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Your personal finances can be an important but challenging aspect of your life to manage. Even if you are brilliant at math, computing things like the payoff amount on student loans or the optimal goal for retirement savings can be complicated.

That’s where financial calculators can swoop in and help you. These tools can make it simple to see how much you are spending in, say, credit card interest or what a mortgage payment might look like on your dream house.

Here’s a resource with a variety of financial calculators. Read on to learn what kind of assistance is out there to help you take control of your money and your goals.

1. Student Loan Calculator

There are plenty of student loan calculators out there that can help you estimate your monthly payment and total interest cost.

In addition, you are likely to find student loan refinancing calculators to get a basic idea of how refinancing might affect your bottom line.

Typically, you enter your current loan information, then adjust the term “slider” to see how your monthly payment and total savings amount could be impacted by refinancing.

You could see valuable information like how much you might be able to save every month by refinancing or how much you could potentially save over the lifetime of a loan if you were to refinance. (Calculated payments and savings are only estimates, and don’t factor in your current credit picture or financial situation.)

Just keep in mind that refinancing isn’t necessarily the right choice for everyone. If you have federal student loans and refinance, you will forfeit federal protections and benefits. Also, if you refinance for an extended term, you may pay more interest over the life of the loan.


💡 Quick Tip: A low-interest personal loan from SoFi can help you consolidate your debts, lower your monthly payments, and get you out of debt sooner.

2. Retirement Calculator

It’s almost impossible for one online retirement calculator to take into account all the variables that retirement planning requires. But a calculator could still be useful to give you a general idea of how much money you may want to be saving and how big your retirement nest egg could grow.

It might also give you some insight into how much you’re contributing now, and if you might want to think about adjusting your IRA (individual retirement account), 401(k), or other retirement investment.

One online tool that may be helpful is AARP’s Retirement Calculator . It asks for quite a bit of information, including information about your age, income, current savings and lifestyle expectations in retirement (i.e., will you need more, less, or the same amount of money as you now spend).

The calculator then gives an estimate of how much wealth you’re likely to accumulate and changes you could make — like working longer or saving more — that might help improve your outcomes. Understanding when to retire and what your expenses will be like at that life stage can be an important part of your future planning.

3. Budgeting Calculator

Making a budget — and sticking to it — is one important step on the road to financial security. By making a budget and sticking to it, you might be able to save some extra cash and even be able to gain some new insight and understanding about how you’re currently spending your money.

Setting up a budget might have a snowball effect, potentially empowering you to save even more money once you have a holistic view of current spending. By tracking your finances with a budgeting tool, you can get a better sense of how your earnings, spending, and savings are tracking. It can also help you course-correct if, say, you get hit with a big unexpected bill or move to an area with a different cost of living.

4. & 5. Credit Card Debt Payoff Calculator

Various tools can be helpful if you’re focused on paying down some credit card debt.

•   You might want to use this debt snowball calculator to figure out how long it could take you to completely pay down your balance. In this method, you eliminate your smallest debt first, which can build your motivation. You may want to see how increasing your monthly payments could affect your debt and help you save on interest, which might help keep you motivated in your payoff goals.

You could also use a calculator to see how much faster you could pay off your debt with the debt avalanche method. With this technique, you go after your highest interest-rate debt first.

•   Additionally, to take a look at debt in terms of your credit card interest rate, you might spend some time using a credit card interest calculator. Since credit card debt can be one of the most challenging debts to pay off, you might want to understand how much you are paying overall.

This kind of calculator shows roughly how much interest you could end up paying on your credit card debt. It can give a broad estimate of when that debt could be paid off in full if you continue to make the same payments. Equipped with that information, you might decide to opt for a different way to pay down your debt, such as looking for a lower-interest personal loan.

6. Student Loan Payoff Calculator

If you’re budgeting for your student loans, you could try working with a student loan payoff calculator. Simply add your basic information, and it calculates when your estimated payoff date could be. Plus, you can often click through and discover additional information and tips you could use to potentially shorten that payoff period.

