woman on laptop with credit card

What Is a FICO Score? FICO Score vs Credit Score

A credit score is one factor used in a lender’s assessment of your creditworthiness when you apply for a lending product, such as a loan, line of credit, or credit card. It can also be a factor in lease approval, new utilities setup, and insurance rates. You can have more than one credit score, depending on what credit scoring model a lender uses.

One type of credit scoring model is the FICO® Score, which is used in 90% of lending decisions in the U.S. Since it’s such a widely used determiner, consumers are wise to pay close attention to their own score.

What Is a FICO Score?

The FICO Score is a trademark of the Fair Isaac Corporation. It was the first widely used, commercially available score of its type. FICO Scores essentially compress a person’s credit history into one algorithmically determined score.

Because FICO scores (and other credit scores like it) are based on analytics rather than human biases, the intention is to make it easier for lenders to make fair lending decisions.

💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.

What Is the FICO Score Range?

FICO’s base range is 300 to 850: The higher the score, the lower the lending risk a lender might consider you to be.

•   Exceptional: 800 to 850

•   Very Good: 740 to 799

•   Good: 670 to 739

•   Fair: 580 to 669

•   Poor: 300 to 579

Recommended: What Is Considered a Bad Credit Score?

How Is a FICO Score Calculated?

There are five main components of your base score, each having a different weight in the calculation:

•   Payment history: 35%

•   Amounts owed: 30%

•   Length of credit history: 15%

•   Credit mix: 10%

•   New credit: 10%

About two-thirds of your base FICO score depends on managing the amount of debt you have and making your monthly payments on time. Each of the three major credit bureaus — Experian, Equifax, and TransUnion — supply information for the calculation of your credit score, so it can vary slightly even if your creditworthiness doesn’t fluctuate.

The base FICO Score range may not be the range used in all credit and lending decisions. There are also industry-specific scores, such as one specifically for auto loans (FICO Auto Scores), others for credit card applications (FICO Bankcard Scores), and multiple FICO scores used by mortgage lenders.

Industry-specific FICO scores range from 250 to 900, compared to the 300 to 850 range for base scores.

What Is a Good FICO Score?

Strictly referencing the base FICO Score range, a “good” score is between 670 and 739 on the overall scale of 300 to 850.

But what’s considered acceptable for credit approval might vary from lender to lender. Each lender has its own requirements for credit approval, interest rates, and loan terms, and may assign its own acceptable ranges. Lenders may also use factors other than a credit score to determine these things.

Recommended: Average Personal Loan Interest Rates & What Affects Them

Why Is a FICO Score Important? What Is a FICO Score Used For?

As mentioned above, the FICO Score is used in 90% of lending decisions in the U.S. When a consumer applies for a loan or other type of credit, the lender will look at their credit report and credit score. If there are negative entries on the credit report, which may be reflected in a decreased FICO Score, the applicant may not have a chance to explain those to the lender. Especially in mortgage lending decisions, the lender may have a firm FICO Score requirement, and even one point below the acceptable number could result in a denial.

But what if you’re not applying for credit in the traditional sense? Your FICO Score is still an important number to pay attention to because it’s used in other financial decisions.

•   Renting an apartment. Landlords and leasing agents generally run a credit check during a lease application process. They may or may not look at the applicant’s actual credit score — landlords have a lot of flexibility in how they make leasing decisions — but they do tend to look at the applicant’s credit history and how much debt they have in relation to their income — factors that go into a FICO score calculation.

A few late payments here and there may not affect your ability to rent an apartment, but a high debt-to-income ratio may. If you have a lot of income going toward debt payments, the landlord may be concerned that you won’t have enough income to pay your rent.

•   Insurance. One of the industry-specific FICO Scores is formulated for the insurance industry (think auto insurance and property insurance). Insurers will typically look at more than just a person’s FICO Insurance Score, but it is one factor that goes in determining qualification for insurance and at what rate. The assumption is that a person who is financially responsible will also take more care when it comes to their home and car.

•   Utilities. You may not think of a utility bill as a debt, but since utilities like gas, electric, and phone are billed in arrears, they technically are a form of debt. “Billed in arrears” means that you are billed for services you have already used. Utility companies want to make sure that you will be able to pay your monthly bill, so they may run a credit check, which may or may not include looking at your FICO Score.

Recommended: What Credit Score Is Needed to Rent an Apartment in 2024?

What Affects Your FICO Score?

