn’t offer a checking account means you would have to transfer your money between banks, which could take a couple of days. By law, account holders with Ally can withdraw or transfer money online up to six times per month with no penalty. After, Ally charges $10 per transfer. You can also call the bank to request a mailed check, which doesn’t count as one of your six transactions.

    You can’t deposit cash in your Ally savings account, which is standard for many online banks, but you can deposit checks remotely with eCheck Deposit on the mobile app. Account holders can organize their saving goals by creating up to 10 different “buckets” within the same savings account. For example, you can create a designated fund for a “Future Vacation” and another for “Emergency Savings.”

    Ally is also a consumer favorite because of its easy-to-use mobile app and 24/7 live customer service that is available over the phone, through online chat or on the Ally mobile app. 

    Best for easy access to your cash

    Synchrony Bank High Yield Savings

    Synchrony Bank is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Excessive transactions fee

      None, but may result in account closure

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance
    • No monthly fees
    • Up to 6 free withdrawals or transfers per statement cycle*
    • Easy ATM access
    • 1 physical branch (in Bridgewater, New Jersey)

    Cons

    • Account could close if you make more than 6 transactions in a statement cycle
    • No option to add a checking account

    Who’s this for? Withdrawing money is quick and easy when you have a Synchrony Bank High Yield Savings account. There is no minimum balance requirement, no monthly fees and a strong APY. But what makes this account stand out is its convenient withdrawal options.

    Synchrony Bank offers an optional ATM card to its savings account holders. You can access your money by ATM, wire transfer (up to three free per statement cycle) or through an electronic transfer to or from accounts you have at other banks.

    Though you are limited to six free withdrawals or transfers per statement cycle, Synchrony Bank allows you to conduct unlimited transactions at an ATM. The bank won’t charge an ATM fee, but the ATM provider may. For these charges, Synchrony Bank refunds ATM fees in the U.S. up to $5 per statement cycle.

    Still, you should be wary of how much you withdraw from an ATM because the fees, even with a $5 refund, can add up. According to Bankrate, ATM operators charge customers an average fee of $3.14. Just going to the ATM twice in one month would already put you over the refundable amount.

    To deposit money into your savings account at Synchrony Bank, you can make an electronic transfer from an external bank account that you’ve linked, do a direct deposit, make a wire transfer, mail a check or use the bank’s mobile app to deposit a check.

    Synchrony Bank’s customer service line is available seven days a week by phone or online chat, as well as 24/7 through its app so you can manage your account on the go. Additional customer perks include complimentary identity theft assistance, travel discounts and free webinars.

    Best for earning airline miles

    Bask Bank Interest Savings Account

    Bask Bank and BankDirect are divisions of Texas Capital Bank, Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance 
    • No monthly fees
    • Ability to earn American Airlines AAdvantage miles instead

    Cons

    • No option to add a checking account
    • No ATM access

    Who’s this for? If you want to maximize your interest-earning potential, the Bask Bank Interest Savings Account may be for you. It offers a very respectable cash APY to all savings account holders.

    Here’s the kicker: If you’re a frequent traveler, you can opt to earn American Airlines AAdvantage® miles back instead. You can use these miles for flights on American Airlines or any of its 20+ partner airlines. So, you can effectively fund your next vacation without any spending.

    The accounts offer no monthly fees and no minimum deposits. Just note that the bank may close your account if it remains unfunded for 60 days. Bask Bank is a division of Texas Capital Bank, but operates completely online.

    Best for welcome bonus

    SoFi Checking and Savings

    Information about SoFi Checking and Savings has been collected independently by CNBC Select and has not been reviewed or provided by the issuer prior to publication.

    • Monthly maintenance fee

    • Minimum deposit to open

    • Minimum balance

    • Annual Percentage Yield (APY)

      Members with direct deposit earn 3.75% APY on savings and Vaults balances, and 2.50% APY on their checking balances. Members without direct deposit will earn 1.20% APY.

    • Free ATM network

      55,000+ fee-free ATMs within the Allpoint® Network

    • ATM fee reimbursement

    • Overdraft fee

      No-Fee Overdraft Coverage is available; however, SoFi requires $1,000 of monthly direct deposit inflows to unlock it

    • Mobile check deposit

    Pros

    • No minimum deposit to open an account
    • 1.80% APY with direct deposit
    • 2-day-early-paycheck automatically when you set up direct deposit
    • Save your change automatically with Roundups and set savings goals with Vaults
    • Get up to 15% cash back at local establishments
    • No foreign transaction fees

    Cons

    • No reimbursement for out-of-network ATM fees
    • Not a standalone checking or savings account

    Who’s this for? The SoFi Checkings and Savings account stands out for offering a valuable welcome bonus after you set up and receive direct deposit payments. You can earn anywhere from $50 to $300, depending on the total of your direct deposits in a 30-day period.

    The account also gives you a solid return. The only caveat is that you must opt-in to direct deposit in order to get the maximum interest.

    In addition, the account comes with a debit card that has fee-free ATM access through the Allpoint® Network, which has over 55,000 locations across the country. And while paying with a debit card can sometimes lack rewards, you can get up to 15% cash back when you use your card at specific merchants.

    And if you’re looking to fully immerse yourself in the fintech/online bank space, SoFi offers a variety of financial products, including student loans, personal loans, mortgage refinancing, auto loans and more.

    Best if you want extra help saving

    Varo Savings Account

    Bank Account Services are provided by Varo Bank, N.A., Member FDIC.

    • Annual Percentage Yield (APY)

      Begin earning 3.00% and qualify to earn 5.00% if you meet requirements

    • Minimum balance

      None; $0.01 to earn savings interest

    • Monthly fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

      Yes, if have a Varo Bank Account

    Pros

    • High APY and option to earn even higher
    • No minimum balance
    • No monthly fees
    • Up to 6 free withdrawals or transfers per statement cycle*
    • ATM access at 55,000 fee-free AllPoint® ATMs with a Varo Bank Account
    • Offers 2 programs to help automate your savings

    Cons

    • Cash deposits are only available through third-party services, which charge a fee

    Who’s this for? Varo is an all-mobile national bank, so for those looking to save and don’t mind banking entirely over the phone or online, the Varo Savings Account makes a good option.

    Varo offers a solid APY to all savings account holders, as well as a checking account option. Neither accounts require minimum balances to open and neither charges monthly maintenance fees. 

    Varo stands out because of its uniquely tiered APY program that encourages you to save more.

    For those who want extra help saving, the online bank offers two programs that automatically transfer money from your Varo bank account to your savings account: Save Your Pay, which transfers a percentage of your paycheck into your savings, and Save Your Change, which rounds up your checking account transactions to the nearest dollar and transfers the difference to your savings.

    Varo also offers an ATM network with no fees (as well as no penalty for overdrafts up to $50). For any cash deposits, note that Varo only makes these available through third-party services, which may charge a fee.

    Find the best savings account for you: Help your money grow by finding the savings account that offers the best rates and features for you.

    FAQs

    How do online savings accounts work?

    While online savings accounts offer some of the highest APYs, it’s also more tedious to access your money than banking at a brick-and-mortar institution, since you’ll usually have to transfer to a checking account to use your money. This is arguably a good thing if you’re trying to grow your emergency savings, as you won’t have easy access to withdraw from the account.

    While it may seem nerve-wracking to have limited access to your savings, one of the big reasons to put your emergency fund into a high-yield account is to watch it grow. The higher your account balance is, the more money you will earn in compound interest over time.

    Can you lose money in a high-yield savings account?

    There’s a near-zero risk of capital loss when you open a savings account at an FDIC-insured bank, as your account is insured for up to $250,000. Interest rates may decrease, but your cash will not. Theoretically, your money would lose value if the inflation rate is higher than your APY, but that’s no different than a traditional savings account. So, opening a high-yield savings account is definitely worth considering.

    Do you pay taxes on a high-yield savings account?

    Interest accrued on a high-yield savings account is taxed as ordinary income. You must report the interest on your tax return for any account that earned more than $10 in one year.

    Can you withdraw money from a high-yield savings account?

    By law, consumers can withdraw or transfer cash out of a high-yield savings account up to six times per month without paying any fees. However, some accounts let you make more withdrawals for no additional fee.

    What are the cons of a high-yield savings account?

    The biggest con of a high-yield savings account is that you’re usually limited to a certain number of withdrawals each month before you’re hit with a fee — just like a traditional savings account. Further, interest rates can fluctuate over time, but that applies to all types of savings accounts. Withdrawing money may also be a slightly slower process as only a few high-yield savings accounts offer ATM cards. Most of the online high-yield savings account banks don’t have physical locations.

    Common high-yield terms you should know

    • Annual Percentage Yield (APY): The amount of interest an account earns in a year.
    • ACH transfer: When you want to make small and frequent payments electronically (direct deposit, automated bill payments, etc.); typically always free but usually takes at least one business day to complete the transfer.
    • Wire transfer: When you want to move funds from one bank account to another and have the money be available for use in the same business day; banks usually charge a fee.
    • Mobile deposit: Instead of going to the bank to deposit a check, you can use your mobile banking app to scan a photo of the check and have the funds immediately deposited into your account. It can sometimes take a day or two for the funds to be accessible.
    • ATM networks: ATMs can either be in-service or out-of-network, depending on which bank you have. When you make a transaction at an ATM that is outside your bank’s network, then a fee will most likely be applied by both the ATM operator and your bank.

    Our methodology

    To determine which high-yield savings accounts offer the best return on your money, CNBC Select analyzed dozens of U.S. savings accounts offered by online and brick-and-mortar banks, including large credit unions. We narrowed down our ranking by only considering those savings accounts that offer an above-average APY, no monthly maintenance fees and low (or no) minimum balance requirements.

    While the accounts we chose in this article consistently rank as having some of the highest APY rates, we also compared each savings account on a range of features, including ease of use and account accessibility, as well as factors such as insurance policies and customer reviews when available. We also considered users’ deposit options and each account’s compound frequency.

    All of the accounts included on this list are FDIC-insured up to $250,000. Note that the rates and fee structures for high-yield savings accounts are not guaranteed forever; they are subject to change without notice and they often fluctuate in accordance with the Fed rate. Your earnings depend on any associated fees and the balance you have in your high-yield savings account. To open an account, most banks and institutions require a deposit of new money, meaning you can’t transfer the money you already had in an account at that bank.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • CNBC’s best big bank checking accounts of 2022

    CNBC’s best big bank checking accounts of 2022

    Editor’s Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC Select will update as changes are made public.

    Big banks have a major advantage over online-only banks when it comes to convenience. With hundreds or thousands of physical branches scattered across the U.S., customers can deposit and withdraw money by visiting a teller inside or via a drive-up window or ATM machine. Customers also have the convenience of being able to speak to someone face-to-face and work out any account questions or requests, rather than needing to call in and deal with potentially long wait times.

    Online banks often offer customers better rates and lower fees since big banks have to recoup overhead costs to keep physical branches up and running. That said, there are still competitive brick-and-mortar banks that offer checking accounts with options to waive monthly fees if you meet certain requirements.

    To help you choose the right bank for your needs, CNBC Select evaluated dozens of checking accounts offered by big banks, offering access to at least 2,000 physical branches and over 4,000 fee-free ATMs in the U.S. We considered features like fees, minimum balance requirements and ease of use, among other factors to choose the top five best big bank checking accounts. (See our methodology for more information on how we choose the best checking accounts.)

    Note: Most big banks require you to enter your zip code online for the correct account offerings, and in some cases, you might not be able to open an account because of your location.

    Best big bank checking accounts of 2022

    Best at Bank of America

    Bank of America Advantage Plus Banking®

    • Monthly maintenance fee

      $12, with options to waive

    • Minimum deposit to open

    • Minimum balance

      $1,500 daily balance to avoid monthly maintenance fee

    • Annual Percentage Yield (APY)

    • Free ATM network

      16,000 Bank of America ATMs

    • ATM fee reimbursement

    • Overdraft fee

      $10 per item (max 2 per day)

    • Mobile check deposit

    Pros

    • Earn cash back on select deals at stores, restaurants and more through BankAmeriDeals®
    • Make saving easier with the Bank of America’s Keep the Change® program
    • Four ways to waive the monthly maintenance fee
    • Bank of America has a vast network of ATMs
    • Send and receive money with Zelle

    Cons

    • $10 per item overdraft fee
    • $12 monthly maintenance fee
    • $100 minimum deposit to open an account
    • No reimbursement for out-of-network ATM fees

    How to avoid the monthly fee:

    • Have at least one qualifying direct deposit of $250,
    • or maintain a minimum daily balance of $1,500 or more,
    • or be a Preferred Rewards client,
    • or be a student under age 24 who’s enrolled in high school, college, university or a vocational program

    Best at Chase

    Chase Total Checking®

    • Monthly maintenance fee

      $12, with options to waive

    • Minimum deposit to open

    • Minimum balance

      $1,500 daily balance to avoid monthly maintenance fee

    • Annual Percentage Yield (APY)

    • Free ATM network

      Access to more than 16,000 Chase ATMs

    • ATM fee reimbursement

    • Overdraft fee

      *With Chase Overdraft AssistSM, we won’t charge an Insufficient Funds Fee if you’re overdrawn by $50 or less at the end of the business day OR if you’re overdrawn by more than $50 and you bring your account balance to overdrawn by $50 or less at the end of the next business day (you have until 11 PM ET (8 PM PT) to make a deposit or transfer). Chase Overdraft Assist does not require enrollment and comes with eligible Chase checking accounts. 

    • Mobile check deposit

    Pros

    • Top-rated mobile app
    • No minimum deposit to open an account
    • Chase is no. 2 on J.D. Power’s 2019 U.S. National Banking Satisfaction Study
    • Send and receive money with Zelle®

    Cons

    • No APY
    • No reimbursement for out-of-network ATM fees

    How to avoid the monthly fee:

    • Electronic deposits made into this account totaling $500 or more,
    • or a balance at the beginning of each day of $1,500 or more in this account,
    • or an average beginning day balance of $5,000 or more in any combination of this account and linked qualifying Chase checking, savings and other balances

    Best at PNC Bank

    Virtual Wallet® with Performance Select

    Information about the PNC Bank Virtual Wallet® has been collected independently by Select and has not been reviewed or provided by the bank prior to publication. PNC Bank is a Member FDIC.