Some of these ideas might include things like seeing if you can find a lower interest rate or making additional payments. Plugging these two data points into the calculator might give you a basic estimate of how much sooner you could pay off your loans.

7. Housing Costs Calculator

Is your attention focused on buying a home? Are you all about mood boards for the primary bedroom and vegetable garden you’ll plant? Then you’re in the right place.

A home affordability calculator can help you look at how much house you can afford. It will help you factor in such considerations mortgage amount, interest rate, property taxes, and so forth. It can be a great way to get a handle on just how much homeownership might cost you.

Additionally, a mortgage calculator can help you get a sense of how much you can save on your monthly payment by changing your down payment. This intel can help you decide whether to start bidding soon or wait until you have a bigger chunk of cash to put down.

These tools can help you decide whether to rent or buy in the near future, as well as (when buying) how to determine the right balance of down payment and financing to suit your budget.

Get Started on Your Goals With These Tools

Your goals are probably pretty unique to you and where you’re at career-wise, with money, and maybe even with outstanding loans. So there’s probably not one end-all, be-all financial calculator to help you achieve all of your financial goals. But there are an array of tools that can help you track your money and determine good options as you move forward.

As you evaluate where your finances stand, you may want to consider ways to pay down debt, such as using a personal loan to eliminate high-interest debt and lower your monthly outlay of funds.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

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.

Most of us have debt, whether that means a student loan, a car loan, a credit card balance, or a combination of these. Although there are plenty of good reasons to take on debt, such as affording your education, buying wheels to get to work, and charging clothes to wear on the job, face it: Debt has a way of piling up, and that interest can keep ticking northward.

To deal with debt, it’s wise to be proactive about paying it off. Luckily, there are plenty of great resources and techniques to help you create your debt payoff plan — but only you will know what’s best for your unique financial situation.

While none of this is meant to replace financial advice from a professional, here are a few tips to consider. They can offer solid advice on techniques to help crush your debt.

Customize Your Debt Payoff Plan Approach

The words “snowball” and “avalanche” might sound like an increasingly alarming day on the mountain, but they also apply to three popular debt payoff methods, one of which may be just right for you.

•   The snowball method entails paying off your debts in order from smallest to largest, regardless of their respective interest rates. By getting that smallest debt paid off quickly, you may well feel a surge of motivation to keep on going with your debt repayment plan.

But people using the debt snowball method, beware: Ignoring interest rates usually means paying more money in the long run.

•   If savings is your main priority, you’ll probably want to look at the avalanche method, which has you putting more money toward your higher-interest rate debt first. Not only does this avalanche method save you money, it can also help you get debt-free sooner.

💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.

Try a Debt Detox

People often compare getting fiscally fit with getting physically fit, and with good reason. Whether you’re trying to achieve financial goals or health and fitness goals, you’re more likely to succeed if you have a good plan in place, a fair amount of willpower, and a desire to change your habits.

You might try what’s known as a spending fast, and only buy necessities for a month or two (or longer) and see how much you can save. The funds you accrue can go towards your debt. Seeing that debt shrink can inspire you to keep going.

Or you might try a technique such as only using your debit card or cash, to help you avoid more high-interest credit card debt.

Amp up the Minimum

Another approach for a debt payoff plan is to pay more than the minimum payment each month. Whether you have student loans or credit card debt, paying more than the minimum can help accelerate your debt payoff journey.

It can be tempting to just stick with paying the minimum balance due rather than adding to it. But paying as much as you can each month (without stretching yourself too thin) can add up. In order to make this happen, however, you may have to make a few sacrifices.

Making coffee at home, cooking for yourself, or exercising outside instead of paying for a pricey gym membership are all small changes that can help save extra money each month to put toward your debt.

By increasing how much is allocated toward monthly payments, you could pay off your debt faster and therefore save on interest. And who wouldn’t want to be out of debt sooner?

