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It’s the most wonderful time of the year. It’s also the time when Americans tend to go on a shopping spree. The average person spends more than $900 on holiday gifts, according to the latest research. And that’s before factoring in entertainment, food, or travel costs, or the higher inflation rate, which means your dollars don’t go as far as they used to.

Fortunately, it is possible to have a festive season without blowing your budget and starting the New Year in debt. Try the holiday budgeting tips below to help you celebrate the holidays affordably.

20 Holiday Savings Ideas

It is possible to enjoy the holidays on a budget. In fact, you may have even more to celebrate since you won’t be starting the New Year in debt. As you start making your lists for holiday gifts and activities to do, consider these clever ways to avoid overspending and still have fun this season.

1. Create a Holiday Budget

Before you start your holiday shopping, make a budget for gifts, decorations, and experiences. This will allow you to prioritize your spending in advance and identify where you can make cuts.

As a bonus, following a budget can be one way to help achieve financial security, so this could be a good practice to continue after the holidays as well.

💡 Quick Tip: Are you paying pointless bank fees? Open a checking account with no account fees and avoid monthly charges (and likely earn a higher rate, too).

2. Use the Envelope Method

By making purchases with cash instead of credit during the holidays, you could end up spending more thoughtfully. Try the cash envelope system to help stick to your holidays on a budget. To do it, designate a few different envelopes for spending categories like holiday meals, decorations, and experiences, and then put cash for each into the envelopes. When you run out of money, it means you can’t spend any in that category (or you’ll have to dip into the budget for another category).

3. Host a Potluck

Hosting a gathering at your place and asking your friends and family members to bring food to the holiday meal is a good way to cut costs on your grocery bill. It’s also less stressful for you. Just make sure that you ask people ahead of time what they plan to bring so that you have enough different kinds of dishes and options for everyone.

4. Visit a Museum for Free to See the Holiday Decorations

Another holiday budgeting tip: Check out your local museum when there’s no admission fee (many cultural institutions offer a monthly or weekly date) as a fun thing to do for free. The holiday decorations will likely be up, and there may even be an exhibition of holiday ornaments or trees. It can get your seasonal spirit soaring at no cost.

Recommended: 23 Tips on Saving Money Daily

5. Take a Tour of Your Town’s Christmas Lights

There may be an area near you that’s known for looking spectacular at the holidays. Or perhaps you just drive around until you find some fun Grinch inflatables. Whatever the case, hop in the car with a friend or your family and tour the local lights and decor for a festive, free night out.

6. Hold a Cookie Swap

Instead of doing a Secret Santa gift exchange with presents, get together some friends, colleagues, or neighbors and do a cookie swap instead. It’s simple and fun: Everyone bakes a different kind of treat and then shares them, so that each guest goes home with an assortment of sweets. Just make sure each person is making a different kind of cookie so you don’t end up with duplicates.

7. Go Ice-Skating

Local ice rinks typically offer an affordable and fun way to get some exercise, along with helping to put you in the holiday spirit. It can be a great after-work outing with friends or colleagues or a family activity. You can all celebrate (and warm up) with hot chocolate afterward.

8. Head to the Dollar Store

Here’s one secret to not paying full price: Go where the discounts are. The dollar store is full of inexpensive holiday decorations as well as goodies you can put into gift bags or stuff into stockings. You can find low-cost ornaments, lights, balloons, and more to make your home more festive for the season.

9. Give the Gift of Holiday Playlists

A custom playlist is a thoughtful gift for friends and family, and it’s another way of budgeting for the holidays. And now that most music is available online, making a playlist is easier than ever. Just create a playlist on Spotify or another platform, name it, and then share the link. The recipients will appreciate the tunes!

10. Check Out Your Town’s Calendar

Your town likely hosts lots of events you can participate in during the holidays. Search for Christmas tree lightings, concerts, parades, and outdoor movie nights, which are usually free or low cost.

11. Volunteer at a Soup Kitchen

What better way to celebrate the holidays than to give back? Look for local opportunities to volunteer at a soup kitchen or local animal shelter, for instance. Your community will benefit from your kindness, and you’ll feel great for volunteering.

12. Donate Toys to Families in Need

Another way you can give back — and get the entire family involved — is to donate toys your kids no longer use to children and families in need. Search for local toy drives happening in your community to find the best place to donate them to.

13. Get Friends Together to Regift

Here’s another alternative to a Secret Santa get-together: Host a regifting party with you pals. Everyone brings a gift they received but didn’t like or use, and then swaps them. After all, one person’s trash is another’s treasure.