    • Monthly maintenance fee

      $25, with options to waive

    • Minimum deposit to open

    • Minimum balance

      $5,000 combined average monthly balance in your Spend and up to 7 linked PNC bank consumer checking accounts to avoid monthly maintenance fee

    • Annual Percentage Yield (APY)

      Need to call PNC for the APY offered in your area

    • Free ATM network

      18,000 PNC and PNC partner ATMs

    • ATM fee reimbursement

      Up to $20 per statement period

    • Overdraft fees

    • Mobile check deposit

    Pros

    • Three options to waive monthly maintenance fee 
    • Virtual Wallet includes individual checking and savings accounts that work together
    • New account holders can earn a welcome bonus of $400 when you establish total qualifying direct deposits of $5,000 or more to your Spend account
    • Up to $20 reimbursement for non-network ATM fees per statement period
    • No charge for overdraft protection transfer fees

    Cons

    • $25 monthly maintenance fee
    • Have to call PNC Bank to find out APY offered in your area

    How to avoid the monthly fee:

    • Have a $5,000 or greater monthly direct deposit to your Spend account
    • or maintain a $5,000 minimum monthly balance in Spend and Reserve,
    • or maintain $25,000 in all PNC consumer and/or investments accounts

    Best at U.S. Bank

    U.S. Bank Gold Checking Package

    Information about the U.S. Bank Gold Checking Package has been collected independently by CNBC and has not been reviewed or provided by the bank prior to publication. U.S. Bank is a Member FDIC.

    • Monthly maintenance fee

      $14.95, with options to waive

    • Minimum deposit to open

    • Minimum balance

    • Annual Percentage Yield (APY)

    • Free ATM network

    • ATM fee reimbursement

    • Overdraft fee

      $36 (max of 4 overdraft fees per day)

    • Mobile check deposit

    Pros

    • Easily waive the monthly maintenance fee with an open U.S. Bank personal line of credit, home mortgage, home equity loan and line of credit, personal and purpose loan or activated credit card
    • 2 out-of-network ATM reimbursements per statement period
    • No overdraft protection transfer fee for transfers made from a linked deposit account
    • Preferred rates on new auto loans, home equity loans or lines, and other personal loans (autopay may be required for benefit)
    • Up to 2 additional Easy Checking accounts with no monthly maintenance fee (requires you to be an account holder)
    • Send and receive money with Zelle

    Cons

    • $14.95 monthly maintenance fee
    • No APY

    How to avoid the monthly fee:

    • Have open a qualifying U.S. Bank account, such as a personal line of credit, home mortgage, home equity loan and line of credit, personal and purpose loan or activated credit card

    Best at Wells Fargo

    Wells Fargo Everyday Checking

    Information about the Wells Fargo Everyday Checking has been collected independently by Select and has not been reviewed or provided by the bank prior to publication. Wells Fargo is a Member FDIC.

    • Monthly maintenance fee

      $10, with options to waive

    • Minimum deposit to open

    • Minimum balance

      $500 daily deposit balance to avoid monthly maintenance fee

    • Annual Percentage Yield (APY)

    • Free ATM network

    • ATM fee reimbursement

    • Overdraft fee

      $35 (max of 3 overdraft fees per day)

    • Mobile check deposit

    Pros

    • Four ways to waive the monthly maintenance fee
    • Send and receive money with Zelle
    • Easy-to-use mobile app

    Cons

    • $25 minimum deposit to open an account
    • $35 overdraft fee
    • No APY
    • No reimbursement for out-of-network ATM fees

    How to avoid the monthly fee:

    • Maintain $500 in combined minimum deposit balances,
    • or make qualifying direct deposits totaling $500 or more,
    • or be between 17 – 24 years old
    • or have a linked Wells Fargo Campus ATM Card or Campus Debit Card (for college students)

    FAQs

    How to choose a checking account

    Before you open a checking account, consider these six factors:

    1. Insurance: Verify that the bank or credit union where you open an account provides insurance from either the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). This insurance protects and reimburses you up to your balance and the legal limit ($250,000 per individual account) in the event your bank or credit union fails.
    2. Minimum deposit requirements: Many checking accounts require you to maintain a certain balance in order to avoid the monthly maintenance fee. If you don’t meet the balance requirements, you may incur a monthly maintenance fee up to $15. However, some accounts offer several different ways you can qualify for a waived monthly fee that don’t require a minimum balance.
    3. Fees: Checking accounts charge various fees to access your money, including: monthly service/maintenance fee, overdraft fee, non-sufficient (NSF) fee and ATM fee. These fees can range from a couple dollars to $35 per occurrence, making repeat fees costly.
    4. ATM network: If you often pay with or receive cash, you’ll need to use an ATM and/or visit a branch location to withdraw money. Thankfully, all of the checking accounts mentioned above provide access to thousands of free ATMs, plus physical branch locations.
    5. Interest and rewards: Checking accounts aren’t meant for long-term savings goals, but there are some financial institutions that provide interest rates on eligible balances.
    6. Mobile app features: While you can visit physical branch locations with brick-and-mortar checking accounts, you should also consider what mobile features are offered. Mobile check deposit and integration with peer-to-peer payment apps, such as Zelle, are two common features to look for.

    Find the best savings account for you: Help your money grow by finding the savings account that offers the best rates and features for you.

    Common checking account fees

    While there are several good no-fee checking accounts out there, most checking accounts come with standard fees. Here are some of the common checking account fees you may incur:

    • Monthly maintenance fee: The monthly service fee, often up to $15, that banks or credit unions charge to maintain your account.
    • Overdraft fee: If you spend more than the amount in your account, resulting in a negative balance, you may be hit with a steep overdraft fee up to $35.
    • Non-sufficient funds (NSF) fee: If you write a check and it bounces because there isn’t enough money in your bank account, you’ll likely incur a NSF fee.
    • ATM fee: When you use an ATM that isn’t affiliated with your bank or credit union, you may be hit with two fees: one from your bank/credit union and another from the ATM operator. Banks/credit unions charge around $1.63 while ATM operators charge roughly $3.09.
    • Paper statement fee: If you don’t enroll in paperless statement, you could pay up to $5 per statement.
    • Foreign transaction fee: If you use your debit card to make purchases or withdraw money from an ATM outside of the U.S., you’ll often incur a fee that’s often 3% of the U.S. dollar amount of the transaction.
    • Account closure fee: If you close your account within 90 to 180 days of opening it, you may incur an account closure fee around $25.

    While these fees can add up, you can avoid them by responsibly managing your account and always maintaining a positive balance.

    Our methodology

    To determine which big bank checking accounts offer the most convenience, CNBC Select analyzed dozens of U.S. checking accounts offered by the largest national banks and credit unions. We narrowed down our rankings by only considering checking accounts that come from brick-and-mortar banks with broad availability, offering access to at least 2,000 physical branches and over 4,000 fee-free ATMs in the U.S.

    We compared each checking account on a range of features, including:

    • Fees
    • Minimum balance requirement
    • Number of states with branches
    • Large ATM network
    • Ease of use and account accessibility
    • Customer reviews, when available

    All of the accounts included on this list are Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) insured up to $250,000. This insurance protects and reimburses you up to your balance and the legal limit in the event your bank or credit union fails.

    The rates and fee structures for checking accounts are subject to change without notice and they often fluctuate in accordance with the prime rate.

    Your earnings depend on any associated fees and the balance you have in your checking account. To open an account, some banks and institutions may require a deposit of new money, meaning you can’t transfer money you already had in an account at that bank.

    Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.

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    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • CNBC’s best high-yield savings accounts of 2023

    CNBC’s best high-yield savings accounts of 2023

    Editor’s Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC Select will update as changes are made public.

    High-yield savings accounts have been in the spotlight in 2023. While the stock market has been highly volatile, high-yield savings accounts have been consistently paying out higher annual percentage yields (APYs) to their customers. Some of this year’s highest rates have exceeded 4% APY.

    These types of accounts reward you with higher interest rates than traditional savings accounts and allow your money to grow faster thanks to compound interest — which lets you earn interest on interest. The higher your APY, the faster your money grows and you get a better return than you would with a traditional savings account.

    While rates can fluctuate over time, high-yield savings accounts generally offer APYs over 10 times greater than the national average on savings accounts. So, if you’re building an emergency fund or saving up for a large expense, putting your money in a high-yield savings account can help you reach your goals quicker.

    To determine which high-yield savings accounts are the best overall, CNBC Select analyzed and compared dozens of savings accounts offered by online and brick-and-mortar banks, including large credit unions. We considered factors like the account’s APY, its ease of use, account accessibility, monthly fees and minimum balance requirements. The savings accounts selected offer an above-average APY to all customers (no matter their balance), are FDIC-insured, have zero monthly maintenance fees and low (or no) minimum balance requirements. (See our methodology for more information on how we choose the best high-yield savings accounts.)

    Best high-yield savings accounts of 2023

    Best overall

    LendingClub High-Yield Savings

    LendingClub Bank, N.A., Member FDIC

    • Annual Percentage Yield (APY)

    • Minimum balance

      No minimum balance requirement after $100.00 to open the account

    • Monthly fee

    • Maximum transactions

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance required
    • No monthly fees
    • Free ATM card and no ATM fees

    Cons

    • $100 minimum opening deposit required, though there’s no minimum balance after that
    • No physical branch locations

    Who’s this for? The LendingClub High-Yield Savings account stands out for offering one of the highest returns on your money, charging no monthly maintenance fee and not having a minimum balance requirement. You just need an initial $100 deposit to open the account.

    Unlike many savings accounts, LendingClub provides customers with a free ATM card and never charges any ATM fees. This makes it easy to access your savings account and withdraw money whenever you want. You can also use your funds to pay bills, send money to friends and family and make internal and external transfers.

    To add money to your savings account at LendingClub, you can deposit cash at select ATMs, deposit checks via the mobile app, do a direct deposit, make an electronic transfer from an external bank or make a wire transfer.

    Best for earning high APY

    UFB Preferred Savings

    UFB Best Savings is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

    • Maximum transactions

      No max number of transactions; Max transfer amounts may apply

    • Excessive transactions fee

    • Overdraft fees

      Overdraft fees may be charged, according to the terms, but a specific amount is not specified; overdraft protection service available

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance
    • No monthly fees
    • Free ATM card
    • Free transfers between direct deposit accounts
    • Online and SMS banking available
    • Mobile check deposits

    Cons

    • No option to add a checking account
    • No physical branch locations
    • Potential overdraft fee, though, overdraft protection is offered

    Who’s this for? The UFB Preferred Savings account is for anyone who’s focused on maximizing their returns. It offers one of the highest interest rates currently available.

    The account charges no monthly fees, allows unlimited transfers and has no minimum deposits. Whether you deposit $1 or $1,000, you’ll earn the same, high return.

    As with the other banks on this list, UFB Direct is an online-only bank, and it is a division of Axos Bank. Although there are no physical branches and you can’t add a checking account, customers do get a free ATM card.

    Best for no fees

    Marcus by Goldman Sachs High Yield Online Savings

    Goldman Sachs Bank USA is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

      None to open; $1 to earn interest

    • Monthly fee

    • Maximum transactions

      At this time, there is no limit to the number of withdrawals or transfers you can make from your online savings account.

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • No minimum balance (just $1 to earn interest)
    • No monthly fees
    • No limit on withdrawals or transfers per statement cycle
    • Easy-to-use mobile banking app
    • Offers no-fee personal loans

    Cons

    • No option to add a checking account
    • No ATM access

    Who’s this for? Marcus by Goldman Sachs High Yield Online Savings offers no fees whatsoever, no minimum deposits and easy mobile access. It’s the most straightforward savings account to use when all you want to do is grow your money with zero conditions attached.

    The Marcus account also stands out thanks to its mobile banking app, which is simple to use and allows you to set up recurring deposits, track your savings goals and see how much interest you’ve earned this year. The bank’s U.S.-based contact center is open 24/7 for live customer support over the phone or through online chat.

    Account holders can withdraw money from their Marcus savings account online and by phone through ACH or by free wire transfer to a linked account at another bank. You can also request a withdrawal by check mailed to you.

    To add money to your account, you can transfer funds, make direct deposit payments, deposit a check or make a wire transfer. Marcus doesn’t charge a fee if you link other bank accounts for incoming and outgoing transfers, but keep in mind that your other bank might.

    While there are no ATM cards or checking account options available through Marcus, the bank does offer a variety of no-fee personal loans as well.

    Best for checking/savings combo

    Ally Bank Online Savings Account

    Ally Bank is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

      No monthly maintenance fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

      Yes, if have an Ally checking account

    Pros

    • Strong annual percentage yield on all balance tiers
    • No minimum balance
    • No monthly maintenance fee
    • Up to 6 free withdrawals or transfers per statement cycle*
    • Option to add a checking account
    • ATM access if you have a checking account

    Cons

    • $10 fee per transaction if you make more than 6 in a statement cycle
    • $25 overdraft fee

    Who’s this for? Ally is a good choice for anyone looking to do all their banking in one place. While the Ally Online Savings Account is a good high-yield account on its own, account holders can enjoy even more benefits if they also have an Ally checking account.

    In addition to a solid APY, no minimum account balance and no monthly maintenance fees, an Ally checking and savings account also gives you access to over 43,000 free Allpoint® ATMs, making it easy to withdraw cash when you need to. If you only have an online savings account, you won’t have access to a debit card.

    If you use an out-of-network ATM, Ally doesn’t charge a fee and if the ATM provider does, Ally will reimburse those fees up to $10 per month.

    Not all online banks also offer a checking account option. Saving your money with a bank that doesn’t offer a checking account means you would have to transfer your money between banks, which could take a couple of days. By law, account holders with Ally can withdraw or transfer money online up to six times per month with no penalty. After, Ally charges $10 per transfer. You can also call the bank to request a mailed check, which doesn’t count as one of your six transactions.

    You can’t deposit cash in your Ally savings account, which is standard for many online banks, but you can deposit checks remotely with eCheck Deposit on the mobile app. Account holders can organize their saving goals by creating up to 10 different “buckets” within the same savings account. For example, you can create a designated fund for a “Future Vacation” and another for “Emergency Savings.”

    Ally is also a consumer favorite because of its easy-to-use mobile app and 24/7 live customer service that is available over the phone, through online chat or on the Ally mobile app. 

    Best for easy access to your cash

    Synchrony Bank High Yield Savings

    Synchrony Bank is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Excessive transactions fee

      None, but may result in account closure

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance
    • No monthly fees
    • Up to 6 free withdrawals or transfers per statement cycle*
    • Easy ATM access
    • 1 physical branch (in Bridgewater, New Jersey)

    Cons

    • Account could close if you make more than 6 transactions in a statement cycle
    • No option to add a checking account

    Who’s this for? Withdrawing money is quick and easy when you have a Synchrony Bank High Yield Savings account. There is no minimum balance requirement, no monthly fees and a strong APY. But what makes this account stand out is its convenient withdrawal options.

