Catching your favorite show or movie via streaming service is commonplace in this day and age â especially during the COVID-19 pandemic â and doing so using a smart device other than a standard computer has gained popularity in recent years.
In fact, 2020 data out of the Leichtman Research Group found that 80% of T.V.-owning households in the U.S. have at least one internet-connected T.V. device â from streaming devices like the Roku Streaming Stick to video game consoles like Nintendo Switch to standard smart T.V.s. And with the uptick in internet-connected T.V. devices, one can assume the popularity of streaming services (coupled with Americans’ ever-heightening presence online) may have something to do with it.
As the popularity of streaming services grows, U.S. households are increasingly cutting the cord with cable
Research published as recently as this year by the Leichtman Research Group indicates that â82% of U.S. households have at least one streaming video serviceâ from 11 of the top direct-to-consumer and subscription-based video-on-demand services â a slight increase from its 2019 findings.
At the same time, numerical estimates from eMarketer forecast that an additional 6.6 million U.S. households will âcut the cordâ with cable T.V. subscriptions in 2021, bringing the projected total number of U.S. cord-cutters to 31.2 million.
Overall, it can be inferred that the COVID-19 pandemic could have something to do with these numbers as Americans look for more ways to stay entertained while under stay-at-home orders.
Got streaming subscriptions? A rewards card can help
If you happen to be juggling streaming service subscriptions for personal use â or even to stream calming tunes at your small business or within your (virtual) second-grade classroom, for example â odds are you’re spending a decent amount on these services per month. And while financial tools like a rewards credit card can be helpful, streaming services probably arenât the first bonus category you check for when scoping out the most ârewardingâ card options.
Since these purchases likely make up less of your budget, it makes sense that they wonât be your first priority. Thankfully, though, many great rewards and cash back credit cards now include streaming service bonuses in addition to their ongoing rewards and perks. Hereâs a quick look at some of our favorite cards that reward streaming.
Wells Fargo Propel American ExpressÂ® card*: Best for earning rewards on streaming with no annual fee
Blue Cash PreferredÂ® Card from American Express: Best for earning rewards on streaming with an ongoing annual fee
Discover itÂ® Cash Back: Best for rotating category enthusiasts
Amazon Prime Rewards Visa Signature card: Best for Amazon Prime loyalists
U.S. Bank Altitude Go Card: Best for everyday spending
U.S. Bank Altitude Connect Card: Best for streaming credit
Capital One Savor Cash Rewards Credit Card*: Best for dinner and a movie
Best for earning rewards on streaming (no annual fee): Wells Fargo Propel
For cardholders who prefer a rewards card with no annual fee, the Wells Fargo Propel American Express cardÂ is a great option. It offers 3X points per dollar on dining, travel and transit, gas station purchases and select streaming services. Cardholders also earn 1X point per dollar on other purchases. Based on the average person’s spending habits, we estimate this card offers an average rewards rate of 1.78 points per dollar, one of the highest rates you can find on a card with no annual fee.
Wells Fargo Propel American Express® card*
Why should you get this card?
The Wells Fargo Propel card is one of the best no-annual-fee travel cards on the market, thanks to its 3X point bonus.
Read full review
Other things to know:
3X points per dollar on dining, travel and transit, gas station purchases and select streaming services; 1X point per dollar on other purchases
20,000 points if you spend $1,000 in first 3 months
$0 annual fee
No foreign transaction fee
If you were to spend $29 a month on streaming services, you’d earn 1,044 points annually with this card. That’s just over $10 a year in cash back from streaming purchases.
Streaming services eligible for bonus rewards on Wells Fargo Propel
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This card’s video streaming service category includes a number of popular providers. Eligible partners include Netflix, Hulu, Amazon Prime, Disney+, HBO Now and more. You can also earn rewards on eligible music streaming services, including Apple Music, Spotify Premium and Pandora. With so many providers included, it’s easy to rack up points on your subscriptions.
Other card perks to consider
Beyond offering a good rate on streaming services, the Wells Fargo Propel comes with several other perks that make it a valuable option. New cardholders can enjoy a generous sign-up bonus of 20,000 points for spending $1,000 in the first three months. Plus, the Propel cardâs bonus categories are particularly valuable for frequent travelers, as they include gas stations, transit, travel and dining purchases.
Best for earning rewards on streaming (with an ongoing annual fee): Blue Cash Preferred
The Blue Cash Preferred Card from American Express is a great choice for cardholders looking to earn cash back on streaming service purchases, and the card’s terrific ongoing rewards rate should make it easy to offset the $95 annual fee after the first year.
You’ll earn 6% cash back on U.S. supermarket purchases (for up to $6,000 per year in purchases, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% on transit and U.S. gas station purchases, and 1% on general purchases.
Blue Cash Preferred® Card from American Express
Why should you get this card?
The Blue Cash Preferred card helps take the sting out of long commutes by offering a generous point bonus on U.S. gas station spending, and it offers one of the highest cash back bonuses you can get when you use your cardÂ at U.S. supermarkets.
Read full review
Other things to know:
6% cash back on select U.S. streaming subscriptions, 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%), 3% cash back at U.S. gas stations and on transit purchases and 1% cash back on other purchases
$150 statement credit if you spend $3,000 in first 6 months
20% back on Amazon.com purchases in first 6 months, up to $200 back
Free ShopRunner membership
$95 annual fee is waived the first year
The 6% cash back on streaming services is the most generous bonus on this category currently available among rewards cards â especially since there is no cap on how much you can earn. If, like the average person, you pay about $29 each month on various services, you can earn more than $20 a year in cash back on those purchases alone.
Streaming services eligible for cash back on Blue Cash Preferred
The Blue Cash Preferred card also boasts a robust list of eligible streaming services, including popular options like Apple TV+, Netflix, Hulu, SlingTV, Spotify and Disney+, as well as HBO Max.
Keep in mind, however, that according to Amex, “If your subscription is bundled with another product or service or billed by a third party (such as a digital platform, a cable, telecommunications, or internet provider or a car manufacturer), your purchase may not be eligible.”
In other words, if you have an add-on subscription to a service like HBO included as part of your cable service, you won’t earn bonus rewards even if you pay that bill with the Blue Cash Preferred.
Other card perks to consider
On top of the highest rate of cash back currently available for streaming services, the Blue Cash Preferred offers a top-tier rate on U.S. supermarket purchases (6% on up to $6,000 in purchases a year, then 1%). If you spend a lot on groceries each month, this card is one of the most rewarding options available. Even with the $6,000 per year spend cap, you can rack up quite a bit of cash back.
Best for rotating category enthusiasts: Discover it Cash Back
If you enjoy tracking quarterly rotating categories for higher cash back rates, the Discover it Cash BackÂ might be your card of choice. The Discover it Cash Back publishes its quarterly rotating categories ahead of time.
In 2021, the Spring (April to June, activate starting March 1, 2021) categories include select streaming services. During the Spring quarter, if activated, you can earn 5% cash back on up to $1,500 in purchases per quarter in the bonus categories, then 1% after that. If you miss the Spring bonus quarter this year, keep an eye out to see if itâs offered again next year.
Discover it® Cash Back
Why should you get this card?
The Discover it® Cash Back offers rotating quarterly rewards category, plus no annual fee.
Read full review
Other things to know:
Enroll every quarter to earn 5% cash back on up to $1,500 in purchases in various categories throughout the year
1% cash back on general purchases
$0 annual fee
Streaming services eligible for cash back on Discover it Cash Back
The following streaming services are eligible in this category: Apple Music and Apple TV+, YouTube TV, Spotify, Disney+, HBO Max, AT&T TV Now, HBO Max, Hulu, Netflix, Pandora, BET+, CBS All Access, DAZN, ESPN+, Fubo TV, Google Play Movies & TV, Philo, Peacock TV, Showtime, Sirius XM, Starz, Sling and Vudu.
Note that if your subscription is bundled with another product or service billed by a third party, it may not be eligible in this category. The same goes for add-ons on select streaming services if they arenât on the list of eligible services.
Other card perks to consider
The Discover it Cash Back card offers other great perks, including a sign-up bonus that matches your cash back at the end of your first year of card membership. In addition, it comes with a $0 annual fee and multiple easy options for how you can redeem your rewards.
Best for Amazon Prime Video loyalists: Amazon Prime Rewards card
The Amazon Prime Rewards Visa Signature card is designed with Amazon fans in mind, making it one of the best options if your streaming service of choice is Amazon Prime Video. The card earns 5% cash back on Amazon.com and Whole Foods purchases (including your Amazon Prime membership), 2% cash back on restaurant, gas station and drugstore purchases, and 1% cash back on everything else. In order to qualify for the card, an Amazon Prime membership is required â but the cardâs 5% rewards rate can help offset the fee.
Amazon Prime Rewards Visa Signature card
Why should you get this card?
The Amazon Prime Rewards Visa Signature card offers a great 5% rate on Amazon and Whole Foods purchases.