14. Host a Game Night

Have some board games in your closet? Invite over friends and neighbors, and host a game night. Buy some snacks like popcorn, chips, and pretzels, and serve some beverages like soda, water, beer, or wine to stay on budget.

15. Use Your Credit Card Points

If you have credit card points racked up, the holiday season can be a good time to use these rewards to purchase gifts as well as book hotels and flights at a discount.

16. Make Your Own Decorations

If you log onto Pinterest, you’ll find a number of DIY holiday decorations you can make yourself for a fraction of the price of store-bought. For instance, you could create a wreath out of cranberries or string up popcorn on your Christmas tree.

If you have a natural area nearby where pinecones are abundant and yours for the taking, consider a winter walk to gather some. You’ll get some fresh air and exercise, plus these and any pine boughs on the ground can make a festive seasonal display at home.

17. Get Creative with Gift Wrap

Rather than buying expensive wrapping paper and ribbons, find some low- or no-cost ways to make your gifts look great. For example, you could use craft paper that you decorate with a few colorful flourishes with a marker. Yarn or twine can work well in place of ribbon and save you money.

18. Make Some of Your Gifts

You can construct some great gifts at home without having to spend much on materials — and at the same time, get the satisfaction of practicing a more sustainable way to shop. For example, you could make a family cookbook with treasured recipes and stories about the person they came from. If you sew or knit, you could whip up items like scarves or tote bags, and if you’re a whiz in the kitchen, you could make jams and jellies, and more.

19. Save Your Shopping for the Biggest Sale Days

Black Friday and Cyber Monday are great times to save on certain items. The key is knowing in advance what price actually constitutes a deal. Many stores advertise their upcoming sales around this time of year, so you should have plenty of time to research and comparison-shop.

20. Avoid Last-Minute Purchases

If you put off shopping until the last minute, you’re much more likely to blow your budget. Schedule time to shop before the holiday season is in full swing to help you avoid the impulsive overspending trap.

The Takeaway

The holidays don’t have to be expensive for you and your family to enjoy them. Focus on spending time with loved ones, investing in your community, and exploring your DIY side to get the most out of the season while spending the least.

It can also be helpful to start saving up money ahead of time. You could designate a certain bank account for the holidays, for instance, and contribute a little bit to it each week.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

How much does the average person spend during the holidays?

The average person spends more than $900 on gifts alone, according to the latest research. That doesn’t include decorations, holiday entertainment, or travel.

Is it possible to celebrate the holidays on a tight budget?

Yes! There are many ways to celebrate the holidays without spending much money. For instance, you can make gifts and decorations yourself. Rather than buying and cooking an elaborate holiday dinner, you could host a potluck and ask each guest to bring a dish. And you can take advantage of no-cost seasonal activities like free nights at a local museum, holiday parades, and outdoor movie nights in your town.

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About the author

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Photo credit: iStock/Tijana Simic

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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Card skimmers are small devices that fit into credit card readers (say, at a gas station or outside ATM) and snag your card information. This can then be used to steal your credentials and commit identity theft.

Unfortunately, credit card fraud is all too common, totaling more than 426,000 instances in the most recent year studied. These skimmers, installed by would-be criminals, contribute to this figure. Here’s another indicator of how pervasive skimmers are: The FBI reports that financial institutions and consumers lose more than $1 billion per year to this practice.

To help protect yourself against theft, keep reading to learn what credit card skimmers are, how to spot a credit card skimmer, and what to do if your credit card is skimmed.

What Is a Credit Card Skimmer?

Credit card skimming is a form of theft that occurs when someone installs a small electronic device, known as a credit card skimmer, into a card reader. This device can read and collect information from a credit card when someone makes a purchase. The skimmer does this by reading the magnetic strip on a debit or credit card, which provides the full name on the credit card as well as the credit card number and credit card expiration date.

Credit card skimmers have been around for almost a decade. They are most commonly attached to gas station pumps, ATMs, and other types of machines that accept payments from both secured and unsecured credit cards as well as debit cards.

Identifying Credit Card Skimmers

Knowing how to check for credit card skimmers is a great way to protect against potential theft. Especially when using an outdoor payment machine like a gas pump or ATM, take a look at the card reader for signs of a credit card skimmer. See if the card reader is sticking out at an angle or looks any different from other nearby card readers. Also check if the card reader is loose or the keypad is unusually bulky.