    Synchrony Bank offers an optional ATM card to its savings account holders. You can access your money by ATM, wire transfer (up to three free per statement cycle) or through an electronic transfer to or from accounts you have at other banks.

    Though you are limited to six free withdrawals or transfers per statement cycle, Synchrony Bank allows you to conduct unlimited transactions at an ATM. The bank won’t charge an ATM fee, but the ATM provider may. For these charges, Synchrony Bank refunds ATM fees in the U.S. up to $5 per statement cycle.

    Still, you should be wary of how much you withdraw from an ATM because the fees, even with a $5 refund, can add up. According to Bankrate, ATM operators charge customers an average fee of $3.14. Just going to the ATM twice in one month would already put you over the refundable amount.

    To deposit money into your savings account at Synchrony Bank, you can make an electronic transfer from an external bank account that you’ve linked, do a direct deposit, make a wire transfer, mail a check or use the bank’s mobile app to deposit a check.

    Synchrony Bank’s customer service line is available seven days a week by phone or online chat, as well as 24/7 through its app so you can manage your account on the go. Additional customer perks include complimentary identity theft assistance, travel discounts and free webinars.

    Best for earning airline miles

    Bask Bank Interest Savings Account

    Bask Bank and BankDirect are divisions of Texas Capital Bank, Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance 
    • No monthly fees
    • Ability to earn American Airlines AAdvantage miles instead

    Cons

    • No option to add a checking account
    • No ATM access

    Who’s this for? If you want to maximize your interest-earning potential, the Bask Bank Interest Savings Account may be for you. It offers a very respectable cash APY to all savings account holders.

    Here’s the kicker: If you’re a frequent traveler, you can opt to earn American Airlines AAdvantage® miles back instead. You can use these miles for flights on American Airlines or any of its 20+ partner airlines. So, you can effectively fund your next vacation without any spending.

    The accounts offer no monthly fees and no minimum deposits. Just note that the bank may close your account if it remains unfunded for 60 days. Bask Bank is a division of Texas Capital Bank, but operates completely online.

    Best for welcome bonus

    SoFi Checking and Savings

    Information about SoFi Checking and Savings has been collected independently by CNBC Select and has not been reviewed or provided by the issuer prior to publication.

    • Monthly maintenance fee

    • Minimum deposit to open

    • Minimum balance

    • Annual Percentage Yield (APY)

      Members with direct deposit earn 3.75% APY on savings and Vaults balances, and 2.50% APY on their checking balances. Members without direct deposit will earn 1.20% APY.

    • Free ATM network

      55,000+ fee-free ATMs within the Allpoint® Network

    • ATM fee reimbursement

    • Overdraft fee

      No-Fee Overdraft Coverage is available; however, SoFi requires $1,000 of monthly direct deposit inflows to unlock it

    • Mobile check deposit

    Pros

    • No minimum deposit to open an account
    • 1.80% APY with direct deposit
    • 2-day-early-paycheck automatically when you set up direct deposit
    • Save your change automatically with Roundups and set savings goals with Vaults
    • Get up to 15% cash back at local establishments
    • No foreign transaction fees

    Cons

    • No reimbursement for out-of-network ATM fees
    • Not a standalone checking or savings account

    Who’s this for? The SoFi Checkings and Savings account stands out for offering a valuable welcome bonus after you set up and receive direct deposit payments. You can earn anywhere from $50 to $300, depending on the total of your direct deposits in a 30-day period.

    The account also gives you a solid return. The only caveat is that you must opt-in to direct deposit in order to get the maximum interest.

    In addition, the account comes with a debit card that has fee-free ATM access through the Allpoint® Network, which has over 55,000 locations across the country. And while paying with a debit card can sometimes lack rewards, you can get up to 15% cash back when you use your card at specific merchants.

    And if you’re looking to fully immerse yourself in the fintech/online bank space, SoFi offers a variety of financial products, including student loans, personal loans, mortgage refinancing, auto loans and more.

    Best if you want extra help saving

    Varo Savings Account

    Bank Account Services are provided by Varo Bank, N.A., Member FDIC.

    • Annual Percentage Yield (APY)

      Begin earning 3.00% and qualify to earn 5.00% if you meet requirements

    • Minimum balance

      None; $0.01 to earn savings interest

    • Monthly fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

      Yes, if have a Varo Bank Account

    Pros

    • High APY and option to earn even higher
    • No minimum balance
    • No monthly fees
    • Up to 6 free withdrawals or transfers per statement cycle*
    • ATM access at 55,000 fee-free AllPoint® ATMs with a Varo Bank Account
    • Offers 2 programs to help automate your savings

    Cons

    • Cash deposits are only available through third-party services, which charge a fee

    Who’s this for? Varo is an all-mobile national bank, so for those looking to save and don’t mind banking entirely over the phone or online, the Varo Savings Account makes a good option.

    Varo offers a solid APY to all savings account holders, as well as a checking account option. Neither accounts require minimum balances to open and neither charges monthly maintenance fees. 

    Varo stands out because of its uniquely tiered APY program that encourages you to save more.

    For those who want extra help saving, the online bank offers two programs that automatically transfer money from your Varo bank account to your savings account: Save Your Pay, which transfers a percentage of your paycheck into your savings, and Save Your Change, which rounds up your checking account transactions to the nearest dollar and transfers the difference to your savings.

    Varo also offers an ATM network with no fees (as well as no penalty for overdrafts up to $50). For any cash deposits, note that Varo only makes these available through third-party services, which may charge a fee.

    Find the best savings account for you: Help your money grow by finding the savings account that offers the best rates and features for you.

    FAQs

    How do online savings accounts work?

    While online savings accounts offer some of the highest APYs, it’s also more tedious to access your money than banking at a brick-and-mortar institution, since you’ll usually have to transfer to a checking account to use your money. This is arguably a good thing if you’re trying to grow your emergency savings, as you won’t have easy access to withdraw from the account.

    While it may seem nerve-wracking to have limited access to your savings, one of the big reasons to put your emergency fund into a high-yield account is to watch it grow. The higher your account balance is, the more money you will earn in compound interest over time.

    Can you lose money in a high-yield savings account?

    There’s a near-zero risk of capital loss when you open a savings account at an FDIC-insured bank, as your account is insured for up to $250,000. Interest rates may decrease, but your cash will not. Theoretically, your money would lose value if the inflation rate is higher than your APY, but that’s no different than a traditional savings account. So, opening a high-yield savings account is definitely worth considering.

    Do you pay taxes on a high-yield savings account?

    Interest accrued on a high-yield savings account is taxed as ordinary income. You must report the interest on your tax return for any account that earned more than $10 in one year.

    Can you withdraw money from a high-yield savings account?

    By law, consumers can withdraw or transfer cash out of a high-yield savings account up to six times per month without paying any fees. However, some accounts let you make more withdrawals for no additional fee.

    What are the cons of a high-yield savings account?

    The biggest con of a high-yield savings account is that you’re usually limited to a certain number of withdrawals each month before you’re hit with a fee — just like a traditional savings account. Further, interest rates can fluctuate over time, but that applies to all types of savings accounts. Withdrawing money may also be a slightly slower process as only a few high-yield savings accounts offer ATM cards. Most of the online high-yield savings account banks don’t have physical locations.

    Common high-yield terms you should know

    • Annual Percentage Yield (APY): The amount of interest an account earns in a year.
    • ACH transfer: When you want to make small and frequent payments electronically (direct deposit, automated bill payments, etc.); typically always free but usually takes at least one business day to complete the transfer.
    • Wire transfer: When you want to move funds from one bank account to another and have the money be available for use in the same business day; banks usually charge a fee.
    • Mobile deposit: Instead of going to the bank to deposit a check, you can use your mobile banking app to scan a photo of the check and have the funds immediately deposited into your account. It can sometimes take a day or two for the funds to be accessible.
    • ATM networks: ATMs can either be in-service or out-of-network, depending on which bank you have. When you make a transaction at an ATM that is outside your bank’s network, then a fee will most likely be applied by both the ATM operator and your bank.

    Our methodology

    To determine which high-yield savings accounts offer the best return on your money, CNBC Select analyzed dozens of U.S. savings accounts offered by online and brick-and-mortar banks, including large credit unions. We narrowed down our ranking by only considering those savings accounts that offer an above-average APY, no monthly maintenance fees and low (or no) minimum balance requirements.

    While the accounts we chose in this article consistently rank as having some of the highest APY rates, we also compared each savings account on a range of features, including ease of use and account accessibility, as well as factors such as insurance policies and customer reviews when available. We also considered users’ deposit options and each account’s compound frequency.

    All of the accounts included on this list are FDIC-insured up to $250,000. Note that the rates and fee structures for high-yield savings accounts are not guaranteed forever; they are subject to change without notice and they often fluctuate in accordance with the Fed rate. Your earnings depend on any associated fees and the balance you have in your high-yield savings account. To open an account, most banks and institutions require a deposit of new money, meaning you can’t transfer the money you already had in an account at that bank.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • CNBC’s best mortgage lenders of 2022

    CNBC’s best mortgage lenders of 2022

    Most homebuyers use mortgages to purchase their homes. However, with dozens of lenders to choose from, it can be challenging to pick the one that best suits your needs. For instance, are you a first-time homebuyer or purchasing an investment property?

    Mortgage interest rates can fluctuate quite often, and the rate you are likely to receive will heavily depend on your location, credit score and credit report.

    The mortgage approval and acceptance process also comes with many fees, collectively called “lender fees.” This can include an origination fee, processing fee, application fee and an underwriting fee. In addition to lender fees, you may also pay a document preparation fee, an appraisal fee, title search fee, title insurance and more.

    Some lenders may waive certain fees or provide discounts on fees so it’s always a good idea to ask which fees have the potential to be waived. However, when you decide to move forward with a particular loan from a lender, prepare yourself to account for these additional charges.

    Below, CNBC Select rounded up a list of five of the best mortgage lenders of 2022 based on the types of loans offered, customer support and minimum down payment amount, among others (see our methodology below.)

    The best mortgage lenders of 2022

    Best for lower credit scores

    Rocket Mortgage

    • Annual Percentage Rate (APR)

      Apply online for personalized rates

    • Types of loans

      Conventional loans, FHA loans, VA loans and Jumbo loans

    • Terms

      8 – 29 years, including 15-year and 30-year terms

    • Credit needed

      Typically requires a 620 credit score but will consider applicants with a 580 credit score as long as other eligibility criteria are met

    • Minimum down payment

      3.5% if moving forward with an FHA loan

    Pros

    • Can use the loan to buy or refinance a single-family home, second home or investment property, or condo
    • Can get pre-qualified in minutes
    • Rocket Mortgage app for easy access to your account

    Cons

    • Runs a hard inquiry in order to provide a personalized interest rate, which means your credit score may take a small hit
    • Doesn’t offer USDA loans, HELOCs, construction loans, or mortgages for mobile homes
    • Doesn’t manage accounts for jumbo loans after closing

    Who’s this for? Rocket Mortgage is one of the biggest U.S. mortgage lenders and has become a household name. Most mortgage lenders look for a minimum credit score of 620 but Rocket Mortgage accepts applicants with lower credit scores at 580.

    The lender even has a program called the Fresh Start program that’s aimed at helping potential applicants boost their credit scores before applying. Keep in mind, though, that if you apply for a mortgage with a lower credit score, you may be subject to interest rates on the higher end of the lender’s APR range.

    This lender offers conventional loans, FHA loans, VA loans and jumbo loans but not USDA loans, which means this lender may not be the most appealing for potential homebuyers who want to make a purchase with a 0% down payment. Rocket Mortgage doesn’t offer construction loans (if you want to build a brand new custom home) or HELOCs, but if you’re a homebuyer who only plans to purchase a single-family home, a second home, or a condo that’s already on the market, this shouldn’t be a drawback for you.

    This lender offers flexible loan repayment terms that range from 8 – 29 years in addition to standard 15-year and 30-year terms.

    On average, it takes about 47 days to close on a home through Rocket Mortgage. However, keep in mind that, in general, much of the closing timeline will depend on how quickly you can provide all the information and documentation that’s needed and whether or not they can be processed without a major hitch.

    Best for flexible down payment options

    Chase Bank

    • Annual Percentage Rate (APR)

      Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

    • Types of loans

      Conventional loans, FHA loans, VA loans, DreaMaker℠ loans and Jumbo loans

    • Terms

    • Credit needed

    • Minimum down payment

      3% if moving forward with a DreaMaker℠ loan

    Pros

    • Chase DreaMaker℠ loan allows for a slightly smaller down payment at 3%
    • Discounts for existing customers
    • Online support available
    • A number of resources available for first-time homebuyers including mortgage calculators, affordability calculator, education courses and Home Advisors

    Cons

    • Doesn’t offer USDA loans or HELOCs
    • Existing customers discounts apply to those who have large balances in their Chase deposit and investment accounts

    Who’s this for? Chase Bank provides several options for homebuyers who would prefer to make a lower down payment on their home. The traditional advice has been to make a down payment that’s about 20% of the price of the home, however, Chase offers a loan option called the DreaMaker loan that would allow homebuyers to make a down payment that’s as low as 3% (by comparison, the FHA loan requires borrowers to make a 3.5% down payment).

    This option is made for those who can only afford a smaller down payment, but it also comes with stricter income requirements compared to their other loans (the annual income used to qualify the customer must not exceed 80% of the Area Median Income (AMI), according to the Chase team). If you meet the income requirements for the DreaMaker loan, this option could be very attractive for those who would prefer to make a down payment that’s as small as possible so they can have more money reserved for other homebuying expenses.

    In addition to the DreaMaker loan, Chase also offers a conventional loan, FHA loan, VA loan and jumbo loan (USDA loans and HELOCs are not offered by this lender). Much like other lenders, Chase has a minimum credit score requirement of 620 for their mortgage options.

    Chase offers mortgage terms that range from 10 years to 30 years, as well as fixed-rate and adjustable-rate mortgages (ARM). This lender also offers discounts for existing customers, but the requirements are rather high: For $500 off your mortgage processing fee, you need to have $150,000–$499,999 between Chase deposit accounts and Chase investment accounts; $500,000 or more in these accounts can get you up to $1,150 off the processing fee.

    On top of this, Chase provides a number of resources to help their customers navigate the process and feel comfortable managing their mortgage, including online customer support, mortgage calculators and educational articles. Chase customers typically close on their house within three weeks.