We briefly touched on how a FICO Score is calculated, but what goes into those different categories? Let’s look at those in more detail.

Payment History (35%)

Do you tend to pay your bills on time or do you have a history of late or missed payments? Your payment history is the most important factor in the calculation of your FICO Score. Perfection isn’t necessary, but a solid track record of regular, on-time payments is important. Lenders like to be assured that a borrower will make their payments, and a past payment history tends to be a good predictor of future payment habits.

Both installment (personal loans, mortgage loans, and student loans, for example) and revolving credit such as credit cards can affect your payment history. Since it’s such an important factor, how can you make sure it’s a positive one for you?

•   Making payments on time, every time, is the best way to make sure your payment history is a positive one. Having a regular routine for paying bills is a good way to accomplish this.

•   Automating your payments may help you make at least the minimum payment on credit accounts.

•   Checking your credit report regularly for errors or discrepancies can help catch things that might have a negative effect on your FICO Score if left uncorrected. You can get a free credit report from each of the three credit bureaus once per year at AnnualCreditReport.com.

Amounts Owed (30%)

The amount of debt you owe in relation to the amount of debt available to you is called your credit utilization ratio, and it’s the second-most important factor in the calculation of your FICO Score. Having debt isn’t at issue in this factor, but using most of your available debt is seen as relying on credit to meet your financial obligations.

Credit utilization is based on revolving debt, not installment debt. If you’re keeping your credit card balance well below your credit limit, it’s a good indicator that you’re not overspending. If you have more than one credit card, consider the percentage of available credit you’re using on each of them. If one has a higher credit utilization than the others, it might be a good idea to use that one less often if you’re trying to increase your FICO Score.

Length of Credit History (15%)

This factor’s percentage may not be as high as the previous two, but don’t underestimate its importance to lenders. As with payment history, lenders tend to look at a person’s credit history as predictive of their credit future. If there is no credit history or short credit history, a lender doesn’t have much information on which to base a lending decision.

Since the amount you owe is such an important factor in your FICO Score, you might think that paying off and closing credit accounts would have a positive effect on your score. But that might not be the best strategy.

Revolving accounts like credit cards can be a useful tool in your financial toolbox if used responsibly. A credit card account with a low balance and good payment history that has been part of your credit report for many years can be an indicator that you are able to maintain credit in a responsible manner.

Installment loans like personal loans are meant to be paid off in a certain amount of time. The account will remain on your credit report for 10 years after it’s paid off.

Paying off a personal loan is certainly a positive thing, but paying off a personal loan early could cause the account to stop having that positive effect earlier than it otherwise would.

Recommended: 11 Types of Personal Loans & Their Differences

Credit Mix (10%)

Having multiple types of credit can have a positive effect on your FICO Score. Being responsible with both revolving and installment credit accounts shows lenders that you can successfully manage your debts.

•   Revolving accounts are those that are open-ended, such as a credit card. You can borrow money up to your credit limit, repay it, and borrow it again. As long as you’re conforming to the terms of the credit agreement, the account is likely to have a positive effect on your credit report and, therefore, your FICO Score.

•   Installment accounts are closed-ended. There is a certain amount of credit extended to you and you receive that money in a lump sum. It’s repaid in regular installments over a set period of time. If you need additional funds, you must take out another loan. A personal loan is one example of an installment loan.

Credit mix won’t make or break your ability to qualify for a loan, but having different types of debt indicates to lenders that you’re likely to be a good lending risk.

New Credit (10%)

Though lenders like to see that a person has been extended credit in the past, too much new credit in a short amount of time can be a red flag to lenders.

When you apply for a loan or other type of credit, the lender will typically look at your credit report. This is called a credit inquiry and can be a hard inquiry or a soft inquiry. A soft inquiry may be made by a lender to pre-qualify someone for credit or by a landlord for a lease approval, for example.

During a formal application process, a lender might make a hard inquiry into your credit report, which can affect your credit score. FICO Scores take into account hard inquiries from the last 12 months in your credit score calculation, but a hard inquiry will remain on your credit report for two years.

💡 Quick Tip: Generally, the larger the personal loan, the bigger the risk for the lender — and the higher the interest rate. So one way to lower your interest rate is to try downsizing your loan amount.

FICO Score vs Credit Score

These two terms — FICO Scores and credit scores — are often used interchangeably. More accurately, though, is that a FICO Score is one type of credit score, the one most often used by lenders when making their decisions. There are multiple types of credit scores, each of them using analytics to create a rating that illustrates a person’s creditworthiness.