Consider a Balance Transfer

Balance transfer credit cards sometimes offer low or 0% introductory annual percentage rate, or APR, periods for high-interest credit card debt transfers. Typically, you may enjoy 18 months of 0% interest, which can help keep you from accumulating even more debt via interest.

Reasons people apply for a balance transfer credit card include:

•   Having high-interest credit card debt

•   A desire to simplify payments on one card, rather than managing payments on multiple credit cards

•   Wanting to take advantage of a good promotional deal (for example, up to months of 0% interest).

But it is important to remember that this debt payoff strategy is optimal if you know you can pay off your entire debt by the time the low- or no-interest period ends. Otherwise, you will go back to accruing interest on your debt after the introductory period ends.

A credit card interest calculator can help you discover how much you are paying in interest alone on your credit card debt. This can help you evaluate how much you might save.

Recalibrate Your Rate

High-interest rate debt is not only expensive, it can also take forever to pay off. But just because your loan or credit card came with a rate that’s higher than you’d like doesn’t necessarily mean you’re stuck with it forever.

•   For one thing, if you have student loans, student loan refinancing is one option. When you refinance your student loans with a private lender, you are taking out a completely new loan with a new interest rate.

You can refinance both private and federal student loans with a private lender, but understand that if you refinance federal loans you will lose access to all federal benefits like deferment, income-driven repayment plans, and public service loan forgiveness programs. In addition, if you opt for a loan with an extended term, you may pay more interest over the life of the loan, so think carefully about whether it’s the right move for you.

If you have an improved financial profile from when you took out your original loan, however, you may be able to qualify for a lower interest rate. By obtaining a lower interest rate, you could save money over the life of the loan. Or you may be able to select a shorter term with higher payments but a quicker payoff — and save money on interest payments.

•   If you have high-interest credit cards, you can look into consolidating them with a low-interest rate unsecured personal loan. One plus of taking out a personal loan to consolidate your debt is that personal loans are typically installment loans, which means they have a fixed repayment period. That means you’ll know exactly when your loan will be paid off.

In contrast, credit card debt is “revolving debt,” which means you can continuously add to the debt even while paying it off. That’s not an option with a personal loan. By consolidating your credit card debt with a personal loan, you could also potentially qualify for a lower interest rate, which can make your debt easier to manage.

On the flip side, a personal loan may not be right for everyone. Some personal loans come with origination fees, late fees, or prepayment penalties, which could potentially drive up the cost of your loan. When shopping around for debt payoff solutions, you may want to consider any hidden fees that could come with a personal loan.

No matter what debt payoff plan you choose, the key is to take control of your debt rather than letting it control you. Ultimately, executing a successful debt payoff strategy might help you focus on the positive outcomes that happened as a result of your debt rather than the frustration of having to pay it back.

The Takeaway

Debt, especially when it’s the high-interest variety, can be hard to pay off. By trying such tactics as budgeting, reducing spending, and considering balance transfer credit cards and loan financing, you can likely get on a path to lowering and then eliminating your debt.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

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.

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Student loans are mounting for college and graduate students, with engineering majors being no exception. In fact, for the 2020-21 school year, 54% of bachelor’s degree holders left school with student loans—with a debt level of $29,100, on average. Nationally, Americans have $1.6 trillion in student debt combined. Given that engineering is the fourth most common major, many of those shouldering student debt are engineering students.

Since careers in engineering can come with salaries well into the six-figures, some students might consider taking on student loans in order to follow all the way through to a master’s degree in that area. But getting there isn’t cheap. The typical engineering grad school student can expect to spend upwards of $50,000 or more for their masters degree. And that doesn’t include possible balances carried over from their undergrad years. The average student debt for engineering undergrad students varies, but when you factor in graduate school and undergraduate debt, that could mean a substantial amount of student debt.