When skimmers first came into play, it was easier to spot a credit card skimmer as the card reader often appeared to be tampered with or wiggled when used. Today, skimmers can fit snugly over the scanner, which makes it much harder to tell if something is amiss.

In the instance that all seems well with the card scanner at a gas station, double check the pump. If a gas pump is open, unlocked, has had the tamper-evident security tape altered or removed, or anything else seems amiss, it’s a good idea to use a different pump.

If possible, it’s best to use a credit card pump that has an encrypted credit card reader. Ideally, use one that has the illuminated green lock symbol near the credit card reader — this symbolizes that it’s been encrypted.

What Happens When a Credit Card Is Skimmed

When a credit card skimmer reads a magnetic strip on the back of a credit or debit card, it can obtain the cardholder’s full name, credit card number, and the credit card expiration date. Sometimes, scammers add a small camera into the equation in order to watch someone enter their PIN number when using a debit card. Really, one of the few things that’s safe is the CVV number on a credit card, which is why it’s so important to keep this secure.

Once the thief has this information in hand, they can use the card anywhere that accepts credit card payments. They may have access to the cardholder’s bank account and could steal their identity. Or the thief can sell the information on the dark web.

Recommended: 10 Common Credit Card Scams and How to Avoid Them

Protecting Yourself From Credit Card Skimmers

If you’re old enough to get a credit card, it’s critical to know how to use it responsibly and safely. Here’s a few tips to keep in mind to avoid falling prey to credit card skimmers.

Use NFC or Supervised ATMs

To help avoid coming into contact with a card skimmer, try to use payment terminals that are supervised by security cameras or skip using the card reader altogether and make a Near Field Communication(NFC) payment. NFC payments are secure transactions made with a smartphone, allowing you to avoid swiping your card at all.

Check and Recheck the Keypad

When it comes to how to spot a credit card skimmer, remember to check the keypad for any signs of tampering. These days, it’s a bit harder to identify when a keypad has a skimmer on it, but if anything seems amiss, use another payment machine or go inside the gas station or bank to make a transaction or withdrawal.

Don’t Leave Your Card Unattended

Whenever possible, make a transaction or withdrawal inside of a gas station or bank. The odds of a criminal accessing inside payment terminals with a clerk watching are much lower compared to outside payment terminals. It only takes criminals a few seconds to add a skimmer to an outside payment terminal where no one is watching.

Just like taking the time to compare the APRs on credit cards, spending a few extra minutes going inside to buy gas or take out cash can pay off. It could help you avoid countless hours of dealing with identity theft as a result of credit card skimming.

Use Credit Cards With a Chip

If you’re familiar with what a credit card is, you’ll know that most credit cards today come with a “chip” that allows consumers to make payments without actually swiping their credit card. With an EMV chip, it’s possible to simply tap a credit card instead of swiping it to make a payment, which helps avoid credit card skimming. If you have a card that is old-school and lacks a chip, you might ask the issuer if an updated version is available.

Be Vigilant

If someone does need to use an outdoor ATM or gas pump, use one that is close to the building and preferably in the line of sight of an attendant, security guard, or security cameras. The more hidden a payment terminal is, the more likely it is that there is a credit skimmer placed on it. Also make sure to be aware of your surroundings when using any exterior payment terminals.

Sign Up for Credit and Debt Alerts

One way to catch fraud is to sign up for alerts that send a notification any time a purchase is made with the card. After all, it’s unlikely a fraudster’s activity will result in a negative balance on a credit card.

By receiving an alert right when a purchase is made, you can confirm whether or not you made it. If you believe an unauthorized purchase was made, contact your bank or credit card issuer immediately.

Check Your Account Regularly

To be extra vigilant, double-check debit and credit card statements frequently to make sure that no unauthorized charges slipped through the cracks. It can be easier to stay on top of charges if you check in throughout the month rather than waiting until you receive your credit card statement and being shocked that you’re almost at your credit card limit due to unauthorized spending.

Can You Get a Refund if Your Card Gets Skimmed?

If you realize your credit card or debit card has been skimmed, check in with your bank or credit card issuer about next steps. You should also put a freeze on your credit report to ensure that the fraudsters aren’t applying for new credit cards in your name. In some cases, you may need to file a police report.

The credit card issuer or bank will have fraud protections in place and should refund you for any money lost. These protections are an important part of how credit cards work. Still, the sooner you cancel the cards and stop the fraud, the better. Most top credit cards have zero-liability policies that will refund the full amount of the fraudulent charges. If they don’t, the maximum liability anyone has as a consumer is $50.