The Takeaway

Your FICO Score is affected by how you manage your personal finances, whether that’s a personal loan, line of credit, credit card, or other type of credit product. Although it’s not the only credit score lenders use, it is the one used in the majority of lending decisions in the U.S. Personal loans are one financial tool that can be used to add some variety to your credit mix. If managed responsibly with regular, on-time payments, your FICO score could be positively affected by having an installment loan like this in the mix.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.


SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Guide to Credit Union vs Bank Mortgages

Guide to Credit Union vs Bank Mortgages

When looking for a home loan, the two main choices of financial institutions are credit unions and banks. Each option comes with pros and cons.

Here’s an overview to help you make the right choice for your situation. You might start with general tips when shopping for a mortgage.

How Credit Union and Bank Mortgages Are Similar

Common types of home loans include fixed-rate and adjustable-rate loans as well as conventional and government-insured loans (such as FHA and VA loans). Most of the different mortgage types are available at both credit unions and banks.

At a high level, approval processes are the same at each type of financial institution as well. Each will have mortgage underwriting guidelines, and after a borrower applies, the loan will be reviewed and approved, suspended, or denied.

Plus, both may offer mortgage preapprovals.


💡 Quick Tip: SoFi’s Lock and Look + feature allows you to lock in a low mortgage financing rate for 90 days while you search for the perfect place to call home

Differences Between Credit Union and Bank Mortgages

So, credit union or bank for mortgages? Beyond general similarities, differences exist. Let’s look at credit union mortgages and then bank home loans.

Benefits of Getting a Credit Union Mortgage

Are credit unions good for mortgages? In many ways they are. While a bank has stockholders, a credit union consists of members (account holders) who more or less serve in this role. A bank must satisfy its investors by making a profit; credit unions don’t, so they can return those dollars to members through more attractive interest rates, lower fees, and more.

To enhance their members’ financial wellness, credit unions typically provide the following benefits:

Looser Approval Criteria

In general, credit unions may approve more loans in the lower- to middle-income range for their members. Plus, when credit scores are less than ideal, a credit union loan is sometimes the better choice.

Lower Interest Rates

Overall, credit unions offer lower rates on their mortgage loans. To estimate how much money this may save you, use a mortgage calculator.

Fewer Fees

Credit unions can pass on savings to members through lower fees as well as lower rates.

The Personal Touch

Because credit unions are less likely to sell their mortgage loans to a third party, a borrower is more likely to know the loan servicer (the credit union). This can lead to more personalized service.

Recommended: How Does the Mortgage Preapproval Process Work?

Disadvantages of Getting a Credit Union Mortgage

Are credit unions better for mortgages? That depends on a borrower’s needs and preferences because disadvantages of credit union mortgages also exist, including these:

Membership is a Must

In most cases, a borrower must meet certain requirements to join a credit union. This can include living in a certain community, belonging to a certain profession, or otherwise having the appropriate affiliation.

Fewer Locations

Usually, credit unions have fewer branches, which can limit their geographical range. So when away from home, outside the credit union’s range, it may be harder to conduct all the financial transactions you might like. For example, the ATM network may be smaller and less convenient.

Stale Tech

Because credit unions are often more local institutions, they typically won’t have the up-to-date technology found at larger banks. So if a borrower wants first-class online and mobile banking, credit unions may not be the best choice.

Limited Menu

Credit unions may offer fewer financial products, especially on the savings and investment side. They may only offer checking and savings accounts, for example, plus credit cards. Although that may not affect a borrower’s ability to get a mortgage, this can limit what other products they can benefit from at the credit union.

Possibly Higher Interest Rates

Sometimes credit unions can’t compete with banks, especially when a large bank offers especially good interest rates. So be sure to compare rates if you’re looking for the most attractive ones.


💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.

Benefits of Getting a Bank Mortgage

Getting a home loan at a bank has its upsides, including these:

Variety of Services

Banks often offer a significant range of savings, lending, and retirement-related financial products, making it easier for a borrower to have an all-in-one financial institution.

Multiple Branches and ATMs

Banks, especially national ones, will typically allow you to have access to multiple branches in more locations as well as a larger ATM network. This can make for a more convenient experience.

New Tech

Banks are, overall, more likely to have the latest in banking technology, including the ability to bank online and to use more sophisticated mobile apps.

