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Make your resolutions stick this year. Check out our top 22 picks to improve your workouts, and help you reach your fitness goals. These essentials are a great way to start your journey to a stronger, healthier you.
22 must-have fitness essentials:
Bala Bangles Wrist & Ankle Weights
Bala Bangles Wrist & Ankle Weights
Fit in a workout whenever you have time. Keep Bala Bangles in your bag so they’re easy to grab. Wear them on your wrists or ankles to add comfortable resistance to yoga, walking, or any home workout.
Gymreapers Barbell Squat Pad
Gymreapers Barbell Squat Pad
This squat pad helps prevent sore shoulders during back squats or after leg day. It spreads out the bar’s weight so you can focus on your lift.
Yoga Mat Strap
Use this yoga mat strap to improve your flexibility. It helps guide your body for a deeper stretch and a better yoga session. It’s especially useful for beginners or anyone with tight hamstrings.
Quiet Punch Doorway Punching Bag
Quiet Punch – Doorway Punching Bag
This punching bag lets you get a full-body boxing workout at home without much noise. You don’t need any tools to set it up, and it’s great for apartments or shared spaces since it hangs in the doorway and stays quiet.
Adjustable Weighted Fitness Hoop
Popsugar Adjustable Weighted Fitness Hoop
Use this fitness hoop to boost your cardio and work your core. It’s made to help trim your waist and improve your posture, and you can adjust it to fit your body.
Push Up Board
This push-up board helps you practice good form. It has 15 angled slots to target your chest, arms, shoulders, core, and back. It’s also helpful for rehab or for avoiding discomfort from hard floors.
Stealth Core Deluxe Trainer
Stealth Core Deluxe Trainer
Plank exercises can be more fun with interactive video games. You use your body to control the games, which helps you work your abs, arms, shoulders, and back simultaneously.
Everlast Deluxe 9-Foot Speed Jump Rope
Jumping rope is still a great way to exercise. Use this speed jump rope for cardio, calorie burning, and stronger bones. It’s 9 feet long, so it’s good for people up to 6’2″.
Gaiam Pilates Ring
Add resistance to your Pilates routine with this ring. It targets your legs and core and helps you maintain good alignment. It’s a great option for home workouts if you can’t make it to the studio.
Brebebe Door Anchor Strap for Resistance Bands Exercises
Brebebe Door Anchor Strap for Resistance Bands Exercises
These resistance bands are great for a variety of home exercises. They work your back, forearms, and legs, and you can set them up without any tools.
Resistance Bands Set
These bands help you work your arms, back, hips, legs, and abs. They’re suitable for any fitness level and easy to use at home, while traveling, or in a hotel room.
Athletic Works Yoga Wheel
Athletic Works Yoga Wheel
Use this yoga wheel to stretch and build flexibility, whether you’re a beginner or more advanced. It helps you deepen poses, improve balance, and target your spine, shoulders, and hips for backbends, chest openers, and tension relief.
KETTLE GRYP Dumbbell Grip Handle
KETTLE GRYP Dumbbell Grip Handle
Switch up your gym routine by turning dumbbells into kettlebells. Use this Gryp with your regular dumbbells to get a full range of weights for your workouts. Weighing less than 1 lb, Kettle Gryps are easy to pack in your gym bag or carry-on for any gym or hotel workout.
Athletic Works Dual Ab Wheel
Athletic Works Dual Ab Wheel
Strengthen your core and upper body with this dual ab wheel. It’s designed to target your arms, shoulders, back, and abs for a more complete workout.
MERACH Quiet Stationary Fitness Bicycle
MERACH Quiet Stationary Fitness Bicycle
Get fit and stay healthy with this indoor exercise bike. It comes with a touchscreen, speedometer, smartphone control, and body-fat analysis. A bottle holder with a mat is also included.
Gaiam Mini Ab Ball
This little ball can play a big role in your exercise routine. It’s designed to help strengthen your core muscles, improve your back strength, and increase your range of motion. This is ideal for pre- and post-workouts to activate the body, relax the back, and aid with alignment.
edx Under-Desk Elliptical Machine
edx Under-Desk Elliptical Machine
Put aside the excuses and exercise while you work and relax. This elliptical fits under a desk or in front of a comfy chair. It weighs just pounds, making it easy to move, store, and fit under desks.
WRISTBuddy Yoga Blocks
If you want better wrist comfort during yoga, try these blocks. They’re designed to give you a stronger, safer wrist angle for weight-bearing poses, flows, handstands, and push-ups.
ATERCEL Workout Gloves
These workout gloves protect your hands from calluses, reduce friction, and help you keep a strong grip. They’re made from lightweight, breathable, and stretchy material for flexibility, comfort, and a good fit during workouts, weightlifting, gym training, or cycling.
Tapout Ropless Jump Rope
Upgrade your jump rope routine with this ropeless version. It’s perfect for low-ceiling spaces, for people who can’t jump (like those in wheelchairs or with injuries), or for quieter workouts.
Stakt Foldable Yoga Mat
This popular yoga mat is great for studio workouts or weekend retreats. It’s designed for extra support, versatility, and convenience. It’s twice as thick as the average yoga mat, so it’s especially comfortable.
Janji M’s Rainrunner Pack Jacket
Janji M’s Rainrunner Pack Jacket
Stay ready to work out, even on rainy days. The Janji jacket is built to protect you from the weather. Its lightweight ripstop fabric keeps you dry, and 360-degree ventilation gives you plenty of airflow and room to move comfortably.
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As a participant in multiple affiliate marketing programs, Localish will earn a commission for certain purchases. See full disclaimer below*
It’s getting warm out and nothing feels better than packing up some snacks and heading to the park or beach for a picnic! A picnic is a great activity for a self-date, a hangout with friends or with your special someone. To make the experience more enjoyable find the best picnic essentials bellow.
Best picnic blankets and coolers
If you’re looking to have a fun day outdoors with a group of friends, this picnic blanket can hold six to eight people sitting up. It comes in five different colors and is made of cotton. It is machine washable and able to be folded down for portability. The velcro helps you easily pack it up and it won’t take up too much space in your tote bag.
Good GAIN Picnic Blanket Waterproof & Sand Proof
This blanket doubles as something you can bring to the beach or camping. It is sand- and water-proof. The dimensions unfolded are 78 inches x 57 inches; it comes with a handle strap with a double ring buckle, which makes it convenient to carry.
Coleman 16qt Insulated Portable Cooler
The insulated cooler will keep drinks cold on those hotter days. It has a large handle to make it easier to carry with one hand. You can use it for camping, picnics and beach days. Reviewers who’ve bought this product say that it’s lightweight and sturdy.
This cooler backpack is insulated and holds up to 30 cans. It can hold hot foods and keep them warm throughout the day, according to the brand. The backpack has an ergonomic design and back padding to give you comfort while you’re carrying multiple items.
Wicker Picnic Basket with Lid
Just bringing the food? This wicker picnic basket can hold the utensils and snacks you bring. The brand says it can fit soda, chips, sandwiches, baguettes and a wine bottle. It’s a classic, traditional-style basket you can bring anywhere.
Willow Picnic Basket Set for 2
This basket set for two is perfect for a romantic picnic date with your partner. The set comes with a bottle opener, two of each utensil, two wine glasses and a mat. The picnic basket comes with an insulated compartment. You can keep food warm or cold for four hours inside your basket, according to the brand.
Utensils and Clean-Up
250 Piece Compostable Plates
These eco-friendly plates are easy to dispose of after you’re done eating. The heavy-duty party plates are made of sugarcane fiber and the knives, forks and spoons are made of cornstarch. The forks, knives and spoons are strong enough to slice through cooked steaks, vegetables and fruit without cracking or splitting like plastic utensils.
Dixie EcoSmart Paper Cups
These 16-ounce paper cups are sustainable and affordable.
Wet Ones Antibacterial Tropical Splash Scent Hand Wipes
Make clean-up easier with these antibacterial hand wipes. It’ll keep your hands free from germs before and after you eat. The wipes are hypoallergenic and kill 99.99% of germs, according to the brand.
Protection
Equate Sport Broad Spectrum Sunscreen Spray
Protect your skin from the sun with this broad-spectrum sunscreen spray. It absorbs quickly and stays on for up to 80 minutes through sweat and water.
OFF! Clean Feel Insect Repellent Aerosol
With the change in temperatures, mosquitoes will be out and that is definitely a nuisance. Avoid bug bites with this insect-repellent spray.
Cover yourself from the rays of the sun with this sun hat. It comes with a neck flap and is available in 10 different colors. This hat has a wide brim and is made to protect against UV rays.
Outdoor Games
Himal Collapsible Portable Cornhole
Have some fun outdoors by playing classic corn hole. If you’re on a date or want to have a fun challenge with friends, this works perfectly. The entire set is lightweight and foldable. You can even flip the bean bags and board to play a game of tic-tac-toe.
Jenga is a fun game to play with multiple people or a partner. If less movement is more your speed, Jenga is still fun and can be played seated or standing.
Goodminton – The World’s Easiest Racquet Game
Grab a partner and duel to see who takes the win in a game of racquet. It’s fun and easy to play.