    Best for no lender fees

    Ally Bank Mortgage

    • Annual Percentage Rate (APR)

      Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

    • Types of loans

      Conventional loans, HomeReady loan and Jumbo loans

    • Terms

    • Credit needed

    • Minimum down payment

      3% if moving forward with a HomeReady loan

    Pros

    • Ally HomeReady loan allows for a slightly smaller downpayment at 3%
    • Pre-approval in just three minutes
    • Application submission in as little as 15 minutes
    • Online support available
    • Existing Ally customers can receive a discount that gets applied to closing costs
    • Doesn’t charge lender fees

    Cons

    • Doesn’t offer FHA loans, USDA loans, VA loans or HELOCs
    • Mortgage loans are not available in Hawaii, Nevada, New Hampshire, or New York

    Who’s this for? It’s common for lenders to charge a number of fees on mortgage applications, including an application fee, origination fee, processing fee and underwriting fee — these fees can end up costing a significant amount during the home-buying process. Ally Bank doesn’t charge any of these fees (they may, however, charge an appraisal fee and recording fee, and may charge title search and insurance). You can get pre-approved for a loan in as little as three minutes online and submit your application in just 15 minutes as long as you have all the necessary documents handy.

    Ally offers a HomeReady mortgage program that is geared toward low- to mid-income homebuyers (regardless of whether it’s their first time or if they’re a repeat buyer) that would allow them to put down as little as 3% for a down payment. Applicants must also have a debt-to-income ratio of no more than 50%, their income must be equal to or less than 80% of the area’s median income and at least one borrower must take a homeowner education course.

    In addition to this loan option, homebuyers can also apply for a jumbo loan (FHA loans, VA and USDA loans are not available through this lender). Customers can also choose between fixed rate and adjustable rate mortgages, and 15-year, 20-year and 30-year loan terms.

    Ally Bank customers also take an average of 36 days to close on their home. One important drawback, though, is that Ally mortgage loans are not available in every state — residents of Hawaii, Nevada, New Hampshire and New York would be unable to apply.

    Best for flexible loan options

    PNC Bank

    • Annual Percentage Rate (APR)

      Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

    • Types of loans

      Conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, HELOCs, Community Loan and Medical Professional Loan

    • Terms

    • Credit needed

    • Minimum down payment

      0% if moving forward with a USDA loan

    Pros

    • Offers a wide variety of loans to suit an array of customer needs
    • Available in all 50 states
    • Online and in-person service available
    • Pre-approval in as little as 30 minutes

    Cons

    • Doesn’t offer home renovation loans

    Who’s this for? It’s sometimes tough to find lenders that offer USDA loans in addition to other standard mortgage options, but PNC Bank includes USDA loans in their lineup. This lender also offers conventional loans, FHA loans, VA loans, jumbo loans and a PNC Bank Community Loan, which is a special program that allows homebuyers to put down as little as 3% (without paying private mortgage insurance) while still choosing between fixed-rate and adjustable-rate mortgage terms.

    This lender also offers a special loan option catered to medical professionals who are looking to buy a primary residence only. With this loan, medical professionals can apply for as much as $1 million and won’t have to pay private mortgage insurance (PMI), regardless of their down payment amount. They can also choose between fixed-rate and adjustable-rate terms.

    PNC Bank offers online and in-person mortgage application processes, which can be a plus for homebuyers who don’t live near a PNC Bank location but still want to apply for a loan. You can get online pre-approval in as little as 30 minutes as long as you have all the documentation on hand and similar to most other lenders, PNC Bank has a minimum credit score requirement of 620.

    Best for saving money

    SoFi

    • Annual Percentage Rate (APR)

      Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

    • Types of loans

      Conventional loans, jumbo loans, HELOCs

    • Terms

    • Credit needed

    • Minimum down payment

    Pros

    • Fast pre-qualification
    • Provides access to Mortgage Loan Officers for guidance
    • $500 discount for existing SoFi members
    • 0.25% price reduction when you lock in a 30-year rate for a conventional loan
    • Offers up to $9,500 cash back if you purchase a home through the SoFi Real Estate Center

    Cons

    • Doesn’t offer FHA, VA or USDA loans
    • Mortgage loans are not available in Hawaii

    Who’s this for? SoFi offers homebuyers a number of discounts that can help them save as much money as possible throughout their home buying process. When you lock in 30-year rate for a conventional loan, you can receive a 0.25% discount. And when you purchase a home through the SoFi Real Estate Center, which is powered by HomeStory, you can receive up to $9,500 in cash back. Another appealing perk is that SoFi members can get a $500 discount on their mortgage loan.

    This lender offers an online-only experience for those looking to qualify for a conventional loan, jumbo loan, or HELOC (SoFi doesn’t offer FHA, VA, or USDA mortgage loans). Terms range from 10 to 30 years and are both fixed and adjustable-rate. Similar to most other lenders, SoFi considers applicants with a minimum credit score of 620.

    Homebuyers can also take advantage of a host of resources from SoFi, like a home affordability calculator, a mortgage calculator and a home improvement cost calculator, which can really come in handy if you’re purchasing a home that needs some work done and you need to figure out ahead of time how much to budget for renovations.

    Just keep in mind, though, that SoFi’s mortgage loans are only available in 47 states and Washington, D.C. — residents of Hawaii, New York and New Mexico would be unable to apply.

    FAQs

    What is pre-approval and how does it work?

    Pre-approval is a statement or letter from a lender that details how much money you can borrow to purchase a home and what your interest rate might be. To get pre-approved, you may have to provide bank statements, pay stubs, tax forms and employment verification, to name a few. Once you’re pre-approved, you’ll receive a mortgage pre-approval letter, which you can use to begin viewing homes and start making offers. It’s best to get pre-approved at the start of your home-buying journey before you start looking at homes.

    How do mortgages work?

    A mortgage is a type of loan that you can use to purchase a home. It’s also an agreement between you and the lender that essentially says that you can purchase a home without paying for it in-full upfront — you’ll just put some of the money down upfront (usually between 3% and 20% of the home price) and pay smaller, fixed equal monthly payments for a certain number of years plus interest.

    For example, you probably can’t pay $400,000 for a home upfront, however, maybe you can afford to pay $30,000 upfront; a mortgage would allow you to make that $30,000 payment while a lender gives you a loan for $370,000 (the remaining amount) and you agree to repay that amount plus interest to the lender over the course of 15 or 30 years.

    Keep in mind that if you choose to put down less than 20%, you’ll be subject to private mortgage insurance (PMI) payments in addition to your monthly mortgage payments. However, you can usually have the PMI waived after you’ve made enough payments to build 20% equity in your home.

    What is a conventional loan?

    A conventional loan is a loan that’s funded by private lenders and sold to government enterprises like Fannie Mae and Freddie Mac. It’s the most common type of loan and some lenders may require a down payment as low as 3% or 5% for this loan.

    What is an FHA loan?

    A Federal Housing Administration loan (FHA loan) is a loan that typically allows you to purchase a home with looser requirements. For example, this type of loan may allow you to get approved with a lower credit score and applicants may be able to get away with a higher debt-to-income ratio. You typically only need a 3.5% down payment with an FHA loan.

    What is a USDA loan?

    A USDA loan is a loan offered through the United States Department of Agriculture and is aimed at individuals who want to purchase a home in a rural area. A USDA loan requires a minimum down payment of 0% — in other words, you can use this loan to buy a rural home without making a down payment.

    What is a VA loan?

    A VA mortgage loan is provided through the U.S. Department of Veterans Affairs and is meant for service members, veterans and their spouses. They require a 0% down payment and no mortgage insurance.

    What is a jumbo loan?

    A jumbo loan is meant for home buyers who need to borrow more than $647,200 to purchase a home. Jumbo loans are not sponsored by Fannie Mae or Freddie Mac and they typically have stricter credit score and debt-to-income ratio requirements.

    How is my mortgage rate decided?

    Mortgage rates change almost daily and can depend on market forces such as inflation and the overall economy. While the Federal Reserve doesn’t set mortgage rates, mortgage rates tend to move in reaction to actions taken by the Federal Reserve on its interest rates.

    Market forces may influence the general range of mortgage rates but your specific mortgage rate will depend on your location, credit report and credit score. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate.

    What is the difference between a 15-year and a 30-year term?

    A 15-year mortgage gives homeowners 15 years to pay off their mortgage in fixed, equal amounts plus interest. By contrast, a 30-year mortgage gives homeowners 30 years to pay off their mortgage. With a 30-year mortgage, your monthly payments will be lower since you’ll have a longer period of time to pay off the loan. However, you’ll wind up paying more in interest over the life of the loan since interest is charged monthly. A 15-year mortgage lets you save on interest but you will likely have a higher monthly payment.

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    Our methodology

    To determine which mortgage lenders are the best, CNBC Select analyzed dozens of U.S. mortgages offered by both online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.

    When narrowing down and ranking the best mortgages, we focused on the following features:

    • Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
    • Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender is able to cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property. 
    • Closing timeline: The lenders on our list are able to offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
    • Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances where a lender does charge such fees. 
    • Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
    • No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early. 
    • Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches. 
    • Customer support: Every mortgage lender on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
    • Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount. 

    After reviewing the above features, we sorted our recommendations by best for overall financing needs, quick closing timeline, lower interest rates and flexible terms.

    Note that the rates and fee structures advertised for mortgages are subject to fluctuate in accordance with the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee interest rate and monthly payment will remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

    Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • With mortgage rates dropping and fee changes in the pipeline, now may be the time to buy that home

    With mortgage rates dropping and fee changes in the pipeline, now may be the time to buy that home

    The average rate for a 30-year mortgage dropped to 6.15% last week — the lowest in 18 weeks.

    This dip in rates provides welcomed relief for many potential homebuyers who’ve put their dreams on pause thanks to high mortgage interest rates, which have drastically reduced their buying power. 

    On top of reduced interest rates, the Federal Housing Finance Agency (FHFA) has announced changes to its fee structure beginning May 1, 2023. These changes affect conventional loans and will reduce the cost of a loan for certain borrowers (while increasing it for others).

    Plus, according to Redfin, average home prices in the U.S. have continuously dropped, albeit slowly, since hitting their peak in May 2022.

    With rates lower than they have been and fee changes coming down the pipeline, it’s a good time to reassess the home-buying plans you may have put on hold and decide if now is the time to act.

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    Is now a good time to lock-in your mortgage rate?

    If a painfully-high interest rate was the only thing holding you back from signing a mortgage, then you may want to jump on today’s (relatively) low rates. The Federal Reserve has been steadily increasing its benchmark Federal Funds rate and has signaled its intent to continue this pattern until inflation is under control. As long as the Federal Funds rate stays high, so will mortgage rates.

    The recent dip in rates represents a significant savings for home buyers. Today’s 30-year mortgage rates are currently 0.93% lower than they were last fall, when rates hit 7.08%. For a $500,000 home loan, a 0.93% lower rate saves you $300+ on your monthly payment and over $110,000 in interest over the life of the loan.

    To get the lowest interest rate on your mortgage, however, you’ll want to make sure your credit score is as high as possible. This may be the most-important step you can take when trying to get the best terms on a mortgage.

    But before committing to buying a home, you’ll need to save up money for a down payment and closing costs. These upfront costs can easily add up to 10%- 20% of the home’s purchase price. On top of that, it’s a good idea to have money set aside for maintenance, repairs and moving costs. You’ll need to make sure you have enough money saved up before starting your home search.

    One way you can reduce some of the upfront costs of buying a home is to compare offers from lenders that don’t charge origination fees. Here are some of the best lenders with no origination fees according to our rankings:

    Ally Bank

    • Annual Percentage Rate (APR)

      Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

    • Types of loans

      Conventional loans, HomeReady loan and Jumbo loans

    • Terms

    • Credit needed

    • Minimum down payment

      3% if moving forward with a HomeReady loan

    Pros

    • Ally HomeReady loan allows for a slightly smaller downpayment at 3%
    • Pre-approval in just three minutes
    • Application submission in as little as 15 minutes
    • Online support available
    • Existing Ally customers can receive a discount that gets applied to closing costs
    • Doesn’t charge lender fees

    Cons

    • Doesn’t offer FHA loans, USDA loans, VA loans or HELOCs
    • Mortgage loans are not available in Hawaii, Nevada, New Hampshire, or New York

    Better.com Mortgage

    • Annual Percentage Rate (APR)

      Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

    • Types of loans

      Conventional loan, FHA loan, Jumbo loan and adjustable-rate mortgage (ARM)

    • Terms

    • Credit needed

    • Minimum down payment

      3.5% if moving forward with an FHA loan

    Pros

    • No application fee, origination fee, or underwriting fee
    • Pre-approval in as little as three minutes
    • 24/7 support available
    • Offers options for an adjustable-rate mortgage (ARM)
    • Promise to match competitor’s loan offer and if they are unable to, they will give you $100

    Cons

    • Doesn’t offer VA loans or USDA loans

    Navy Federal Credit Union

    • Annual Percentage Rate (APR)

      Apply online for personalized rates

    • Types of loans

      Conventional loans, VA loans, Military Choice loans, Homebuyers Choice loans, adjustable-rate mortgage

    • Terms

    • Credit needed

      Not disclosed but lender is flexible

    • Minimum down payment

      0%; 5% for conventional loan option

    Pros

    • 0% downpayment for most loan options
    • flexible repayment terms ranging from 10 years to 30 years
    • Offers refinancing, second-home financing and loans for investment properties
    • No PMI required
    • Fast pre-approval
    • RealtyPlus program allows applicants to receive up to $9,000 cash back

    Cons

    • Must be a Navy Federal Credit Union member to apply

    How will the upcoming fee changes impact me?

    The upcoming FHFA fee changes affect conforming conventional loans, which can be sold to Fannie Mae or Freddie Mac by lenders. More niche mortgages, such as jumbo loans, FHA loans and VA loans will not be affected by these changes.

    The specific fees that are changing are known as Loan Level Price Adjustments (LLPAs), which are risk-based fees applied to loans. Lenders base these fees on factors such as the borrower’s credit score, the loan-to-value ratio (LTV) and the type of mortgage. In general, you’ll pay more if your credit score is lower or if you’re borrowing a higher percentage of the property’s value (i.e. higher LTV).

    The future fee changes will add an additional layer of complexity to a process that already causes heads to spin. For example, the LLPAs for a purchase mortgage will drop for some borrowers with lower credit scores, while borrowers with higher credit scores could be paying more in certain circumstances.

    Given the amount of nuance with LLPAs, it’s important to have a conversation with your lender (or multiple lenders) to see how the upcoming changes could affect your home loan. Keep in mind that although the changes apply to loans sold to Fannie Mae or Freddie Mac from May 1, 2023, lenders will begin adjusting their fees well before that deadline.