If you’re studying to be an engineer, you may assume there aren’t many loan assistance programs out there for you, and it’s true that there are no federal forgiveness programs specifically for engineers. But you do have options to save money on your loans, whether through public service loan forgiveness, income-driven repayment plans, state programs aimed at professionals in your field, or student loan refinancing. Here, you can learn about some of the opportunities that exist.

Federal Loan Repayment Options

It’s true that many engineering majors go on to lucrative careers. But that doesn’t mean you necessarily earn a high salary right away. And you may choose to apply your skills at a government agency or nonprofit, or work in a different field altogether, earning less than expected.

The federal government offers four different repayment plans that cap your monthly payments at a percentage of your income in order to make your student loans affordable. Once you make the minimum number of payments required, the balance on your loans is eligible to be forgiven. Which plans you’re eligible for will depend on the types of federal student loans you have and when you borrowed them:

•  The Saving on a Valuable Education (SAVE) Plan was created to replace REPAYE. Payments on SAVE are capped at 10% of your discretionary income (in July 2024, that threshold will be 5% for undergraduate loans). Certain borrowers will have their balances forgiven after 10 years, while others will need to make payments for up to 20-25 years before receiving forgiveness. Only Direct Loans are eligible, excluding Direct PLUS loans to parents.

•  The Pay As You Earn (PAYE) plan also limits payments to 10% of your discretionary income. The balance can be forgiven after 20 years of payments. Again, only Direct Loans are eligible, except Direct PLUS loans to parents.

•  Under the Income-Based Repayment Plan (IBR Plan), your payments are limited to 10% of your discretionary income if you borrowed on or after July 1, 2014, or 15% if you borrowed before that date. In the former case, the debt can be forgiven after 20 years; in the latter, it can be wiped away after 25 years. Direct Loans are eligible (except Direct PLUS loans to parents), as well as most loans under the earlier Federal Family Education Loan Program.

•  The Income-Contingent Repayment Plan (ICR Plan) limits payments to 20% of discretionary income in most cases, and the rest can be forgiven after 25 years. Only Direct Loans are eligible, but this is the only program that also allows Direct PLUS loans to parents to qualify, as long as they are consolidated into a Direct Consolidation Loan.

If you aren’t sure which plan is best for you, ask your loan servicer for guidance. You can apply to enroll in an IDR program by filling out an Income-Driven Repayment Plan Request online or by asking your loan servicer for a paper form.

Taking advantage of programs that base your payment on your income can potentially make your monthly payment affordable in the long term if you don’t expect your salary to go up much.

Note: the amount forgiven under an income-driven repayment plan may be considered taxable income.


💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.

Public Service Loan Forgiveness

There’s another way to take advantage of student loan forgiveness for engineers. If you work full-time for a government agency, non-profit, or certain other employers that serve the public interest, your federal loans might qualify for Public Service Loan Forgiveness. Those organizations include the military, as well as public safety, emergency management, and public health groups.

Under this program, once you make 120 qualifying payments (the equivalent of 10 years), the balance on your loans can be eligible for forgiveness. Make sure to submit an Employment Certification form annually or when you switch jobs. Note that only Direct Loans qualify for the program.

If you have older loans, you may be able to make them eligible by consolidating them through a Direct Consolidation Loan. You need to be enrolled in an income-driven repayment plan if you want to apply for Public Service Loan Forgiveness.

State Loan Assistance Programs for Engineers

Engineering is an in-demand profession. The U.S. Bureau of Labor Statistics estimates that 140,000 new engineering jobs will be created between 2016 and 2026. The fastest growing sub-specialties are civil, mechanical, and industrial engineering.

With this in mind, a couple of states have created programs that provide student loan assistance to people in the Science, Technology, Engineering, and Math (STEM) fields as incentive for professionals to reside there and pursue jobs in these areas.

For example, the Rhode Island Wavemaker Fellowship provides funds to college graduates who are pursuing a STEM-related career or starting a business in Rhode Island. Qualifying individuals receive a refundable tax credit certificate worth the value of their annual student loan burden for up to four years. Fellows are also invited to participate in various personal and professional programs and events.