Read full review
Other things to know:
5% cash back on Amazon and Whole Foods purchases, 2% back on restaurant, gas station and drugstore purchases. and 1% back on other purchases
$70 Amazon gift card when you sign up
No foreign transaction fees
Streaming services eligible for cash back on Amazon Prime Rewards Visa Signature
While Amazon Prime is technically the only streaming platform eligible for rewards, the Amazon Prime Rewards card should prove surprisingly flexible if you want to juggle multiple subscriptions. In addition to your Prime membership (which includes Prime Video and Amazon Music), you’ll earn 5% back on all Prime Video rentals and purchases, as well as on any subscriptions you add to your membership through Amazon Prime Video Channels.
With Amazon Prime Video Channels, you can choose from more than 100 add-on video subscriptions, including premium channels like HBO and niche channels like PBS Masterpiece. Here is a brief selection of Prime Video Channels, all of which earn 5% back when added to your Prime Video account:
Hallmark Movies Now
Lifetime Movie Club
NBA League Pass
To earn rewards on these add-on subscriptions and any video rentals or purchases, be sure your Amazon Prime Rewards card is set as your default payment method for Prime Video. You can adjust this setting in the “Your Payments” section of your account, under “Settings” â or change your payment method for Prime Video Channels in the “Manage Your Prime Video Channels” section of your account.
Other card perks to consider
The Amazon Prime Visa also makes a great grocery card for users who live near a Whole Foods location. The 5% cash back you earn on these purchases is one of the best grocery rates available. Additionally, youâll get a $70 Amazon gift card just for signing up. While this is not the highest sign-up bonus available among rewards cards, it doesnât require you to meet any spend requirement, and youâll be able to take advantage of the perk immediately.
Best for everyday spending: U.S. Bank Altitude Go Card
If you want to earn rewards on an array of everyday expenses, including streaming services, the U.S. Bank Altitude Go Card is a terrific option without paying an annual fee. Along with the 4X points per dollar you’ll earn on takeout, dining and food delivery purchases, youâll earn 2X points per dollar at grocery stores, grocery delivery, gas stations and streaming services, then 1X point per dollar on all other eligible purchases.
U.S. Bank Altitude Go Card
Why should you get this card?
It charges no annual fee, offers an impressive rewards rate on a variety of everyday purchases and comes with the added perk of an annual streaming credit.
Read full review
Other things to know:
4X points per dollar on dining, 2X points per dollar on grocery store, gas station and streaming service purchases, then 1X point per dollar on other purchases
20,000-point bonus when you spend $1,000 in first 90 days
Includes an introductory APR on balance transfers and new purchases
No annual fee
On top of its ongoing rewards on streaming service purchases, the card offers a unique annual streaming credit: When you make 11 consecutive calendar month eligible streaming service purchases, youâll receive a $15 credit (automatic statement credit will be applied within two statement billing cycles following the eleventh month; you are eligible for this credit once per 12-month period).
Streaming services eligible for bonus rewards and credit on U.S. Bank Altitude Go Card
While U.S. Bank does not offer a full list of eligible streaming services, it’s safe to assume based on how merchant category codes are typically assigned that services like Amazon Music, Apple Music, AT&T TV Now, Disney+, Google Music, Hulu, Netflix, Pandora, SiriusXM, Slacker Radio, Sling TV, Spotify, Tidal, Vudu, YouTube Music and YouTube TV are included.
Other card perks to considerinstant card number on approval. As soon as you’re approved, you can load your card number into your favorite mobile wallet and start earning rewards instead of waiting for it in the mail. You can also use the card to pay off a transferred balance or finance new purchases â a major plus considering how difficult balance transfer offers can be to come by.
students with a limited credit history can also enjoy streaming service perks with the Journey Student Rewards from Capital One. You can earn up to $60 in streaming service credits: $5 per month for 12 months on select subscriptions when you pay on time. Some exclusions apply, but popular services like Prime Video, Disney+ and Netflix are included.
Best for streaming credit: U.S. Bank Altitude Connect Card
The streaming service earning on the newly launched U.S. Bank Altitude Connect Card is pay, but it makes up for it with a slightly higher credit of $30 for annual streaming service purchases. Plus, you can still rack up plenty of rewards with the card’s 4X rate on gas and travel, 2X on groceries (including grocery delivery), dining and streaming services and 1X on everything else.
U.S. Bank AltitudeÂ® Connect Visa SignatureÂ®
Why should you get this card?
The new U.S. Bank Altitude Connect offers a leading rewards rate on gas and travel, and its TSA Precheck/Global Entry application fee credit can help offset the annual fee.
Other things to know:
4 points per dollar on travel and at gas stations
2 points per dollar at grocery stores and on grocery delivery, dining and streaming services
1 point per dollar on all other purchases
50,000 points when you spend $3,000 in the first 120 days
$95 annual fee (waived the first year)
$30 credit for annual streaming service purchases such as Netflix and Spotify
Receive up to $100 in statement credits for reimbursement toward your TSA Precheck or Global Entry application fee once every four years.
No foreign transaction fees
While the card does offer 2X ongoing rewards on streaming service purchases, the annual streaming credit offers the real value. Like with the Altitude Go Card, you just need to make 11 consecutive calendar month eligible streaming service purchases, and then you’ll receive a $30 statement credit.
Streaming services eligible for bonus rewards and credit on U.S. Bank Altitude Connect Card
There is not a full list of eligible streaming services publicly available, but services like Amazon Music, Netflix, Pandora and YouTube TV are said to qualify.
Other card perks to consider
In addition to its high earning rate on travel and gas purchases, the U.S. Bank Altitude Connect card comes with a statement credit of up to $100 to cover your TSA Precheck or Global Entry application fee. Since the annual fee on this card is only $95 (waived in the first year), you can easily offset the cost on the years you use this credit. (Note, membership to these programs last five years.)
Best for dinner and a movie: Capital One Savor Cash Rewards Credit Card
The Capital One Savor Cash Rewards card has long been a favorite for foodies, thanks to its generous earning rate on both dining and grocery store purchases. But this fan-favorite recently got an upgrade â and with it a new, enhanced rate on streaming service purchases.
Capital One Savor Cash Rewards Credit Card
Why should you get this card?
The Capital One Savor card offers one of the best cash back rates on dining and entertainment purchases combined.
Read full review
Other things to know:
8% cash back on tickets at Vivid Seats through January 2023
4% cash back on dining, entertainment and streaming services
3% cash back at grocery stores
1% cash back on other purchases
$300 if you spend $3,000 in the first 3 months
$95 annual fee
Streaming services eligible for bonus rewards and credit on Capital One Savor Cash Rewards Credit Card
There is not a full list of eligible streaming services publicly available, but services like Hulu, Disney+ and Netflix are said to qualify.
Other card perks to consider
The Savor card also recently enhanced its earning rate on grocery store purchases, making it more valuable for those who prefer eating in to dining out. So whether you’d rather order takeout (earning 4% cash back) or stock up for cooking your own meal (3% cash back), the Savor will reward you for your next movie night.
While streaming services like Netflix, Amazon Prime, YouTube TV or Tidal might not make up the biggest part of your monthly budget, you can still bring in great rewards on your membership fees by choosing the right rewards card. Whether you prefer a dining, grocery or travel card, you can combine rewards on various purchases with a streaming bonus to maximize points or cash back.
*All information about the Wells Fargo Propel American Express card and Capital One Savor Cash Rewards card has been collected independently by CreditCards.comÂ and has not been reviewed by the issuer.
Deia Schlosberg had been working as an environmental educator, teaching students about issues concerning conservation and sustainability. While she loved teaching, she wanted to reach people on a larger scale about the importance of protecting the environment. So she decided to follow her dream of becoming a filmmakerâa dream that would require her to return to school for a graduate degree. She had no idea at the time that it would lead to becoming an award-winning documentarian.
While Schlosberg’s choice may have paid off, learning how to pay for grad school as a working adult can be a challenge. There are various benefits to getting an advanced degree: You can learn more, you can earn more, you can further advance in your current job or prepare for a career change. However, you might also find yourself stressed by the expense and resulting debt of it all, especially if you have kids, a home or other financial commitments. So a big question on your mind could be, “How much should I save for grad school?”
Below are some lessons on how to financially prepare for grad school to help you determine if and when you should go back to school. If you haven’t yet decided if graduate school is right for you, see section 1 for tips on how to decide. If you already know you want to go back to school, skip to section 2.
1. Decide if going back to school is right for you
Getting an advanced degree may seem like a ticket to success, but depending on your chosen area of study, the outcome may vary. For Schlosberg, it was a bit of a risk. It can be difficult to get a break in the film industry, and going to grad school could mean carrying around debt for a long time. Is this the type of outcome you would be willing to accept?