The Takeaway

Skimmers, small devices that fit over credit card readers, are unfortunately a common way that financial credentials can be stolen and unauthorized charges or identity theft enacted. These are especially common at gas station pumps and outside ATMs. With a debit card, consumers aren’t entitled to as much protection regarding theft, so it’s helpful to use a credit card whenever making purchases at an outdoor payment terminal that’s vulnerable to skimmers. Still, it’s important to know how to spot credit card skimmers so you can hopefully avoid them.

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 does a credit card skimmer do?

Credit card skimmers illegally collect information from credit and debit cards. Skimmers are typically attached to outside payment terminals like ATMs or gas stations.

Are card skimmers illegal?

Yes, credit card skimmers are illegal. This is why credit card issuers are creating new technology like chips to help make purchases more secure.

How common is credit card skimming?

Credit card skimming is all too common. The FBI reports that it costs financial institutions and consumers more than $1 billion per year.

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About the author

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Photo credit: iStock/greyj

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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Credit card networks provide the financial infrastructure for transactions, while credit card issuers are responsible for providing cards to consumers and managing their accounts. To put it another way, credit card networks facilitate transactions between merchants and credit card issuers, and credit card issuers pay for transactions on the cardholder’s behalf when they use their card.

Once you understand this difference, however, you may be confused by the fact that some credit card networks are also card issuers. To get a better understanding, keep reading for a closer look at the differences between a credit card network vs. issuer.

What Is a Credit Card Network?

Credit card networks create the digital infrastructure so merchants can facilitate transactions between themselves and the credit card issuers — meaning they’re key to how credit cards work. In order to facilitate these transactions, the credit card networks charge the merchants an interchange fee, also known as a swipe fee.

Here’s an example of how this works:

•   Say someone walks into a clothing store and uses their credit card to buy a pair of pants. They swipe or tap their credit card to make the purchase.

•   The store’s payment system will send the details of this transaction to the cardholder’s credit card network, which then relays the information to the credit card issuer.

•   The credit card issuer decides whether or not to approve the transaction.

•   The clothing store is alerted as to whether or not the transition was approved.

Essentially, credit card networks make it possible for businesses to accept credit cards as a form of payment, making them integral to what a credit card is. Credit card networks are also responsible for determining where certain credit cards are accepted, as not every merchant may accept all networks.

The Four Major Card Networks

The four major credit card networks that consumers are most likely to come across are:

•   American Express

•   Discover

•   Mastercard

•   Visa

All of these credit card networks have created their own digital infrastructure to facilitate transactions between credit card issuers and merchants. These four credit card networks are so commonly used that it’s possible to find a business almost anywhere in the U.S. that accepts one or more of the payment methods supported by these merchants.

When traveling and using a credit card internationally, it’s more common to come across Visa and Mastercard networks.

Now, for the detail mentioned above that can cause confusion: Two of these popular payment networks — American Express and Discover — are also credit card issuers. However, their offerings as a credit card network are separate from their credit card offerings as an issuer.

Does It Matter Which Card Network You Use?

Which credit card network someone can use depends on the type of credit card they have and whether the credit card network that supports that card is available via the merchant they are purchasing from. Most merchants in the U.S. work with all of the major networks who support the most popular credit cards, so it shouldn’t matter too much which credit card network you have when shopping domestically. When traveling abroad, however, it’s important to have cash on hand in case the credit card network options are more limited.

Merchants are the ones who are more likely to be affected by the credit card networks that they use. This is due to the fact that credit card networks determine how much the merchant will pay in processing fees in order to use their system.

Recommended: Charge Cards Advantages and Disadvantages

What Are Credit Card Issuers?

Credit card issuers are the financial institutions that create and manage credit cards. They’re responsible for approving applicants, determining cardholder rewards and fees, and setting credit limits and the APR on a credit card.

Essentially, credit card issuers manage the entire experience of using a credit card. Cardholders work with their credit card issuer when they need to get a new card after losing one, when they have to make their credit card minimum payment, or when they want to check their current card balance.

Credit card issuers can be banks, credit unions, fintech companies, or other types of financial institutions. Some of the biggest credit card issuers in the U.S. are:

•   American Express

•   Bank of America

•   Barclays

•   Capital One

•   Chase

•   Citi

•   Discover

•   Synchrony Bank

•   U.S. Bank

•   Wells Fargo

Credit Card Network vs Issuer: What Is the Difference?

Credit card issuers and credit card payment networks are easy to confuse. The main difference, as noted, is as follows:

•   Credit card networks facilitate payments between merchants and credit cards.