The New Jersey STEM Loan Redemption Program incentivizes professionals to build careers in certain high-growth STEM fields in New Jersey. Program participants receive up to $2,000 to cover eligible student loan expenses each year, for up to four years, up to a maximum of $8,000. Half of each payment is funded by the New Jersey Higher Education Student Assistance Authority (HESAA), and the balance is matched by an equal contribution from the participant’s current employer.

When looking for student loan relief, steer clear of any scams promising fast, easy solutions at a hefty cost. Many of these companies end up filling out paperwork you could’ve completed yourself for free, or providing no services. Focus on official programs administered by federal or state governments, or by legitimate foundations or employers.


💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.

Look to Your Employer

With employers looking to retain talent, some companies offer loan assistance for engineers. For example, PriceWaterhouseCoopers, the professional services firm, pays $1,200 in student loans for associates and senior associates, for up to six years. Its employees include software engineers, data engineers, cloud security engineers, DevOps engineers, and more.

Abbott, a health technology company, assists with student loans in a slightly more indirect way. For full-time and part-time workers who qualify for the company’s 401(k) plan, and who are paying at least 2% of their salary toward student loans, the company will deposit its 5% match in the 401(k) plan even if the employee doesn’t contribute anything.

This way, it helps employees avoid the tradeoff between paying off loans and saving for retirement. Abbott hires for roles like engineering director, senior manufacturing process engineer, mechanical engineer, and more.

These are just a few examples of companies that offer loan repayment help to engineers. It’s worth keeping a lookout for this benefit throughout your job search.

The Benefits of Student Loan Refinancing

The above options may not be enough: Perhaps you don’t live in the right place or work for the right employer, or maybe you earn too much for an income based plan to make sense. If you don’t qualify for loan assistance, or even if you do have some benefits but not all of your loans are covered, refinancing your student loans can be a good way to potentially save money.

You can refinance federal loans or private loans with a variety of lenders and other financial institutions, often nabbing a lower interest rate or reduced monthly payment in the process. (You may pay more interest over the life of the loan if you refinance with an extended term.) And you may get a better rate if you have a good credit score, earn a decent income, and have a solid employment history. It takes just a couple of minutes to see if you pre-qualify online.

Engineer a Better Future

Student loans represent an investment in a solid career path, but they can be a burden even for people in thriving professions. If you’re an engineer, check out what options are available to reduce your student loans, whether that’s loan forgiveness, assistance from your state or employer, or student loan refinancing.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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.

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If you own a home, you probably always have a list of improvements you’re considering. Maybe you desperately want to replace those dated kitchen appliances that scream year 2000, or you want to focus on ways to lower your energy bills, whether that means some strategic air sealing or adding solar panels.

Chances are, you also want any upgrades you pay for to increase the value of your home. You want to know that if and when it comes time to sell your place, you’ll recoup a good percentage of what you invested.

So, whether you have the cash saved up for home investment or you are looking to borrow for your next home project, consider these wise investments.

1. Improve Your Attic Insulation

We get it: You’re not going to invite friends over to see your new attic insulation.But it’s one of the best ways to increase your home’s energy efficiency.

You’ll not only profit when it’s time to sell, but you’ll also see immediate savings from the ongoing energy efficiency this upgrade provides. A properly insulated attic, combined with sealing air leaks throughout your home, cuts an average of 15% off your heating and cooling costs, allowing you to pocket the savings month after month. And who doesn’t want a lower energy bill?

Cost: $600 to $1,200 for blown-in insulation for a 1,000-square-foot attic. You may also need to rent the machine that blows in the fiberglass if you’re a DIY type. If you hire a pro, labor will run about $40 to $70 an hour.


