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We won’t sugarcoat it: Music festivals can cost a lot. Weekend passes are often several hundred dollars and don’t include travel expenses and other extras. That doesn’t mean you should skip music festivals altogether. The events are a great way to sample many different artists, meet people, and enjoy time outdoors.

Keep reading to learn more about music festival costs and money-saving moves. You’ll find out:

•   What are the average costs of a music festival?

•   What are the main expenses to consider when going to a music festival?

•   How can attending a music festival be more affordable?

What Is the Average Cost of a Popular Music Festival?

The average cost of music festival tickets — typically for a weekend-long event — ranges from $200 to $600. If travel is required, expenses can shoot up quite quickly: Spending $2000+ in a weekend is not unusual. Transportation and lodging are often premium-priced during a festival, since businesses know they can get top dollar.

Music festival costs also depend on where the festival is located and the type of experience the attendee is looking to have. Camping out will save you money, as will skipping the VIP experience for basic tickets bought at early-bird pricing.

Recommended: Luxury for Less: How to Travel Posh

Main Expenses to Consider When Going to a Music Festival

Because everyone’s music festival experience looks different, costs can vary. That said, these are the common music festival expenses worth planning for.

Tickets

Tickets for a multi-day event can cost hundreds of dollars. For instance, in 2023, general admission to Bonnaroo in Tennessee was $380 and up for four days. And passes for Coachella, in California, began at $540 for three days.

Costs will vary depending on when you buy tickets (they get more expensive closer to the actual performance date), and whether you decide to shell out for the VIP options.

Travel

Don’t forget to budget for travel for out-of-town events. Driving may cost less than flying, and some festivals offer camping passes that can save you money on hotels.

These tips on saving up for a vacation can help you project your travel costs.

Recommended: Let SoFi help you map out your next trip.

Transportation

Even if you live nearby, you may need to pay for a rideshare or shuttle pass to get to the event. At the very least, remember to account for gas and parking.

Lodging

Music festivals attract large crowds and visitors from around the world. That means local hotel and home rental costs can become inflated. Book early to avoid overpaying once pickings are slim.

Meals

Because music festivals have their attendees held somewhat captive for the day or days of the event, the food and drinks for sale there can be quite expensive. Think about what you pay at a concert or in an airport to get a sense of what you might need to pay.

Clothing

Part of the fun for many festival-goers is planning what you’ll wear. Sure, some people are happy in their usual jeans and a T-shirt, but if you want to buy some new clothes or accessories before a music festival — be honest! — add those costs to your budget.

Recommended: What to Do If You Lose Your Wallet While Traveling

Tips for Saving Money on a Music Festival

The price tag for a music festival experience can be steep, but it can also be an amazing and memorable experience. Here are some ways to bring the costs down so you can be part of the fun.

Another way saving money can help you that’s worth mentioning: Do a great job cost-cutting, and maybe you can attend an additional festival.

Project Your Expenses

From tickets to transportation to food, plan out what the day or weekend will entail cost-wise and make a budget. This can be done in a journal, on a piece of paper, or in an app. You can also learn how to make a budget in Excel. If you can plan for this outing months in advance, you can slowly save up for it so your overall budget doesn’t take a major hit.

Once you know the total amount needed, you can divide that by the number of months until it’s time to pay for your expenses. The figure you see is how much you should save monthly to afford the festival.

Take a Pass on VIP Tickets

Music festivals often have different tiers of tickets and offer some sort of VIP experience for a much higher price than the cost of general admission. Skip these overpriced tickets, and spend the money on food or transportation instead.

Buy Tickets Early

Some music festivals offer cheaper tickets for people who book early, so don’t sleep on those good deals. If possible, save up before tickets go on sale to take advantage of early booking deals.

Book Travel Far in Advance

It can be possible to save on travel and lodging by booking those things sooner rather than later as well. (This is a wise move when trying to save money for a trip of any kind.) Once tickets are booked, try to find some travel deals. When flights and hotels get down to the last few available options, prices tend to soar.