    You can see the current fees here and the upcoming fee structures here.

    Bottom line

    Mortgage rates have dipped in recent weeks, which can help make your future mortgage payments more affordable. Just be sure to pay attention to the fees, in addition to the rate, when you are comparing mortgage loan offers.

    Also, certain fees associated with conventional loans are changing soon, which could save you money or cost you more depending on your situation. So if you’re in the process of buying a home, talk with your lender to figure out how you’ll be affected.

    Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • The credit scoring system has its downsides — here’s what a new credit scoring and reporting system could look like

    The credit scoring system has its downsides — here’s what a new credit scoring and reporting system could look like

    In the U.S., credit scores can affect every aspect of someone’s life. This three-digit number can determine the interest rate you get on a mortgage, the APR you receive on a credit card and the rates you pay for car and homeowner’s insurance.

    There are three major credit bureaus — Experian, Equifax and Transunion — which collect information on an individual’s credit use. This information is then recorded in a credit report, and a three-digit credit score is calculated using one of two major scoring models, FICO and VantageScore.

    Most scores range from 300 to 850 with higher scores indicating that a borrower is lower risk and more likely to make on-time payments. FICO uses factors like payment history, amounts owed, credit mix, length of credit history and new credit.

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    What credit scores don’t capture

    Lenders have always needed a way to determine a borrower’s creditworthiness, and credit scores were a faster, easier way to do so. 

    Yet are these three-digit numbers really a foolproof way of figuring out someone’s creditworthiness? What happens to people who don’t have credit scores or those who have poor scores?

    Barbara Kiviat, assistant professor of sociology at Stanford, explains that while credit scores are meant to predict whether or not someone will default on a loan, these scores don’t reflect why someone has defaulted.

    For example, someone may fail to pay their credit card bill in full during an economic downturn or a job loss but this doesn’t necessarily mean they’ve been irresponsible with their credit. Credit scores are supposed to show how creditworthy someone is, but they can be a flawed measure of creditworthiness because they don’t account for the many factors that affect someone’s ability to repay their debt.

    “If you look at credit scores from the perspective of other social actors, like policymakers or consumer advocates, why someone does or does not repay might start to have more bearing on how you make sense of credit scores,” says Kiviat. 

    The credit scoring system can also reflect and even worsen existing racial and wealth inequality.

    As Kiviat writes, “it is harder to maintain good credit when one faces precarious work, has no wealthy family members to turn to in emergencies, is sold predatory loans, and otherwise experiences the disadvantages minorities in the U.S. disproportionately do.”

    For racial minorities, a lack of a credit score or a credit file that’s too thin to be scored can mean a lack of access to credit. This leads many to rely on cash or loans with high APRs, creating a vicious cycle where people end up with high-interest debt that’s hard to pay off and which may ultimately hurt their credit scores.

    A 2010 CFPB report found that a more significant percentage of Black and Hispanic individuals (15%) are credit invisible, or unscorable, compared to White and Asian individuals (9%). Furthermore, a larger percentage of credit-invisible individuals reside in low-income neighborhoods (30%) than in high-income ones (4%).

    “It’s important to note that credit scores didn’t create some of the social economic disparities,” Sally Taylor, vice president and general manager at FICO, told CNBC. “They simply reflect the social economic disparities that are out there…”

    Reforming the credit scoring system

    One proposed solution to make more people’s credit visible is to include alternative forms of data on credit reports. For example, mortgage payments are included on your credit report while rental payments are typically not. Therefore, the system benefits homeowners but not renters.

    Experian Boost was launched in 2019 and uses data not typically collected on people’s credit reports such as on-time utility, streaming subscription and telecom payments. It’s a free service and it only considers positive payment history, so late payments on added accounts won’t negatively affect your score. It also recently added the ability to include rent payments in the calculation of your credit score.

    Experian Boost®

    On Experian’s secure site

    • Cost

    • Average credit score increase

      13 points, though results vary

    • Credit report affected

    • Credit scoring model used

    Results will vary. See website for details.

    However, the use of alternative data could come with drawbacks. Just as homeowners are prone to falling behind on mortgage payments during a recession, renters are too. If credit bureaus or policymakers aren’t careful, including alternative data could end up hurting the people that it’s supposed to help the most. 

    Another proposed solution is using cash-flow data from people’s bank accounts for underwriting, yet more research is still needed.

    “Credit underwriting with cash-flow data involves using financial data insights from a bank account or other types of transaction accounts to evaluate consumers and small businesses for credit,” says Melissa Koide, CEO of FinRegLab.

    FinRegLab looked at data from six non-bank financial services providers, such as Petal and Kabbage, and found that cash flow data for underwriting worked as well as traditional credit scores, and primarily benefited borrowers who were credit invisible or who had poor credit scores.

    And of course, while the credit reporting system is error-free for the majority of people, many still have mistakes on their reports that could affect their credit scores, according to Aaron Klein, senior fellow in Economic Studies at the Brookings Institution.

    How to check your credit score for free

    A recent survey done by Consumer Reports found that more than one-third of people who checked their credit report found an error, the majority of which were related to an individual’s personal information, such as an incorrect name or address. This leaves consumers with the responsibility of checking their credit reports and scores for errors.

    Credit reports became available to consumers for free in 2003. People can access one free credit report from each of the main credit bureaus once a year through annualcreditreport.com, which is authorized by federal law.

    Consumers can also check their credit scores for free throughout the year using resources provided through credit card issuers. For example, people can use Chase Credit Journey or CreditWise from Capital One to find out their VantageScore® 3.0 credit score, even if they don’t have any credit cards.

    Chase Credit Journey

    • Cost

    • Credit bureaus monitored

    • Credit scoring model used

    • Dark web scan

    • Identity theft insurance

    CreditWise® from Capital One

    Information about CreditWise has been collected independently by Select and has not been reviewed or provided by Capital One prior to publication.

    • Cost

    • Credit bureaus monitored

    • Credit scoring model used

    • Dark web scan

    • Identity insurance

    Getting your FICO score can be a bit trickier. People can access it through Experian or a lender that partners with FICO. If you want to get it through a card issuer, you’ll need to be a Discover member in order to use Discover Credit Scorecard which provides free FICO scores. 

    And in Washington, there’s been some political appetite for reform but not enough for change. 

    Congresswoman Ayanna Pressley (D-MA) has spearheaded The Comprehensive CREDIT Act of 2021 which would reform the dispute process for mistakes on credit reports and would require that credit reporting agencies provide a free score to consumers once a year.

    Bottom line

    Credit scores provide an easy way for lenders to determine whether a borrower is creditworthy. However, the credit scoring and reporting systems can function imperfectly, leaving many of the most marginalized without credit scores or with poor credit scores. This can harm people’s ability to gain access to credit.

    While there’s no consensus on how credit reporting and scoring can be more inclusive, some have proposed using alternative data or cash-flow data to underwrite decisions. Furthermore, policymakers have been considering how to make it easier for people to access their credit scores and resolve mistakes on their credit reports.

    Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • The Fed increased interest rates again — here’s why you should save more and pay off debt in response

    The Fed increased interest rates again — here’s why you should save more and pay off debt in response

    The Federal Reserve recently announced the seventh consecutive increase to the federal funds rate and indicated its intent to continue raising interest rates going forward. The Fed has repeatedly raised rates this year in an effort to corral rampant inflation that has reached 40-year highs. However, there are signs inflation is starting to cool. 

    Higher interest rates may help curb soaring prices, but it also increases the cost of borrowing which can make everyday financial products more expensive, like mortgages, personal loans and credit cards.

    Given the current economic outlook and interest rate environment, saving money and paying down high-interest debt have become more appealing. Select dives into what you should do with your money after the Fed’s interest rate hike.

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    Why the Fed’s decision to raise rates means it’s time to save and pay down debt

    A complex web of factors influences the economy and interest rates in general, making it impossible to predict the future rate environment with absolute certainty. But right now there are no signs rates will be dropping anytime soon, and the Fed says it will continue rate hikes in 2023. And even if the economic outlook suddenly shifts, it’s always a good idea to focus on the fundamentals that put you on firm financial footing. 

    That’s why now is a good time to reassess your approach to saving and to take a good hard look at your debt — especially debt with a variable interest rate.

    Savings accounts are paying better

    During the height of the pandemic, the interest you could earn on money held in a savings account was next to nothing. Even high-yield savings accounts often had APYs under 1%.

    But in a world of high interest rates, savings accounts can earn much more considerable returns. Currently, the best high-yield savings accounts offer rates of over 4% with no monthly fees. 

    At the time of writing, a UFB Best Savings account has a 4.11% APY with no minimum balance and no monthly fees. And it’s not the only account offering high returns. High-yield savings accounts with Marcus by Goldman Sachs and LendingClub also have APYs of 3% or more.

    UFB Best Savings

    UFB Best Savings is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

    • Maximum transactions

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance
    • No monthly fees

    Cons

    • No option to add a checking account
    • No physical branch locations

    Marcus by Goldman Sachs High Yield Online Savings

    Goldman Sachs Bank USA is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

      None to open; $1 to earn interest

    • Monthly fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    LendingClub High-Yield Savings

    LendingClub Bank, N.A., Member FDIC

    • Annual Percentage Yield (APY)

    • Minimum balance

      No minimum balance requirement after $100.00 to open the account

    • Monthly fee

    • Maximum transactions

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    The cost of borrowing is increasing

    While savers have reasons to rejoice during an era of high rates, borrowers may feel the financial pain of increased costs. And if you have debt tied to an adjustable interest rate, you’ll pay more for the money you’ve already borrowed.

    One of the best ways to save money during times with higher interest rates is to focus on paying down your debt with the highest interest rate first. The balance on your credit card is often a good place to start, as many cards can easily have an annual percentage rate (APR) of more than 20%. That’s more than double today’s inflation rate and far higher than what you’d earn with a savings account.

    Pro tip: There are a number of 0% APR credit cards that charge no interest for a set amount of time, typically six to 21 months.

    An emergency fund is a vital safety net

    Building up an emergency fund is a wise decision regardless of the economy’s health.

    Your personal circumstances can take a turn for the worst even if the broader economy is doing well. Although there is debate as to how much you should save in your emergency fund, a good target is to have enough funds to cover three to six months of living expenses. And, keeping your emergency fund in a high-yield savings account allows you to earn interest and have your cash work for you.

    With inflation, savings rates, and interest rates on debt all at elevated levels, you may have to balance building your savings with paying down debt.

    Bottom line

    The Federal Reserve is continuing to raise its benchmark interest rate. That means rates for mortgages, personal loans, credit cards, and savings accounts are likely to continue increasing.

    Although there are signs that the pace of the increase in rates may be slowing, the Fed hasn’t signaled it will stop with the rate hikes anytime soon. With high rates, saving becomes more appealing, and paying off your debt is even more important.

    Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • Here are 4 money moves you should make to set yourself up for financial success in 2023

    Here are 4 money moves you should make to set yourself up for financial success in 2023

    With the end of the year approaching, it may be time to reevaluate your finances. This year has been marked by record-high inflation and multiple interest rate hikes. As the Fed attempts to rein in inflation by raising interest rates, there’s a strong possibility that the economy teeters towards a recession in the coming months. 

    If you’re concerned about the economy, you’re not alone. This summer, consumer sentiment about the economy hit historic lows. Though personal finance advice is unlikely to save you from inflation or a market downturn, Select shares some personal finance tasks and tips to complete this year to help you save at least some money and to plan for the future.

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    Check the APR on your credit card debt

    When it comes to getting your finances in order, you’ll want to consider how rising interest rates affect how much interest you pay on your debt. When the Fed increases the interest rate, or the federal funds rate, it alters the interest rate on interbank lending. This, in turn, affects how much interest you pay on your credit card debt. Credit card APRs are tied to the federal funds rate. 

    In November, the Fed implemented its sixth rate hike this year. Now, the Fed’s target interest rate range is around 4%, up from near-zero interest rates during the pandemic. This means credit card APRs have been on the rise too. According to the Federal Reserve, the average APR is 18.43% for credit cardholders paying interest, up nearly 4% from five years ago. 

    In other words, it’s likely to get even more expensive to revolve a balance on your credit card in the coming months. Of course, paying it off is easier said than done, but you may consider getting a 0% balance transfer card to help avoid paying a lot in interest.

    With a 0% balance transfer card, consumers transfer their credit card balance to a new card for a small fee, usually 3% to 5% of the balance. Cardholders then pay 0% interest on that balance before the 0% introductory period ends. 

    If you think this might be a good choice for you, you’ll likely need a good credit score (a FICO score of 670 or above). You’ll also want to make sure the balance transfer fee doesn’t exceed the amount you’d be saving in interest with the new card.

    The Citi® Diamond Preferred® Card and the Wells Fargo Reflect® Card are both good options.

    The Citi® Diamond Preferred® Card has a 21-month 0% APR introductory period on balance transfers from the date of the first transfer, after that the variable APR will be 16.74% – 27.49%. Balance transfers must be completed within 4 months of account opening.

    Citi® Diamond Preferred® Card

    • Rewards

    • Welcome bonus

      For a limited time earn a $150 Statement Credit after you spend $500 on purchases in the first 3 months of account opening.

    • Annual fee

    • Intro APR

      0% for 21 months on balance transfers; 0% for 12 months on purchases

    • Regular APR

    • Balance transfer fee

      5% of each balance transfer; $5 minimum. Balance transfers must be completed within 4 months of account opening.

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Balances can be transferred within 4 months from account opening
    • One of the longest intro periods for balance transfers

    Cons

    • 3% foreign transaction fee

    The Wells Fargo Reflect® Card has a 0% introductory APR for 18 months from account opening on qualifying balance transfers with a three-month extension for cardholders who make on-time minimum payments during the introductory period. There’s a 16.74% to 28.74% variable APR thereafter. Balance transfers made within 120 days qualify for the intro rate and fee.

    Wells Fargo Reflect® Card

    On Wells Fargo’s secure site

    • Rewards

    • Welcome bonus

    • Annual fee

    • Intro APR

      0% intro APR for 18 months from account opening on purchases and qualifying balance transfers. Intro APR extension for 3 months with on-time minimum payments during the intro period. 16.74% to 28.74% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min $5.