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

2. Treat Yourself to New Windows

New windows can do double duty. Not only do they update a room’s tired appearance, they can also have energy-efficiency benefits. Depending on how many windows you replace, this can be a very big-ticket item. The average cost for a vinyl window replacement is $850, and a whole-home job can ring in at $20,091, according to Remodeling magazine. (Wood windows are pricier still.)

But here’s some good news: Replacing those windows adds value to your home. Typically, to the tune of 69% of the cost of the window-replacement project.

Cost: Anywhere from $850 per vinyl window to $20,000+ for the whole house. Again, if you go for wood vs. vinyl windows or need custom size ones (or several French doors), the price can ratchet up significantly. In that case, you might want to look at home improvement loan options.

3. Build a Deck

You and likely anyone who might buy your home in the future will love what a deck can do, lifestyle-wise. Weather permitting, you can have your AM coffee there, type away on your laptop during the day, and host friends, read, or just listen to the birdsong during off-hours. Here’s another nice thing about adding a deck: Your ROI is typically around 68% of the money you pay.

Cost: A new wood deck will cost on average $16,766. A composite one can cost more; on average, these are $22,426.

Read Next: How to Create a Renovation Plan to Match Your Budget

4. Refresh Your Bathroom

Who doesn’t love a beautiful new bathroom, whether your style is sleek and all white or if you prefer a warmer country cottage vibe? A bath remodel will cost, on average, between $6,627 and $17,494, according to Angi, the home renovation site. While an updated bath can definitely add to your home’s value, keep in mind that the sky’s the limit with the price tag. If you move the fixtures around and add one of those egg-shaped soaking tubs or a spa shower that has half-a-dozen mist settings, you may go well beyond the average range of costs.

Also, keep in mind that if you do something really singular (say, you pick tile in a super-bright shade), it may be harder to get your money out if and when you sell your property.

Cost: The average cost is $11,944, with cabinets and shelving accounting for 25% of the total, the shower and tub eating up 22% of costs, and your contractor’s fees usually being about 13% of your total expense. Of course, you can do a small bathroom remodel, perhaps repainting, adding some new artwork and a fresh shower curtain.


💡 Quick Tip: Home improvement loans typically offer lower interest rates than credit cards. Consider a loan to fund your next renovation.

5. Cook up a Cooler Kitchen

If you’re stuck with outdated appliances or hideous cabinets, a kitchen remodel is likely high on your list of improvements. It’s a great way to refresh your kitchen’s style and function.

But increasing home value with a new kitchen can fry your bank account: A remodel typically runs $14,612 and $41,392 according to Angi, but can cost much more if you move appliances’ position, opt for marble countertops, or fall in love with custom cabinetry. On average, you’ll recoup about 60% in ROI.

To update for less and wow your kitchen in a weekend, make some wallet-friendly upgrades: fresh paint, a new faucet, updated lighting (pendant lights are a good choice), and new cabinet pulls.

Cost: While you could just swap out cabinet pulls, which start at about $2 each, and repaint (plan on around $200), a larger kitchen remodel averages $26,849. Again, however, it’s worth noting you could spend multiples of that, depending on how large a project, how luxe the details, and where you live (cost of living can impact the price of goods and services in your area).

Recommended: Secured vs. Unsecured Personal Loans

The Easy Way to Finance HGTV-Worthy Upgrades

Even budget-friendly home improvements can set you back quite a bit. If you haven’t set aside the budget to bring more value to your home, you don’t necessarily have to dip into your retirement account or pay less on your student loans each month. You might want to consider a personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

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.

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It’s hard to believe that Americans ever got by without plastic, but the credit card is less than 75 years old. There’s a good chance your grandparents could tell you about life in the days of nothing but cash or checks.

Today, about 84% of Americans have at least one credit card, which allows them to quickly and conveniently tap or swipe their way towards purchases. Unfortunately, those rectangles of plastic may make spending a little too easy: The average household has almost $8,000 in this kind of debt.

Here, you’ll learn just how the credit card came into being, as well as smart ways to manage your credit card usage more effectively.