Disadvantages of Getting a Bank Mortgage

Meanwhile, drawbacks of getting a bank home loan can include the following:

Higher Interest Rates

Banks need to generate profit for stockholders — and credit unions don’t — so banks may charge a higher rate on home loans. But this isn’t universally true, so it’s always a good idea to compare rates.

Higher Fees

In general, banks charge higher mortgage fees than credit unions do. Although not always true, this is something to investigate.

Less Personalized Customer Service

Because credit union membership tends to be smaller and more local, bank customers may receive less personal service, especially when using a branch outside their more typical one (perhaps while traveling). Plus, banks are more likely to sell mortgage loans to a third-party loan servicer.

With any lender, bank, or credit union, a house hunter should feel at ease asking a range of mortgage questions.

The Takeaway

Credit union vs. bank mortgage? Each has its upsides and potential downsides. Borrowers looking for a home mortgage loan can explore the pros and cons to make the right choice for their specific situation.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.


SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is it better to get a mortgage at a credit union?

Not necessarily. It’s a good idea to look into what each route offers before making the right choice for you.

What are the disadvantages of credit unions?

Credit unions tend to be smaller and more localized than many banks, so disadvantages can include fewer locations, a smaller ATM network, and more limited financial products. Borrowers must qualify to become a credit union member; technology probably won’t be as modern as that at a larger bank; and, in some cases, costs can be higher.

Are credit unions safe for mortgages?

The National Credit Union Administration insures deposits of up to $250,000 at all federal and some state credit unions, protects the members who own credit unions, and regulates federal credit unions. Eligible bank accounts of the same amount are insured by the Federal Deposit Insurance Corp.

Can I take out a HELOC or second mortgage through a credit union?

Not all credit unions offer the same products, but many of them do offer home equity lines of credit and home equity loans.


Photo credit: iStock/Lemon_tm

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.


*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

+Lock and Look program: Terms and conditions apply. Applies to conventional purchase loans only. Rate will lock for 91 calendar days at the time of preapproval. An executed purchase contract is required within 60 days of your initial rate lock. If current market pricing improves by 0.25 percentage points or more from the original locked rate, you may request your loan officer to review your loan application to determine if you qualify for a one-time float down. SoFi reserves the right to change or terminate this offer at any time with or without notice to you.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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How to Pay a Credit Card From Another Bank

While there are many different methods for paying your credit card, it is not always straightforward to pay a credit card from another bank. This can be problematic, since credit cards are becoming more and more prevalent as many people’s preferred method of payment.

If you choose to pay your credit card from another bank via check or an automated transfer, it should be fairly simple to do. However, you may not be able to pay a credit card directly via a debit or credit card issued by another bank. You might wind up in the latter case using a cash advance, which will probably involve higher costs.

Read on to learn more about how to pay a credit card from another bank.

How to Pay Off a Credit Card With Another Bank

The easiest way to pay off a credit card from another bank is with a check, bill pay, or ACH transfer from your bank. While writing checks has become less popular, many banks offer a bill pay service that would allow you to have your bank send a check to pay your credit card bill.

If your credit card issuer allows it, you may also be able to enter your account and routing numbers on your online card account and have your payment directly drafted from your bank account.

When Should I Pay My Credit Card Bill?

Paying your credit card bill regularly is an important factor used in calculating your credit score. So it’s a good idea to either set up automatic payments that will pay your bill each month or to have a system that makes sure you complete those payments each month.

It can be extra important to pay off a large credit card bill, since the amount of your available credit that you’ve used is another factor that makes up your credit score. Your credit utilization ratio is how much you are carrying as a balance vs. your credit limit. It’s expressed as a percentage, and you’ll want to keep it as low as possible. Lenders typically like to see that figure as no more than 30% (10% is even better) when reviewing your finances.

Why You Should Pay Your Credit Card Bill on Time

One of the factors that is used to calculate your credit score is your payment history, and late payments can have a negative impact on your credit score. The way that most credit card payments work is that you often do have a grace period after the due date before your payment is reported as “late.” Still, you should do your best to pay your credit card bill on time, each and every month.

On-time payments are the single largest contributing factor to your credit score at 35%.

Why You Should Pay Your Credit Card Bill Early

In some cases, it can make sense to pay your credit card bill early, even before it is officially due. The 15/3 credit card payment method is one strategy that encourages users to make a second payment to their credit card account in the middle of the month. This can help to keep your credit card utilization ratio low, which can help build your credit score.