According to Emma Johnson, best-selling author, career consultant and founder of Wealthysinglemommy.com, there are a few things you can do to help you decide whether or not going back to school is right for you:
Do your homework. When considering how to pay for grad school as a working adult, research your degree options and the jobs to which they might lead. Compare cost and compatibilityâfor instance, will classes for the program align with your work schedule? Once you’ve determined what kind of occupation you may pursue after grad school, search online for information about that occupation’s average earnings.
Solidify your goals. You may find clarity in writing out your goals for going back to school. Some benefits are tangible, like earning more money, building a professional network and gaining skills. Others might be less tangible, such as finding personal fulfillment. Once you know your goals, it will be easier to determine if a graduate degree makes personal and professional sense.
“Your savings should not only depend on tuition but also what the degree isâi.e., how easy it will be to repay once you are working in the desired field.”
Give your degree program a test run. Consider taking classes that relate to the degree you are interested in getting in grad school. These classes can give you a taste of the subject matter you’ll be studying and help you meet people involved in the field. Also, if prerequisites are required for your advanced degree, they often cost less online or at a community college, which is important to remember when thinking about how to prepare your finances before grad school. Make sure the course credits will be accepted at the graduate school you plan to attend.
Take a hands-on approach. To level up in your existing career or find out what it’s like in a new field before making the change, get some work-related experience first. For instance, to learn more about moving up in your own field, get out and meet those higher level professionals by attending conferences and networking events. The same tactic applies if you want to change careers.
2. Know how much you need to save
How to pay for grad school as a working adult can be complicated, but you’ve decided you’re ready for it. Plus, hitting the books at a time when saving for retirement or your child’s education could be at the forefront makes the task of how to prepare your finances before grad school even more critical.
Figuring out how much to save for grad school begins with determining the cost of attendance. Here are a couple ways to do that, according to Johnson:
Do the research. Once you have found a school and degree that you like, visit the school’s web site. Some schools may provide the cost of tuition, fees and estimated costs for books, supplies and transportation. Costs can vary tremendously, depending on various factors: whether you attend full or part time, whether you attend a public or private school, whether you are an in-state or out-of-state resident and the time it takes to get your degree.
Determine your budget. Once you have a handle on the school-related costs, build a spreadsheet that accounts for these costs and projects monthly income and living expenses. Working through a savings plan beforehand can help you financially prepare for grad school by showing just how much you’ll need to budget for monthly on tuition plus living expenses. Once you determine these factors, you’ll get a better idea of what you need to save up.
Create a savings buffer. After you determine your monthly costs, pad that number. “Your savings should not only depend on tuition but also what the degree isâi.e., how easy it will be to repay once you are working in the desired field,” Schlosberg says. She saved a little more than she estimated, giving herself an extra cushion to cover some of the potential risk to her finances.
“You may have to downscale your career and current lifestyle to go back to school, which may be a worthwhile investment of time and resources.”
3. Allow yourself a flexible timeline
One key factor in planning the timeline for earning your graduate degree: Don’t be in a rush. If you need to, create the time to save. It may not be necessary to go back to school full time or finish on a particular schedule, Johnson says. She mentions these possible paths to earning your degree when planning how to pay for grad school as a working adult:
Consider a side hustle. One option is to go to school full time and take on a side hustle. You may not make as much as you did as a full-time employee, but the income can complement your savings. It may also allow you to concentrate more on your degree and finish faster.
Attend part time. Go to school part time (nights and weekends) while working. It will take longer, but it will also minimize your debt, which could be better in the long run.
Take it slowly. Only sign up for a class or twoâwhatever you can affordâand continue to work. This part-time “lite” approach may take even longer, but could help you avoid overextending yourself financially or sliding into debt.
Take online classes. Consider online programs that could lower the cost of tuition and allow you to continue working full time.
4. Take advantage of potential cost-saving benefits
So you’ve done your research on how much you need to save while determining how to prepare your finances before grad school. But there are ways to potentially cut or eliminate some of those costs. What comes next are some solutions that may help pay your grad school bills:
Consider loans, financial aid and scholarships. “I took out some student loans for living expenses, but I tried to pay off my tuition as I went by working through school,” Schlosberg says. Graduate students may also be eligible for different types of scholarships and grants, which is aid that does not need to be paid back. Depending on your area of study, scholarships and grants can also be obtained through federal and state organizations, private foundations, public companies and professional organizations.
Ask your employer to pay the tuition. One way to financially prepare for grad school is to talk to your manager or human resources representative to find out if your current employer would help pay for, or fully fund, your degree through tuition reimbursement. This is most likely if you plan to move up the ladder and use your new skills on behalf of the company.
Take advantage of in-state tuition. Some people move to the same state as their desired school to try to get a break on tuition. “I moved to Montana and worked a couple jobs for a year before applying so I could get in-state tuition,” says Schlosberg. Whether you are already a resident or you move to a new state, be sure to determine how long you need to be a resident to qualify for in-state tuition at your desired university.
Cut back on discretionary expenses. Seemingly small things like adjusting your lifestyle to lower your monthly costs, which could mean fewer lattes and dinners out, might go a long way in resolving how to prepare your finances before grad school. “You may have to downscale your career and current lifestyle to go back to school, which may be a worthwhile investment of time and resources,” Johnson says.
Financially prepare for grad school and get a new start
Answering the question of how to pay for grad school as a working adult requires significant research and preparation, but some say it’s worth it, including Schlosberg. It not only gave her a whole new start, but a wealth of knowledge going forward to nurture her future endeavors. “Getting a graduate degree gave me the confidence to jump into a new career. I met an amazing network of people,” Schlosberg says.
But an advanced degree may not be a necessity. While it could look impressive on a resume, for many employers, a master’s degree is not a requirement. “Whatever you do, don’t go back to school just for the sake of getting a degree,” Johnson says. When thinking about how to financially prepare for graduate school, make sure it fits into your financial picture and that you’re able to âweigh your sacrifices against future gains,” she says.
The post Hitting the Books Again? Here’s How to Financially Prepare for Grad School appeared first on Discover Bank – Banking Topics Blog.
Surgery is a prestigious field that requires a high degree of skill, dedication and hard work of its members. Not surprisingly, surgeonsâ compensation reflects this fact, as the average salary of a surgeon was $255,110 in 2018. This figure can vary slightly depending on where you live and the type of institution at which you work. Moreover, the path to becoming a surgeon is long and involves a substantial amount of schooling, which might result in student loan debt.
Average Salary of a Surgeon: The Basics
According to the Bureau of Labor Statistics (BLS), the average salary of a surgeon was $255,110 per year in 2018. That comes out to an hourly wage of $122.65 per hour assuming a 40-hour work week â though the typical surgeon works longer hours than that. Even the lowest-paid 10% of surgeons earn $94,960 per year, so the chances are high that becoming a surgeon will result in a six-figure salary. The average salary of a surgeon is higher than the average salary of other doctors, with the exception of anesthesiologists, who earn roughly as much as surgeons.
The top-paying state for surgeons is Nebraska, with a mean annual salary of $287,890. Following Nebraska is Maine, New Jersey, Maryland and Kansas. Top-paying metro area for surgeons include Cincinnati, OH-KY-IN; Winchester, WV-VA; Albany-Schenectady-Troy, NY; New Orleans-Metairie, LA; and Bowling Green, KY.
Where Surgeons Work
According to BLS data, most of the surgeons in the U.S. work in physiciansâ offices, where the mean annual wage for surgeons is $265,920. Second to physiciansâ offices for the highest concentration of surgeons are General Medical and Surgical Hospitals, where the mean annual wage for surgeons is $225,700. Colleges, universities and professional schools are next up. There, surgeons earn an annual mean wage of $175,410. A smaller number of surgeons are employed in outpatient Care Centers, where the mean annual wage for surgeons is $277,670. Last up are special hospitals. There, the mean annual wage for surgeons is $235,770.
Becoming a Surgeon
You may have heard that the cost of becoming a doctor, including the cost of medical school and other expenses, has soared. Aspiring surgeons must first get a bachelorâs degree from an accredited college, preferably in a scientific field like biology.
Then comes the Medical College Acceptance Test (MCAT) and applications to medical schools. The application process can get expensive quickly, as many schools require in-person interviews without reimbursing applicants for travel expenses.
If accepted, youâll then spend four years in medical school earning your M.D. Once youâve accomplished that, youâll almost certainly enter a residency program at a hospital. According to a 2018 survey by Medscape, the average medical resident earns a salary of $59,300, up $2,100 from the previous year. General surgery residents earned slightly less ($58,800), but more specialized residents like those practicing neurological surgery earned more ($61,800).
According to the American College of Surgeons, surgical residency programs last five years for general surgery. But some residency programs are longer than five years. For example, thoracic surgery and pediatric surgery both require residents to complete the five-year general surgery residency, plus two additional years of field-specific surgical residency.
Surgeons must also be licensed and certified. The fees for the licensing exam are the same regardless as specialty, but the application and exam fees for board certification vary by specialty. Maintenance of certification is also required. Itâs not a set-it-and-forget-it qualification. The American Board of Surgery requires continuing education, as well as an exam at 10-year intervals.