* By clicking on the featured links, visitors will leave Localish.com and be directed to third-party e-commerce sites that operate under different terms and privacy policies. Although we are sharing our personal opinions of these products with you, Localish is not endorsing these products. It has not performed product safety testing on any of these products, did not manufacture them, and is not selling, or distributing them and is not making any representations about the safety or caliber of these products. Prices and availability are subject to change from the date of publication.
One of my favorite things to do every night before bed is fill my online cart with tons of clothes. Call me delusional or a dreamer, but I love to think about what I would buy in an ideal world. Spending all this time window shopping also helps me figure out what’s trending, and what styles might be surging into popularity soon.
I’ve always been the type of person who emphasizes the importance of a bomb outfit. Nothing impacts my confidence like what fit I’m rocking. It’s my duty to serve.
With New York Fashion Week in full swing, the streets of the city are flooded with luxury-clad off-duty models showing us the ropes. Fashion Weeks are a good indicator of what everyone else will be wearing soon enough.
The stylish cohorts walking the streets of FW are already sporting future trends – like when everyone was wearing the MSCHF Big Red Boots around. Before you know it, we’ll be ditching our linen sets and fluorescent colors for whatever Bella Hadid is wearing. It’s a never ending rollercoaster, but we prevail.
Fall fashion 2023 will have elements of the familiar, plus a few dark horses. There will be pieces that look like an old friend to you, buried deep in your closet from when they were last trending, and pieces that will soon flood fashion store floors in mass quantities.
If you’re feeling a little lost shopping for those fall fits, here’s what I’ve found:
Do you remember why you chose your current checking account?
If you got started early, your parents might have helped you open a kids’ checking or savings account at their bank’s branch. Or maybe you went with the credit union down the street from your work after getting your first W2 job.
Whatever the reason, location likely played a big part. Thankfully, you’re no longer confined to a financial institution for a checking account because of its proximity to you — or a brick-and-mortar site altogether, for that matter.
From higher interest rates to better benefits, it pays to expand your search beyond your local bank or credit union these days. Here’s how to choose the right checking account for you.
Chime is an online checking account that truly embraces the digital banking space* — consider that its app has over 550,000 positive reviews. The company’s tagline is “banking that has your back” and it aims to do that through its Early Payday function (where you get access to direct deposit funds up to two days early), fee-free overdraft services and more.
Chime Checking Account
Fees
No monthly fees
APY
None
ATM access
60K+ fee-free ATMs*
Promotions
None
Prime perk
“Pay friends” feature
More information About Chime Checking Account
Chime doesn’t charge overdraft fees or for overdraft protection, a monthly maintenance fee, foreign transaction fees or minimum balance fees. You can also open an easy-to-access connected savings account — it allows you to automate your savings with features like the round-up tool, which will round up your transactions to the nearest dollar and dump the change into savings. Bonus: Chime has a “Pay Friends” feature, so you don’t have to mess with cash, math or other apps to split the bill.
For a full run down of fees and services, check out our complete Chime Bank review.
Varo Bank Account
Best for Cash Back
Key Features
No hidden fees
Early access to your paycheck
Tool to project your cash flow
Varo has combined traditional banking tools with modern technology to help its customers become financially healthy. Its big selling points include Varo Perks — get up to 15% cash back with in-app purchases — no hidden fees and early access to your paycheck. You can also earn up to a whopping 5.00% APY with a Varo high-yield savings account.
Varo Bank Account
Fees
Out-of-network ATM and cash deposit fees
APY
None
ATM access
More than 55,000 Allpoint ATMs
Promotions
Earn money by referring friends
Prime perk
Up to 15% cash back
More information About Varo Bank Account
With Varo, you’ll pay no monthly service fees, no extra fees for minimum balance requirements, no foreign transaction fees and no cash replacement fees. For money transfers, Varo Bank works with Zelle® so you can send money to folks who user other banks for free. You’ll just pay out-of-network ATM fees and cash deposit fees if you deposit cash in-store through Green Dot®. Varo keeps tabs on how much you spend across all your accounts, too, so you can better analyze and project your cash flow. It also allows you to set spending caps so you have a better handle on your money.
For a full run down of fees and services, check out our complete Varo Bank review.
Chase Total Checking Account
Best for Promotional Offers
Key Features
A hefty sign-on bonus for new customers
Offers online, mobile and text banking
Lots of branch locations in the U.S.
Chase Bank is a well-known entity in the financial world, and we had to include its Total Checking Account on our list. The account comes with a $12 monthly service fee, but it’ll be waived if you have monthly direct deposits of at least $500. If you don’t have direct deposit, you can also have the fee waived with a minimum daily balance of $1,500 (or $5,000 across multiple Chase accounts).
Chase Total Checking Account
Fees
Yes, but may be waived
APY
None
ATM access
16,000 ATMs
Promotions
Yes
Prime perk
Branches in 33 states to avoid fees
More information About Chase Total Checking
This Chase account has other fees. For example, you can use a Chase ATM for free, but you’ll pay a $3 fee for non-Chase ATMs in the U.S., Puerto Rico and the U.S. Virgin Islands and $5 outside of those locations — so, this account isn’t the best for frequent international travelers. Thankfully, the bank has branches and 16,000 fee-free ATMs in 33 states around the U.S., so you can avoid the fees if you’ve got one nearby.
Bonus (literally): You can get $200 when you open a new checking account. Getting it is pretty simple, too, compared with similar offers — open a new Chase Total Checking account* with $0, and set up direct deposit within 90 days of opening. Keep your account open for at least six months, or you’ll lose the bonus at closing.
For a full run down of fees and services, check out our complete Chase Bank review.
Chase College Checking Account
Best for Responsible Students
Key Features
New applicants can qualify for a bonus
Lots of branches and ATMs in the U.S.
No monthly service fee
The Chase College Checking Account is designed with the college student in mind. For anyone ages 17 to 24 with proof of college enrollment, there is no monthly service fee. However, it does come with some hefty insufficient-funds fees and fees for using non-Chase ATMs.
Chase College Checking Account
Fees
None
APY
None
ATM access
16,000 ATMs
Promotions
Yes
Prime perk
$100 for signing up
More Information About Chase College Checking Account
New applicants can get a $100 bonus in their account just for signing up for paperless statements and making 10 qualifying transactions within the first 60 days. Debit card transactions count, so that should be easy.
No other rewards are a part of this account, but that’s typical with a student checking account. Beyond that, the account comes with the accessibility of one of the nation’s largest financial institutions, so ATMs are plentiful and online and mobile banking is available.
For a full run down of fees and services, check out our complete Chase Bank review.
TD Bank Convenience Checking
Best for Mobile Banking
Key Features
Free online and mobile banking
No maintenance fee for students 17-23 years old
Monthly fee that can be waived easily
TTD Bank is another big name on our list. All TD accounts include free online and mobile banking, including mobile check deposit. The $15 monthly maintenance fee on this account sounds hefty at first, but it’s waived if you maintain a $100 minimum daily balance. However, if you tend to keep a low account balance, that fee — and the account’s $35 overdraft fee — could pinch your wallet.
TD Bank Convenience Checking
Fees
Yes, but may be waived
APY
None
ATM access
700 ATMs
Promotions
Yes
Prime perk
No monthly maintenance fees for students
More Information About TD Bank Convenience Checking
Anyone can open an online checking account, but TD’s brick-and-mortar banks (and ATMs) are mostly located on the East Coast. With a $3 fee for using an out-of-network ATM, you might want to have a physical location nearby. The best thing about this financial institution is it’ll pay you — just for opening an account. For a $300 bonus and an interest-yielding account, consider TD Bank’s higher-tier Beyond Checking account. You must meet certain criteria (and be a new customer) to earn this bonus. (And double-check when the offer ends.)
Axos Bank Essential Checking
Best for Online Customers
Key Features
Up to 1.00% APY on certain accounts
Requires balance of only $1
Unlimited ATM-fee reimbursement in the U.S.
Axos’ Essential Checking account comes with no monthly, annual or overdraft fees. An Axos representative told TPH all its checking accounts require a $100 minimum opening deposit — but, after that, you only need a minimum balance of $1. Despite the low minimum balance, this bank rewards its customers with up to 1.25% APY on their balance (though Essential Checking accounts are not eligible).
Axos Bank Essential Checking Account
Fees
None
APY
Up to 1.25% on certain accounts
ATM access
Unlimited domestic ATM reimbursements
Promotions
$150 welcome bonus
Prime perk
Online bankers valued
More Information about Axos Bank Essential Checking
Axos offers a lot if you’re in the market for an online-only checking account. On top of no fees, Axos will also reimburse you by the end of the next business day for unlimited ATM fees within the U.S. Regarding spending abroad — per a rep via live chat, you’ll pay a 1% service transaction charge on purchases made in other countries. So, even though this online bank account is flexible, it isn’t ideal for international travelers.
For a full run down of fees and services, check out our complete .