How Can I Pay My Credit Card Bill?

You have several different options for paying your credit card bill. Here are a few of the most common ways to pay your bill.

Online Payments

Probably the easiest way to pay your credit card bill is with an online payment.

•   Most issuers allow you to set up automated credit card payments by entering in your routing and account numbers in your online credit card account.

•   You may also be able to use your bank’s bill pay feature to pay your credit card bill online.

•   You may be able to use a debit card to pay a credit card in some cases. However, most credit card issuers are likely to prefer drawing directly from your bank account vs. deducting funds via a debit card.

Over the Phone

Many credit card issuers allow you to make credit card payments over the phone, using a touch tone keypad. You’ll need to have your bank’s account and routing numbers to pay over the phone.

With Cash

If you’re looking to pay using cash, you may have a more difficult time. One option might be to use your cash to buy a money order which you can mail to your credit card company to pay your bill. Or, your credit card company may have relationships that allow you to pay your bill at the customer service desk of certain retailers.

Can You Pay a Credit Card With Another Credit Card?

You generally cannot directly pay a credit card with another credit card. If you’re looking to use your available credit on one card to pay the bill of another card, you generally have two options — a balance transfer or a cash advance. Both of these options typically come with fees, so they should be used as a method of last resort in most cases.

Should You Carry a Balance on Your Credit Card?

While there may be some times that you will need to carry a balance on your credit card, you should avoid it when possible. Carrying a balance on your credit card raises your utilization rate, which generally has a negative impact on your credit score. That’s why, when possible, you want to know how to pay off a credit card from another bank every month and not carry a balance.

Another note: Remember that you’ll also be charged interest on any outstanding balance on your card. Credit card debt is typically considered high-interest debt, with rates currently topping 20% on average.

When Do You Receive Your Credit Card Bill?

With many credit card issuers, you receive a monthly statement around the same time of the month. Your credit card payment due date may be three weeks or more after that, and you may have a grace period after that before your payment is considered officially late.

If you don’t want to have to worry about remembering when you receive your statement or when your payment is due, you might consider setting up automatic payments.

Tips for Paying Credit Card Bills

One of the best tips for paying credit card bills is to set up automatic payments, or what may be called autopay. You can do that either through your bank or by entering your bank’s information in your credit card online account. Setting up automatic payments eliminates the chances that you will forget about making your payment and end up being charged interest, late fees, or both.

Recommended: Guide to Paying a Credit Card with a Debit Card

The Takeaway

The easiest way to pay a credit card from another bank is by using your bank’s account and/or routing numbers to transfer funds. You can either set up payments on your online credit card account using that account information or use your bank’s bill pay service to pay a credit card from another bank. There usually is not a way to pay a credit card directly with a debit card or another credit card, and the indirect methods may trigger fees.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How do I pay my credit card bill with another bank credit card?

There is generally not a way to directly pay a credit card bill with another bank credit card. You can use a balance transfer credit card to transfer the balance of one credit card to another, but there are often fees associated with this. You could take a cash advance to pay a different credit card, but you’ll usually be charged fees and interest.

Can you pay a credit card online from a different bank?

Yes, it is often possible to pay a credit card online with the information from a different bank. Most credit card issuers allow you to set up payment information either over the phone or through your online account using your bank account’s routing number and your account number.

Can I pay my credit card bill with another bank debit card?

No, it is not generally possible to pay a credit card with a debit card, at least not directly. To pay a credit card from a different bank, you typically need to use your bank account details to set up a payment in your online credit card account, if your issuer supports that.


Photo credit: iStock/VioletaStoimenova

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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What Is a Credit Card Management App?

Credit card management apps can help you stay on top of your credit card balances, payment dates, and rewards. But as with most things in life, there can be pros and cons to using these apps.

Here, you’ll learn about the ins and outs of a credit card management app, plus some general tips to managing your credit cards.

What Is a Credit Card Management App?

A credit card management app can help you manage multiple credit cards that are in your rotation. You can think of the different credit card management apps falling into different categories.

•   The first group of credit card management apps is designed to track credit cards and help you stay on top of payments. Common features include tracking your credit utilization, payment due dates, payments, and remaining balance, and helping you stay on the path to repaying your credit card debt.

•   The next type is a money management app or debt tracker app. Both sync up to your credit cards and track recent credit card transactions, minimum payments due, and payment due dates. Some money management apps offer free credit score and credit monitoring. In turn, you can save time and stress wading through credit card statements.