BYO Food and Water

If allowed, pack food and lots of water to avoid overspending on food and drinks at the event. Bonus: You’ll spend less time in line and more time enjoying the music. Some music festivals won’t allow attendees to bring in their own food, but most allow water from outside sources. Not overspending on water is a great way to save money and stay hydrated while out in the sun all day.

Volunteer

Some music festivals offer volunteers the chance to trade work for access to the festival. It’s always worth seeing whether such opportunities are available — they may very well be worth the trade-off.

Walk Whenever You Can

If staying nearby, try walking to the event. Parking is often expensive at music festivals, and ride-share prices surge as well due to high demand.

Camp Out

Because it can be hard for the many attendees of music festivals to find affordable lodging nearby, some music festivals are held at campgrounds. Camping is a great way to save a lot of money versus hotel costs, and it can add to the fun of the weekend.

The Takeaway

Music festival costs can vary greatly, but the major ones are undeniably expensive. Planning ahead for these events is one of the best ways to manage costs. By booking early, camping instead of staying at a hotel, and considering volunteer opportunities on-site, you may be able to listen to your fill of music and still have money in the bank.

Need to save up for a music festival or other short-term goal? SoFi has you covered. Open a bank account online with direct deposit, and your SoFi Checking and Savings won’t charge you any account fees, will offer you automatic savings features, and pay you a competitive APY.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

Why are music festivals so expensive?

Attending music festivals can be expensive. The tickets for weekend-long events are pricey (the organizers have to cover the bands’ fees, the space, set-up, advertising, and more). Plus, if you travel to get there, you have transportation and lodging costs to contend with as well, plus food costs are part of the experience, too.

How much does it cost to hold the festival?

One reason that tickets for music festivals are so expensive is that it can cost a lot of money to host these events. It can cost millions upon millions of dollars to host a music festival — especially when top-tier musical talent is performing; their fees can be steep, in keeping with their stature.

Should I use my emergency fund for a festival?

Emergency funds are a type of savings fund specifically earmarked for unexpected expenses that interrupt daily life, such as a car repair, medical bill, or loss of one’s income. Since a music festival is a planned expense, you should not tap your emergency fund for this. Instead, it’s better to gradually save up for the cost of the festival in advance.

Should you layaway your festival tickets?

Whenever possible, it’s best not to make a purchase using a layaway arrangement, especially for an unnecessary expense like a music festival. While layaways don’t come with interest like credit cards, they do typically charge fees for spreading out the cost of the purchase. It’s best to create a budget for attending a music festival and to save up for festival tickets in advance.

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Photo credit: iStock/urbazon

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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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Buying a home is a major responsibility. If you’re unable to continue paying the mortgage on your house, what happens next? You’ve heard of foreclosure, which can result in losing your home and be financially damaging. But there’s another option called a deed in lieu of foreclosure, which may be less stressful than foreclosure, have less of a negative impact on a credit report, and may be faster to complete.

Here’s what you need to know about a deed in lieu of foreclosure, and when it might be an option to consider.

What Is a Deed in Lieu of Foreclosure?

Where a foreclosure may involve the court and a lengthy process, the alternative, a deed in lieu of foreclosure, is fairly simple.

If your lender agrees, you hand over the deed to them and the lender releases the lien on the property. You may be released from any balance you owed on the mortgage (however, there may be exceptions if you owe more than the home is worth).

And while a deed in lieu will appear on your credit report, it doesn’t have as severe an impact as a foreclosure.

The lender might even offer you financial assistance to spruce up the home to make it more sellable.

Recommended: Tips On Buying a Foreclosed Home

Working With the Lender

Your lender may only consider a deed in lieu of foreclosure in certain situations.

For instance, the lender might require that you first put your home on the market as a short sale or explore a loan modification.

If you’re completely unable to pay, start by contacting your lender and asking if a deed in lieu of foreclosure is an option. If it is, you’ll be given an application and asked for documents proving your inability to pay the mortgage. The documents will show your income and expenses, as well as bank account balances.

This process can take 30 days or more.

If your application is approved, you may want a real estate lawyer to review it to help you understand whether you are fully released from the financial obligations tied to the mortgage. For example, if the lender sells the home for less than the remaining mortgage balance, are you responsible for that deficiency?