•   Credit card issuers create and manage credit cards for consumers. If you have an issue with your credit card — like in the instance you want to dispute a credit card charge or request a credit card chargeback — it’s the issuer you’d go to.

These are the main differences to be aware of when it comes to credit card networks vs. issuers, provided in chart form:

Credit Card Issuer	Credit Card Payment Network
•   Creates credit cards •   Manages credit cards •   Accepts or declines applicants •   Sets credit card fees •   Determines interest rates and credit limits •   Creates rewards offerings •   Approves and declines transactions	•   Processes transactions between credit card companies and merchants •   Creates the digital infrastructure that facilitates these transactions •   Charges an interchange fee to merchants •   Determines which credit cards can be used at which merchants

How Credit Card Networks and Issuers Work Together

Credit card networks and issuers need each other to function. Without a credit card network, consumers wouldn’t be able to use their card to shop with any merchants, and the credit card issuer’s product would go unused. Credit card networks create the infrastructure that allows merchants to accept credit cards as payment.

However, it’s up to the credit card issuers to approve or decline the transaction. The credit card issuer is also the one responsible for getting credit cards into consumers’ hands when they’re eligible and old enough to get a credit card, thus creating a need for the credit card networks’ services.

Recommended: When Are Credit Card Payments Due

The Takeaway

A credit card network provides the financial infrastructure for cards and facilitates the transaction between the issuer and the merchant. The issuer is responsible for creating, offering, and managing consumers’ accounts. A couple of businesses are both credit card networks and issuers. Understanding the fine points of how credit cards operate can be an important part of your financial literacy and using credit responsibly.

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 a credit card network?

A credit card network is the party that creates the necessary infrastructure to process transactions between a credit card issuer and a merchant. In return for processing the transaction, the merchant pays the credit card network an interchange fee, which is how the credit card networks make money.

How do I know my credit card issuer?

To find out a credit card’s issuer, simply look at your credit card. There will be a string of numbers on the credit card, and the first six to eight digits represent the Bank Identification Number (BIN) or the Issuer Identification Number (IIN). The Issuer Identification Number identifies who the credit card issuer is.

Who is the largest credit card issuer?

The four largest credit card networks are American Express, Discover, Mastercard, and Visa. Most merchants in the U.S. work with all four credit card networks. When traveling abroad, it’s more common to come across Visa and Mastercard networks.

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About the author

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Photo credit: iStock/Poike

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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Credit cards are handy financial tools, thanks to the credit card issuers who offer, provide, and manage them. A credit card issuer is a type of financial institution that supplies credit cards to consumers.

Read on to learn more about how these businesses operate.

What Is a Credit Card Issuer?

Credit card issuers are financial institutions responsible for making credit cards, managing the application and approval process for credit cards, and keeping credit card accounts running smoothly. If you needed to check your credit card balance, pay your bill, or request a replacement credit card, you’d turn to your credit card issuer.

Recommended: Guide to Credit Card Purchase Protection

How Credit Card Issuers Work

The financial institutions that offer credit cards can be lending institutions, banks, credit unions, or fintech companies. The cardholder borrows money from the credit card issuer each time they make a purchase, and when they pay their credit card bill, they’re paying the credit card issuer back for some or all of the credit they have used. This makes credit card issuers integral to what a credit card is.

A credit card issuer is the one to determine an applicant’s credit card interest rate and limit, the type of cardholder benefits offered, and the fee structure for the credit card. Generally, credit card issuers aren’t the ones to process merchant transactions, but they do decide whether to approve or decline a charge.

When questions about their credit card arise, account holders can call the number on the back of their credit card to connect with their credit card issuer’s customer support line.

Why Are Credit Card Issuers Important?

Understanding why credit card issuers are so important can help consumers to better manage their relationship with their credit card issuer and choose the right credit card for their needs once they’re old enough to get a credit card.

The issuer is responsible for determining a credit card’s terms and features. All credit card issuers have different policies, customer support approaches, and types of rewards offerings. Before choosing a credit card, it’s helpful to carefully research not just how a credit card works but how the credit card issuer runs its operations, in terms of fees and rates you will be subject to.

Recommended: How Do Credit Cards Work?

Common Credit Card Issuer Fees

What the fees look like for a specific credit card will vary by credit card issuer, but the following credit card issuer fees are fairly common to come across.