•   There are also credit card management apps to keep track of your credit card rewards and travel points.

As you review different credit card management apps, some of the ones you may see are Tally, AwardWallet, and Debt Payoff Planner.

Many credit card management apps are free, though some have a monthly subscription fee. Prices for the programs that do require payment (and may come with extra features) can be about $30 per year, though costs run from $2 to $12 a month. Often, you can receive a discount for paying annually versus monthly.

Recommended: Mobile Banking Features

Common Features of Credit Card Management Apps

Here are some common features of credit card management apps:

•   Syncs to your credit card accounts. By linking your credit card accounts to the app, you can track transactions, such as recent purchases and refunds. Plus, you can see when your payments were posted.

•   Tracks your payment due dates. Many money management apps enable you to monitor when your payments are due. This might be a calendar view or a list of all your payment due dates and amounts.

•   Credit score and monitoring. Some money management apps offer free credit scores and credit monitoring, alerting you of when your score goes up or down. These alerts and checking your credit score regularly can help you pinpoint financial habits and patterns that might be impacting your score.

•   View credit card balances. A credit card management app can show not only your credit card balances but also the interest rates and credit utilization, which is how much balance you’re using against all your cards. It can also indicate how much of your credit limit you have remaining.

•   Tracks credit card points and travel rewards. Apps that track credit cards specifically can help you make the most of your credit card rewards. There are apps that also help you maximize your rewards points earnings on every card.

Recommended: Leveraging Credit Cards to Build Wealth

Benefits of Credit Card Management Apps

Here are the perks of adding a credit card management app to your toolkit.

•   Keeps you organized. You don’t have to muddle through a pile of credit card and bank statements to make heads or tails of when your payments are due and what purchases you put on your cards.

•   Makes it easier to keep track of credit usage. By using a single app, you won’t have to log on to all your different credit cards to see which purchases you’re putting on your cards, how much you owe on your balances, and your credit utilization, which is how much you’ve used of the credit limit on all your cards.

•   Helps pay off credit card debt quicker. Some credit card apps have handy features to help you knock down debt at a much speedier pace. For instance, the app might detect “extra funds” you have in a given month. That’s money you can put toward one of your outstanding balances.

•   Helps avoid falling behind on payments. With due dates and reminders to set on your app, you won’t be scrambling to remember when you need to pay off each credit card bill. In turn, you’ll have an easier time staying on track. Plus, you can consider setting up automated credit card payments.

Reasons to Use a Credit Card Management App

Here are a few reasons why you might want to consider linking up your credit card accounts to a credit card management app.

•   Tracking your transaction history at a glance. Instead of muddling through a stack of credit card and bank statements, you can see your recent purchases through a credit card management app.

•   Understanding your financial behaviors better. You can gain a better understanding of your spending habits (such as impulse buying) and how much credit card debt you owe at a given time.

•   Organizing your credit card account. You can stay organized with the payment schedule and the minimum payment amounts.

•   Managing debt. Some credit card management apps include debt tracker tools to help you monitor your progress on your different cards.

•   Optimizing credit card rewards. Credit card management apps might help you find ways to maximize your credit card rewards. You can calculate your rewards, stay on top of deals and offers, and integrate loyalty programs.

The Takeaway

A credit card management app can help you keep tabs on your credit cards without having to log in to multiple credit card apps or maintain a complicated spreadsheet. These apps can optimize your ability to stay on top of payments, monitor your credit usage, and make the most of a card’s rewards and perks.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is the app that combines all your credit cards?

There are a couple of apps that help you monitor all your credit cards and track your outstanding balances and credit usage. Some say their goal is to help lower your credit card payments and manage your debt.

Is it safe to have a credit card app on your phone?

It is generally safe to have a credit card app on your phone. Credit cards on mobile phones have the same fraud protection as online or in-store purchases. Your liability is capped at $50 for unauthorized transactions. Plus, thieves and fraudsters won’t be able to get their hands on your physical card and skim or steal it.

How do I manage all my credit cards in one place?

Using a credit card management app may help you stay on top of your credit card activity in one place. There are different kinds of such apps, which have varying features and tools, from rewards tracking to debt payoff strategies.


Photo credit: iStock/Mindful Media

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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How to Pay a Credit Card Bill With Cash

While many people use cash less often today, you can still use it to pay a credit card bill at some ATMs and retail locations or by using mail technique (money orders; no $20s in the envelope).