Once you are comfortable with the title-transferring agreement, you and the lender will sign it, and it will be notarized and recorded in public records.

At this point, you will be notified how long you have to leave the home.

When to Consider a Deed in Lieu

One instance when a deed in lieu may be a good idea is if you owe more on your home than it is worth, as long as the agreement stipulates that you won’t owe the difference between the value of the home and what you owe.

If you are unable to continue paying your mortgage, it’s important to know that a foreclosure will leave a nasty mark on your credit report for seven years and make it difficult or impossible for you to take out another mortgage for years.

A deed in lieu will appear on your credit report, but it may not have the same lasting effect. Your credit score will drop, but long term, it may not affect your ability to take out a loan.

Benefits of a Deed in Lieu

There are advantages for both the borrower and the lender when it comes to a deed in lieu. For both, the big benefit is not having to go through the long and expensive process of foreclosure.

Because a deed in lieu is an agreement between you and the lender and not an order from a court, you may have a little more flexibility in terms of when you vacate the property.

With foreclosure, you are sometimes forced to vacate within days by local law enforcement. With a deed in lieu, you may even be able to work out an arrangement where you rent the property back for a period. The lender gets a little rent money and you have more time to figure out your next move.

In addition, this option is more private than a foreclosure.

From the lender’s perspective, the benefits of a deed in lieu include avoiding litigation and court time.

Drawbacks of a Deed in Lieu

There are disadvantages as well. A deed in lieu will appear on your credit report, even if it’s not as damaging as a foreclosure. Plus, it may still be difficult to get another mortgage in subsequent years.

It may still be difficult to get another mortgage in subsequent years.

If you owe more than your home is worth, you may still be on the hook for the difference between the appraised property value and what you owe.

You may be denied a deed in lieu if there are other liens or tax judgments on the property, or if the home is in bad condition and requires maintenance to sell.

Recommended: Home Affordability Calculator

Being Smart About Your Mortgage

The best thing to do, if at all possible, is to avoid getting into a situation where you can’t afford to pay your mortgage. If you’re having short-term financial issues, talk to your lender immediately to see if there is the possibility of delaying a few months’ payment or setting up a loan modification so you can work to pay off your outstanding debt.

Typically, the lender will want to help you; it’s easier to work out an agreement now than several months down the road, when you haven’t paid your mortgage at all and are facing foreclosure.

If you do end up in a situation where you are unable to continue paying your mortgage and you aren’t offered options, consider a deed in lieu of foreclosure as a faster and easier solution than a foreclosure.

If you’re just starting to consider buying a home, create a budget and calculate how much in mortgage payments you can afford each month. Don’t forget to calculate insurance and interest as well. Make sure that you won’t be stretched thin financially.

Recommended: Mortgage Calculator

The Takeaway

If you can’t pay your mortgage and you’re unable to get a short sale or loan modification approved, a deed in lieu of foreclosure may be the best option. Rather than go through the foreclosure process, a deed in lieu allows a borrower to sign a property over to the lender.

Your credit will take a significant hit, though not as bad as with a foreclosure.

If you’re looking for a home mortgage or a cash-out refinance, SoFi offers a range of competitive and flexible options, with a mortgage loan officer guiding you every step of the way.

SoFi makes the home mortgage process simple.

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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.

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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The short answer to the question, “Can I use a credit card in another country?” is yes, you can. The longer answer? Take precautions to ensure you don’t get hit with high foreign transaction fees. You also want to avoid having your card declined because the issuer didn’t know you were traveling and thinks it’s a fraudulent charge.

We’ll review those scenarios and more as we share smart strategies to use your credit card internationally without any hitches or way high fees. Let’s look into:

•  Whether you can use your credit card abroad

•  How to safely use a credit card overseas

•  The cost of using a credit card when traveling

•  The pros and cons on using plastic when in another country

•  Alternatives to using a credit card when abroad.

Here’s what you need to know.

Can You Use Your Credit Card Abroad?

Whether you’re planning a quick weekend trip to Cabo or going to college abroad, using your credit card can be a super convenient way to pay for day-to-day expenses. It’s also more secure than carrying cash. After all, if you lose paper money, it’s gone… but if you lose your credit card, you can just call the issuer and let them know.