Annual Fees

An annual fee is a charge that’s paid once a year for having the credit card. These fees can often range from $95 to $500 or more per year. Not all cards charge this fee, but those that do tend to come with more valuable perks and rewards.

Before signing up for a credit card with an annual fee, it’s important to crunch the numbers to see if the rewards that come with using the credit card (like cash back or travel points) will outweigh the cost of the fee. Even if you get a good APR for a credit card, a high annual fee could make the offer less sweet.

Late Payment Fees

Late payment fees apply when someone is past due on paying their bill. Usually, these fees go up each time a payment is missed. The late fee won’t ever cost more than the minimum payment due on the payment the cardholder missed, but these fees can still add up. The current average fee is $32, but it may soon be lowered to $8, pending legislation.

Balance Transfer Fees

When someone transfers their credit card balance from one card to another (usually to a balance transfer card with a lower interest rate), they can potentially owe a balance transfer fee. This fee can be either a percentage of the transferred amount or a fixed fee.

While consolidating debt through a balance transfer can make it easier to pay off credit card debt, make sure to take into consideration any fees involved.

Foreign Transaction Fees

Making purchases when traveling abroad can lead to paying a foreign transaction fee, which is usually around 1% to 3% of the purchase.

However, there are plenty of credit cards — especially travel rewards credit cards — that don’t charge foreign transaction fees. If someone travels internationally often, they could save a lot by choosing a credit card with no foreign transaction fees, which is worth considering when applying for a credit card.

Credit Card Issuer vs Credit Card Payment Networks

It’s easy to confuse credit card issuers and credit card payment networks. While a credit card issuer creates and manages credit cards, a credit card payment network is the one that processes transactions between credit card companies and merchants.

Here are the key differences between credit card issuers and credit card payment networks:

Credit Card Issuer	Credit Card Payment Network
•   Creates and manages credit cards •   Accepts or declines credit card applicants •   Determines fees, credit card APR, credit limits, and rewards •   Approves and declines credit card transactions	•   Processes transactions between credit card companies and merchants •   Creates the digital infrastructure that facilitates credit card transactions •   Charges an interchange fee •   Determines which credit cards can be used with which merchants

Differences Between Credit Card Issuers and Co-branded Partners

A co-branded partner is a merchant that works with a credit card issuer to create a co-branded credit card with their name on it. This is a common arrangement with store, airline, and hotel credit cards.

Here’s a breakdown of how credit card issuers and co-branded partners differ:

Credit Card Issuer	Co-Branded Partner
•   Responsible for creating and managing credit cards •   Decides whether to accept or decline credit card applicants •   Determines card specifics, like fees, interest rates, and rewards •   Approves and declines credit card transactions	•   Works with a a credit card issuer to create a co-branded card •   Uses co-branded card created by issuer to increase sales and attract new customers •   Can use co-branded card to deliver value to loyal customers

Finding the Credit Card Issuer Number

If someone looks closely at their credit card, they’ll be able to learn a lot about their credit card issuer, including what their credit card issuer number is and how to contact their issuer.

Credit Card Issuer Phone Number

It’s always possible to learn how to contact a credit card issuer by going to their website, but cardholders also can find their card issuer’s phone number on the back of their credit card or on their monthly statements.

Credit Card Issuer Identification Number

To find a credit card issuer number, all a cardholder has to do is look at the string of numbers on a credit card. The first six to eight digits on the card represent the Bank Identification Number (BIN), or the Issuer Identification Number (IIN). This number is what identifies the credit card issuer. The following digits on the card are what identify the cardholder.

Examples of Some Major Credit Card Issuers

There are many different credit card issuers, but these are some of the biggest ones in the U.S.:

•   American Express

•   Bank of America

•   Capital One

•   Chase

•   Citi

•   Discover

•   U.S. Bank

•   Wells Fargo

The Takeaway

When you’re choosing a credit card, looking at the credit card issuer matters. This is the financial institution that creates and manages credit cards, determines a card’s fees, interest rate, and rewards offerings, and also approves (or denies) credit card applicants. Knowing that you have a well regarded issuer with fair policies is an important step in securing a credit card that suits your needs.

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 know my credit card issuer?

If someone is unsure of who their credit card issuer is, they can look at the credit card number on their card. The first six to eight digits on a credit card — called either the Bank Identification Number (BIN) or the Issuer Identification Number (IIN) — identify the card issuer.

What is the difference between a credit card issuer and a credit card network?

Credit card networks, unlike credit card issuers, are the party that processes the credit card transaction directly with merchants. Credit card networks have digital infrastructure that allow them to facilitate transactions between merchants and card issuers in exchange for an interchange fee.