Ally Interest Checking Account
Best for No Fee Perks
Key Features
Use any Allpoint ATM in the U.S. free of charge
No overdraft fees
Up to 0.25% APY
With Ally’s online Interest Checking account, you can take advantage of no minimum required deposit and use any Allpoint ATMs in the U.S. for free. Plus, Ally will reimburse you up to $10 per statement cycle for other ATM fees within the U.S. As for no fees, there’s more good news: Last year, Ally permanently suspended overdraft fees for checking accounts and all others.
Ally Interest Checking Account
Fees
None
APY
Up to 0.25%
ATM access
More than 55,000 Allpoint ATMs
Promotions
None
Prime perk
Account accessible online or through app
More Information About Ally Interest Checking
With a daily balance of $15,000 or more, this checking account yields 0.25% interest. Below $15,000, it’s 0.10%. That tops a lot of bank accounts, but it’s not as impressive as we’d expect for an account with “interest” in the name — and that balance requirement is a beast. We expect more when checking accounts earn interest.
You can access Ally Interest Checking online or through the Ally app, so it’s an accessible choice for anyone within the U.S.
For a full run down of fees and services, check out our complete Ally Bank review.
Consumers Credit Free Rewards
Best for High Balance Benefits
Key Features
Earn 2.09% interest
All ATM fees in the U.S. are reimbursed
Branches in IL; anyone in U.S. can bank online
Prefer to bank at a credit union? Check out the Consumers Credit Union Free Rewards Checking Account. The interest is solid and the rewards are pretty sweet — no monthly maintenance fees, good APY, early direct deposit and more — but the requirements are a bit hefty.
Consumers Credit Union Free Rewards
Fees
Overdraft fees
APY
2.09% (but up to 4.09% for all accounts)
ATM access
Over 30,000 ATMs
Promotions
None
Prime perk
Solid interest offers
More Information About Consumers Credit Union Free Rewards Checking
With this Consumers Credit Union plant, account holders will earn 2.09% interest on your balance up to $10,000. You’ll also have all ATM fees reimbursed, as long as you:
Make 12 debit card purchases each month without using the PIN (as a credit transaction).
Have at least one direct deposit or ACH credit of $500 or more each month.
Enroll in e-documents.
In addition to that, you can earn 3.09% or 4.09% APY (annual percentage yield) on balances up to $10,000 if you meet CCU Visa credit card spending requirements: $500 and $1,000, respectively. All CCU branches are in Illinois, but anyone can open and manage an account online and through the mobile app.
Schwab Bank High Yield Investor
Best for International Travelers
Key Features
Easy-to-use app
ATM-fee reimbursements around the world
No fees or minimum deposit required
Schwab Bank is loved by international travelers. The account offers unlimited ATM fee rebates for cash withdrawals at ATMs anywhere in the world. You can manage your account online or through the Schwab app for iPhone, and make deposits through the app, so this account keeps up with jet-setters.
Schwab Bank High Yield Investor Checking
Fees
None
APY
0.45%
ATM access
Unlimited ATM-fee reimbursements
Promotions
None
Prime perk
Free ATM rebates worldwide
More Information About Schwab Bank High Yield Investor Checking
The downside? Schwab’s online-only High Yield Investor Checking account must be linked to a Schwab One brokerage account. Luckily, there are no fees or minimum deposits to open either account, as long as you open them together. Neither account comes with monthly fees or a minimum balance, but “other account fees, fund expenses and brokerage commissions may apply” to the brokerage account once you begin investing, according to the Schwab site. The checking account offers a variable interest rate. If you want to grow your savings through Schwab, you’ll want to invest through the brokerage account.
Montgomery Bank New Start
Best for No-Frills Banking
Key Features
Low minimum deposit to open an account
No service fees or required monthly balance
Free debit card
The Montgomery Bank New Start Checking account is what you want in a second chance banking account. No frills, but no unnecessary fees, either. All it takes is a $20 minimum deposit to open the account. While this is a no-frills account, it offers a lot of benefits for those who are looking to get back on their financial feet again.
Montgomery Bank New Start Checking
Fees
$20 to open, and then none
APY
None
ATM access
Montgomery Bank & MoneyPass ATMs
Promotions
None
Prime perk
Lots of freebies
More Information About Montgomery Bank New Start Checking Account
This account is loaded with freebies and other extras, such as free direct deposit, unlimited check writing and a free debit card. You can also open interest-bearing accounts with the bank if you’re interested in other options. Additionally, Montgomery Bank offers a business checking account, too.
Pro Tip
Check out our current list of bank promotions for a chance to gain a monetary bonus when signing up for a new bank account.
What Is a Checking Account?
A checking account is a place to store money at a bank, credit union or other financial institution. The money in a checking account is typically reserved for regular, everyday expenses, as opposed to a savings account. Checking accounts usually distribute paper checks and a debit card to members as well.
How to Choose a Checking Account
You probably already know that you need a checking account and if it comes with a free debit card, that’s even better. A checking plan serves as the primary hub for your money. It’s where your paychecks and direct deposits land, and, from there, you use the money to pay bills, buy the stuff you need and hopefully slide some of it into a savings account. Maintaining a savings account is a smart personal finance decision.
Picking a bank account is a personal choice. What makes checking accounts “good” depends largely on your financial situation and goals. Checking accounts come in a lot of varieties these days, each with different features and benefits. You can pick from online-only banks to those with physical branches, and from those that pay interest to those that offer free checking accounts and no fees for out-of-network ATM use. It’s up to you to do the research and find the one that will benefit you and your lifestyle the most.
But we can tell you a few things that make certain checking accounts worth opening. Here are a few important features to keep in mind when looking for the best checking accounts:
Fees: How much will it cost you to manage your money with this account? Make sure you know the monthly fee — or fees — to maintain the account. Also, understand the account’s overdraft fee protection.
Safety: If something happens to the institution where you hold your account, will your money be protected? Make sure your checking account is NCUA- or FDIC-insured.
Interest rates and APY: Does a particular checking account offer interest on your money to keep it in an account? (These types of accounts tend to offer no or low interest rates and APY, but there are high-interest checking accounts out there.)
Rewards: What do you earn in return for using the account? Are you rewarded for making regular direct deposits or keeping a high balance, for example?
Minimum balance:: Is there a minimum or average daily balance needed to maintain the account? Or to open the account? Minimum balance requirements can range for $1 to thousands of dollars (to earn a particular rate) and you’ll want to know this before you open an account, be it at a branch or through online banking.
Accessibility: What are the requirements to open this account (again, minimum balance requirements, and earn the rewards?
Mobility: Can this account travel and move with you? How are the online banking features? Do direct deposits make your banking life easier? How good is the financial institution’s app in making mobile check deposits easier? Are you considering online banks or only those with physical branches?
Types of Checking Accounts
There are a few varieties of checking accounts out there that offer different benefits. You just need to figure out which kind will work best for you. Some of your options for traditional and online checking accounts are:
Student Checking: These accounts usually feature minimal fees and no minimum balance. They also don’t offer a lot of perks. They’re bare-bones accounts designed for cash-strapped students who just need the basics.
Express Checking: This is the checking account for today’s digital person. If you don’t like going to the bank, this could be for you. These accounts are designed for use on computers, phone apps, ATMs or by telephone. You may actually get a fee for going to a live teller. The upside is fees are minimal as long as you keep banking digitally.
Joint Checking: Need to share a checking account with a spouse or another person? A joint account lets you both put money in and take money out as needed.
Fresh Start or Second Chance Checking: If you’ve run into financial trouble and have had your accounts closed, it can be tough to get a new account. These accounts are designed to minimize the bank’s risk, but they allow you to open a new account. If you maintain it well for an extended period of time, it may open opportunities for you to upgrade.
Rewards Checking: Rewards checking offers the highest perks, such as annual percentage yield (APY) interest on the account balance. Debit card purchases could also receive cashback bonuses or earn points for things like airline travel or gift cards. Some, however, will come with an annual fee.
Pro Tip
Check out our current list of bank promotions for a chance to gain a monetary bonus when signing up for a new bank account.
Checking Account vs. Savings Account
financial setup. You want to have one location for more regular, everyday expenses (checking) and one for longer-term savings and goals (savings).
Checking Account Pros and Cons
There are advantages and disadvantages to checking accounts and below are the most common.
Pros
Relatively easy and quick to open
Low- or no-fee account options
Typically offer a free checkbook and debit card
Cons
Usually don’t earn interest
Certain accounts have fees (like overdraft and minimum balance requirements) that can add up quickly if you’re not vigilant
Savings Account Pros and Cons
The following pros and cons of savings accounts can help you decide how to use them.
Pros
Relatively easy and quick to open
Offers interest
Easy to access your money in times of need (versus a CD, for example)
Cons
Interest rates can vary over time
Certain accounts have fees or requirements (like a particular monthly balance to earn a higher interest rate)
When it comes to checking and savings accounts, don’t think of it as an either-or situation — it’s a good idea to have both. You can also mix and match. For instance, you might go for an online checking account and a local credit union for a savings account.
You can have multiple checking accounts, too; perhaps one offers a new-member bonus for an influx of free cash, while another offers free overdraft protection for regular spending. Alternatively, when it comes to savings accounts, one might offer a higher annual percentage yield, while another offers other saving products like a money market account.