    • Regular APR

      16.74% – 28.74% variable APR on purchases and balance transfers

    • Balance transfer fee

      Introductory fee of 3% for 120 days from account opening, then up to 5% ($5 minimum)

    • Foreign transaction fee

    • Credit needed

    Pros

    • No annual fee
    • Long introductory APR period up to 21 months on purchases and qualifying balance transfers
    • 3% intro balance transfer fee ($5 minimum) for first 120 days
    • Access to Visa Signature Concierge
    • Get up to $600 cell phone protection (subject to a $25 deductible)
    • Access to My Wells Fargo Deals to earn cash back in the form of an account credit when shopping, dining

    Cons

    • No rewards
    • No welcome bonus
    • 3% fee charged on foreign transactions

    Take advantage of a high-yield savings account

    The Fed’s moves make it more expensive for consumers to borrow but rising rates also encourage people to save. When the Fed increases rates, annual percentage yields (APYs), or the interest you earn on your deposits, increases. 

    High-yield savings accounts differ from traditional savings accounts because they offer significantly higher interest rates. The national average APY on savings accounts is 0.24%, according to the Federal Deposit Insurance Corporation (FDIC). Meanwhile, the high-yield savings accounts with the highest APYs have rates that are 18 times higher than the average APY on traditional accounts. The WSJ found that people who held their deposits in traditional savings accounts at the five largest banks missed out on more than $42 billion in interest by not switching to the five highest-yield savings accounts.

    High-yield savings accounts are a good option for people looking to store their emergency funds as consumers are able to make up to six withdrawals a month without paying fees. Select ranked LendingClub High-Yield Savings and UFB High Rate Savings as some of the best high-yield savings accounts.

    LendingClub High-Yield Savings

    LendingClub Bank, N.A., Member FDIC

    • Annual Percentage Yield (APY)

    • Minimum balance

      No minimum balance requirement after $100.00 to open the account

    • Monthly fee

    • Maximum transactions

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance required
    • No monthly fees
    • Free ATM card and no ATM fees

    Cons

    • $100 minimum opening deposit required, though there’s no minimum balance after that
    • No physical branch locations

    UFB High Rate Savings

    UFB High Rate Savings is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

    • Maximum transactions

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    Pros

    • Strong APY
    • No minimum balance
    • No monthly fees

    Cons

    • No option to add a checking account
    • No physical branch locations

    Consider maxing out your 401(k)

    If you have access to a 401(k) through your employer, you’ll have until the end of the year to contribute up to the $20,500 limit for 2022. People above the age of 50 can make catch-up contributions for a total limit of $27,000. 

    401(k) contributions are considered tax deductible. This means 401(k) contributions reduce your taxable income and therefore, the amount you pay in taxes. If you’re able to invest more in your 401(k), you may consider increasing your contribution amount to further reduce your taxable income. 

    Use up your FSA money

    FSAs are flexible spending accounts that allow people to use pretax money for out-of-pocket medical expenses. These accounts are offered through your employer, and the money is ‘use it or lose it’. This means that you must spend the money before the end of the year or risk losing it. The contribution limit in 2022 for FSAs is $2,850.

    Note that some employers offer grace periods of a few months after the year ends, but you should check with your employer. If you have an FSA, you can use your funds on everything from out-of-pocket doctor’s expenses to prescription medications to sunscreen.

    Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • If you need help covering large wedding expenses, consider these 5 personal loan lenders

    If you need help covering large wedding expenses, consider these 5 personal loan lenders

    With the average cost of a wedding at $28,000 according to The Knot, you may be exploring alternative ways to finance your special day.

    Personal loans have become a popular way to fund a variety of large expenses, including weddings. This is because they’re a more affordable alternative to credit cards since they typically carry a much lower interest rate (though the rate you receive will depend on your credit score). 

    If you’re considering using a loan to cover some or all of your wedding expenses, CNBC Select rounded up five of the best personal loan lenders for you to consider. When compiling our list, we evaluated dozens of lenders and looked at key factors like interest rates, fees, loan amounts and term lengths offered, plus other features including how your funds are distributed, autopay discounts, customer service and how fast you can get your funds. (Read more about our methodology below.)

    The best wedding loans

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    Best overall

    LightStream Personal Loans

    • Annual Percentage Rate (APR)

      5.99% to 22.49%* when you sign up for autopay

    • Loan purpose

      Debt consolidation, home improvement, auto financing, medical expenses, wedding and others

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Pros

    • Same-day funding available through ACH or wire transfer
    • Loan amounts up to $100,000
    • No origination fees, no early payoff fees, no late fees
    • LightStream plants a tree for every loan

    Cons

    • Requires several years of credit history
    • No option to pay your creditors directly
    • Not available for student loans or business loans
    • No option for pre-approval on website (but pre-qualification is available on some third-party lending platforms)

    Who’s this for? LightStream is known for offering loans with some of the lowest interest rates (plus the ability to receive an even lower interest rate when you enroll in autopay). This lender provides loans for nearly every purpose except for higher education and small business, which means using the funds to cover wedding expenses is fair game. 

    Terms range from 24 to 144 months — the longest-term option among the lenders on this list. A longer loan term typically means lower monthly payments, which can make repaying the debt feel a little more affordable. Just keep in mind that a longer term also means you’ll accrue more interest charges over the long run.

    LightStream does not charge any origination fees, administration fees or early payoff fees.

    Best for borrowing larger amounts

    SoFi Personal Loans

    • Annual Percentage Rate (APR)

      7.99% to 23.43% when you sign up for autopay

    • Loan purpose

      Debt consolidation/refinancing, home improvement, relocation assistance or medical expenses

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Pros

    • No origination fees, no early payoff fees, no late fees
    • Unemployment protection if you lose your job
    • DACA recipients can apply with a creditworthy co-borrower who is a U.S. citizen/permanent resident by calling 877-936-2269
    • Can have more than one SoFi loan at a time (state-permitting) 
    • May accept offer of employment (to start within the next 90 days) as proof of income
    • Co-applicants may apply

    Cons

    • Applicants who are U.S. visa holders must have more than two years remaining on visa to be eligible
    • No co-signers allowed (co-applicants only)

    Who’s this for? SoFi offers personal loan amounts of up to $100,000 depending on creditworthiness, which can be ideal for individuals who need to borrow larger amounts of money to cover their wedding expenses.

    SoFi allows borrowers to choose between a variable or fixed APR — most other personal loans only come with a fixed interest rate. Variable rates can go up and down over the lifetime of your loan, which means you could potentially save if the APR goes down (but the APR can also go up depending on economic conditions). However, fixed rates guarantee you’ll have the same monthly payment for the duration of the loan’s term, which makes it easier to budget for repayment.

    Best for no fees

    Marcus by Goldman Sachs Personal Loans

    • Annual Percentage Rate (APR)

      6.99% to 24.99% APR when you sign up for autopay

    • Loan purpose

      Debt consolidation, home improvement, wedding, moving and relocation or vacation

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Pros

    • No origination fees, no early payoff fees, no late fees
    • Will send direct payment to up to 10 creditors (for debt consolidation)
    • Monthly VantageScore updates
    • Earn a one-month payment vacation (interest-free) after making 12 on-time consecutive payments
    • Ability to choose your due date when you accept the loan (and again up to two more times after that)

    Cons

    • Does not accept joint applications and/or co-signers
    • Not the fastest funding (can take a week or 10 business days)
    • Slightly tougher approval requirements (especially for larger loans/lower interest)

    Who’s this for? Marcus by Goldman Sachs Personal Loans doesn’t charge any origination fees, early payoff fees, or late fees. By avoiding these fees, taking on this loan makes paying for your wedding just a little more affordable, and you won’t have to worry about accruing penalty charges for paying back the entire loan early.

    Term lengths vary from 36 to 72 months. Marcus also has a soft inquiry tool on its website, so potential borrowers can look at possible loan options based on their credit report without impacting their credit score.

    Best for lower credit scores

    Upstart Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, credit card refinancing, home improvement, wedding, moving or medical

    • Loan amounts

    • Terms

    • Credit needed

      Credit score of 300 on at least one credit report (but will accept applicants whose credit history is so insufficient they don’t have a credit score)

    • Origination fee

      0% to 10% of the target amount

    • Early payoff penalty

    • Late fee

      The greater of 5% of last amount due or $15, whichever is greater

    Pros

    • Open to borrowers with fair credit (minimum 300 score)
    • Will accept applicants who have insufficient credit history and don’t have a credit score
    • No early payoff fees
    • 99% of personal loan funds are sent the next business day after completing required paperwork before 5 p.m. Monday through Friday

    Cons

    • High late fees
    • Origination fee of 0% to 10% of the target amount (automatically withheld from the loan before it’s delivered to you)
    • $10 fee to request paper copies of loan agreement (no fee for eSigned virtual copies)
    • Must have a Social Security number

    Who’s this for? Upstart is ideal for individuals with a low credit score or even no credit history. It considers factors like education, employment, credit history and work experience. Term lengths are a bit limited, though, compared to other more flexible options; you can choose either a three-year or five-year loan.

    There are a few fees involved with this loan. Upstart charges an origination fee of up to 10% of the loan amount. And while there is no early payoff fee, this lender does charge a late fee of 5% of the last amount due or $15, whichever is greater.

    Best for next-day funding

    Discover Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, home improvement, wedding or vacation

    • Loan amounts

    • Terms

      36, 48, 60, 72 and 84 months

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Pros

    • No origination fees, no early payoff fees
    • Same-day decision (in most cases)
    • Option to pay creditors directly
    • 7 different payment options from mailing a check to pay by phone or app

    Cons

    • Late fee of $39
    • No autopay discount
    • No cosigners or joint applications

    Who’s this for? With Discover Personal Loans, you can receive your money as early as the next business day provided that your application was submitted without any errors (and the loan was funded on a weekday). So if you need funding in a pinch so you can start booking your venue and other services, this lender may be appealing.

    While there are no origination fees, Discover does charge a late fee of $39 if you fail to repay your loan on time each month. There’s no penalty for paying your loan off early or making extra payments in the same month to cut down on the interest. 

    FAQs

    What is a wedding loan?

    A wedding loan is simply a personal loan that is used to cover wedding expenses. Personal loans are a form of installment credit that can be a more affordable way to finance the big expenses in your life. In addition to weddings, you can use a personal loan for debt consolidation, home renovations, travel and more.

    How do wedding loans work?

    Most personal loan terms range anywhere from six months to seven years. The longer the term, the lower your monthly payments will be, but they usually also have higher interest rates, so it’s best to elect for the shortest term you can afford.

    The cash from a personal loan is usually delivered directly to your checking account. Once you receive the money, you have to pay back the lender in monthly installments, usually starting within 30 days.

    Your monthly loan bill will include your installment payment plus interest charges. Although none of the lenders on our list have early payoff penalties, sometimes lenders charge a fee if you make extra payments to pay your debt down quicker.

    See if you’re pre-approved for a personal loan offer.

    How big of a wedding loan can I get?

    Lenders offer a wide range of personal loan sizes, from $500 to $100,000. Before you apply, consider how much you can afford to make as a monthly payment, as you’ll have to pay back the full amount of the loan, plus interest.

    Will a wedding loan impact my credit score?

    As with any other form of credit, wedding loans and other personal loans can impact your credit score positively or negatively. Applying for a personal loan will trigger a hard inquiry so you should expect a slight dip at first, but using a personal loan to diversify your credit mix and making on-time payments can improve your score in the long run.

    How is my wedding loan rate decided?

    Your interest rate will be decided based on your credit score, credit history and income, as well as other factors like the loan’s size and term. Generally, loans with longer terms have higher interest rates than loans you pay back over a shorter period of time.

    Select now has a widget where you can put in your personal information and get matched with personal loan offers without damaging your credit score.

    Common personal loan definitions you should know

    Here are some common personal loan terms you need to know before applying.

    • Co-applicants or joint applications: A co-applicant is a broad term for another person who helps you qualify by attaching their name (and financial details) to your application. A co-applicant can be a co-signer or a co-borrower. Having a co-applicant can be helpful when your credit score isn’t so great, or if you’re a young borrower who doesn’t have much credit history. If your co-applicant has a good credit score, you might be offered better terms, including qualifying for a lower APR and/or a bigger loan. At the same time, both applicants’ credit scores will be affected if you don’t pay back your loan, so be sure that your co-applicant is someone you feel comfortable sharing financial responsibility with. 
    • Co-signers: A co-signer agrees to help you qualify for the loan, but they are only responsible for making payments if you are unable to. The co-signer does not receive the loan, nor do they necessarily make decisions about how it is used. However, the co-signers credit will be negatively affected if the main borrower misses payments or defaults.
    • Co-borrower: Unlike a co-signer, a co-borrower is responsible for paying back the loan and deciding how it is used. Co-borrowers are usually involved in decisions about how the loan is used. Some lenders will only consider two co-borrowers who share a home or business address, as this is a firm indicator that they are sharing the responsibility of money in mutually beneficial ways. Both co-borrowers’ credit scores are on the hook if either one stops making payments or defaults.
    • Direct payments: Some lenders offer direct payments when you select debt consolidation as the reason for taking out a personal loan. With direct payments, the lender pays your creditors directly, and then deposits any leftover funds into your checking or savings account. Until you see your account balance is fully paid off, it’s best to keep making payments so that you don’t get hit with additional late fees and interest charges.
    • Early payoff penalty: Before you accept a loan, look to see if the lender charges an early payoff or prepayment penalty. Because lenders expect to get paid interest for the full term of your loan, they could charge you a fee if you make extra payments to pay your debt down quicker. The fees could equal either the remaining interest you would have owed, a percentage of your payoff balance or a flat rate.
    • Origination fee: An origination fee is a one-time upfront charge that your lender subtracts from your loan to pay for administration and processing costs. It is usually between 1% and 5%, but sometimes it is charged as a flat-rate fee. For example, if you took out a loan for $20,000 and there was a 5% origination fee, you would only receive $19,000 when you got your funds. Your lender would get $1,000 of the loan off the top, and you’d still have to pay back the full $20,000 plus interest. It’s best to avoid origination fees if possible. Having a good to excellent credit score helps you qualify for loans that don’t have origination or administration fees. 
    • Unsecured versus secured loans: Most personal loans are unsecured, meaning they are not tied to collateral. However, if your credit score is less-than-stellar and you’re finding it hard to qualify for the best loans, you can sometimes use a car, house or other assets to act as collateral in case you default on your payments. When you put an asset up as collateral, you are giving your lender permission to repossess it if you don’t pay back your debts on time and in full.

    Bottom line

    Selecting the personal loan that’s right for you can make large expenses, like a wedding, feel more affordable. Pay attention to features like low or no fees, ability to receive quick funding and the maximum loan amount you can apply for.

    Our methodology

    To determine which personal loans are the best, Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions, that come with no origination or signup fees, fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.