What do credit card issuers do?

Credit card issuers create, distribute, and manage credit cards. They decide what the interest rates and fees of a credit card are, who is approved for one and how much they can spend, and how the card’s rewards structure works.

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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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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Budgeting can take some work to get just right. One area that often trips people up is understanding exactly how much they spend each month. Figuring that out can take some trial and error as well as fine-tuning. And even if things are humming along well for a few months, you can suddenly get hit with a surprise bill or a colossal credit card statement that jeopardizes your finances.

To help avoid that scenario and make budgeting easier, it’s important to consider some of the items that are often omitted from the expenses list when people set up budgets. This can help ensure that your hard work managing your finances stays on track.

Read on to learn about commonly overlooked expenditures and how to work them into your budget. That way, you’ll know exactly where your money is going, which can help you avoid debt.

What Are Some Expenses That Are Commonly Budgeted For?

When thinking about a basic living expenses budget, some items are so major, recurring, and important that it would be hard to overlook them. These likely include:

•   Rent or mortgage payments

•   Homeowners association fees

•   Utilities

•   WiFi

•   Cell phone bill

•   Car and/or student loan payments

•   Groceries

•   Daycare or tuition

•   Gym memberships

•   Medical insurance and pet insurance premiums

•   Transportation

Why Is It Important to Budget for Forgotten Expenses?

It’s understandable that some expenses may slip your mind when creating a budget. The typical person probably has dozens of things they are paying for in a given month. But these sneaky forgotten expenses can wreak havoc on your budget and prevent you from reaching your financial goals.

That’s why it’s important to pay close attention to your spending so you can adjust your budget as needed. These are some of the reasons why it’s important to budget for forgotten expenses:

•   Creating a successful budget requires knowing what you spend each month.

•   If you forget to add an expense and run out of funds to pay for it, you may end up pulling funds out of your savings account and sacrificing future goals to cover it.

•   If you really overspend due to forgotten expenses, you may have to turn to high-interest credit card debt to make ends meet.

Recommended: How Much Should I Save a Month?

20 Commonly Forgotten Budget Items

If you are convinced of the importance of accounting for all of your expenses, then it’s time to move ahead. Let’s look at some commonly forgotten budget items to make sure they don’t fall through the cracks.

1. Home Maintenance

While it’s hard to forget about your mortgage payments, the other expenses of homeownership are easy to forget about and add up fast. From hiring a gardener to regular carpet cleanings to random handyman repairs, it makes sense to leave room in a budget for home maintenance as those charges tend to frequently pop up.

2. Vehicle Maintenance

Budgeting for a car payment is probably top of mind, since you likely don’t want to risk getting hit with late payment fees or losing your car. The same generally holds true for car insurance. But those aren’t the only car expenses worth planning for. Drivers also need to make room in their budget for such car-related expenses as tune-ups and repairs. You’ll also want to remember to include gas, insurance, parking and toll road fees; they also have a way of adding up.

3. Taxes

Income taxes may be withdrawn from your paychecks, but property taxes generally aren’t. Forgetting about these bills is a common budgeting mistake. Then, when the payment does come due, it’s a nasty surprise that can throw your budget out of whack.

4. Medical Expenses

It’s easy to forget about or overlook your medical expenses, including over-the-counter and Rx drugs, dental cleanings, regular checkups, or getting new glasses or contacts. These are all vital expenses worth planning for. Budgeting for medical expenses can help improve your financial health too by helping you avoid debt.

5. Donations/Giving

Perhaps you donate when you see a worthy cause on social media or sponsor a colleague who’s doing a charity walk. This kind of spending is easy to forget about, so make sure to put it into your budget so you don’t wind up short of funds when you want to help others.

Recommended: 15 Creative Ways to Save Money

6. Office/School Supplies

Items that keep your home office or study space up and running need a spot in your budget too. This means accounting for things like toner, paper, stamps, shipping supplies, and software subscription fees.

7. Renewals for Licenses (Insurance, Drivers, Etc.)

Some expenses only pop up once a year, or every few years, like driver’s license or insurance renewals, but it can be helpful to split up that expense into smaller chunks and save for it month by month.

8. Seasonal Maintenance

Some home-maintenance needs are ongoing, but others come around seasonally. Similar to license renewals, it can be helpful to save up for pricey seasonal maintenance needs, like gutter cleaning and snow removal, all year round. That way, you won’t come up short when a bill hits.