Regardless of the checking account or savings account you choose, it’s a good move to keep your money in a secure place
Choosing a Bank vs. a Credit Union vs. a FinTech Company for Your Checking Account
Similarly, opening a checking account, period, is generally a good move, regardless of where you do it.
Keep your own habits and preferences in mind, especially when it comes to choosing between a brick-and-mortar (bank or credit union) and online-only setup. Consider fees, from initial to ongoing, as well to make sure the account doesn’t end up costing you.
Ultimately, though, don’t get hung up on too many details: When it comes to personal finance, it ultimately comes down to what works for you and your situation.
Methodology
We graded 10 of our favorite bank and credit union accounts on the factors that we like to see in any checking account — no fees, free ATMs, good rewards, easy setup and accessibility.
If an account has a monthly fee or out-of-network ATM charges, we highlighted some more positive qualities (think: a low minimum balance requirement, interest checking account offering or a free debit card). With that said, we prioritized those checking accounts that nixed monthly maintenance fees, featured savings accounts and had no-charge or reimbursed out-of-network network ATM fees.
Here are the best checking accounts we found across (online) banks, credit unions and other financial institutions.
Recapping the 10 Best Checking Accounts of February 2023
Chime Checking Account: Best for Digital Features
Varo Bank Account: Best for cash back
Chase Total Checking Account: Best for Promotional Offers
TD Bank Convenience Checking Account: Best for Free Mobile Banking
Axos Bank Essential Checking Account: Best for Online Customers
Ally Interest Checking Account: Best for No Fee Perks
Consumers Credit Union Free Rewards Checking: Best for High Balance Benefits
Schwab Bank High Yield Investor Checking: Best for International Travelers
Chase College Checking Account: Best for Responsible Students
Montgomery Bank New Start Checking Account: Best for No-Frills Banking
Frequently Asked Questions (FAQ) About Checking Accounts
When it comes to choosing the best checking accounts, there’s a lot of information out there. Here, we’re answering some of the most popular questions about checking accounts.
What is a Checking Account?
A checking account is where you hold money at a bank, credit union or other financial institution. You typically use this account to pay for everyday expenses or bills. Depending on where you have you bank, you can access your cash in person, or via an ATM or debit card. Unlike a savings account — which you use for an emergency fund or other financial goal — checking accounts should be fairly accessible for regular spending usually with a debit card. They don’t normally accrue interest.
How Can I Open a Checking Account?
Every checking account — whether it’s through a physical or online bank, credit union or other fintech setup — will have its own requirements. Generally, to open a checking account, you need to be at least 18 years old (though guardians can sometimes co-sign an account for a minor) and have a government ID (such as a passport or driver’s license). You’ll likely also need to supply contact information and possibly an opening deposit.
Which is the Best Bank to Open an Account In?
The best bank to open an account will depend on your needs. If you prioritize banking at a physical institution with plenty of locations where you can interact with staff in person, you might choose to go with a big-name chain. If you prefer a bank where you might qualify for higher interest rates in lieu of having access to brick-and-mortar locations, an online setup might work best for you. No matter your choice, it’s a good idea to evaluate it over time; if a bank ends up not being over time.
What is the Best Free Checking Account?
The best free checking account will vary based on your wants and needs in a banking account. You’ll want to look for an account that has no or a low monthly fee, a free debit card and easy access to your money — whether that is an ATM, a physical branch, an app or all of the above. Bonus: look for a free checking account that also offers a new-user bonus. Right now, Chime, Varo and Axos are overall solid free options for checking. Shop around and look for a checking account that’s best for you.
Is Wells Fargo or Chase Better?
Wells Fargo and Chase each offer online checking accounts, among other banking products. But they also have monthly fees, too. Good news: Well Fargo eliminated non-sufficient fees funds (NSF) fees in 2022 and started giving customers early access to eligible direct deposits.
Each have online and in-person banking; so, one could be a better fit depending on branch locations in your area. Chase often offers significant new-user sign-on bonuses.
What Bank is Good for a Checking Account?
What makes a bank good for a checking account weighs largely on what you prioritize in both a bank and an account. As a whole, you want to consider fees (how much does it cost you to keep your money there?), rewards (do you earn anything for banking with them?), accessibility (what are the requirements to open and keep your account open?) and mobility (does the bank charge foreign transaction fees?). Bonus points if they give out a… bonus, too, for being a new account holder.
How is Interest Taxed on a Checking Account?
The interest earned on checking accounts is considered taxable income. So, your bank, credit union or financial institution willsend you a 1099-INT form each year your account earns interest over $10. You file this paperwork along with your yearly taxes. And don’t let this income being taxed deter you from saving money; a traditional or high-yield savings account is still a worthwhile tool for your money.
Contributor Kathleen Garvin (@itskgarvin) is a personal finance writer based in St. Petersburg, Florida, and former editor and marketer at The Penny Hoarder. She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet.
*Chime disclosure: Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.
Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
*Chase fine print:
“Checking offer is not available to existing Chase checking customers, those with fiduciary accounts, or those whose accounts have been closed within 90 days or closed with a negative balance. To receive the $200 checking bonus: 1) Open a new Chase Total Checking account, which is subject to approval AND 2) Have your direct deposit made to this account within 60 days of account opening. Your direct deposit needs to be an electronic deposit of your paycheck, pension or government benefits (such as Social Security) from your employer or the government. After you have completed all the above requirements, we’ll deposit the bonus in your new account within 10 business days. You can only receive one new checking account-related bonus per calendar year. Bonus is considered interest and will be reported on IRS Form 1099-INT.
“Account Closing: If your checking account is closed within six months after opening, we will deduct the bonus amount at closing.”
Editorial Disclosure
This content is not provided by the bank advertiser. Opinions expressed here are the author’s alone, not those of the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.
If you haven’t warmed up to the snowball or avalanche debt payoff methods, think smaller. Much smaller.
Consider the debt snowflake strategy for tackling debt. Unlike its better-known siblings, the snowflake method doesn’t involve a structured budgeting system for paying down your debt — think of it more like an easy way to throw a little extra money toward your debt.
Just like snowflakes, tiny payments might not seem like much when tackling a mountain of debt. But when they pile up, your snowflake payments can add up to a lot of help. Here’s how.
How Does the Debt Snowflake Method Work?
First, although they all sound frosty, debt snowflake is not another variation of debt avalanche and debt snowball, two popular methods for tackling debt. Here’s a summary of those methods, in case you’re unfamiliar with them:
The avalanche method prioritizes paying off debts with the highest interest rates first. After the biggest balance is paid off, you move on to the next-highest interest debt, and so on. It’s the best way to save the most money on interest as you’re paying down your debt.
For the snowball method, you pay off the smallest amount of debt first, then work your way up through paying off progressively larger debts. It’s great for people who are motivated by small wins as they watch individual debts disappear faster.
Both options involve creating schedules for making payments and putting any money toward the targeted goal — that’s not the case with the debt snowflake method.
Accumulation is the key to making snowflake work. It requires you to realize all the ways you can save and/or make extra money each day — above and beyond your usual strategies.
Consider this scenario:
On your drive to work, you stop for a jumbo coffee that costs $6. If you downsize to a medium for $5, you save $1.
At lunch, you and your coworker head to the deli to buy $10 subs. By splitting one instead, you’ll add $5 to your snowflake pile.
After work, your neighbor asks if you can babysit her toddler for a couple hours. You consider it a favor, but she insists on giving you $10 for your trouble.
At the end of the day, you’ve saved/made $16 that you immediately pay toward your credit card balance.
Need more suggestions for piling on the pennies — and dollars? We have a blizzard’s worth of ideas:
Ways to Save Money:
Ways to Make Money:
Does the Snowflake Method Actually Work?
We’re not trying to pull some snow job on you (like you didn’t think I’d go there) — collecting the money you save by splitting a sandwich is not your quick and easy way to pay off $20,000 in credit card debt.
In fact, the snowflake method is likely to produce such small results that you might want to consider it more of an add-on to your other debt payoff method.
But that doesn’t mean snowflakes can’t help you pay off your debt faster. And if you start looking for ways to save/make money each week — yard sale, anyone? — those little snowflake payments can add up fast.
Let’s look at another example:
You’re trying to pay off a credit card with a $3,000 balance that’s charging you 17% interest and requires a $90 minimum monthly payment. Check out the difference you could make if you could accumulate $100 extra through the debt snowflake method:
Interest rate
Minimum Payment
Monthly Addition to Your Payment
How Many Months It Will Take to Pay Off Balance
Amount of Interest Paid
No Snowflake
17%
$90
-0-
46
$1088.88
With Snowflake
17%
$90
100
18
$419.80
You’d save about $670 and shave 28 months of your debt payback timeline. Let it snow!
Where to Gather Your Snowflakes
Here’s the thing about snowflakes: They melt fast. If you’re going to use the snowflake method, you need to move quickly before your micro payments disappear into the abyss of other expenses.