That said, you probably don’t want to rely solely on a single credit card as your only source of funds. Credit cards can be lost or stolen. Additionally, not all vendors will necessarily accept credit cards, and some may not accept the specific type you have. Generally speaking, Visa and MasterCard are more widely accepted than Discover or American Express. Worth noting, though: Both of these latter credit card companies are working hard to increase their overseas presence.

You’ll also want to be aware that many credit cards come with foreign transaction fees that can stack up quickly, even if they appear small. For instance, a 3% foreign transaction fee means that if you put $500 on your credit card during your trip, you’ll spend an additional $15 just for the privilege of using the card. Using a credit card responsibly means being aware of these charges and deciding when and if they are worth it.

Finally, keep in mind that you’ll want to call your card issuer ahead of time to put a travel advisory on the card. That way, they won’t automatically flag a transaction thousands of miles away from home as fraudulent — which could lead to an inconvenient and frustrating declined transaction.

Is It Safe to Use Your Credit Card Abroad?

As long as you’re making purchases from reputable vendors, it is safe to use your credit card abroad. Determining who’s a reputable vendor and who isn’t can be challenging when traveling, and credit card scams can be rampant wherever you go. And it’s always possible, whether you’re traveling or at home, to have your credit card information stolen and used fraudulently. (For example, some criminals steal private information by installing credit-card skimmers on self-service gas pumps.)

How to protect yourself? The best way to ensure your credit card is still secure is to regularly check your transactions and ensure they’re all legitimate. If you see one you don’t recognize, immediately contact your credit card issuer so they can remove the charge and issue you a new card.

Of course, while traveling internationally, it may be difficult to have that new card delivered to you in time to be useful. This is why it’s so important to have some backup funding with you, including some local currency and an additional credit card.

What Are the Costs of Using a Credit Card Overseas?

Using a credit card overseas can get expensive awfully quickly. You may run into hidden costs depending on how you use the credit card. Here are a few to look out for:

•  Regular foreign transaction fees These charges are levied by credit card companies simply for your conducting a transaction with a foreign vendor.

•  Cash withdrawal fees In some cases, you may be able to use your credit card to access cash money from an ATM. Doing so may incur additional ATM fees on top of the foreign transaction fee. You may even be hit by a third fee from the ATM provider.

•  Dynamic currency conversion This is a service that some card issuers offer, which allows you to see what the cost will be in your home currency. Although this can make you feel more secure when it comes to knowing how much something really costs, you may pay for the privilege of seeing that information ahead of time. If you can, choose to have the price listed in the local currency. If you really need to know what that translates to in US dollars (or whatever your home currency is), look it up on your phone. There are plenty of sites and apps that will do the math for you.

•  Interest As with any credit card purchase, if you let a revolving balance rack up on your card, you could be subject to expensive interest charges. The best practice is to pay off your card in full, each and every month.

The good news: It’s totally possible to avoid foreign transaction fees by opting for a card that simply doesn’t charge them. You can also skip dynamic currency conversion and decide not to use the card to withdraw cash from an ATM. These moves will help whittle down your fees.

Recommended: What Is Revolving Debt?

Using Credit Cards to Withdraw Cash Overseas

As mentioned above, using credit cards to withdraw cash overseas is possible, but it might not be the smartest option. Along with any foreign transaction fees, you could also be charged cash withdrawal fees, ATM fees, and more.

That said, it is a good idea to have some local currency with you for your journey. So if you aren’t going to use your credit card to withdraw it, what are your options? While ordering foreign currency will almost certainly come at some cost, there are ways to lower the associated fees and save as much as possible.

For example, you may be able to order foreign currency from your regular domestic bank, which could come with fewer charges than withdrawing from an overseas ATM using a credit card. You may also see currency exchange services available at the airport, but these can be pricey in their own right.

Another good option: Withdraw money from a foreign ATM — but using the right kind of card. Some banks offer debit or prepaid cards with no foreign transaction fees, and may even throw in ATM fee reimbursement so you truly don’t have to worry about any additional fees. Of course, you’ll have to put in the effort ahead of time to ensure your bank offers a product like this or even to open a new bank account for this purpose.