You might want to pay your credit card in cash if you work in a cash-based business, or a relative hands you an envelope of $20 bills as a birthday gift. It’s good to know that you can pay your plastic with that money at some ATMs and retail locations or by sending a money order.

Here, you’ll learn more about paying a credit card bill with cash and other ways to pay, as well as tips for keeping your credit card account in good standing.

When Should I Pay My Credit Card Bill?

Before diving into ways to pay your credit card bill, consider gaining some knowledge about the billing cycle so you can better understand how and when to pay a credit card bill.

•   A credit card’s billing cycle is the time between two statement closing dates. This period is usually anywhere from 28 to 31 days.

•   Another important tidbit about credit cards: A grace period for a credit card exists between the end of the statement closing date and your credit card payment due date. During a grace period, you aren’t charged any interest.

•   You always want to pay your credit card bill (at least the minimum payment) by your payment due date — for good reasons that you’ll learn about next.

Why You Should Pay Your Credit Card Bill on Time

As mentioned, you should always pay your credit card bill by the payment due date to avoid negatively impacting your credit score. Here’s what you need to now:

•   Payment history is usually the largest single contributor to your credit score at 35%. Your score may dip if you fall behind on your credit card payments.

•   If you continue being late paying your credit card, your account could enter delinquency and then default. After you’ve defaulted on a credit card, your card will likely go to collections, which can seriously injure your credit score.

•   If you can manage to pay your credit card on time and in full, you won’t owe any interest charges. So those purchases you put on your card won’t cost anything in interest.

A sober truth: Americans dole out an average of $120 billion in credit card interest fees a year. Paying off your balance in full each cycle puts your share of that money back into your pocket.

Why You Should Pay Your Credit Card Early

You’ll carry a lower balance when you pay your credit card before the due date. This means more available credit, which reduces your credit utilization ratio. (That’s the percentage of your credit limit that your current balance accounts for.) And the lower your credit utilization, the better.

Your payment history gets reported to the credit bureaus, and a lower credit utilization figure could help build your credit score.

If you’re carrying a balance, you’re charged interest daily on your balance. So, a lower balance by making an early payment means you’ll be paying less on interest fees.

Another reason why it’s a good idea to pay your credit card before the payment date is that it increases your available credit. If you were planning to make a major purchase on your card, you’ll usually have to spend within the credit available.

Recommended: Guide to Paying Credit Cards with Debit Cards

How Can I Pay My Credit Card Bill?

There are several main ways you can pay your credit card bill. Take a closer look at your options here.

Online Payments

Many credit card networks and companies offer the option to pay online. You can do this either through the card’s mobile app or by logging on to your account on your computer.

To make sure you’re always on top of your payments, you can opt for auto payment, which you may see called autopay. You can link a bank account, which sets you up for recurring monthly payments. You can choose whether you want to pay the minimum, full, or custom amounts each month. That way, you won’t have to quibble over whether you’ll remember to pay your bills. You just want to be sure you have enough money in your account to cover that payment so you can avoid the headache and fees that overdraft can trigger.

Recommended: How Do Credit Card Companies Make Money?

Over the Phone

Another way to pay your credit card bill is to call the number on the back of your credit card (or look for the customer service number online) and make a payment over the phone. Usually, this is an automated service, and you provide your bank routing and account number.

While this is a fairly convenient way to make a credit card payment, it’s easy to forget a payment due date and let it slip. There may also be a surcharge for paying this way.

By Mail

If you get paper credit card statements in the mail, you can also send payment via a check. Should you decide to go this route, you’ll need to be sure the check arrives to the credit card issuer before the cutoff time. It needs to arrive by 5pm the day it’s due or be deemed late.

With Cash

Yes, when your credit card bill is due, it’s entirely possible to pay using cash. If you’re wondering how you can pay a credit card with cash, there are typically three ways:

•   By making a cash payment through an ATM. You probably can only do so at the credit card issuer’s ATM. You select the option to send cash, then deposit the money at the ATM.

•   In-person, provided the credit card issue has physical branches.

•   By sending a money order (this is the secure mail technique alluded to above; don’t put cash in the mail).

Can You Pay a Credit Card With Another Credit Card?

Typically, you can’t use a credit card to pay off another credit card. In other words, you can’t link your credit card and make an online payment, nor can you swipe a credit card to make an in-person payment.