Surgeons earn some of the highest salaries in the country. However, the costs associated with becoming a surgeon are high, and student debt may eat into surgeonsâ high salaries for years. The costs of maintaining certification and professional insurance are significant ongoing costs associated with being a surgeon.
Tips for Forging a Career Path
Your salary dictates a lot of your financial life, such as how much you can afford to pay in rent and the slice of your paycheck that goes to taxes. However, there are some principles that apply no matter your income bracket, like the importance of an emergency fund and a well-funded retirement account.
Whether youâre earning a six-figure surgeonâs salary or living on a more modest income, itâs smart to work with a financial advisor to manage your money. Finding the right financial advisor that fits your needs doesnât have to be hard. SmartAssetâs free tool matches you with financial advisors in your area in 5 minutes. If youâre ready to be matched with local advisors that will help you achieve your financial goals, get started now.
Inflation, or a sustained period of rising consumer prices, can take a bite out of investor portfolios and reduce purchasing power as the prices of goods and services increase.
Treasury Inflation-Protected Securities, or TIPS, are one way to hedge against inflation in a portfolio. These government-issued securities are inflation-protected bonds that adjust in tandem with shifts in consumer prices to maintain value.
Investing in TIPS bonds could make sense for investors who are seeking protection against inflation or who want to increase their conservative asset allocation. But what are TIPS and how exactly do they help to minimize inflationary impacts? This primer answers those questions and more.
Recommended: Smart Ways to Hedge Against Inflation
What Are TIPS?
Understanding Treasury Inflation-Protected Securities starts with understanding a little about how bonds work. When you invest in a bond, whether it’s issued by a government, corporation or municipality, you’re essentially lending the issuer your money. In return, the bond issuer agrees to pay that money back to you at a specified date, along with interest. For that reason, bonds are often a popular option for those seeking fixed income investments.
TIPS are inflation-protected bonds that pay interest out to investors twice annually, at a fixed rate applied to the adjusted principal of the bond. This principal can increase with inflation or decrease with deflation, which is a sustained period of falling prices. When the bond matures, you’re paid out the original principal or the adjusted principalâwhichever is greater.
Here are some key TIPS basics to know:
• TIPS bonds are issued in terms of 5, 10 and 30 years
• Interest rates are determined at auction
• Minimum investment is $100
• TIPS are issued electronically
• You can hold TIPS bonds until maturity or sell them ahead of the maturity date on the secondary market
Treasury Inflation-Protected Securities are different from other types of government-issued bonds. With I Bonds, for example, interest accrues over the life of the bond and is paid out when the bond is redeemed. Interest earned is not based on any adjustments to the bond principalâhence, no inflationary protection.
How Treasury Inflation Protected Securities (TIPS) Work
Understanding how TIPS work is really about understanding the relationship they have with inflation and deflation.
Inflation refers to an increase in the price of goods and services over time. The federal government measures inflation using price indexes, including the Consumer Price Index. The federal government measures inflation using the Consumer Price Index, which measures the average change in prices over time for a basket of consumer goods and services. That includes things like food, gas, and energy or utility services.
Deflation is essentially the opposite of inflation, in which consumer prices for goods and services drop over time. This can happen in a recession, but deflation can also be triggered when there’s a significant imbalance between supply and demand for goods and services. Both inflation and deflation can be detrimental to investors if they have trickle-down effects that impact the way consumers spend and borrow money.
When inflation or deflation occurs, inflation-protected bonds can provide a measure of stability with regard to investment returns. Here’s how it works:
• You purchase one or more Treasury Inflation-Protected Securities
• You then earn a fixed interest rate on the TIPS bond you own
• When inflation increases, the bond principal increases
• When deflation occurs, the bond principal decreases
• Once the bond matures, you receive the greater of the adjusted principal or the original principal
This last part is what protects you from negative impacts associated with either inflation or deflation. You’ll never receive less than the face value of the bond, since the principal adjusts to counteract changes in consumer prices.
Are TIPS a Good Investment?
Investing in inflation-protected bonds could make sense if you’re interested in creating some insulation against the impacts of inflation in your portfolio. For example, say you invest $1,000 into a 10-year TIPS bond that offers a 2% coupon rate. The coupon rate represents the yield or income you can expect to receive from the bond while you hold it.
Now, assume that inflation rises to 3% over the next year. This would put the bond’s face value at $1,030, with an annual interest payment of $20.60. If you were looking at a period of deflation instead, then the bond’s face value and interest payments would decline. But the principal would adjust to reflect that to minimize the risk of a negative return.
Recommended: Understanding Deflation and How it Impacts Investors
Pros of Investing in TIPS
What TIPS offer that more traditional bonds don’t is a real rate of return versus a nominal rate of return. In other words, the interest you earn with Treasury Inflation Protected Securities reflects the bond’s actual return once inflation is factored in. As mentioned, I Bonds don’t offer that; you’re just getting whatever interest is earned on the bond over time.
Since these are government bonds, there’s virtually zero credit risk to worry about. (Credit risk means the possibility that a bond issuer might default and not pay anything back to investors.) With TIPS bonds, you’re going to at least get the face value of the bond back if nothing else. And compared to stocks, bonds are generally a far less risky investment.
If the adjusted principal is higher than the original principal, then you benefit from an increase in inflation. Since it’s typically more common for an economy to experience periods of inflation rather than deflation, TIPS can be an attractive diversification option if you’re looking for a more conservative investment.
Recommended: The Importance of Portfolio Diversification
Cons of Investing in TIPS
There are some potential downsides to keep in mind when investing with TIPS. For example, they’re more sensitive to interest rate fluctuations than other types of bonds. If you were to sell a Treasury Inflation-Protected Security before it matures, you could risk losing money, depending on the interest rate environment.
You may also find less value from holding TIPS in your portfolio if inflation doesn’t materialize. When you redeem your bonds at maturity you will get back the original principal and youâll still benefit from interest earned. But the subsequent increases in principal that TIPS can offer during periods of inflation is a large part of their appeal.
It’s also important to consider where taxes fit in. Both interest payments and increases in principal from inflation are subject to federal tax, though they are exempt from state and local tax. The better your TIPS bonds perform, the more you might owe in taxes at the end of the year.
How to Invest in Treasury Inflation Protected Securities
If you’re interested in adding TIPS to your portfolio, there are three ways you can do it.
1. Purchase TIPS bonds directly from the U.S. Treasury. You can do this online through the TreasuryDirect website. You’d need to open an account first but once you do so, you can submit a noncompetitive bid for inflation protected bonds. The TreasuryDirect system will prompt you on how to do this.
2. Purchase TIPS through a banker, broker or dealer. With this type of arrangement, the banker, broker or dealer submits a bid for you. You can either specify what type of yield you’re looking for, which is a competitive bid, or accept whatever is available, which is a noncompetitive bid.
3. Invest in securities that hold TIPS, i.e. exchange-traded funds or mutual funds. There’s no such thing as a TIP stock but you could purchase a TIPS ETF if you’d like to own a basket of Treasury Inflation-Protected Securities. You might choose this option if you don’t want to purchase individual bonds and hold them until maturity.
When comparing different types of investments that are available with ETFs or mutual funds, pay attention to:
• Underlying holdings
• Fund turnover ratio
• Expense ratios
Also consider the fund’s overall performance, particularly during periods of inflation or deflation. Past history is not an exact predictor of future performance but it may shed some light on how a TIPS ETF has reacted to rising or falling prices previously.
Treasury Inflation-Protected Securities may help shield your portfolio against some of the negative impacts of inflation. Investors who are worried about their purchasing power shrinking over time may find TIPS appealing.
But don’t discount the value of investing in stocks and other securities as well. Building a diversified portfolio that takes into consideration an investorâs personal risk tolerance, as well as financial goals and time horizons, is a popular strategy.
With a SoFi InvestÂ® online investing account, members can choose from stocks, ETFs, and cryptocurrency options in one place. You can start investing with as little as $1, and manage your account from the convenient mobile app.
Find out how to get started with SoFi Invest.
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The pandemic threw many Americans into financial disaster, but credit card delinquencies surprisingly declined during the health crisis.
According to the Experian 2020 Consumer Credit Review published in January 2021, the number of accounts one month past due fell by 37%, two months past due by 36% and three or more months past due by 53%.
And although the American Banking Association reported that consumer delinquencies rose in the fourth quarter of 2020, it noted that credit card delinquencies remained near all-time lows.
âConsumers have done a good job of managing their spending throughout the pandemic and paid down their credit card balances at a record pace last year,â said Rob Strand, ABA senior economist, in a news release.
He went to say that during the pandemic, online purchases climbed, but that consumers continued to prioritize their credit card payments.
âAt the same time, card issuers have worked with customers who have experienced economic challenges related to the pandemic,â he said.
But will delinquencies rise once the pandemic â and help from card issuers and the government â is over?