Is It Better to Pay and Withdraw Money in Local Currency?

As mentioned above, one of the costliest parts of overseas travel is dynamic currency conversion — the service that lets you choose to pay in your own currency at a point-of-sale transaction. Dynamic currency conversion comes at an additional cost, and that’s not counting any other foreign transaction fees you might be hit with.

All of which is to say: If you can, paying in local currency is almost always the better option. (And, of course, with cash, you won’t face any additional charges other than what you already paid to acquire the currency.)

Pros and Cons of Using a Credit Card Overseas

As with any financial decision, using a credit card overseas has both pros and cons to consider. Here are a few to mull over.

Pros of using a credit card overseas:

•  More secure than cash, which can be easily lost

•  Easy to use and less bulky than carrying around bills and coins

•  Some cards offer special travel perks, such as the ability to earn miles as a reward, which can make travel easier and cheaper

Now, let’s look at the other side: the cons of using a credit card when you travel outside the U.S.

•  Can come with costly foreign transaction fees, some of which may be hidden

•  Not all overseas vendors accept credit cards (or all types of credit cards)

•  Could be declined if you don’t put a travel advisory on your card

For those who like an at-a-glance approach to seeing the benefits and downsides, take a look at this chart summarizing both sides of charging purchases with a credit card when on foreign soil:

Pros	Cons
More secure than cash	May trigger costly foreign transaction
Easy to use and less bulky to carry	Not all overseas vendors accept credit cards
May offer special travel perks, like earning travel miles	Could be declined if you don’t add a travel advisory to your account

Alternatives to Using Credit Cards

If you decide you don’t want to use credit cards overseas, you can always rely on cash. Ideally, though, you’ll also want to carry a debit card connected to your checking account that allows you to access more cash in case you overrun your original budget or need money in an emergency.

You may also be able to pay for certain goods and services using an online P2P payment system like PayPal or Venmo, or purchase gift cards for specific vendors ahead of time.

Although they’re slightly outdated, traveler’s checks are still available, though relatively rare compared to their heyday. They offer another relatively secure way to pay for goods and services overseas.

Tips for When You Travel With a Credit Card

For the best success when traveling with a credit card, follow these tips:

•  Choose a card that’s widely accepted worldwide.

•  Shop around for a card that doesn’t assess foreign transaction fees.

•  Call your card issuer ahead of time to tell them you’ll be traveling. This will help you avoid having a transaction declined while you’re abroad.

•  It’s a good idea to travel with some backup funds, whether that means cash, a foreign-transaction-fee-free debit card, or another credit card.

The Takeaway

Whether you’re studying abroad or just enjoying a foreign getaway, it’s possible to use a credit card in another country. Yet, if you’re not careful, you may run into costly foreign transaction fees that can stack up fast. It’s a good idea to do your homework ahead of time to avoid any billing-statement sticker shock or regret. With a little planning, you can enjoy your travels without the cloud of growing credit-card debt hanging over your head.

Looking for a bank that doesn’t charge foreign transaction fees? SoFi has you covered, wherever you are. Sign up with direct deposit, and you’ll get both Checking and Savings accounts with one easy application. Better yet, you can earn a competitive APY.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

How do I pay internationally with a credit card?

The same way you do at home: You might swipe, dip, or tap the card at the point of sale. Use a card that doesn’t charge foreign transaction fees to minimize charges as you travel.

Is it better to use a debit or credit card abroad?

Whichever option offers lower — ideally, zero — foreign transaction fees is the best bet. Keep in mind that withdrawing money from an ATM using a credit card can be a very expensive option for acquiring foreign currency.

Can I withdraw money from my credit card abroad?

You can, but that doesn’t necessarily mean you should. Many credit cards charge foreign transaction fees as well as cash withdrawal fees that can really add up. Look for a bank account that offers a no-foreign-transaction-fee debit card, or order foreign currency ahead of time from your local bank.

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Photo credit: iStock/martin-dm

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

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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Buying a home is probably one of the biggest financial commitments many people make in their life, and so it stands to reason that the process can be complex and lengthy. From figuring out how much you can afford to understanding how mortgages work to getting preapproved to determining where exactly to live…it’s a lot!