However, with a balance transfer, you move the balance from one card to another, usually to save on interest. In this way, you are technically using a new credit card to nix the balance from an older card, then paying the balance on the new card. This might be helpful if you are paying off a large credit card bill.

Another option could be getting a cash advance on one credit card to pay another. This, however, will usually involve a high interest rate and fees, so proceed with caution.

Should You Carry a Balance on Your Credit Card?

Carrying a balance means shouldering interest fees. Plus, you’re increasing your credit utilization, which can reduce your score. In a perfect world, you should aim to pay off your balance in full each billing cycle.

However, if you need to carry a balance on your credit card, make it a top priority to make the minimum payments and pay on time, all the time. Getting that bill paid on time, as noted above, can help build your credit.

When Do You Receive Your Credit Card Bill?

If you get paper statements, you can expect to receive your credit card statement at least 21 days before your bill is due. This is legally required of credit card issuers. In some cases, they might send you your bill before the 21-day mark.

If you opt for paperless statements, you can view your bill as soon as the billing cycle ends. Downloading your credit card bill from your card issuer’s app at the end of a billing period is also an option — and can be the most convenient one.

Tips for Paying Credit Card Bills

Staying on top of your credit card bill is an important part of your financial life. Credit card debt carries high interest in most situations and can spiral upward if you aren’t diligent about monitoring and paying your balance.

•   Set up autopay. The easiest way to make sure you pay your credit card on time is to set up automated credit card payments. You only need to do it once, and you can choose either to make the minimum payment, pay your monthly statement balance in full, or pick a specific amount.

•   Monitor your accounts. Mistakes can and do happen. To make sure there are no errors or fraudulent activity, comb through your transactions regularly. When looking over your statements, besides transactions you should see any refunds, credits, fees, your minimum payment, and how much of your balance remains.

•   Document cash payments. If you do decide to pay with cash, remember to get a receipt and make sure the payment shows up on your credit card statement.

•   Always pay on time. Make it a top priority to stay on top of your credit card bills. If you’re struggling to keep up, consider reaching out to your credit card issuer and seeing if they’re able to move your payment due date or temporarily lower your minimum monthly payment.

•   Make early payments. You can also break up your credit card payments in chunks, and pay a portion before your due date. This will increase your available credit limit, and lower your credit usage, which can help your credit. Plus, you’ll be paying less on interest.

One method you can try is the 15/3 credit card payment method. You split your credit card payment in half. Then, you pay half 15 days before the due date, and the remaining half three days before.

For example, your bill is due on the 24th of the month. And this month’s balance is $700. In this case, you pay $350 on the 9th of the month, and the other $350 on the 21st of the month. This can help you knock down your debt faster plus lower your credit utilization.

•   Make more than the minimum payment. To pay off your debt quicker and cut down on how much interest you pay, aim to pay more than your minimum. If you receive a tax refund or a work bonus, lucky you! When wondering what to do with a windfall, why not commit to putting at least part of it toward your credit card payments?

•   Take action if your credit card debt is getting too high. If you are struggling to pay off your debt or even the minimum due, it can be a wise move to look into such options as a balance transfer credit card, which will give you a period or no or low interest to play catch-up; using a lower-interest personal loan to pay off the card’s balance; or working with a nonprofit, well-regarded credit counseling agency to find solutions.

The Takeaway

It is possible to pay a credit card bill with cash. To do so, you will likely want to find the card issuer’s ATMs or branches, or you could use a money order. That said, whenever dealing with high-interest credit card debt, it’s wise to educate yourself about how the billing cycles and due dates work, so you can pay off the debt as well as possible and avoid snowballing interest charges. That can help protect your financial status.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What credit cards can you pay in cash?

Can you pay a credit card bill with cash? Yes: Most major credit card issuers accept cash to make your credit card payments. These include Chase, Capital One, Citibank, Discover, Bank of America, Wells Fargo, U.S. Bank.

How do I pay a bill with cash?

You can typically pay a credit card bill with cash in one of three ways: by visiting the card issuer’s physical location and making a payment, depositing a cash payment at a card issuer’s ATM, or purchasing a money order with cash, then mailing it to the credit card company.

Can I pay cash at an ATM for a credit card?

Yes, you can pay cash for a credit card, provided you are accessing your card issuer’s ATM. Then you’ll need to insert your card at the ATM, select the correct payment option, and follow the on-screen directions about how to proceed. You’ll need to insert the cash payment into the ATM and get a receipt for your transaction.


Photo credit: iStock/Abdullah Durmaz

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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