Keep reading to see what industry experts think will happen in 2021.
See related: Acerage credit card interest rates
Congress and banks stepped in to help consumers
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When unemployment numbers dramatically rose last March, observers presumed that default rates would rise in lockstep, said Martin Lynch, compliance manager and director of education at the nonprofit Cambridge Credit Counseling Corp.
But Congress quickly responded by passing the CARES Act that same month: The distribution of stimulus payments began in April and other efforts followed in short order, including the PPP loan program for businesses, unemployment support for states and forbearance for federal student loans and federally backed mortgages.
Major banks also stepped in and offered relief, trying their best to keep their clients afloat in the hope that the pandemic would exit as quickly as it came.
All of these efforts have combined to help mitigate the economic effects of the virus, but the long-term effect is the subject of considerable debate, Lynch said.
Have the various relief efforts only put off the inevitable?Â Will the economy enter a significant recession once the forbearances end?
Default rates might give insights into future delinquencies
A closer look at default rates, Lynch said, may be the key that unlocks the answers to the questions above.
In ordinary times, loan default rates are simple data that show how many borrowers are paying and how many aren’t.
The CARES Act included a clause allowing that a loan in forbearance need not be reported as delinquent if it was current when the forbearance was granted.
Now that some of the dust has cleared, it’s apparent that at leastÂ some loans that were delinquent prior to the pandemic wereÂ alsoÂ granted forbearance, Lynch explained, and that those loans were reported to the credit bureaus as current.
This means that looking at default rates alone isn’t enough to get an idea about how borrowers are performing during the pandemic.
To get more accurate results, Lynch said, we need to look at the number of defaultsÂ as well asÂ the number of loans in forbearance.
But even this approach might not yield a definitive answer because no one knows whether the sheer number of forbearances consists solely of borrowers who were in dire need of assistance or whether that number also includes borrowers who simply took advantage of a pause in payments because it was offered, he pointed out.
And beyond all that, Lynch added, the effect of unemployment support and stimulus checks must have come atÂ a critical momentÂ for at least some of these same borrowers, allowing them to avoid delinquency and earn the forbearances extended to them.
See related: Poll â 51% of U.S. adults accrued more debt during the COVID-19 outbreak
Banks donât believe we are out of the woods yet
Ted Rossman, senior industry analyst at CreditCards.com, views all delinquency stats, which have fallen across the board, through the lens of pandemic relief.
âIt’s not what we expected at the onset of the pandemic, and it’s artificial, but the stimulus and accommodation programs have helped tremendously,â Rossman said.
The big question now is, what happens moving forward?
Will there be more stimulus and accommodations once the current programs expire? Will the metaphorical bridge that has already been built be enough to carry us through to the other side?
Rossman is hoping for the best and he said there are many reasons to be optimistic, but banks don’t believe we’re out of the woods yet.
While many have begun to release some of the loan-loss reserves they stockpiled in the early days of the pandemic, they’re proceeding cautiously, Rossman pointed out.
They still have significantly elevated reserves and are watching the situation carefully. Many have begun to ease their lending standards a bit, but we still see a lot more caution than we did just prior to the pandemic.
Much of this will depend on how the health situation plays out â with the vaccine rollout and the COVID-19 variant progression â and what the government and consumer responses are.
âWe’re optimistic that we’re close to the end of this, but sadly some people are in deep holes created by extended unemployment,â Rossman said.
Several sectors are doing great, others are on the mend and some will be slow to recover, he added.
For example, he said, over the past year, goods have mostly outperformed services â E-commerce, electronics, furniture and other home goods did very well, while travel and restaurants were among the worst performers.
But that’s starting to change.
So, Rossman said, if you work in a restaurant, it has been a very tough year, but if your savings, unemployment benefits and stimulus payments kept you afloat, the hope is you won’t be delinquent going forward because now you’ll be making more money.
Many forbearances will turn into defaults
Lynch said itâs not unreasonable to look at all of this delinquency data and conclude that low default rates are a mirage and that the country’s economy isn’t as healthy as the default rates would suggest.
A fair amount of the forbearances granted will turn into defaults when those programs end, but we won’t know for certain until it happens, he said.
What we can say for certain is that, to their credit, the federal government and a large number of private lenders worked hard to build an economic bridge to the other side of the pandemic.
If they were successful, we’ll have learned lessons that could be applied if something like this happens again. And if some of those efforts turn out to have been in vain, we’ll have learned something else that might still be useful.
If you have loans in forbearance, act now
Consumers with loans in forbearance need to take stock nowÂ beforeÂ those payment holidays come to an end, Lynch warned.
For example, we know that federal student loan payments are set to resume in October 2021, so those borrowers should prepare a budgetÂ now to ensure they’ll be able to handle the payments when they start coming due.
The same approach will work for other loans, though lenders won’t have the same flexibility as student loan servicers.
âAt thisÂ point, I’d be making sure my budget accurately reflected appropriate repayment priorities,â Lynch said.
If you can’t meet your obligations, consider talking to a nonprofit credit counselor to review your budget and credit report, then go over your options, Lynch suggested.
You’ll also want to let your creditors know what’s happeningÂ beforeÂ you start missing payments, Lynch advised; âIt’s the adult thing to do, and they may be able to help.â
What happens now very much depends on your individual circumstances, such as the industry you work in and how much savings you have, Rossman said.
Ironically, many people’s finances have improved during the pandemic because they were able to save more and spend less and their home values and investment portfolios grew, he added.
But, sadly, others have not shared in these gains, Rossman said, and they’re the ones who could cause the delinquency stats to rise once stimulus and accommodations run out.
See related: How to protect your credit during the coronavirus crisis
Now, with AmOne, you donât need a perfect credit score to get a loan â and comparing your options wonât affect your score at all.Â Plus, AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
Plus: No credit card payments for you this month!
It takes less than a minute and just 11 questions to see what loans you qualify for â you donât even need to enter your Social Security number. You do need to give AmOne a real phone number in order to qualify, but donât worry â they wonât spam you with phone calls.
When the COVID-19 pandemic hit, banks expected delinquencies to surge, forcing borrowers to rely on their credit cards to make ends meet, The Wall Street Journal reported. But then the government stepped in with stimulus checks and expanded unemployment benefits. It allowed borrowers to pause payments on mortgages and student loans. So that surge of delinquencies never happened.
Wouldnât it be great to turn the tables on them? Well, now a lot of people are. More and more Americans are simply paying off their credit card balances, and thatâs making credit card companies like Capital One, Citibank and Chase really, really nervous. Thatâs because their whole business model is based on gouging you.
âAmericans are paying down their credit card debt at levels not seen in years. That is good news for everyone but credit card issuers,â reports The Wall Street Journal. âMany card issuers rely on growing card usage and balances for their revenue, and they are wondering if the pandemic trends will turn into a long-term shift.â
Theyâre Getting Awfully Nervous
Wouldnât it be nice to get a little revenge and make your credit card companies sweat for a change? Now you can, and itâs easier than you think.
A free website called Credit Sesame makes it easy to put your credit score on track to reach your goals. Within two minutes, itâll give you access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. Youâll even be able to spot any errors holding you back (one in five reports have one).
The benefit? Youâll be left with one bill to pay each month. And because personal loans have significantly lower interest rates (AmOne rates start at 3.49% APR), youâll get out of debt that much faster.
Why is this happening? This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
If youâve got credit card debt, you know how painful it is. Itâs the most expensive kind of debt you can have, and your credit card companies are just getting rich and fat while they gouge you with high interest rates.
How to Beat Your Credit Card Company
Mike Brassfield (firstname.lastname@example.org) is a senior writer at The Penny Hoarder. He paid off all his credit cards, and wow did it feel good.
Credit cards charge you harsh interest rates that routinely rise north of 20% APR. But if you owe your credit card companies ,000 or less, a website called AmOne will match you with a low-interest loan you can use to pay off all your balances.
Overall, credit card balances are down nearly 15% compared to a year before, according to the credit reporting firm Equifax.
Now, âit appears that many households are working to reduce their revolving debt balances, and this is happening across the board,â the Fed wrote.
These days, credit card companies are sweating bullets because Americansâ credit card balances are falling. They shrunk by a whopping billion in the first quarter of 2021 compared to the previous quarter, according to data released last week by the New York Fed,
Revenge is sweet.
Stop shoveling money into high-interest credit card payments. Cackle along with the rest of us as credit card companies express deep concern in earnings calls, sweating over their plummeting profits.
If youâre interested in getting a personal loan to wipe out your credit card balances, it helps to have a good credit score. For big credit card issuers like Capital One, Discover and Synchrony (the largest issuer of store credit cards), balances are down by 17%, 9% and 7% compared to a year ago, those companies reported.
Consumers have not been immune to financial challenges in the grips of a global pandemic. One way lenders are responding is by tightening their standards when issuing credit card accounts as the number of credit card accounts continues to fall.