    When narrowing down and ranking the best personal loans, we focused on the following features:

    • No origination or signup fee: None of the lenders on our best-of list charge borrowers an upfront fee for processing your loan.
    • Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
    • Flexible minimum and maximum loan amounts/terms: Each lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
    • No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
    • Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
    • Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
    • Fund disbursement: The loans on our list deliver funds promptly through either electronic wire transfer to your checking account or in the form of a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
    • Autopay discounts: We noted the lenders that reward you for enrolling in autopay by lowering your APR by 0.25% to 0.5%.
    • Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $500 to $100,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

    After reviewing the above features, we sorted our recommendations by best for overall financing needs, borrowing larger amounts, no fees, low credit scores and next-day funding.

    Note that the rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more. 

    Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • The IRS reminds Americans earning over $600 on PayPal, Venmo, or Cash App transactions to report their earnings

    The IRS reminds Americans earning over $600 on PayPal, Venmo, or Cash App transactions to report their earnings

    If you use third-party payment platforms, like PayPal, Venmo or Cash App, to collect payments for your side gig or business, the Internal Revenue Service (IRS) wants to remind you to report payments of at least $600.

    This rule is aimed at individuals who run a side hustle, small business or do part-time work. So if you’re just sending money to friends for a restaurant bill or a vacation, or collecting a one-time payment for selling something online, this won’t apply to you.

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    Before 2022, third-party transactions for business owners and side hustlers followed different thresholds: individuals needed to report gross payments exceeding $20,000 and report earnings if they had more than 200 such transactions, according to the IRS. But as a result of the American Rescue Plan Act, any transactions made after March 11, 2021 that exceed $600 must be reported to the IRS, regardless of how many of those transactions you’ve had.

    These earnings were already taxable so this is not a change in tax law, but rather just a reporting change.

    In order to report these earnings and transactions, you’ll need to file Form 1099-K. According to the IRS, you should receive this form from each third-party payment platform you received transactions through. If you incorrectly receive the form for personal transactions, the IRS recommends you contact the payment platform for a correction or to attach an explanation to your tax return.

    How to prepare to file taxes as a business owner

    Tax season already feels daunting for individuals, but if you’re a business owner — and a new business owner at that — it can feel even more stressful. If you anticipate filing Form 1099-K for this year, make sure you keep an up-to-date record of your transactions, balance sheet and other financial documents. Otherwise, inaccuracies when filing could trigger an IRS audit.

    It also helps to work with a professional bookkeeper or accountant who can help you get organized and make sense of your tax liability so you don’t feel blindsided at the last minute. If you need to hire a professional, consider using a business credit card, like the Ink Business Unlimited® Credit Card or the American Express Blue Business Cash Card, so you can get rewarded for the business expense. The Ink Business card lets you earn 1.5% cash back on all business-related expenses and the Blue Business Cash card gives you 2% cash back on eligible business purchases.

    Ink Business Unlimited® Credit Card

    • Rewards

      Earn 1.5% cash back on every purchase made for your business

    • Welcome bonus

      Earn $900 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening

    • Annual fee

    • Intro APR

      0% for the first 12 months from account opening on purchases; N/A for balance transfers

    • Regular APR

    • Balance transfer fee

      Either $5 or 5% of the amount of each transfer, whichever is greater

    • Foreign transaction fee

    • Credit needed

    Blue Business Cash™ Card from American Express

    On the American Express secure site

    • Rewards

      Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1% cash back earned is automatically credited to your statement

    • Welcome bonus

      Earn a $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months.

    • Annual fee

    • Intro APR

      0% for 12 months on purchases from date of account opening

    • Regular APR

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    TurboTax Self-Employed

    On TurboTax’s secure site

    • Cost

      Costs may vary depending on the plan selected – see breakdown by plan in the description below

    • Mobile app

    • Live support

    • Better Business Bureau rating

    Pros

    • Step-by-step guidance with a Q&A format that is easy to follow
    • TurboTax Live provides on-demand advice and a final review from a tax expert or CPA
    • Live Full Service has a tax expert prepare, sign, and file your return
    • Accuracy and maximum refund guaranteed*
    • Audit support, which provides free assistance if you get an IRS or other tax notice

    Cons

    • More costly than other software programs
    • Live expert assistance plans have additional costs

    Cost breakdown by plan:

    Save an additional $20 on TurboTax Self-Employed – prices below do not reflect discount; click “Learn More” for details

    • Self-employed (for personal and business income and expenses): $89* federal, $39* per state
    • Live self-employed (includes help from tax experts): $199* federal, $49* per state
    • Full Service Live self-employed (includes help from tax experts): $389* federal, $49* per state

    *Click here for TurboTax offer details and disclosures

    H&R Block

    On H&R Block’s secure site

    • Cost

      Costs may vary depending on the plan selected – see breakdown by plan in the description below

    • Mobile app

    • Live support

    • Better Business Bureau rating

    Pros

    • Simple step-by-step guidance that’s easy to follow
    • Unlimited on-demand chat or video support with Online Assist plans
    • Ability to speak to a tax expert who has an average of 10 years experience (costs extra)
    • Over 11,000 physical locations so you can meet with a tax expert in-person
    • Maximum refund guarantee, or H&R Block will refund the plan fees you paid
    • Audit support guarantee, which provides free assistance if you get an IRS or other tax notice
    • 100% accuracy, or H&R Block will reimburse you for any penalties or interest up to $10,000

    Cons

    • Plans that include speaking with a live tax expert cost more for federal returns
    • One of the more costly software programs

    Cost breakdown by plan:

    • Self-employed (for personal and business income and expenses): $91.99 federal, $44.99 per state per state
    • Online Assist Self-employed (includes help from tax experts): $194.99 federal, $44.99 per state

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • Looking for a new credit card but not sure what to get? Use this tool to find the best one for you

    Looking for a new credit card but not sure what to get? Use this tool to find the best one for you

    When it comes to finding the right credit card, you’ll want to consider a variety of factors. For instance, what types of credit cards can you get given your credit score? What do you like using rewards for — travel or cash-back? Are you willing to pay an annual fee?

    With so many different types of credit cards on the market, it can be hard to know which one is right for you. For that reason, Select has launched a credit card marketplace.

    The marketplace is designed to help you find the best credit card based on your lifestyle. With Select’s marketplace, people can search for cards based on credit score requirements, types of credit cards and card issuers. It’s free to browse and doesn’t require entering any personal information.

    Click here to check out Select’s Credit Card Marketplace

    Your credit score plays a big part in what type of credit card you can qualify for — most rewards credit cards require cardholders to have at least a good FICO score (or a 670 and above). The credit card marketplace allows people to filter for cards based on their credit scores, so consumers can see what cards they’re eligible for even if they have less than stellar credit. Just remember that credit card issuers look at factors beyond your credit score, such as income and the length of your credit history, so a certain credit score will not guarantee your approval for a card.

    The credit card marketplace also allows you to search for credit cards based on your lifestyle and financial needs. If you want a card that earns you miles and points so you can take that destination trip to Bali, Select has you covered: you can filter for travel cards or cards with no foreign transaction fees in the marketplace. Or if you need a 0% APR card to make gift purchases for the holiday season, you can filter for that too. The marketplace also has card options for students.

    Whatever your needs are —whether it’s a no-annual fee card, a cash-back card, a business card — the marketplace has options for you.

    And of course, if you want to search for cards offered by certain credit card issuers, you can do so through the marketplace. For instance, if you aren’t eligible for any more Chase credit cards because of its 5/24 rule, you can filter your search to only show American Express or Capital One cards.

    Regardless of what type of credit card you’re looking for, the credit card marketplace can help you narrow down your search to find the right card for your needs, and it’s just a click away.

    Click here to check out Select’s Credit Card Marketplace

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • How much money should you have in a high-yield savings account?

    How much money should you have in a high-yield savings account?

    A checking account and a savings account are two basic, but very important, accounts for managing money. And while there isn’t any one “correct” way for an individual to manage the money in their checking and savings accounts, there are some general rules of thumb that can help you figure out how much money you should have in each account.

    “Like many Americans, you may default to leaving extra funds in a traditional checking or savings account,” says Dan Stampf, a CFP® and Vice President of Advisory Solutions for Personal Capital. “Maybe you haven’t decided how to allocate it to investment accounts. Perhaps you’re stowing away money for a rainy day or emergency fund. Or you could be building up savings for a short-term goal like funding a wedding or a vacation.”

    It’s important to note that you’re essentially losing money if you allow that cash to just sit in a low-yield checking account, as the value of your money is being eaten away by inflation and you’re missing out on higher interest payments from a high-yield savings account. This is why high-yield savings accounts are generally recommended as a vehicle for keeping savings, including your emergency fund.

    Some checking accounts, like the Ally Interest Checking Account or the Capital One 360 Checking® accounts do offer slightly higher interest rates compared to traditional checking accounts, but the interest is still lower than what high-yield savings accounts offer.

    How much money should you keep in a high-yield savings account?

    Of course, you do want to make sure you’re investing — and not only saving — so you can reach long-term goals like retirement. So you do have to draw a line between how much you should invest versus keep in a savings account.

    “Everyone’s financial situation is different and the amount of cash you have on hand will depend on your life stage and savings goals,” Stampf says. “As a general rule, consider aiming to have six to 12 months worth of liquid cash or cash alternatives, so you can withdraw from those if needed without touching your [investment] portfolio.”

    Avoid over-saving

    Stampf also cautions against over-saving for emergencies since keeping too much cash on hand could mean not having enough of your money invested, which could potentially undermine your retirement goals or other investing goals.

    You can avoid over-saving by targeting a specific number for your emergency fund. Maybe a fully funded emergency account for you means having six months’ worth of necessary expenses saved; take your monthly expenses and multiply that by six to find your target amount. You might also consider using a budgeting app, like Mint or Personal Capital, to help you figure out what your total monthly expenses look like.

    And of course, a high-yield savings account is also the best way to save for large expenses that you foresee having to make in the near future (1–3 years). It’s prudent to make sure you save for these expenses on top of your fully-funded emergency account money. And the higher interest rates let you grow your balance just a little quicker. Select ranked the Marcus by Goldman Sachs High Yield Online Savings as the best account for no fees.

    Marcus by Goldman Sachs High Yield Online Savings

    Goldman Sachs Bank USA is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

      None to open; $1 to earn interest

    • Monthly fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle *The 6/statement cycle withdrawal limit is waived during the coronavirus outbreak under Regulation D

    • Excessive transactions fee

    • Overdraft fees

    • Offer checking account?

    • Offer ATM card?

    The SoFi Checkings and Savings also stands out since it offers a welcome bonus after you setup and receive direct deposit payments. You can earn anywhere from $50 to $300, depending on the amounts of your direct deposits in a 30-day period.

    SoFi Checking and Savings

    Information about Sofi Checking and Savings has been collected independently by Select and has not been reviewed or provided by the issuer prior to publication.

    • Monthly maintenance fee

    • Minimum deposit to open

    • Minimum balance

    • Annual Percentage Yield (APY)

      Members with direct deposit earn 3.00% APY on savings and Vaults balances, and 2.50% APY on their checking balances. Members without direct deposit will earn 1.20% APY.

    • Free ATM network

      55,000+ fee-free ATMs within the Allpoint® Network

    • ATM fee reimbursement

    • Overdraft fee

      No-Fee Overdraft Coverage is available; however, SoFi requires $1,000 of monthly direct deposit inflows to unlock it

    • Mobile check deposit

    Pros

    • No minimum deposit to open an account
    • 1.80% APY with direct deposit
    • 2-day-early-paycheck automatically when you set up direct deposit
    • Save your change automatically with Roundups and set savings goals with Vaults
    • Get up to 15% cash back at local establishments
    • No foreign transaction fees

    Cons

    • No reimbursement for out-of-network ATM fees
    • Not a standalone checking or savings account

    Bottom line

    A high-yield savings account can sometimes be a happy medium between investing for the long-term and keeping liquid cash on hand for shorter-term large expenses, but it’s still important to avoid over-saving. ]

    Stampf recommends keeping six to 12 months’ worth of expenses in a high-yield savings account for easy access to cash in case of an emergency and saving for larger expenses that are are coming in the short term, like buying a home. Of course, you’ll want to also consider your stage of life and your needs when determining how much money to keep in a high-yield savings account.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • The best hardship personal loans if you need cash but have a low credit score

    The best hardship personal loans if you need cash but have a low credit score

    Personal loans are a common way to pay for large expenses like weddings, funerals and home renovations. In fact, personal loan balances are up 31% from last year, according to a TransUnion report. But they can also be used to float the costs of a major emergency or hardship. This is especially handy since sometimes these events can wind up being a lot more costly than we might expect and a basic emergency fund may not suffice.

    This category of personal loans has unofficially become known as hardship personal loans. They’re regular personal loans that you can apply for when you just happen to be facing a hard time. And, there are some lenders out there that even cater to potential borrowers with lower credit scores.

    Select rounded up some personal loan lenders you can apply to for funding during a difficult time. We looked at key factors like interest rates, fees, loan amounts and term lengths offered, plus other features including how your funds are distributed, autopay discounts, customer service and how fast you can get your funds. (Read more about our methodology below.)

    Get matched with personal loan offers.

    Best hardship personal loans for bad credit

    FAQs

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    Best for people without a credit history

    Upstart Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, credit card refinancing, home improvement, wedding, moving or medical

    • Loan amounts

    • Terms

    • Credit needed

      Credit score of 300 on at least one credit report (but will accept applicants whose credit history is so insufficient they don’t have a credit score)

    • Origination fee

      0% to 10% of the target amount

    • Early payoff penalty

    • Late fee

      The greater of 5% of last amount due or $15, whichever is greater

    Pros

    • Open to borrowers with fair credit (minimum 300 score)
    • Will accept applicants who have insufficient credit history and don’t have a credit score
    • No early payoff fees
    • 99% of personal loan funds are sent the next business day after completing required paperwork before 5 p.m. Monday through Friday

    Cons

    • High late fees
    • Origination fee of 0% to 10% of the target amount (automatically withheld from the loan before it’s delivered to you)
    • $10 fee to request paper copies of loan agreement (no fee for eSigned virtual copies)
    • Must have a Social Security number

    Who’s this for? Upstart is ideal for individuals who don’t have a sufficient enough credit history to qualify for most other loans and forms of credit. This lender is also ideal for those who do have a credit score that’s on the lower end.

    You can choose a three-year or five-year loan and borrow anywhere from $1,000 to $50,000. Plus, Upstart may be able to disburse your funds quickly. You can get your money as soon as the next business day if you accept the loan before 5 p.m. EST Monday through Friday. 

    One other major draw for Upstart is that this lender doesn’t charge any prepayment penalties. In other words, if you choose to pay off your loan early, you won’t be hit with a fee as a consequence.