9. Items for Pets

Pets bring a lot of love into a home, but also a lot of expenses. From vet fees and pet insurance to toys, food, and doggie daycare, these expenses can be significant and deserve a place in your budget.

10. Personal Items (Hair, Nails, Etc.)

A bottle of shampoo here, a manicure there, plus regular haircuts — the myriad expenses that help us look and feel our best can add up quickly. They may only cost a few bucks a pop (hello, body wash) or only happen once in a while (that fresh set of highlights), but it’s wise to be prepared for the cost.

11. Lump Sum Bills

Some memberships and insurance plans may only renew once or twice a year. Many of them are lump sum bills, meaning you are expected to pay them in full, right away. Which is why it can be helpful to save money each month to make sure you have the funds to cover lump sum bills.

Recommended: 18 Common Misconceptions About Money

12. Ridesharing

If you rely on ridesharing apps to get around (whether it’s once a month or several times a week), it’s important to budget for that expense. The convenience can make it feel like a free ride…but it isn’t!

13. Delivery App Fees

Another app-based expense to look out for are the delivery fees that get added when you order dinner or groceries from the comfort of your home. Also, if you tip the driver, make sure to include that as well. These fees definitely add to the price of what’s being dropped off.

14. Business Expenses (Conferences, Trips, Etc.)

You may incur expenses related to work that aren’t reimbursed by your employer. These include such purchases as buying professional clothing, renewing professional licenses, or pursuing continuing education to further your career.

15. Entertainment

From travel to movies and concerts to museum memberships, there’s no shortage of entertainment costs that need to make their way into our budgets.

Recommended: Are You Bad with Money? Here’s How to Get Better

16. Subscriptions or Membership Fees

Speaking of entertainment, you may be paying for one or more streaming platforms, like Netflix, HBO Max, and Hulu. And you may have other subscriptions, like meal kits, personal-care supplies, gym memberships, or even a wine- or beer-of-the-month club. These kinds of one-click sign-ups may not make it onto your budget, but they should.

17. Gifts for Others

From swanky birthday dinners to holiday gifts to wedding presents, you may spend a chunk of change every year to make others happy. It can help to save for the costs of gifts all year round. You can do this by estimating how much you expect to spend in this category for the year and then break it down into a monthly expense by adding a “presents” line to your budget. That way, when these expenses do pop up, you’ll be prepared.

18. Coffee

There’s nothing wrong with enjoying a pricey latte on the go now and then, as long as it finds a spot in your budget. These kinds of little treats can be an important part of self-care, and budgeting for them properly can be an example of financial self-care.

19. Roadside Assistance Costs

One extra that some drivers may find very worthwhile is roadside assistance service. Keep it in the budget, and stay safe.

20. Laundromat/Dry Cleaners

Whether you drop off your clothing at a laundromat once a week and have them washed and folded for you, or you DIY but occasionally drop clothing off at the dry cleaner, these are all costs that need to be considered in your monthly budget.

Why Are These Expenses Commonly Forgotten?

As you can see, the list of commonly forgotten monthly expenses is long. One key reason is that it’s relatively simple to remember to add the really big, recurring expenses — like rent or a car payment — into a monthly budget. But there are plenty of “invisible” expenses that we pay for with a simple click online (whether that means paying for a subscription service or a life insurance policy) that just don’t come to mind when setting up a budget.

There are also those very infrequent charges — say, an annual technician visit to clean your heating system — that we can overlook until they hit. It’s also easy to overlook small but relatively frequent purchases, such as laundry detergent or printer paper, that can add up over time.

Accounting for as many expenditures as possible will help you hone your budget and be as prepared as possible for the bills that come your way.

Banking With SoFi

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

What are common monthly expenses?

Common monthly expenses include rent or mortgage payments, utilities, food, cell phone bills, and loans or credit-card payments. Many of us also purchase clothes, meals/beverages away from home, personal care products, medical insurance, and have transportation expenses, which may or may not include car payments and insurance.

What are some hidden expenses you may have?

Some commonly forgotten budget items can include medical expenses, petcare costs, charitable donations, home- and car-maintenance charges, and subscription services, whether that’s a gym membership or streaming channels.

Will my budget be messed up if I do not add these forgotten expenses?

Yes, it’s possible to mess up a budget if you don’t include all of your expenses. You may wind up with bills to pay and not enough income to cover them. To resolve this, you might have to dip into your savings or start putting things on your credit card, neither of which is ideal. The good news is, each month offers a fresh start to make your budget work better.

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SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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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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