The Origins of Credit

Here’s how the story of the first credit card goes: Businessman Frank McNamara was having dinner at a New York City restaurant in 1949 when he realized he forgot his wallet. Rather than dine and dash, he came clean and asked if he could sign for the meal and pay later.

Though some say this legendary dinner never happened, everyone agrees McNamara founded Diners Club, the world’s first multipurpose charge card, in 1950. McNamara sold Diners Club memberships to friends and acquaintances willing to pay $3 for the “sign now, pay later” privilege at participating restaurants and hotels.

Until that point, only individual stores extended credit to customers. If you couldn’t pay for, say, a dress or a new suit at the general store — and the owner knew you were good for the money — you could run up a tab and pay cash later. But the Diners Club card provided the benefit of credit at multiple locations instead of just one establishment.


💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.

Next Came the “Big Four” of Credit Cards

Of course, future entrepreneurs and banks wouldn’t let Diners Club monopolize the charge and credit market for long. Eventually, other cards came on the scene—most notably Visa, Mastercard, American Express, and Discover.

•   Visa: In 1958, Bank of America issued the BankAmericard — the first true credit card — to customers in California. While the original Diners Club card required payment in full at the end of each month, BankAmericard users could pay off purchases over time. In 1976, BankAmericard became Visa.

•   Mastercard: BankAmericard got a run for its money when a group of banks joined forces in 1966 to create the Interbank Card Association (ICA). In 1969, ICA created Master Charge: The Interbank Card, which became Mastercard in 1979.

•   American Express: The American Express Company has been around since 1850, but it didn’t issue its first charge card until 1958. Like Diners Club, the American Express card had to be paid in full each month. That changed in 1987 with the introduction of the Optima card, the first true credit card by American Express. (Fun fact: Elvis Presley was one of the earliest American Express card members.)

•   Discover: Discover is the newest major credit card network on the scene. Sears launched the Discover card in 1986, distinguishing it from the pack by charging no annual fees and offering higher credit limits than other cards at the time.

Discover was also the innovator of cash rewards on credit card purchases—back in 1986. At that time, Discover cardholders could earn rewards of up to 1% cash back on all purchases. Incidentally, Discover Financial Services purchased Diners Club International in 2008.

How Credit Cards Have Changed Over Time

A lot has changed since McNamara’s legendary dinner. Take a look at some of the biggest shifts in the credit industry:

The Ubiquity of Credit

In the early decades, credit was curbed by restrictive interstate banking laws. But credit’s big breakthrough came in 1978, when the Supreme Court ruled to allow nationally chartered banks to charge out-of-state customers the interest rate set in the bank’s home state.

Credit expanded as a result, and today, the average American credit card holder has nearly four cards.

The Evolution of Fees

When Diners Club began, it made money by charging stores a 7% fee on all transactions. Today, credit card companies charge interest on debt, too, so they make money when you don’t pay your bill in full. This is what’s typically known as high-interest debt. How high? At the end of 2023, the average credit card interest rate was reported as 24.59%.

Also, Diners Club used to charge nominal membership fees, but by the 1980s, many credit card companies eliminated annual fees to stay competitive.

The Advent of Rewards

The ’80s also brought tangible rewards for using credit cards instead of cash. Discover pioneered cash rewards, allowing cardholders to get a percentage back on purchases charged. And in 1987, Citibank made a deal with American Airlines to give consumers reward points to use for future flights.

Today, consumers continue to use credit card rewards programs to earn cash or points for future purchases, including travel. In fact, more than 87% of credit card users have rewards programs associated with their cards.

How to Control Your Credit

Credit can be convenient and a real asset when you want to buy something you don’t have enough cash to pay for outright. It’s a powerful tool, and one that must be managed wisely. In the summer of 2023, credit card balances in America hit a new milestone, topping a total of $1 trillion. That likely means many people are carrying a significant amount of debt. To avoid having your balances soar too high, consider these ways to take control of your credit.