But by learning about the usual flow before you begin hitting the open houses, you can be well-prepared to dive into homeownership. Here, the eight steps to follow that will help make purchasing a home a smooth process.

8 Steps to Prepare for a Home Purchase

Here, the moves that will help you get ready to buy your dream property:

1. Determining Credit Score

A homebuyer’s credit score can impact their ability to secure a mortgage loan with a desirable rate. It can also affect how much they’ll be required to pay as a down payment when it’s time to close.

Credit score can be influenced by a variety of factors, from payment history to amount of debt (a.k.a. credit utilization ratio) to age of credit accounts, mix of credit accounts, and new credit inquiries.

Payment history is the main factor that affects a person’s credit score, accounting for 35% of an overall FICO® score. Missing a payment on any credit account — from unpaid student loans to credit cards, auto loans, and mortgages — can negatively impact a person’s credit score.

On the other hand, positive habits can include making on-time payments, limiting the number of new inquiries on their credit file, and working to pay down outstanding balances.

Is There a Credit Score “Sweet Spot?”

Many buyers wonder whether there’s a desired credit score range or “sweet spot” to obtain a mortgage. Typically, a credit score of 740 or higher will get the best deals (meaning lowest rates).

Credit scores can also affect the amount of the down payment itself. Some mortgage lenders require at least 20% of the house’s sale price be put down, but might offer more flexibility if the buyer’s credit score is in the higher range. A lower credit score, on the other hand, could call for a larger down payment.

Whether homebuyers have debt or not, checking credit reports is still a recommended first step to applying for a mortgage. Understanding the information on credit reports can be invaluable in knowing where you stand when qualifying for a mortgage loan rate.

2. Deciding How Much to Spend

Deciding how much to pay for a new home can be based on a variety of factors including expected and unexpected housing costs, upfront payments and closing costs, and how it all fits into the buyer’s overall budget.

Calculating Housing Costs

There are several housing costs for home purchasers to consider that might affect how much they can afford to offer for the house itself. The costs of ongoing fees like property taxes, homeowner’s insurance, and interest — if the loan isn’t a fixed-rate mortgage — can all lead to an increase in the monthly mortgage payment.

Closing costs are fees associated with the final real estate transaction that go above and beyond the price of the property itself. These costs might include an origination fee paid to the bank or lender for their services in creating the loan, real estate attorney fees, escrow fees, title insurance fees, home inspection and appraisal fees and recording fees, to name a few.

Typically, closing costs are between 3% and 6% of the loan’s amount. To get an idea on how this can impact your budget, use this home affordability calculator to estimate total purchase cost.

In addition to closing costs, expenses that potential homebuyers might want to consider are repairs and updates they might want to make to a home, new furniture, moving costs, or even commuting costs.

Finally, unforeseen costs of a major life event like a layoff or the birth of a new child might not be the first expenses that come to mind. However, some buyers could find themselves making a potential home-buying mistake by not getting their finances in order to prepare for the unexpected.

Making a list of these estimated expenses can help homebuyers calculate how much they can feasibly afford. It can also help them create a budget that could help them avoid being overextended on housing costs, especially if they might be paying other debt or saving for other financial goals.

3. Saving for a Down Payment

Saving money for a house is one of the biggest financial goals many people will have in their lifetime. And how much they’re able to offer as a down payment can significantly impact the amount of their monthly mortgage payment.

A larger down payment can also be convincing to sellers who see it as evidence of solid finances, sometimes beating out other offers in a competitive housing market.

The average down payment on a house varies depending on the type of buyer, loan, location, and housing prices. Most recently, the average down payment was 13%.

For first-time homebuyers, 13% or 20% of the price of the home can seem like a daunting figure. Many buyers find that cutting spending on luxury or non-essential items and entertainment can help them save up the funds.

Other tactics could include getting gifts and loans from family members, applying for low down-payment mortgages, withdrawing funds from retirement, or receiving assistance from state and local agencies.

For buyers who were also sellers, proceeds from another property could also fund the down payment.