So how do you capture them? If you’re using cash, you can start a change jar to collect your savings at the end of the day — just make sure to deposit your savings into your bank account and use the entire amount to pay off the debt on a regular basis.
If you’re using a debit card, you can transfer the amounts into a separate account in real time.
Pro Tip
Contact your lender to request that your payments be applied toward your principal balance — it will help you save money on interest and pay off your loan faster.
But beware: Many banks have a limit on the number of transfers you can make in a month, and you don’t want all your snowflakes paying for transaction fees.
Instead, keep a running tally of your savings for a specified period (like every two weeks), then pay the total amount at the end of the period. Also check with your lender to ensure that you won’t get dinged for making multiple payments in a specified period.
However you save it, do yourself a favor and track the additional amount you paid each month as a reminder of how much those little snowflakes can add up — you can use it for motivation when Uber Eats beckons you.
Less debt? Now that’s cool.
Tiffany Wendeln Connors is deputy editor at The Penny Hoarder. A journalist for 25 years, she has been with The Penny Hoarder since 2018 covering debt and ways to make money.
We know how incredibly easy it is to rack up credit card debt.
More than 50% of Americans carry a credit card balance, with 30% carrying more than $1,000 of debt or more month to month, 15% carrying $5,000 or more and 6% carrying $10,000 or more, according to a recent GOBankingRates survey. The ongoing pandemic and rising inflation have made it even harder for Americans to avoid going into credit card debt, with 45% increasing their overall debt since the start of the pandemic.
But here’s the tricky thing about credit cards: They only benefit you when you’re building credit and receiving perks — but not when you’re paying interest. If you’re paying a lot of interest on your balances, credit card companies are making money off of you.
Your cards are using you, not the other way around.
With average APRs (annual percentage rates) on new credit cards north of 16%, according to LendingTree, paying them off is a smart move. You can do it. And it’ll be worth it.
Tina Russell/The Penny Hoarder
5 Ways to Eliminate Credit Card Debt
Before you start your journey to becoming debt free, try to stop using your credit cards altogether until you can use them without putting yourself in financial risk. Though the specifics will vary based on your situation, we only recommend using credit cards if:
You don’t have any debt outside of a mortgage or student loans. (Mortgages and student loan debt are almost impossible to avoid nowadays.)
You have an emergency fund with three to six months of expenses saved. This is how much money you’d need to survive during that time period, assuming you have no income reaching your bank account.
You can pay off your credit card debt in full every month — not just minimum payments.
However you do it, make paying off your credit cards — and learning to use them responsibly — a high priority.
First, determine how much credit card debt you have. You can do this using a tool like Credit Sesame, a free credit monitoring service.
Then choose your weapons! We’ll go over five different methods, from debt consolidation loans to repayment strategies to settlement, for paying off your credit card debt.
1. The Debt Avalanche Method
Instead of looking at your debt in its entirety, we recommend approaching it bit by bit. By breaking your debt down into manageable chunks, you’ll experience quicker wins and stay motivated.
Using the debt avalanche method, you’ll order your credit card debts from the highest interest rate to the lowest. You’ll make the minimum payment on each of your credit card accounts, and any extra income you have will go toward the highest-interest card.
Eventually, that card will be paid off, and you won’t have to worry about that monthly payment anymore. Then, you’ll attack the debt with the next-highest interest rate, and so on, until all your cards are paid off.
2. The Debt Snowball Method
With the debt snowball method, you’ll order your debts from the lowest balance to highest, regardless of the interest rates on the cards. You’ll make the minimum payment on each of your credit card balances, and any extra income will go to the credit card with the smallest balance.
Starting with the smallest balance allows you to experience wins faster than you would with the avalanche. This method is ideal for people who are motivated by quick wins, but it has a downside: Those who choose it could end up paying more interest over the long term.
Here’s an example of how each method would work if you’re paying off four credit cards of varying balances and interest rates.
$654 with 0% interest
$5,054 with 15% interest
$2,541 with 23% interest
$945 with 17% interest
If you followed the avalanche method, you’d pay off card No. 3 first, followed by No. 4, No. 2 and No. 1. If you followed the snowball method, you’d pay off card No. 1 first, followed by No. 4, No. 3 and No. 2.
Choosing the right method comes down to deciding whether you’d rather get quick results or save money on interest. We encourage you to check a debt calculator yourself, so you can calculate what each method would cost you.
3. The Balance Transfer
If you have good to excellent credit (typically a FICO score of 670 or above) and can feasibly pay off your debt within a year, a balance-transfer credit card is a great option. Balance-transfer credit cards can save you money on interest charges by letting you transfer the balance of a card with a high interest rate to a card with 0% interest.
Most of these cards offer 0% interest for 12 to 18 months with no annual fee. They generally have a 3% to 5% balance-transfer fee, but you can easily find balance transfer cards with no fee. Higher credit scores help borrowers to qualify for a credit card with better terms.
Think a balance transfer card is the right move for your finances? We’ve put together a list of the best balance transfer cards currently available.
4. Take out a Loan
You might look at getting a loan to consolidate and refinance your debts.
If you get a loan with a lower interest rate and pay off your credit cards, that lower rate could potentially save you thousands of dollars in interest.
This is a realistic way to pay off credit card debt if you currently have little or no money to put toward it.
Let’s look at two options for debt consolidation here: A personal loan or a home equity loan.
Personal Loan
Online marketplaces will allow you to prequalify for a personal loan without doing a hard inquiry of your credit, so if you want to shop around, head there first. Shopping for personal loans online does not affect credit scores.
A personal debt consolidation loan is a good idea if you have decent credit and can manage the repayment plan that accompanies the loan. Whereas credit cards offer revolving credit, meaning you can continue to borrow and just make minimum payments, a debt consolidation loan will have a predetermined repayment plan with a set schedule of payments.
A debt consolidation loan is similar to a balance transfer credit card, as you are consolidating all of your debt into one place. The personal loan route is more attractive, however, because rates are typically lower for debt consolidation loans.
A good resource for finding personal loans here is Fiona, a search engine for financial services, which can help match you with the right personal loan to meet your needs. It searches the top online lenders to match you with a personalized loan offer in less than a minute.
Home Equity Loan
If you own a home with equity, you have three ways to borrow money against the value of your home: a home equity loan, home equity line of credit or a cash-out refinance.
With a home equity loan, the lender gives you your money all at once, and you repay it at a fixed interest rate over a set period of time.
With a home equity line of credit, you’re given a limit to borrow. Within that limit, you can take as little or as much as you need whenever you want.
With a cash-out refinance, you refinance your first mortgage with a mortgage that’s slightly more money than your current one, and pocket the difference.
For homeowners, these options will most likely offer the lowest interest rates. But they’re also the riskiest, because your home is the collateral — something you own that your lender can take if you don’t pay off the loan.
5. Debt Settlement
The world of debt collections and creditors can be confusing, intimidating and sometimes even illegal. There’s a common misconception, for example, that someone can take your house or you can go to jail for not making your credit card payments. But credit card debt is unsecured debt, meaning no one can put you in jail or take your house if you don’t pay it.
If you’re being harassed by creditors or have circumstances that make your debt repayment confusing, don’t give up before finding out your options for assistance.
Debt Management Program
With a debt management program, a credit counseling company will handle your consolidation in hopes of getting you a better interest rate and lower fees. You’ll be assigned a counselor, who will set up a repayment and education plan for you. This program is specifically for unsecured debt, like credit cards and medical bills.
A debt management program pays your creditors for you to ensure you stay current on your debt payments. Your credit score may even improve during the program. But if you miss a monthly payment, you can be dropped, and you’ll lose all the benefits you gained.
Debt management plans usually don’t reduce your debt, but they may reduce your interest rates by as much as half or extend your payment timeline to make paying your debt more manageable.
Credit Card Debt Settlement
If you’re in more than just a temporary season of financial instability, and you can’t see yourself affording the amount of credit card debt you owe, debt settlement is an option, though we regard it as a last resort.
Debt settlement reduces the amount of debt you owe, but it will significantly lower your credit score and negatively impact your credit report.
The process isn’t as simple as debt consolidation. You have to convince every creditor that if they don’t settle with you, they probably won’t get anything at all. So, of course, during that time you won’t be making any payments — while interest and late fees accrue.
You can do this on your own, but most people seek the help of a debt settlement company.
Like a debt management program, a debt settlement firm will negotiate debts on your behalf, and the company will make lump-sum payments to creditors while you make monthly payments to the debt settlement company.
Pro Tip
Be careful when seeking help with debt settlement. While some companies are legitimately there to assist you, others take your money and do very little to help your situation.
While you’re paying the debt settlement company, you’ll still be delinquent with any creditors the company hasn’t yet negotiated with, meaning you’ll still get calls from those creditors.
And there’s no guarantee the company will be successful. If it isn’t successful in negotiating, you’ll still be responsible for the full debt amount, plus any extra interest that accrued.
If the company is successful, you’ll have to pay the settlement amount in full. Then in April, you’ll owe taxes on the amount forgiven.
The settlement company will also charge you up to 25% in fees on top of the settlement.