Build Your Credit History Wisely

It might sound enticing to pay for everything in cash (and thus stay out of debt), but most of us don’t have the cash flow to pay for college, buy a car, and purchase a home outright. Besides, even if you do have the cash to buy everything you need right now, when the day comes to apply for a loan, you’ll need a solid credit history to qualify.

If you’ve never had a single credit card or loan, your credit history is minimal, which means you pose a higher risk to lenders. In that way it pays to borrow, as long as you do so responsibly. That means spending less than you earn and paying your bills on time, every time. Whenever possible, pay off your credit card in full every month.

Consider Prefinancing

Of course, credit cards aren’t the only way to pay for purchases and build a strong debt payment history. Prefinancing (getting access to a sum of money in advance of a purchase), such as taking out a personal loan, is another option. When you apply for a loan, you’re requesting a specific amount of money from a lender and agreeing to repay that loan over a predetermined period of time.

How credit cards work is a different process. When you pay on credit, the credit card network (e.g., Visa) pays the merchant (e.g., Home Depot) for your purchases, and you pay the network back for your purchases each month. If you don’t pay your balance in full, you’ll be charged interest on future payments.

Between the two options, prefinancing may offer the benefit of lower interest rates and shorter loan terms, helping you get out of debt quicker. After all, if you don’t have a system in place to pay off purchases in a reasonable time frame, credit card debt can haunt you for a long time.

Think about it: If you’ve racked up $15,000 in credit card debt at an interest rate of 20%, and make a payment of $300 each month, it will take you 109 months (9+ years) to pay off your debt, including $17,635.48 in interest, by the way. (You can use a credit card interest calculator to see how your own debt stacks up.)

Understand Your Credit Score

Whenever you borrow money via a personal loan or use your credit card, your lenders and creditors send details of those transactions to three major national credit bureaus (Equifax®, Experian®, and TransUnion®). That information is then used to assess your creditworthiness, which is expressed as a three-digit credit score that represents the risk you pose to lenders.

The higher your credit score, the less risky you are in their eyes. FICO® scores are the ones used most often in lending decisions in the United States, with scores typically ranging from 300 (poor) to 850 (exceptional).

Your credit score comprises five categories, and each one has an impact:

•   Payment history: Late or missed payments drag down your score.

•   Amounts owed: High balances can hurt you; maxing out your credit cards is even more damaging.

•   Length of credit history: A long history can increase your score.

•   Credit mix in use: A healthy mix of credit cards, student loans, a mortgage loan, etc., can boost your score.

•   New credit: Opening several credit accounts in a short period of time can damage your score.

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Build Your Credit Score

If your credit score isn’t where you want it to be, there’s good news: Scores aren’t set in stone. Try these tips to build yours:

Getting out of Credit Card Debt With a Personal Loan

Sometimes the problem is bigger than a low credit score. Unfortunately, some people get so deep into debt that it’s hard to find a way out on their own. One option: A personal loan to pay off credit card debt. This kind of loan usually allows you to consolidate high-interest credit card debt into one lower-interest loan with a fixed monthly payment.

Balance-transfer credit cards are another potential avenue to get out from under debt. Keep in mind, though, that these likely charge balance transfer fees, and your interest rate will be considerable after the promotional period. On the other hand, if you shop around, you may be able to find a personal loan that doesn’t charge origination or other fees.

You might also benefit from free or low-cost financial counseling from a nonprofit organization, such as the National Foundation for Credit Counseling (NFCC).

The Takeaway

Clearly, Americans have become accustomed to and perhaps even reliant on credit cards since they were developed almost 75 years ago. When managed effectively, credit cards are valuable tools to help you pay for the things you need and to sustain the lifestyle you want.

If, however, you feel weighed down by credit card debt, start taking steps to control your credit, rather than letting it control you. Consider your options, such as balance transfer credit cards or using a personal loan, to help you pay off your balance.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

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