    Best for flexible terms

    OneMain Financial Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, major expenses, emergency costs

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

      Flat fee starting at $25 to $500 or percentage ranging from 1% to 10% (depends on your state)

    • Early payoff penalty

    • Late fee

      Up to $30 per late payment or up to 15% (depends on your state)

    Pros

    • Approves applicants with bad or fair credit
    • No early payoff fees
    • Reasonable loan minimums ($1,500) for smaller needs
    • Can pre-qualify with a soft credit check (no hard inquiry right away)
    • ACH funding within 1-2 business days (sometimes same day with proper paperwork)
    • Option to apply for secured loan (with collateral) for potentially lower rates
    • Borrowers can choose the date the bill is due each month
    • Applicants may apply with a co-applicant or, if married, may apply for a loan separately from spouse

    Cons

    • High origination fee
    • High interest rates
    • No autopay APR discount
    • No co-signers

    Information about OneMain Financial’s secured loans:

    While not required, applicants who don’t qualify for an unsecured personal loan with OneMain Financial may be offered a secured loan. A secured loan lets borrowers who want to use the equity from their car potentially qualify for lower interest that way. Rates, repayment terms and agreements vary by individual and the state in which apply. Learn more by checking for offers on OneMain Financial’s site.

    OneMain Financial link provided by Even Financial.

    OneMain Financial consumer loans are offered in 44 states (we do not lend in AK, AR, CT, DC, MA, RI, and VT). Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z such as college, university or vocational expense; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes.

    Example loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07.

    Additional conditions for secured offers: Secured offers require a first lien on a motor vehicle that meets our value requirements, titled in your name with valid insurance. The lender places a lien on the collateral until the loan is paid in full. Active duty military, their spouse or dependents covered by the Military Lending Act may not pledge any vehicle as collateral.

    Funding options; availability of funds: Loan proceeds may be disbursed by check or electronically deposited to the borrower’s bank account through the Automated Clearing House (ACH) or debit card (SpeedFunds) networks. ACH funds are available approximately 1 to 2 business days after the loan closing date. Funds through SpeedFunds can be accessed on the loan closing date by using a bank-issued debit card.

    Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600.

    Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: North Carolina: $7,500.

    Who’s this for?  OneMain Financial is a good option for people who want different options when it comes to the length of the repayment period. Borrowers can choose between term lengths ranging from 24 to 60 months.

    OneMain offers loan amounts ranging from $1,500 to $20,000 (this can vary by state). This lender also doesn’t charge any early payoff penalty fees. However, they do charge origination fees can either be a flat fee ranging from $25 to $500 or a percentage of the loan you’ve taken out, ranging from 1% to 10%, depending on your state. Late fees can cost up to $30 per late payment or 1.5% to 15% of the late amount of your last monthly payment.

    And while most personal loans are unsecured, OneMain Financial offers borrowers the option of using collateral in order to receive better loan terms, like a lower interest rate.

    Best for quick funding

    Avant Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, major expenses, emergency costs, home improvements

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

      Up to $25 per late payment after 10-day grace period

    Pros

    • Lends to applicants with scores lower than 600
    • No early payoff fees
    • Can pre-qualify with a soft credit check (no hard inquiry)
    • Quick funding (often by the next day)
    • Late payment grace period of 10 days

    Cons

    • Origination fee
    • Potentially high interest (caps at 35.99% APR)
    • No autopay APR discount
    • No direct payments to creditors (for debt consolidation)
    • No co-signers

    Who’s this for? Avant Personal Loans can be a good option for those who need money in a pinch. If you manage to be approved by 4:30 p.m. CT Monday through Friday, you can receive your funds as early as the next day. Of course, quick funding can also depend on whether or not you have submitted all the necessary information in a timely manner.

    This lender also lets you check to see if you prequalify for the loan without harming your credit score. If your credit score isn’t great, you can still get approved since Avant looks at both your credit score and income.

    You can borrow as little as $2,000 and as much as $35,000, and loan terms range from 24 to 60 months.

    The origination fees range from 0% to 4.75% of the loan amount. Also, keep in mind that this lender charges a late fee of $25 if you don’t make your payment within ten days after the due date.

    Best for fast approval

    LendingPoint Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, wedding, car repair, home renovations and more

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

      Origination or other fees from 0% to 7% may apply depending upon your state of residence

    • Early payoff penalty

    • Late fee

      Currently, LendingPoint does not charge any late fees but reserves the right to assess late fees of up to $30. Fees vary by state.

    Pros

    • Fast application with same-day approval
    • Possible next-day funding (after final documents are verified/approved)
    • May approve applicants with minimum 620 credit score
    • Allows soft inquiry to prequalify
    • No early payoff fees

    Cons

    • Origination fees from 0% to 6%
    • Not available in Nevada or West Virginia
    • Must have a social security number
    • No joint or co-signed loans

    Who’s eligible to apply for a LendingPoint loan:

    1. You must be at least 18 years of age.
    2. You must be able to provide a U.S. federal, state or local government issued photo ID.
    3. You must have a social security number.
    4. You must have a minimum annual income of $40,000 (from employment, retirement or some other source).
    5. You must have a verifiable personal bank account in your name.
    6. You must live in one of the states where LendingPoint does business (excludes Nevada and West Virginia). 

    Who’s this for? LendingPoint offers pre-qualification so you can check the terms of your potential loan without impacting your credit score. But the biggest appeal to LendingPoint is that this lender will inform you of the approval decision within seconds of applying. Generally, it will take one business day to receive the funds.

    There is, however, a minimum annual income requirement of $35,000 in order to qualify to apply for the loan, and these loans are not available to residents of Nevada or West Virginia. When determining eligibility for a loan, LendingPoint considers credit score, loan term, credit usage, loan amount and other factors.

    Loan amounts range from $2,000 to $36,500, and the length of the loan term can be anywhere from 24 to 72 months. The origination fees range from 0% to 7% of your total loan amount.

    Personal loan FAQs

    What is considered a bad credit score?

    Here is how lenders classify “fair” and “poor” credit scores:

    FICO Score

    • Very poor: 300 to 579
    • Fair: 580 to 669
    • Good: 670 to 739
    • Very good: 740 to 799
    • Excellent: 800 to 850

    VantageScore

    • Very poor: 300 to 499
    • Poor: 500 to 600
    • Fair: 601 to 660
    • Good: 661 to 780
    • Excellent: 781 to 850

    Scores lower than 670, and certainly scores lower than 600, will most likely disqualify you for the most affordable personal loans. But if you’re in a pinch, it’s not all-out impossible to get a loan with a credit score in the high 500s or low 600s.

    Can I pre-qualify without hurting my credit score?

    Yes, it is possible to pre-qualify for a personal loan without hurting your credit score. Do some research before you apply. Read reviews and learn what to consider before agreeing to take on a loan. When you’re ready to apply, follow these steps to make sure you don’t ding your score too much.

    1. Shop around for the best rate. Avoid hard inquiries by knowing your credit score before you submit a formal application so you know what you might qualify for. Many lenders will allow you to submit a prequalification form. Or consider using a lending platform (such as Upstart or LendingTree) to view multiple offers at once.
    2. Decide on the best offer. Choose the loan with the best monthly payment and interest rate for your budget. Be sure to look at how much the loan will cost you over the full length of the term and decide if the cost is worth it.
    3. Submit a formal application. Have your social security number on hand, as well as supporting documents such as bank statements and paystubs.
    4. Wait for final approval. This could take just a few minutes, an hour or up to 10 days. To facilitate speedier approval, apply during normal business hours and submit the required documents right away.
    5. Get your funds. Once your loan is approved, you’ll be asked to input your bank account information so the funds are deposited into your account. You may also be able to request a paper check from your lender, or in the case of a consolidation loan, you may be able to have funds sent right to your creditors.

    Do personal loans build credit?

    Personal loans are a form of installment credit, which affect both your credit report and your credit score. Having both installment and revolving credit in your profile will strengthen your credit mix.

    Having a diverse credit mix is helpful — but it’s not everything. Some say that adding a new installment loan, like a car loan or a mortgage, can boost your score, but there’s no sense in taking on debt (plus interest) unless you actually need it.

    While a new installment loan might boost your score by strengthening your credit mix, a personal loan will only improve your credit over time if you can afford to make on-time payments. Late and missed payments show up as negative marks on your credit report.

    While taking on an installment loan won’t boost your score a whole lot, using a personal loan to pay off credit card debt could increase in your credit score. Paying off a card will have a big impact on your credit utilization rate, which is a major factor in determining your credit score.

    Once your cards are paid off, aim to keep your spending under 10% of your available credit. If you don’t take on more credit card debt and you pay your personal loan on time each month, you’ll see a noticeable improvement to your credit score.

    What’s the difference between secured vs. unsecured loans?

    A secured loan is a loan backed by collateral. The most common types of secured loans are mortgages and car loans, where the collateral is your home or car. But really, collateral can be any kind of financial asset you own. And if you don’t pay back your loan, the bank can seize your collateral as payment. A repossession stays on your credit report for up to seven years.

    An unsecured loan requires no collateral, though you’re still charged interest and sometimes fees. Student loans, personal loans and credit cards are all examples of unsecured loans.

    Since there’s no collateral, financial institutions give out unsecured loans based in large part on your credit score, income and history of repaying past debts. For this reason, unsecured loans may have higher interest rates (but not always) than secured loans.

    Get matched with personal loan offers.

    Bottom line

    When facing a financially difficult time, having a low credit score can often limit the options you have available to you, since you may not qualify for certain credit cards or other loans. However, some personal loan lenders that cater to lower credit scores may be able to provide some relief. Just keep in mind that with a lower credit score, you may be subject to higher interest rates.

    Our methodology

    To determine which hardship personal loans are the best for consumers with bad credit, Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions. When possible, we chose loans with no origination or sign-up fees, but we also included options for borrowers with lower credit scores on this list. Some of those options have origination fees.

    When narrowing down and ranking the best personal loans, we focused on the following features:

    • Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
    • Flexible minimum and maximum loan amounts/terms: Each lender provides more than one financing option that you can customize based on your monthly budget and how long you need to pay back your loan.
    • No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
    • Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
    • Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
    • Fund disbursement: The loans on our list deliver funds promptly through either electronic wire transfer to your checking account or in the form of a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
    • Autopay discounts: We noted the lenders that reward you for enrolling in autopay by lowering your APR by 0.25% to 0.5%.
    • Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $1,000 to $100,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

    The rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee your interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, many lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • Debt consolidation loans gain popularity as interest rates rise — here’s how to save money on expensive debt

    Debt consolidation loans gain popularity as interest rates rise — here’s how to save money on expensive debt

    In unpredictable times like these, flexibility is key, especially when it comes to borrowing money for the things we need most. In a pinch, personal loans can be used to cover any number of things, whether it’s wedding expenses, surprise medical bills, major home repairs or funeral costs.

    Debt consolidation can be an especially strategic way to use them, too, since the process allows borrowers to better organize their debts and typically involves a lender sending funds to creditors on your behalf. Consolidating debt through a personal loan also lets borrowers receive a lower interest rate while they pay back the loan, resulting in significant money being saved over the life of the loan.

    A recent study by LendingTree indicated that between the third quarter of 2021 and the third quarter of 2022, personal loan inquiries in general had risen by 12.3%, while inquiries for personal loans to use for debt consolidation had increased by 29.1% during that period of time.

    The report pointed to increasing annual percentage rates, or APRs, coinciding with interest rate hikes by the Federal Reserve as the major reason behind the recent spikes.

    Below, Select details what you can do if you’re interested in taking out a personal loan for the purpose of debt consolidation.

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    How to apply for a personal loan

    Before applying for a personal loan, you’ll want to double-check your credit score. While there are several lenders, such as Upstart and OneMain Financial, that will still consider borrowers with low credit scores or an insufficient credit history, you might end up having to pay a higher interest rate — those with higher credit scores, however, will typically have to pay a lower interest rate.

    Upstart Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, credit card refinancing, wedding, moving or medical

    • Loan amounts

    • Terms

    • Credit needed

      FICO or Vantage score of 600 (but will accept applicants whose credit history is so insufficient they don’t have a credit score)

    • Origination fee

      0% to 8% of the target amount

    • Early payoff penalty

    • Late fee

      The greater of 5% of monthly past due amount or $15

    OneMain Financial Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, major expenses, emergency costs

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

      Flat fee starting at $25 to $onem00 or percentage ranging from 1% to 10% (depends on your state)

    • Early payoff penalty

    • Late fee

      Up to $30 per late payment or up to 15% (depends on your state)

    Click here to see if you prequalify for a personal loan offer. Terms apply.

    Next, you’ll want to figure out how much money you actually need to borrow. If you’re consolidating debt, simply add up all your balances to find a total.

    While the smallest personal loan amounts — from a lender such as PenFed Credit Union, for instance — tend to begin around $600, minimum amounts closer to the $1,000 mark are often more common. Be careful not to apply for more than you need since you’ll have to pay all the money back eventually.

    PenFed Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, home improvement, medical expenses, auto financing and more

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Then, you’ll want to do your homework by researching and comparing the rates, fees and terms of different personal loan providers. Some lenders will allow you to check your rate without hurting your credit score before you even apply.

    Ideally, you’ll want to go with a lender that offers a low interest rate with no fees (or the fewest fees) and a term length that best fits your budget. LightStream and Marcus by Goldman Sachs are each known for offering personal loans with no origination fees, late fees or early payoff fees.

    LightStream Personal Loans

    • Annual Percentage Rate (APR)

      5.99% to 21.49%* when you sign up for autopay

    • Loan purpose

      Debt consolidation, home improvement, auto financing, medical expenses, wedding and others

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Marcus by Goldman Sachs Personal Loans

    • Annual Percentage Rate (APR)

      6.99% to 24.99% APR when you sign up for autopay

    • Loan purpose

      Debt consolidation, home improvement, wedding, moving and relocation or vacation

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    When you decide which lender you want to go with, submit your application and wait for approval, which can take anywhere from one to a few days. After that, just wait for the funds to be paid.

    With debt consolidation, lenders will typically disburse the money directly to as many as 10 of your chosen creditors — you’ll just need to provide their information and how much money each one should be sent. That way, you’ll just be on the hook for paying back your personal loan lender.

    Get matched with personal loan offers.

    Bottom line

    If you’ve noticed the APR on your debts rising as interest rates have kept creeping up, consolidating your debt can be a smart and strategic way to lower it while also organizing the money you owe into one monthly payment.

    Before you apply for a debt consolidation loan, make sure your credit score is as healthy as possible, as this is the key to helping you get approved for the lowest interest rates available.

    Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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