How one Penny Hoarder paid off $12,000 in debt in just 12 weeks. She shares her top tips so you can get out of debt too.
Bankruptcy
Bankruptcy is another last resort. The two major types for individuals are Chapter 7 and Chapter 13.
Chapter 7 bankruptcy allows you to completely discharge all your debts except student loans in four to six months by liquidating your assets. A trustee gathers and sells all of your nonexempt assets to pay off your debt. Those assets can include property that’s not your primary residence, a vehicle with equity, investments or valuable collections.
Those who earn a high income or have significant assets typically choose Chapter 13, which allows you to keep certain assets while still repaying some of the debts. It’s a long, arduous process that doesn’t guarantee to resolve your debt. It can be reversed if your income increases, and it wrecks your credit.
Both bankruptcy options have negative long-term ramifications on your credit. But if you’re out of options, bankruptcy gives you a chance to get your debt under control and get creditors and debt collectors off your back.
Getty Images
How to Pay off Credit Card Debt Fast
If you want to become debt free quickly, here are some ways to pay off credit cards fast:
Up Your Monthly Payments
Make two payments per month instead of one. Most credit card companies use an average daily balance to compute interest charges. Instead of making monthly payments of $400 toward a balance, make two payments of $200, one at the middle of the month and one at the end. You’ll lower the average daily balance so you’ll pay less interest. Some credit card users even advocate for paying off credit card balances every week; a weekly reminder in your calendar is all it takes.
Try to Get a Lower Rate
Ask your credit card companies for lower interest rates. It’s worth trying at least once for each credit card you have. Research competitor cards similar to yours for which you qualify and that offer better rates — then share those with your credit card company to see if they’ll match it.
Knocking four interest percentage points off a $10,000 balance, for example, can save you hundreds of dollars in interest annually. Add those savings to your debt repayment budget!
Get the Debt Reduced
Sometimes you can convince a credit card company to forgive your debt — or at least part of it. After all, these companies want to retain you as a customer, so they may be more open to negotiation than you might think. If you’re in serious financial trouble, explain the situation to the card issuer. Offer to pay a portion of the balance owed as payment in full.
For most of us, though, there’s no quick answer.
How Much Will Paying Off Credit Cards Raise Your Score?
You might be asking yourself, “How much will my credit score go up if I pay off my credit cards?” It turns out that credit card usage has a huge impact on credit scores.
If you spend too much of your overall limit or miss payments, you’ll hurt your score. If you keep your balances low and regularly make your minimum monthly payment on time, your score will increase over time.
Just because you have available credit doesn’t mean you should max out your credit cards. Your credit utilization, which tells the credit bureaus how much of your available credit you’re using, shows whether you are sensible with your borrowing.
Keeping your credit utilization at or under 30% is ideal. That means on a credit card with a $10,000 limit, you wouldn’t want your balance to exceed $3,000.
Credit utilization accounts for a whopping 30% of your score. Other factors affecting your score include payment history (35%), credit history length (15%), credit mix (10%) and new credit (10%).
Looking for ways to increase your score outside of paying down your credit card debt? Penny Hoarder senior editor Robin Hartill shares 10 moves you can make in 2023 to improve your credit.
Credit card issuers make it so easy to get in the habit of overspending. The introductory APR offers, new credit card sign-up bonuses and cash back offers are designed to get us using cards more frequently and thinking less about what items cost.
So if you ever want to be debt-free, you need to change the way you use credit cards.
Former Freelance Editor Janet Keeler, freelancer Tim Moore, former Staff Writer Jen Smith and Senior Writer Mike Brassfield contributed to this post.
For most credit card users, being able to withdraw cash from an ATM seems like a revelation. After all, who wouldn’t want to take advantage of being able to borrow cash from their credit card now and again when money gets low in your bank account?
But getting cash from an ATM using your credit card isn’t something you’ll want to get in the habit of doing. The main reason? Banks see it as a risky behavior, and besides costing you a lot of money in interest payments and fees, regularly getting cash advances can also damage your credit score. We’ve got the details on what you need to know about using your credit card at the ATM and why cash advances from your credit card issuer should only be used in cases of emergency.
Can You Use a Credit Card to Get Cash at an ATM?
Yes, you can use a credit card to get cash from an ATM. Unlike withdrawing money from a debit account, withdrawing cash from your credit card is equivalent to getting a cash advance — which comes with its own unique set of costs, including higher interest rates and increased fees. Although many credit cards will allow you to withdraw cash from an ATM, it isn’t something you should get in the habit of doing.
Because credit card cash advances are typically applied to a different (and much smaller) line of credit than your other credit card purchases, they can also disproportionately affect your credit score. All of these circumstances make banks see cash advances as a risky behavior, which is why withdrawing cash from an ATM using your credit card is best reserved as a worst-case scenario, and not just something you do instead of using your debit card.
What Is a Cash Advance?
A cash advance is a means of borrowing cash against your credit line. Not all credit card companies offer cash advances, but many do. The key thing to keep in mind is that cash advances are often treated differently than normal credit card use, and they typically cost more than a regular ATM transaction. And there will be a cash advance limit.
For example, many cash advances come with higher interest rates (also called a cash advance APR) that can be as much as 25-30%. These interest charges are also usually applied to your account right away and without the usual 20-day grace period of other credit card transactions. You should study these details more closely on your credit card statement.
This means that even if you pay your credit card bill in full every month, using cash advances is a near-guarantee that you will owe a high percentage of interest on the cash you withdrew in that billing cycle, which can easily translate into credit card debt.
In addition to the high cash advance APR, a credit card company will often charge a cash advance fee at the time of the withdrawal. This may be a flare rate fee of $5-10 or a percentage of the amount of cash you withdraw, depending on which is greater. You may also have to pay an ATM surcharge if making the cash advance from a bank that isn’t also your card issuer.
Besides all the fees, it’s important to note that cash advances typically come from a different line of credit than your other credit card purchases. This line of credit is usually much smaller, meaning that even a relatively insignificant credit card cash advance can have a much larger impact on your credit utilization ratio, and in turn, negatively impact your credit score.
Most banks will view you as a greater credit risk after you make a cash advance, since they are generally only used as a last resort when someone needs cash but can’t afford to withdraw it from their checking account.
How to Use Your Credit Card at the ATM
If you want to withdraw money from an ATM using your credit card, follow these steps:
Insert your credit card into the ATM
Enter your credit card PIN — make sure you have one before you start the process.
Select the option for “cash withdrawal” or “cash advance”
Select the “credit” option (if asked to choose between checking, debit, or credit)
Enter the amount of cash you’d like to withdraw
Accept any associated fees that come with the transaction
Follow all prompts on the screen to complete the transaction and don’t forget to take your cash and receipt.
Using your credit card at an ATM isn’t all that different from using a debit card, just be sure to follow all the prompts on the machine for withdrawing cash, then accept the additional fees or charges and collect your cash and receipt.
What to Consider Before Taking a Cash Advance
Higher interest rates, cash advance fees and negative effects on your credit score are the three biggest results of taking out a cash advance on credit.
Higher Interest Rates
There are a few things to consider before taking out a cash advance. The first of these are the higher interest rates. Since most cash advances come with a cash advance APR that’s between 20-30% (without a grace period), you’re almost guaranteed to pay it. This means that a cash advance of $500 could cost you an extra $150 in interest.
Cash Advance Fees
Besides the increased interest rates, many banks charge a fee that’s either a flat rate of $5 to $10 or a percentage of your withdrawal amount. Be sure to read the fine print and understand what fees you’ll be charged, before making a cash advance.
Negative Effects on Credit Scores
Since cash advances are usually taken from a different, smaller credit line than your credit card purchases, you can increase your credit utilization ratio relatively quickly, which can result in a decreased credit score.
In general, most banks consider those who use cash advances to be a greater credit risk since they are likely using the funds to cover an expense that requires cash but that they cannot afford to pay using their debit card or checking account. All of these things can negatively impact your credit score, and make it harder to apply for other forms of credit in the future.
Alternatives to a Cash Advance
If you’re considering taking out a cash advance, it’s worth exploring other options which may cost less and can also help avoid damaging your credit score. Here are a few such alternatives to cash advances.
Debit Card
If you need cash and can afford to withdraw it from your account, a debit card is by far your best option. You can use your debit card at an ATM or a bank to withdraw the amount of cash you need quickly, or even to make a payment online.
You can also use the checking account associated with your debit card to either deposit or cash a check, and then use this money to make a purchase or payment.
Peer-to-Peer Payment Apps
Apps like Venmo or Paypal (among others) allow you to pay back a friend or family member who also uses the app, without the need to take out a cash advance. Use these apps to request payments from friends who owe you money or to send a payment for anything from a meal, to shared living expenses like rent or utilities.
Personal Loan
For those who need larger sums of cash and can’t afford to withdraw that amount from their checking account should consider taking out a personal loan. Personal loans will allow you to access a lump sum of cash immediately upon approval, without the higher interest rates (most personal loans have interest rates around 10%) or the potential damage to your credit score. Most personal loans also have a more reasonable grace period and repayment schedule than cash advances.