According to data released in May 2021 by the American Bankers Association, there were 365 million open credit card accounts in the U.S. as of the end of 2020.
That number includes 203 million accounts held by superprime consumers, 98 million held by prime consumers and 64 million held by subprime consumers. According to the ABA data, the number of credit card accounts decreased for the third quarter in a row.1
While the number of prime and subprime accounts dropped to levels not seen since 2015-2016, the number of superprime accounts hit an all-time high, suggesting that those with the best credit have plenty of options to choose from.1
See related: How to choose the best credit card
How many Americans own credit cards?
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Despite the decline in credit card accounts, credit cards are found in most Americans’ wallets. Federal Reserve Bank of Atlanta data released in May 2021 found that in 2020, 79% of consumers had at least one credit card or charge card, which is the highest percentage since the Fed began conducting the Survey of Consumer Payment Choice in 2008.2
A credit card is defined as a card that allows the cardholder to make a purchase by borrowing funds paid back to the credit card company later. A charge card is a type of credit card that must be paid off in full every month.
Using the U.S. Census Bureau estimate of 253 million adults in the U.S.,3 that means nearly 200 million American adults have a credit card, a charge card or both.
However, lenders have shown caution when extending new credit, perhaps due to Americans’ financial challenges during the pandemic. Average new account credit lines decreased to $3,696 in the first quarter of 2021 from $5,128 the year before, according to a May 2021 TransUnion report. And the number of credit cards fell from 457.6 million in Q1 2020 to 454.6 million in Q1 2021.4
According to a survey conducted in August 2020 by Travis Credit Union, more and more Americans are going cash-free. Fifty percent of respondents said they used cash less during the pandemic than they did before the COVID-19 crisis. On top of that, 58% said they planned to stop using cash entirely after the pandemic.5
See related: How COVID-19 is possibly leading the cashless revolution
Types of credit cards Americans own
Americans tend to hold a variety of cards, but cash back credit cards are most popular. According to a 2021 survey of 2,000 Americans by The Ascent, from the investing site The Motley Fool, 46% of Americans own a cash back credit card, down from nearly 60% who had a cash back credit card in 2019. Also, 31% own a retail credit card, 25% own a low-interest card and 19% own an airline or other travel rewards card.6
Card ownership by age
Older consumers tend to carry the most cards. According to Experian, in the third quarter of 2020, baby boomers – those between 56-74 – carried, on average, 4.61 cards followed by:
Generation X – those between 40-55 – who carried 4.23 cards on average.
The silent generation – those 75 and up – carried 3.64 cards, on average.
Among younger cardholders, millennials – those between 24-39 – carried on average 3.18 cards and Generation Z – those between 18-23 – carried 1.91 cards.7
Young Americans are waiting longer to get their first credit card, possibly because younger consumers also are dealing with student debt. Additionally, the Credit CARD Act of 2009 bans credit card approvals for anyone under 21 years old unless they have an adult co-signer or can prove they have sufficient income to pay the bills.
However, that doesn’t mean young people are not using credit cards.
According to Sallie Mae’s 2019 “Majoring in Money” report, 57% of undergraduate students owned a credit card in 2019, and 38% of undergraduates have two or more cards.8
However, a higher percentage of college students (19%) have only one card, compared with college graduates or people who didn’t finish college (14%).8
Debit cards are still more popular, and 85% of undergraduate students carry debit cards. Students overall are more likely to use debit (85%) or cash (81%) than credit cards (57%).
Students prefer cash over any other payment method for in-store purchases of less than $20. Forty-three percent of college students do not use credit cards at all.8
The Ascent survey showed that while nearly 55% of consumers have maxed out at least one credit card, Generation Z (44%) was least likely to do so, followed by baby boomers (48%), millennials (51%) and Generation X (66%).6
However, millennials were most likely to fall more deeply into credit card debt because of the pandemic, according to a CreditCards.com survey conducted in May 2020. More than a third of millennial cardholders – 34% – said they incurred more debt during the pandemic compared to 23% of Generation Xers and 15% of baby boomers.9
Card ownership by state
Where you live can also play a role in how many credit cards you have. In every state, the average number of credit cards owned by consumers dropped in 2020, according to a 2021 study by Experian.7
New Jersey residents had, on average, the most credit card accounts in the third quarter of 2020 with 4.54. Other states in the top five include Connecticut (4.21), Rhode Island (4.16), Florida (4.15) and New York (4.14).7
On the low end, Alaska residents had the fewest credit card accounts in the third quarter of 2020, with 3.06 accounts. They were followed by South Dakota (3.22), Mississippi (3.26), the District of Columbia (3.26) and Wyoming (3.28).7
See related: 2020 state debt burden survey
Card ownership by credit score
Superprime (those with credit scores greater than 759) and prime borrowers (those with credit scores between 680-759) make up most credit card account holders. In fact, prime and above consumers represent 82% of all open credit card accounts, according to the ABA report.1
In Q4 2020, there were 31 million new accounts issued for superprime borrowers, 23 million new accounts issued for prime borrowers and 16 million issued for subprime borrowers (those with credit scores less than 680).1
American Bankers Association Credit Card Market Monitor, May 2021
The Federal Reserve Bank of Atlanta’s 2020 Survey of Consumer Payment Choice, May 2021
U.S. Census Bureau July 2019 estimate of U.S. population, and U.S. Census Population by Age and Sex 2019
TransUnion Industry Insights Report, Q1 2021
2020 Travis Credit Union Cash Survey
The Ascent from Motley Fool, “How Gen Z, Millennials, Gen X and baby boomers use credit cards”
Experian, “What is the average number of credit cards per U.S. consumer?”, April 2021
Sallie Mae “Majoring in Money” report, 2019
CreditCards.com, “Poll: 23% of consumers added to their card debt during the pandemic,” May 2020
Everyone knows that raising kids can put a serious squeeze on your budget. Beyond covering day-to-day living expenses, there are all of those extras to considerâsports, after-school activities, braces, a first car. Oh, and don’t forget about college.
Add caring for elderly parents to the mix, and balancing your financial and family obligations could become even more difficult.
“It can be an emotional and financial roller coaster, being pushed and pulled in multiple directions at the same time,” says financial life planner and author Michael F. Kay.
The “sandwich generation”âwhich describes people that are raising children and taking care of aging parentsâis growing as Baby Boomers continue to age.
According to the Center for Retirement Research at Boston College, 17 percent of adult children serve as caregivers for their parents at some point in their lives. Aside from a time commitment, you may also be committing part of your budget to caregiving expenses like food, medications and doctor’s appointments.
When you’re caught in the caregiving crunch, you might be wondering: How do I take care of my parents and kids without going broke?
The answer lies in how you approach budgeting and saving. These money strategies for the sandwich generation and budgeting tips for the sandwich generation can help you balance your financial and family priorities:
Communicate with parents
Quentara Costa, a certified financial planner and founder of investment advisory service POWWOW, LLC, served as caregiver for her father, who was diagnosed with Alzheimer’s disease, while also managing a career and starting a family. That experience taught her two very important budgeting tips for the sandwich generation.
First, communication is key, and a money strategy for the sandwich generation is to talk with your parents about what they need in terms of care. “It should all start with a frank discussion and plan, preferably prior to any significant health crisis,” Costa says.
Second, run the numbers so you have a realistic understanding of caregiving costs, including how much parents will cover financially and what you can afford to contribute.
17 percent of adult children serve as caregivers for their parents at some point in their lives.
Involve kids in financial discussions
While you’re talking over expectations with your parents, take time to do the same with your kids. Caregiving for your parents may be part of the discussion, but these talks can also be an opportunity for you and your children to talk about your family’s bigger financial picture.
With younger kids, for example, that might involve talking about how an allowance can be earned and used. You could teach kids about money using a savings account and discuss the difference between needs and wants. These lessons can help lay a solid money foundation as they as move into their tween and teen years when discussions might become more complex.
If your teen is on the verge of getting their driver’s license, for example, their expectation might be that you’ll help them buy a car or help with insurance and registration costs. Communicating about who will be contributing to these types of large expenses is a good money strategy for the sandwich generation.
The same goes for college, which can easily be one of the biggest expenses for parents and important when learning how to budget for the sandwich generation. If your budget as a caregiver can’t also accommodate full college tuition, your kids need to know that early on to help with their educational choices.
Talking over expectationsâyours and theirsâcan help you determine which schools are within reach financially, what scholarship or grant options may be available and whether your student is able to contribute to their education costs through work-study or a part-time job.
Consider the impact of caregiving on your income
When thinking about how to budget for the sandwich generation, consider that caring for aging parents can directly affect your earning potential if you have to cut back on the number of hours you work. The impact to your income will be more significant if you are the primary caregiver and not leveraging other care options, such as an in-home nurse, senior care facility or help from another adult child.
Costa says taking time away from work can be difficult if you’re the primary breadwinner or if your family is dual-income dependent. Losing some or all of your income, even temporarily, could make it challenging to meet your everyday expenses.