4. Shopping for a Mortgage Lender

There are many mortgage lenders competing for the business of homebuyers who finance their home purchases. These lenders offer a variety of mortgages to apply for, with a few of the most common being conventional/fixed rate, adjustable rate, FHA loans, and VA loans.

Buyers might not realize they can — and should — shop around for a lender before selecting one to work with. Different lenders offer different variations in interest rates, terms, and closing costs, so it can be helpful to conduct adequate research before landing on a particular lender.

Mortgage lenders must provide a loan estimate within three business days of receiving a mortgage application. The form is standard — all lenders are required to use the same form, which makes it easier for the applicant to compare information from different lenders and make sure they are getting the best loan for their financial situation.

5. Getting Preapproved for a Loan

While it might seem like a bit of a nuance, getting prequalified for a loan versus preapproved for a loan are two different things.

When a buyer is prequalified for a loan, their mortgage lender estimates the loan amount they are qualified for, based on financial information they provided.

When a buyer is preapproved, the lender conducts a thorough investigation into their finances that includes income verification, assets, and credit rating. Preapproval is not a guarantee but tells a buyer that a lender is likely to approve them for a certain amount, as long as they clear the underwriting process.

Having a preapproval letter in hand can help some buyers get ahead by appealing to the seller as a serious intention of purchase and a lender’s guarantee to back that purchase up.

6. Finding the Right Real Estate Agent

While the internet and popular real estate search websites have made it easier for homebuyers to hunt for a house online, most buyers still solicit the help of a real estate agent to find the right home and negotiate the price and purchase.

Also, many realtors are experts in their particular housing market, so for buyers who are searching in a specific location, a real estate agent may be able to offer valuable insights that might not be revealed online.

7. Exploring Different Neighborhoods

By researching neighborhoods where they might want to purchase a property (both in-person and online), homebuyers can get a better sense of what living in their future community could look like.

Many real estate websites provide comparable listings to help determine a reasonable offer amount in a given neighborhood.

They may also highlight nearby school ratings, price and tax history, commute times, and neighborhood stats like home value fluctuations or predictions, and walkability ratings.

All of this information can help paint a picture of life in the area a homebuyer chooses to settle in. Doing a deep dive into a desired neighborhood can help inform a more realistic decision on where to buy a house.

8. Kicking off the House Hunt

Once the neighborhoods are whittled down, the loan is secured, the real estate agent has been signed, and the savings are set aside, the official house hunt can begin.

With the help of a trusted real estate agent and a housing market with adequate inventory, most homebuyers can begin to book showings, attend open houses, and formally put down an offer on a house they like.

In particularly “hot” markets, houses could receive several offers, so homebuyers might want to be prepared to go through the bidding process with a few properties before they get to that glorious final sale.

Are You Ready to Buy a Home Quiz

The Takeaway

A home may well be the biggest purchase you make and the biggest asset you ever own, so it makes sense to spend some time on the home-buying process. From checking out different mortgage options to getting preapproved for a loan to attending open houses, the process is a valuable one that brings you closer to your dream home.

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.

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

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 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.

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 .

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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If you’re like many Americans, you dream of having a beach house, a desert escape, or a mountain hideaway. Perhaps you’re tired of staying at hotels and want the comforts of home at your fingertips.

You’re ready to make this dream a reality. Before you do, consider these steps.

How to Buy a Vacation Home

1. Choose a Home That Fits Your Needs

As you begin your search for a vacation home, carefully consider your goals and needs. Start with the location. Do you prefer an urban or rural area? Lots of property or a townhouse with just a small yard to care for?

Consider what amenities are important to be close to. Where is the nearest grocery store? Is a hospital accessible?

Think about your goals for the property. Is this a place that only you and your family will use? Do you plan to rent it out from time to time? Or maybe you plan to be there only a couple of weeks out of the year, using it as a rental property the rest of the time.

The answers to these questions will have a cascade effect on the other factors you’ll need to consider, from financing to taxes and other costs.

2. Figure Out Financing

Next, consider what kind of mortgage works best for you, if you’re not paying cash. You may want to engage a mortgage broker or direct lender to help with this process.