For Emergencies Only
Although it might be tempting to use cash advances in lieu of other payment methods, it’s really something best left for emergencies. Due to the higher interest rates, fees and potential damage to your credit score, you’re better off using an alternative payment method like a debit card or even a personal loan whenever possible and thereby avoiding any unexpected fees and interest payments.
Contributor Larissa Runkle frequently writes on finance, real estate, and lifestyle topics for The Penny Hoarder.
One of the many ways credit card issuers make money is by charging you interest when you carry a balance on your card.
In a twist absolutely everyone expected, credit card interest is not at all straightforward. Cue a “Home Alone”–style shocked face. The rate you’re advertised isn’t quite what’s used to actually charge you, and when you’re charged can significantly impact how much you owe. Oh, and interest rates can change pretty easily and frequently after you sign up for a card.
Strap in. Here’s everything you need to know about how credit card interest works.
How Does Credit Card Interest Work?
Credit card interest is the amount of money you’re charged on top of your credit card balance when you repay later than the due date for that balance.
Anytime you use your card to make a purchase, withdraw cash or transfer a balance from another card, you incur credit card debt, but you’re not automatically charged interest. You’ll get a monthly statement with the amount of debt you’re carrying and a due date for repayment, usually a month out. If you repay the debt balance by the due date, you won’t pay interest on it. For each day past the due date that you carry any balance, you’re charged interest at the unique rate you were offered in your card agreement.
An interest charge is effectively an addition to your card balance. The card issuer adds a percentage of your balance (the credit card’s interest rate) to your debt total each day, increasing the total you owe. As you pay down the balance (whether that’s all at once or in increments), the amount added in interest gets smaller, and you pay no interest on a $0 balance.
You’ll never owe interest on any charges you repay before the statement due date. But you do owe interest on any balance you carry past the due date, even if you make the minimum payment listed on your credit card bill. (The minimum payment gets you out of owing late fees, not interest.)
How Is Credit Card Interest Calculated?
Credit card interest is calculated based on your credit card balance and your interest rate and generally charged daily.
You’ll always see your interest rate expressed as an annual percentage rate (APR). The percentage companies use most often to calculate credit card interest is actually a daily or monthly periodic rate, but the U.S. Truth in Lending Act requires issuers to disclose the APR to ensure consistency across credit card companies. APR is the daily periodic rate multiplied by 365 or the monthly periodic rate multiplied by 12.
Interest gets calculated using your balance on a given month or your average daily balance for a given month. This only applies if you’re carrying a balance; if you carry a $0 balance, you have until the due date to repay charges within a statement period without incurring interest.
Multiply the periodic rate by your balance to find the amount of interest you’re charged.
Here’s an example:
Say your credit card APR is 23.5%. That’s based on a daily periodic rate of 0.06437%. You started the month with a balance of $1,000, then made a purchase for $250 on the 10th and another for $250 on the 20th. So you carried a balance of $1,000 for 10 days, a balance of $1,250 for 10 days and a balance of $1,500 for 10 days. Find the average daily balance like this:
((1,000 x 10) + (1,250 x 10) + (1,500 x 10)) / 30
That’s an average daily balance of $1,250 with a daily periodic interest charge of $0.80. Applied over 30 days in the cycle, that’s an interest charge of $24 for the month.
When Is Credit Card Interest Charged?
Credit card interest is charged daily or monthly on any balance you carry on the card. You don’t pay interest if you have a $0 balance and repay any charges before the due date.
When credit card interest is charged is important because of compounding interest. As you can see in the example above, the interest you incur in one compounding period — each day or each month — increases your balance, and the interest in the next period is applied to that entire new balance. So you’re charged interest on the charges you put on the card plus the interest you incur.
In simple terms: Interest on interest on interest — it can add up quickly.
How much interest you pay can depend a lot on when interest compounds. A 1% increase in your balance each day is quite different from a 1% increase on your balance each month. That’s why your credit card interest rate is always expressed as an APR — so you can compare rates on cards quickly without confusion.
Your APR doesn’t tell you exactly how much interest you’ll be charged, though, because that depends on your balance at the time it compounds. If your interest compounds monthly, for example, you’re charged based on your total balance at the end of the month. But if it compounds daily, you’re charged based on your average daily balance, which could be lower if you make purchases or payments throughout the month.
Here’s more math to show you how that works:
Let’s return to your credit card with the APR of 23.5% and your balance of $1,500. With daily compounding interest, you’ll be charged $24 based on an average daily balance of $1,250.
With monthly compounding interest on the same APR, your monthly periodic rate would be 1.96%, and you’d be charged that rate once on your balance at the end of the period for a charge of $29.40.
How to Avoid or Reduce Credit Card Interest
To avoid or reduce credit card interest, you can pay off your balance in full, reduce your balance as much as possible or get a lower interest rate.
To avoid credit card interest altogether, you need to pay off your balance in full by the due date each month. If you don’t carry a balance, you won’t be charged interest.
To reduce how much interest you pay, pay off as much of your balance as you can each month. The lower balance you carry, the less you’ll be charged in interest, because interest is levied as a percentage of that balance.
You’ll also pay less in interest if you have a lower APR. The interest rate a credit card company offers you is often based on your credit score and payment history — the higher your score, the lower your rate. As your credit score improves, contact your credit card issuer to ask for a lower rate, and look for pre-qualified offers from other creditors willing to offer you a lower rate.
If you move credit cards to get a lower interest rate, find a card with a balance transfer option. That’ll let you move any balance you carry on the old card over to the new card, so you incur interest at the lower rate.
Types of Credit Card Interest Rates
Credit cards come with several interest rates that depend on where the balance comes from. Your card agreement will list the rate for each type of balance. Types of interest rates include:
Purchase APR: The most common rate, purchase APR is the rate charged on things you buy with the credit card.
Cash advance APR: This rate is charged on money you withdraw as cash using the credit card.
Balance transfer APR: This rate is charged on balance transfers, money you move from an old card to this one.
Penalty APR: The card issuer might raise your interest rate for around six months if you frequently miss payments.
Promotional rates: Some cards come with a promotional period when you’re charged a lower APR, as low as 0%, for a period of six to 24 months. Any balance you carry past the promotional period will accrue interest at your regular interest rate.
Interest rates can be either fixed or variable. Here’s the difference:
Fixed rate: This rate is set based on your credit score and payment history. As those factors change, a card issuer can change your rate after the first year as long as they give you 45 days’ notice, per the Credit CARD Act of 2009. Fixed rates are rare for credit cards since that law took effect.
Variable rate: A variable rate is based on your credit score and payment history but is also tied to the prime rate — the base rate banks use to set interest rates, based on the Federal Funds rate. This type of APR can change anytime the prime rate changes, as well as fluctuate with your individual factors. Almost all credit cards have moved to variable rates since 2009.
Average Credit Card Interest Rates
In the U.S. the average credit card interest rate across all accounts was 16.27% as of August 2022, according to the Federal Reserve’s October Consumer Credit report. Average interest for accounts assessed interest (those that carried a balance) was 18.43%. Those averages have been steadily climbing over the past few years, as has the prime rate.
Frequently Asked Questions (FAQs) About Interest Rates
Here are answers to some of the most commonly asked questions about interest rates.
How Can I Find My Credit Card’s Interest Rates?
The best place to find your credit card’s APR is on your most recent statement, which you can access in your account through the card issuer’s app or website. You can always see your original APR in your credit card agreement, but it might have changed since you signed up.
What Happens if I Carry a Balance on My Credit Card?
If you carry a balance on your credit card, you’ll be charged interest based on your APR and the card’s compounding period. As long as you make the minimum payments listed on your credit card statements, you won’t be charged late fees, but you’ll continue to accrue interest on your outstanding balance. A balance on your credit card also means you have less available credit to use out of your credit limit, which limits your purchasing power andcan affect your credit score.
What is the Difference Between Interest and APR?
On a credit card, there’s no real difference between interest rate and APR (annual percentage rate). Technically, an interest rate could refer to the daily or monthly periodic rate rather than the APR, but it’s safe to say that when someone refers to a credit card interest rate, they’re referring to the APR. (This isn’t true for mortgages and other installment loans, which include fees in the APR that aren’t included in the interest rate.)
Contributor Dana Miranda is a Certified Educator in Personal Finance® who has written about work and money for publications including Forbes, The New York Times, CNBC, Insider, NextAdvisor and Inc. Magazine.
Since 2011, the average price of a house in the U.S. has more than doubled — rising from $176,000 in 2011 to $358,000 in 2022.
Though home prices have recently dipped for the first time in more than a decade, inflation, growing student loan debt and high interest rates have made the dream of homeownership more challenging for each generation — especially in a booming real estate market.
But it’s not impossible. We’ll walk you through the process of buying a house step by step.
How to Buy a House: 9 Steps for First-Time Buyers
While the road to buying a house has become more riddled with potholes and speed bumps, it’s still one you can navigate with the right savings plan, a decent credit score and a little professional guidance.
Think you’re ready to embark on your home buying quest? Here’s how to buy a house in nine simple steps.