“Very rarely do I recommend putting caregiving ahead of the client’s own cash reserve and retirement.”
When you’re facing a reduced income, how to budget for the sandwich generation is really about getting clear on needs versus wants. Start with a thorough spending review.
Are there expenses you might be able to reduce or eliminate while you’re providing care? How much do you need to earn each month to maintain your family’s standard of living? Keeping your family’s needs in focus and shaping your budget around them is a money strategy for the sandwich generation that can keep you from overextending yourself financially.
“Protect your capital from poor decisions made from emotions,” financial life planner Kay says. “It’s too easy when you’re stretched beyond reason to make in-the-heat-of-the-moment decisions that ultimately are not in anyone’s best interest.”
Keep saving in sight
One of the most important money strategies for the sandwich generation is continuing to save for short- and long-term financial goals.
“Very rarely do I recommend putting caregiving ahead of the client’s own cash reserve and retirement,” financial planner Costa says. “While the intention to put others before ourselves is noble, you may actually be pulling the next generation backwards due to your lack of self-planning.”
Sunny skies are the right time to save for a rainy day.
Start an emergency fund with no minimum balance.
Discover Bank, Member FDIC
Making regular contributions to your 401(k), an individual retirement account or an IRA CD should still be a priority. Adding to your emergency savings each monthâeven if you have to reduce the amount you normally save to fit new caregiving expenses into your budgetâcan help prepare you for unexpected expenses or the occasional cash flow shortfall. Contributing to a 529 college savings plan or a Coverdell ESA is a budgeting tip for the sandwich generation that can help you build a cushion for your children once they’re ready for college life.
When you are learning how to budget for the sandwich generation, don’t forget about your children’s savings goals. If there’s something specific they want to save for, help them figure out how much they need to save and a timeline for reaching their goal.
A big part of learning how to budget for the sandwich generation is finding resources you can leverage to help balance your family commitments. In the case of aging parents, there may be state or federal programs that can help with the cost of care.
Remember to also loop in your siblings or other family members when researching budgeting tips for the sandwich generation. If you have siblings or relatives, engage them in an open discussion about what they can contribute, financially or in terms of caregiving assistance, to your parents. Getting them involved and asking them to share some of the load can help you balance caregiving for parents while still making sure that you and your family’s financial outlook remains bright.
The post Budgeting Tips for the Sandwich Generation: How to Care for Kids and Parents appeared first on Discover Bank – Banking Topics Blog.
Refinancing your student loans can make good financial sense, and thatâs especially true if your current loans are stuck at a high-interest rate. With a new loan at a lower APR, you could save a bundle of money on interest each month and ultimately pay your student debt off faster. Consolidating several loans into one new one can also simplify your financial life and make keeping up with bills a lot easier.
College Ave and Earnest topped our list, but since student loan refinancing is an incredibly competitive space, youâll also want to spend time comparing student loan companies to see who offers the best deal. Many lenders in this space offer incredibly low APRs, flexible payment options, borrower incentives, and more. This means itâs more important than ever to shop around so you wind up with the best student loan for your needs.
Compare rates from dozens of loan providers with Credible
What You Should Know About Refinancing Federal Student Loans with a Private Lender
The lenders on this list can help you consolidate and refinance both federal student loans and private student loans. However, there are a few details to be aware of before you refinance federal loans with a private lender.
Switching federal loans to private means giving up federal protections like deferment and forbearance. You also give up your chance to qualify for income-driven repayment plans like Pay As You Earn (PAYE) or Income Based Repayment (IBR). Income-driven repayment plans let you pay a percentage of your discretionary income for 20 to 25 years before ultimately forgiving your remaining loan balances, so this perk isnât one you should give up without careful thought and consideration.
Best Student Loan Refinancing Companies of 2021
As you start your search to find the best student loan for your lifestyle, take the time to compare lenders and all they offer their customers. While there are a ton of reputable companies offering high-quality student loan refinancing products on the market today, there are also companies you should probably steer clear of.
To make your search easier, we took the time to compare most of the top lenders in this space in terms of interest rates offered, fees, borrower benefits, and more. The following student loan companies are the cream of the crop, so you should start your search here.
Our Top Picks:
PenFed Credit Union
Student Loan Refinancing Company Reviews
1. Splash Financial
Splash Financial may be a newer company in the student loan refinancing space, but their offerings are competitive. This company lets you check your rate online without a hard inquiry on your credit report, and their variable rates currently start at just 2.25% APR.
Not only are interest rates offered by Splash Financial industry-leading, but the company has a 95% customer satisfaction rate so far. Their cutting-edge technology also lets you apply for your loan and complete the loan process online, meaning less hassle and stress for you as the borrower.
Check Out Splash Financialâs Low Rates
2. College Ave
College Ave offers student loan refinancing products that can be tailored to your needs. They offer low fixed and variable interest rates, for example, and youâll never pay an application fee or an origination fee. You can even qualify for a discount if you set your loan up on autopay, and a wide range of repayment schedules are available.
College Ave also offers a wide range of online calculators and tools that can help you figure out how much student loan refinancing could help you save and whether the move would be worth it in the end. Considering their low variable rates start at just 2.74% APR, thereâs a good chance you could save money by refinancing if you have excellent credit or a cosigner with great credit.
Get Started with College Ave
Earnest is another online lender that focuses most of its efforts on offering high-quality student loans. This company lets you consolidate debt at a lower interest rate than you might find elsewhere, and you get the option to pick a monthly payment and repayment period that works with your budget and your lifestyle.
While youâll need excellent credit to qualify for the lowest interest rates, loans from Earnest come with variable APRs starting at 1.81% and low fixed rates starting at just 3.45%. To qualify for student loan refinancing with Earnest, youâll need a minimum credit score of 650 and a strong employment and income history. You also need to be current on all your bills and cannot have a bankruptcy on your credit profile.
Refinance and Save with Earnest
Also make sure to check out student loan refinancing company SoFi as you continue your search. This online lender offers some of the best student loan refinancing products available today, including loans with no application fee, origination fee, or hidden fees.
SoFi lets you apply for and complete the entire loan process online, and they offer live customer support 7 days a week. You can also check your rate online without a hard inquiry on your credit report, which makes it easier to see how much you could save before you commit.
Get Pre-Approved with SoFi in Less than 2 Minutes
Commonbond is another online student lender who lets you check your rate online without a hard inquiry on your credit report. With student loan refinancing from Commonbond, you could easily save thousands of dollars on interest with a new fixed interest rate as low as 3.21%. Repayment terms are offered for 5 to 20 years as well, letting you choose a new monthly payment and repayment timeline that works for your needs.
You can apply for your new loan online and note that these loans donât come with an origination fee or any prepayment penalties. Your loan could also qualify for forbearance, which means having up to 24 months without payments during times of financial hardship.
Apply Online with Commonbond
LendKey offers private student loans and flexible student loan refinancing options to serve a variety of needs. You can repay your loan between 5 and 20 years, and their refinance loans donât charge an origination fee.
You can use this companyâs online interface to check your rate without a hard inquiry on your credit report, and variable APRs start at just 2.01% for graduates with excellent credit. LendKey loans also receive 9.3 out of 10 possible stars in recent reviews, meaning their customers are mostly happy with their decision to go with this company.
Save Thousands by Refinancing with LendKey
7. Wells Fargo
While Wells Fargo is mostly popular for their banking products, home mortgage products, and personal loans, this bank also offers student loan refinancing products. These loans let you consolidate student debts into a new loan with a low variable or fixed interest rate, and you can even score a discount for setting your loan up on autopay.
Terms for Wells Fargo loans are available anywhere from 5 to 20 years, meaning you can choose a repayment schedule and monthly payment that suits your needs. Wells Fargo also lets you check your rate online without a hard inquiry on your credit report.
Get Started with Wells Fargo
8. PenFed Credit Union
PenFed Credit Union offers unique student loan products powered by Purefy. You might be able to qualify for a lower interest rate that could lead to enormous interest savings over time, and PenFed lets you choose a repayment term and monthly payment that fits with your budget and lifestyle.
You can apply for student loan refinancing on your own, but PenFed Credit Union also allows cosigners. Low fixed interest rates start at just 3.48% APR, and you can check your rate online without a hard inquiry on your credit report.
Learn More about PenFed Credit Union
What To Look For When Refinancing
If you decide you want to refinance your student loans, youâll be happy to know the refinancing market is more robust than ever. A variety of lenders offer insanely attractive loan options for those who can qualify, although you should know that student loan companies tend to be very finicky about your credit score. Some also wonât let you refinance if you didnât graduate from college, or even if you graduated from an âunapprovedâ school.
While you should be aware of any lender-specific eligibility requirements before you apply with any student loan company, there are plenty of other factors to look out for. Hereâs everything you should look for in a student loan refinancing company before you decide to trust them with your loans.