If you have a primary residence, you may be in the market for a second mortgage. The key question: Are you purchasing a second home or an investment property?

Second home. A second home is one that you, family members, or friends plan to live in for a certain period of time every year and not rent it out. Second-home loans have the same rates as primary residences. The down payment could be as low as 10%, though 20% is typical.

Investment property. If you plan on using your vacation home as investment property to generate rental income, expect a down payment of 25% or 30% and a higher rate for a non-owner-occupied loan. If you need the rental income in order to qualify for the additional home purchase, you may need to identify a renter and have a lease. A lender still may only consider a percentage of the rental income toward your qualifying income.

Some people may choose to tap equity in their primary home to buy the vacation home. One popular option is a cash-out refinance, in which you borrow more than you owe on your primary home and take the extra money as cash.

3. Consider Costs

While you determine the goals you’re hoping to accomplish by acquiring a vacation home, try to avoid home buying mistakes.

A mortgage lender can delineate the down payment, monthly mortgage payment, and closing costs. But remember that there are other costs to consider, including maintenance of the home and landscape, utilities, furnishings, homeowners insurance, property taxes, and travel to and from the home.

If you’re planning on renting out the house, determine frequency and expected rental income. Be prepared to take a financial hit if you are unable to rent the property out as much as you planned. For a full picture of cost, check out our home affordability calculator.

4. Learn About Taxes

Taxes will be an ongoing consideration if you buy a vacation home.

A second home qualifies for mortgage interest deduction and property tax deductions as long as the home is for personal use. And if you rent out the home for 14 or fewer days during the year, you can pocket the rental income tax-free.

If you rent out the home for more than 14 days, you must report all rental income to the IRS. You also can deduct rental expenses.

The mortgage interest deduction is available on total mortgages up to $750,000. If you already have a mortgage equal to that amount on your primary residence, your second home will not qualify.

The bottom line: Tax rules vary greatly, depending on personal or rental use.

5. Research Alternatives

There are a number of options to owning a vacation home. For example, you may consider buying a home with friends or family members, or purchasing a timeshare. But before you pursue an option, carefully weigh the pros and cons.

If you’re considering purchasing a home with other people, beware the potential challenges. Owning a home together requires a lot of compromise and cooperation.

You also must decide what will happen if one party is having trouble paying the mortgage. Are the others willing to cover it?

In addition to second home and investment properties, you may be tempted by timeshares, vacation clubs, fractional ownership, and condo hotels. Be aware that it may be hard to resell these, and the property may not retain its value over time.

6. Make It Easy to Rent

If you do decide to use your vacation home as a rental property, you have to take other people’s concerns and desires into account. Be sure to consider the factors that will make it easy to rent. A home near tourist hot spots, amenities, and a beach or lake may be more desirable.

Consider, too, factors that will make the house less desirable. Is there planned construction nearby that will make it unpleasant to stay at the house?

How far the house is from your main residence takes on increased significance when you’re a rental property owner. Will you have to engage a property manager to maintain the house and address renters’ concerns? Doing so will increase your costs.

7. Pay Attention to Local Rules

Local laws or homeowners association rules may limit who you can rent to and when.

For example, a homeowners association might limit how often you can rent your vacation home, whether renters can have pets, where they can park, and how much noise they can make.

Be aware that these rules can be put in place after you’ve purchased your vacation home.

8. Tap Local Expertise

It’s a good idea to enlist the help of local real estate agents and lenders.

Vacation homes tend to exist in specialized markets, and these experts can help you navigate local taxes, transaction fees, zoning, and rental ordinances. They can also help you determine the best time to buy a house in the area you’re interested in.

Because they are familiar with the local market and comparable properties, they are also likely to be more comfortable with appraisals, especially in low-population areas where there may be fewer houses to compare.

The Takeaway

Buying a vacation home can be a ticket to relaxation or a rough trip. It’s imperative to know the rules governing a second home vs. a rental property, how to finance a vacation house, tax considerations, and more.

Ready to buy? SoFi offers mortgage loans for second homes and investment properties. SoFi also offers a cash-out refinance, all at competitive rates.

Learn how SoFi can help with your vacation home-buying needs.

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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.

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

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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