Whip your credit score into shape
Save for a down payment
Figure out your price range
Get preapproved for a mortgage
Hire a real estate agent
Shop for your dream home
Make an offer they can’t refuse
Get an appraisal and home inspection
Close on your new home
1. Whip Your Credit Score Into Shape
A strong credit score is crucial to securing a low interest rate on your mortgage.
Over 30 years, the most common length of a mortgage, paying just 1 percentage point more in interest could cost you big time. For example, if you bought a house with a $200,000 fixed-rate 30-year mortgage at a 5% interest rate, you’d pay an extra $40,000 in interest over 30 years than you would have at 4%.
At a minimum, your credit score should be 620. Some mortgage lenders may approve you for a loan if your score is under 620, but prepare for astronomical interest rates and larger down payment requirements. An above-average credit score falls within the 680 to 740 range. Anything above 740 will secure you the best interest rates available.
If you have poor credit, don’t rush to buy a house just yet. You can improve your credit score over time by paying off debts (especially credit cards), lowering your credit utilization and diversifying your credit portfolio responsibly.
Paying off debt is especially important because lenders look at your debt-to-income ratio, which is your monthly debt obligations (including your estimated future monthly mortgage payment) divided by your pre-tax monthly income. Lenders look for a debt-to-income ratio of 43% or lower.
Pro Tip
Making just one extra mortgage payment a year can have a big impact on how much interest you pay over the life of your mortgage, too.
2. Save for a Down Payment
Saving for a down payment while also paying off debt is challenging, but if you want to be a homebuyer, you may need to do both.
The age-old wisdom is that you need to save 20% for a down payment. But with the average home sale price at $358,000 as of 2022, that would make the average 20% down payment $71,600. And in 2022, most first-time homebuyers do not have that kind of cash lying around.
In recent years, it has become more common to put as little as 10%, 5% or even 3.5% down. FHA loans, which are popular among first-time buyers require only 3.5% down when your credit score is above 580.
VA loans — reserved for members of the military, veterans and some surviving spouses — require no money down but typically require a funding fee, which varies based on the price of the home and whether the borrower has a down payment.
There are benefits to putting 20% down, however. When you put 20% down, you usually avoid having to carry private mortgage insurance, or PMI.
VA loans do not require PMI even if you put 0% down. A larger down payment can also make your offer more attractive in a competitive market.
3. Figure Out Your Price Range
How much house you can afford and how much you should actually spend on a house may be two vastly different numbers.
The golden rule: Never set your sights on a house that you could afford — but that will cause you to make other sacrifices you’re not jazzed about, like cutting vacations or ruling out education.
Similarly, if you or your significant other (if you’re buying with a partner) both work, but one of you is considering a career change that could result in less income or becoming a stay-at-home parent, you should not budget using your current combined income.
Be conservative. Your home shouldn’t cost more than three to five times your annual income, but if any part of you that suspects your income may decrease in the next 10 years, stay closer to three times your income than five.
Pro Tip
Housing expenses — including your mortgage payment, homeowners insurance and property taxes — generally should not exceed 30% of your monthly income.
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4. Get Preapproved for a Mortgage
Before shopping for houses, you should shop for a lender. You can compare mortgage rates online and interview prospective lenders to find the best deal.
Ask friends, family and your real estate agent (if you already have one) for recommendations and try your own financial institution. But, ultimately, go with the mortgage lender that will offer you the best interest rate on your home loan.
Then ask that lender for a preapproval letter. This is different from being prequalified. Lenders can typically prequalify you with just a few data points that they don’t verify to give you a ballpark range of the loan amount and interest rate they might offer.
But a preapproval letter is an official document that says the lender is committed to giving you a home loan, assuming nothing changes in your finances. Getting preapproval takes more work, because the lender will send all of your financial documents (W-2s, pay stubs, tax returns, etc.) to an underwriter for verification.
A lender may preapprove you for a higher amount than you’ve budgeted for. Remember: Just because they are willing to give you that much does not mean you have to spend that much.
5. Hire a Real Estate Agent
The beauty of the homebuying process is that the seller will typically pay your real estate agent fees, so hiring an agent doesn’t cost you a thing, though some sellers may lower the price slightly if you purchase without an agent.
Ask family members and friends for recommendations on real estate agents, and always hire a buyer’s agent. These home buying tips include several recommendations for hiring a good real estate agent who will find you the best deal on your dream home.
6. Shop for Your Dream Home
This is the most exciting step. Now you can actually set foot inside of homes and envision your life inside them. Visit open houses and go on private tours with your real estate agent, but also research houses on your own on sites like Zillow and Trulia.
But don’t be distracted by fresh paint and that hot tub in the backyard. When you’re house hunting, have a sharp eye for what really matters. If possible, bring along friends or family who know what to look for in a new house.
Cosmetic things like ugly carpet and questionable wallpaper can be changed relatively cheaply. The structural components are what you should be most concerned with. Some questions to think about when you tour a home:
How’s the plumbing? If there’s a well or septic system, are they in good shape?
How old is the HVAC system? Does it have any issues?
Can you get hot water fast? What’s the water pressure like?
Do you notice any leaks or signs of water damage?
Does the basement show signs of flooding?
Is the foundation solid? Or are there issues that might require costly repairs?
How old are the appliances? Will they need to be replaced soon?
What about the exterior? When was the roof last done? Is the siding in good shape? Are the windows going to drive up your energy bill?
What’s the neighborhood like? Do you feel safe where this house is? Is there a lot of noisy traffic? Is it conveniently located near restaurants, shopping, hospitals and parks?
If you have or want children, are there good schools nearby?
7. Make an Offer They Can’t Refuse
Once you have found a house that fits your needs and is within your budget, you and your real estate agent will submit an offer. Be prepared to negotiate the purchase price, especially if you envision needing to do some remodeling.
Your real estate agent likely has a number of tricks up her sleeve to make your offer more appealing — but then, so does everybody else’s agent.
The seller may make a counteroffer. You can counteroffer right back until you land on a contract that you both find pleasing.
You might have to put up “earnest” money as a show of good faith to the seller that you are serious about moving forward with the sale. You’ll get this money back if the sale falls through because of issues with the appraisal or home inspection. If you purchase the home, the money is applied to the price of the home.
At this point, the house will go into escrow while you secure financing, get the house appraised and coordinate a home inspection ahead of closing.
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8. Get an Appraisal and Home Inspection
Your lender will typically coordinate the home appraisal to determine what the house is worth. If the house is valued at less than what you offered to buy it, the contract will likely need to be revised, because it is not a good investment for the lender.
It is your responsibility to coordinate the home inspection. Though not always legally required, a home inspection is something you should absolutely do. A home inspector will investigate the property, checking for structural issues, HVAC problems and issues with the roof and major appliances. The average home inspection costs between $300 and $400.
Pro Tip
You might need to hire specialized inspectors to test for pests, radon, mold and asbestos and to inspect pools, chimneys and sewers. These inspections can be more expensive.
9. Close on Your New Home
A few days before you officially close, you should do a final walk-through of the house to ensure everything is as you expected. Check that all agreed-upon repairs were made, and if the contract specified that certain appliances would be left behind, like the washer and dryer, verify that those are still present.
On closing day, drink lots of water and maybe do some hand and forearm stretches because there’s going to be a lot of paperwork to sign.
This will also be the day you write a massive check for the down payment and any closing costs that you’ve agreed to cover. It can be painful to watch that paper rectangle slip away from your fingers, but it’ll all be worth it when you are christening your new home with a glass — or whole bottle — of Champagne.
When closing, you need to bring your checkbook, any required identification (driver’s license or passport, for example) and maybe even a thank-you card for your real estate agent.
All told, the process of buying a house takes, on average, 40 to 45 days from application to closing. But considering that there are a lot of steps before making an offer, be prepared for months of hard work.
4 Mistakes to Avoid When Buying a House
Following the above step-by-step guide will keep you on the right path when buying your first house, but it’s still possible to make mistakes. These common mistakes are easy to avoid.
1. Not Having a Real Estate Agent
Real estate agents can get you into homes you might not otherwise find, help you negotiate and spot unfavorable terms in contracts. Plus they probably won’t cost you a dime as the buyer.
2. Forgetting the ‘Extras’ When You Calculate Your Housing Budget
When you’re making your budget, it can be easy to see the cost of a house online and assume you would pay the listing’s estimated monthly payment.
However, those estimates assume your credit report is immaculate and you are putting 20% down. If you’re calculating expenses on your own, don’t forget that you will pay more than just the cost of the house. Plus there’s homeowners insurance, PMI, property taxes and, of course, interest.
3. Skipping the Home Inspection
If you forgo an inspection and issues surface shortly after your purchase, you are out of luck. You’ll be paying out of pocket, and the seller is not liable.
4. Buying Outside Your Price Range
Even if you’re approved to borrow X amount, you should not buy a house for that amount if you don’t feel comfortable spending that much.
Remember: You are likely signing a 15- to 30-year commitment. Make it a number you’re comfortable with.
Timothy Moore is a freelance writer for The Penny Hoarder. Senior writer Robert Bruce contributed to this article.