Low Interest Rate
Obviously, the main reason youâre probably thinking of refinancing your loans is the potential to save money on interest. Lenders who offer the lowest rates available today can potentially help you save more, although itâs important to consider that you may not qualify for the lowest rates available if you donât have excellent credit.
Also consider that most lenders will offer better rates and loan terms if you have a cosigner with better credit than you have. This is especially true if your credit isnât great, so make sure to ask family members if theyâre willing to cosign on your new student loan if you hope to get the best rate. Just remember that your cosigner will be jointly liable for repayment, meaning you could quickly damage your relationship if you default on your loan and leave them holding the bag.
Low Fees or No Fees
Student loans are like any other loan in the fact that some charge higher fees or more fees than others. Since many student loans come with an application fee or an origination fee, youâll want to look for lenders that donât charge these fees. Also check for hidden fees like prepayment penalties.
Some student loan companies let you qualify for discounts, the most popular of which is a discount for using autopay. If youâre able and willing to set up automatic payments on your credit card, you could save .25% or .50% off your interest rate depending on the lender you go with.
Rate Check Option
Many of the top student loan refinancing companies on this list make it possible to check your interest rate online without a hard inquiry on your credit report. This is a huge benefit since knowing your rate can help you figure out if refinancing is even worth it before you take the time to fill out a full loan application.
Flexible Repayment Plan
Also make sure any lender you go with offers some flexibility in your repayment plan and your monthly payment. Youâll want to make sure refinancing aligns with your long-term financial goals and your monthly budget, and itâs crucial to choose a new loan with a monthly payment you can live with.
Most lenders in this space offer repayment timelines of up to 20 years, which means you could spread your payments over several decades to get a monthly payment that makes sense with your income. Keep in mind, however, that youâll pay more interest over the life of your loan when you take a long time to pay it off, so you may want to consider prioritizing a faster payment plan.
The Bottom Line
Student loan refinancing may not sound like a lot of fun. However, taking the time to consider all your loan options could easily save you thousands of dollars. This is especially true if you have a lot of debt at a high interest rate. By consolidating all your student loans into a new one with a lower APR, you could make loan repayment easier with a single payment and save a ton of money that would otherwise go to straight to interest without helping you pay off your loans.
The first step of the loan process is the hardest, however, and thatâs choosing a student loan refinancing company that you trust. The lenders on this list are highly rated, but they also offer some of the best loan products on the market today.
Work with College Ave, our top pick, to refinance your student loan.
Start your search here and youâre bound to wind up with a student loan you can live with. At the very least, you’ll have a better idea of the loans that are available and how much you might save if you decide to refinance later on.
The post The Best Student Loan Companies For Refinancing appeared first on Good Financial CentsÂ®.
One of the harsh truths of secured loans is that your asset can be repossessed if you fail to make the payments. In the words of the FTC, âyour consumer rights may be limitedâ if you miss your monthly payments, and when that happens, both your financial situation and your bank balance will take a hit.
On this guide, weâll look at what can happen when you fall behind on your car payments, and how much damage it can do to your credit score.
What is a Car Repossession?
An auto loan is a loan acquired for the sole purpose of purchasing a car. The lender covers the cost of the car, you get the vehicle you want, and in return you pay a fixed monthly sum until the loan balance is repaid.
If you fail to make to make a payment or youâre late, the lender may assume possession of your car and sell it to offset the losses. At the same time, they will report your missed and late payments to the main credit bureaus, and your credit score will take a hit. Whatâs more, if the sale is not enough to cover the remainder of the debt, you may be asked to pay the residual balance.
The same process applies to a title loan, whereby your car is used as collateral for a loan but isnât actually the purpose of the loan.
To avoid repossession, you need to make your car payments on time every month. If you are late or make a partial payment, you may incur penalties and itâs possible that your credit score will suffer as well. If you continue to delay payment, the lender will seek to cover their costs as quickly and painlessly as possible.
How a Repossession Can Impact Your Credit Score
Car repossession can impact your credit history and credit score in several ways. Firstly, all missed and late car payments will be reported to the credit bureaus and will remain on your account for up to 7 years. They can also reduce your credit score.Â
Secondly, if your car is repossessed on top of late payments, you could lose up to 100 points from your credit score, significantly reducing your chances of being accepted for a credit card, loan or mortgage in the future.Â
And thatâs not the end of it. If you have had your car for less than a couple of years, thereâs a good chance the sale price will be much less than the loan balance. Car repossession doesnât wipe the slate clean and could still leave you with a sizable issue. If you have a $10,000 balance and the car is sold for $5,000, you will owe $5,000 on the loan and the lender may also hit you with towing charges.
Donât assume that the car is worth more than the value of the loan and that everything will be okay. The lender isnât selling it direct; they wonât get the best price. Repossessed vehicles are sold cheaply, often for much less than their value, and in most cases, a balance remains.Â
Lenders may be lenient with this balance as itâs not secured, so their options are limited. However, they can also file a judgment or sell it to a collection agency, at which point your problems increase and your credit score drops even further.
How Does a Repo Take Place?
If you have a substantial credit card debt and miss a payment, your creditor will typically take it easy on you. They canât legally report the missed payment until at least 30-days have passed and most creditors wonât sell the account to a collection agency until it is at least 180-days overdue.
This leads many borrowers into a false sense of security, believing that an auto loan lender will be just as forgiving. But this is simply not true. Some lenders will repo your car just 90-days after your last payment, others will do it after 60 days. They donât make as many allowances because they donât need toâthey can simply seize your asset, get most of the money back, and then chase the rest as needed.
Most repossessions happen quickly and with little warning. The lender will contact you beforehand and request that you pay what you owe, but the actual repo process doesnât work quite like what you may have seen on TV.Â
Theyâre not allowed to break down your door or threaten you; theyâre not allowed to use force. And, most of the time, they donât need to. If they see your car, they will load it onto their truck and disappear. Theyâre so used to this process that they can typically do it in less than 60-seconds.
It doesnât matter whether youâre at home or at workâyou just lost your ride.
What Can You Do Before a Repo Hits Your Credit Score?
Fortunately, there are ways to avoid the repo process and escape the damage. You just need to act quickly and donât bury your head in the sand, as many borrowers do.
Request a Deferment
An auto loan lender wonât waste as much time as a creditor, simply because they donât need to. However, they still understand that they wonât get top dollar for the car and are generally happy to make a few allowances if it means you have more chance of meeting your payments.
If you sense that your financial situation is on the decline, contact your lender and request a deferment. This should be done as soon as possible, preferably before you miss a payment.
A deferment buys you a little extra time, allowing you to take the next month or two off and adding these payments onto the end of the term. The FTC recommends that you get any agreement in writing, just in case they renege on their promise.
One of the best ways to avoid car repossession, is to refinance your loan and secure more favorable terms. The balance may increase, and youâll likely find yourself paying more interest over the long-term, but in the short-term, youâll have smaller monthly payments to contend with and this makes the loan more manageable.
You will need a good credit score for this to work (although there are some bad credit lenders) but it will allow you to tweak the terms in your favor and potentially improve your credit situation.
Sell the Car Yourself
Desperate times call for desperate measures; if youâre on the brink of facing repossession, you should consider selling the car yourself. Youâll likely get more than your lender would and you can use this to clear the balance.Â
Before you sell, calculate how much is left and make sure the sale will cover it. If not, you will need to find the additional funds yourself, preferably without acquiring additional debt. Ask friends or family members if they can help you out.
How Long a Repo Can Affect Your Credit Score
The damage caused by a repossession can remain on your credit score for 7 years, causing some financial difficulty. However, the damage will lessen over time and within three or four years it will be negligible at best.
Derogatory marks cease to have an impact on your credit score a long time before it disappears off your credit report, and itâs the same for late payments and repossessions.
Still, that doesnât mean you should take things lightly. The lender can make life very difficult for you if you donât meet your payments every month and donât work with them to find a solution.
What About Voluntary Repossession?
If youâre missing payments because youâve lost your job or suffered a major change in your financial circumstances, it may be time to consider voluntary repossession, in which case there are no missed payments and you donât need to worry about repo men knocking on your door or coming to your workplace.
With voluntary repossession, the borrower contacts the lender, informs them they can no longer afford the payments, and arranges a time and a place to return the car. However, while this is a better option, it can do similar damage to the borrowerâs credit score as a voluntary repossession, like a traditional repossession, is still a defaulted loan.
Missed payments aside, the only difference concerns how the repossession shows on the borrowerâs credit report. Voluntary repossession will look better to a creditor who manually scans the report, but the majority of lenders run automatic checks and wonât notice a difference.
Summary: Act Quickly
If you have student loan, credit card, and other unsecured debt, a repo could reduce your chances of a successful debt payoff and potentially prevent you from getting a mortgage. But itâs not the end of the world. You can get a deferment, refinance or reinstate the loan, and even if the worst does happen, it may only take a year or so to get back on track after you fix your financial woes.
Repossession Credit Scores: What You Need to Know is a post from Pocket Your Dollars.