Credit Card Rental Insurance: What Is It and How Does It Work?

Whether you’re renting a car to use while on vacation or because your usual vehicle is temporarily out of commission, you might have been asked if you’d like to purchase additional car rental protection. If you paid for your car rental reservation using a credit card, your card may already offer some form of rental protection. However, not all credit cards offer this benefit, and those that do provide varying car rental insurance benefits.

Learning the requirements and limits of your credit card’s car rental insurance coverage — if any at all — can help you make an informed decision when booking or picking up your car rental.

Recommended: What is the Average Credit Card Limit

What Is Credit Card Rental Car Insurance?

Rental car insurance through a credit card is also called an “Auto Rental Collision Damage Waiver.” It generally states that if a rental car that was purchased using the card sustains damage due to an automobile collision or theft, you can file a reimbursement claim through your credit card issuer.

This might include a range of damage, from a smashed window due to theft to a car accident involving another vehicle. An Auto Rental Collision Damage Waiver typically covers damage-related costs of the vehicle itself, but it doesn’t cover stolen personal items resulting from the theft, like a laptop, or costs related to bodily injury. Knowing these ins and outs can be especially helpful given the recent rental car rebound.

Understanding Your Credit Card’s Coverage for Rentals

Not all credit card car rental insurance terms offer the same level of coverage. For example, some credit card rental car insurance only kicks-in after your personal auto insurance coverage and with reimbursement limitations.

Credit card car insurance generally falls into one of two categories: primary or secondary coverage.

Related: How Much Auto Insurance You Need.

Primary Coverage

Certain issuers offer credit card rental car insurance as primary coverage. Primary coverage means that, in the event of damage or theft, you can file a claim directly through the card issuer for reimbursement. You’re not required to file a claim through other insurance sources, like your personal auto insurance company, before the primary credit card car rental insurance benefit applies.

Secondary Coverage

Unlike primary coverage, secondary coverage rental car insurance protection through a credit card offers supplemental reimbursement. With secondary coverage, you’ll first need to file a claim through your personal insurance coverage policy or other sources, such as supplemental insurance through the rental company.

Let’s say you’ve reached your maximum reimbursement through other insurance sources, but you have a remaining reimbursable amount. In this scenario, your credit card rental car insurance benefit can then be used to claim the remaining amount.

How Does Credit Card Rental Insurance Work?

If you’ve rented a car using a credit card that offers rental insurance benefits, you’ll need to follow certain steps to claim a reimbursement. Requirements might vary slightly between card issuers, but below are the general steps you can expect to follow:

1.    Use a credit card with rental insurance protection. The first question you’ll need to answer is, does my credit card cover rental car insurance? If it does, put the entire cost of the rental on your credit card. Keep that card on file with the rental company in case any eligible damage occurs.

2.    Opt out of the car rental company’s collision insurance coverage. If you purchase coverage through the rental company, that becomes the primary source of coverage instead of your credit card issuer.

3.    Pay for damages out-of-pocket. If an incident occurs involving the rental vehicle, your credit card will be charged. You’ll then file a reimbursement claim for the amount of any applicable repair costs through your credit card rental car insurance coverage. Some card issuers allow claim payments to go directly to the rental company, upon request.

4.    Maintain documentation. This includes police reports, if available, as well as rental receipts, damage charges from the car rental agency to your credit card, towing receipts, and any other documentation or proof of expense as a result of the incident.

5.    Submit your claim ASAP. File a Auto Rental Collision Damage reimbursement claim as soon as possible, as it can take weeks to settle a claim. If your card issuer’s benefits administrator reaches out for additional information or documents, submit those details within their designated timeline to avoid issues or possible denial of your claim.

Recommended: What is a Charge Card

Questions to Ask Your Credit Card Issuer

In addition to learning what your own car insurance covers, it’s important to know your credit card’s rules around its Auto Rental Collision Damage Waiver benefit. If you’re unclear about how your card can protect you while using a rental car, contact your issuer’s customer support number. Here are some important questions to ask:

•   Does the rental car insurance benefit offer primary or secondary coverage? The answer to this question can help you choose the best payment option to use for your next rental car. It will also give you a sense of what to expect if you need to file a claim.

•   What is included and not included in the coverage? In addition to reimbursements for damage, you’ll want to know if the card’s rental car insurance covers loss-of-use charges from the rental company, for example. Be clear on what isn’t eligible for reimbursement, too.

•   What are the coverage timelines? Depending on your credit card issuer, the number of days when your rental coverage is in effect might be limited.

•   Are there any countries in which the coverage is ineligible? Rental car insurance coverage might not be offered if the incident occurred in certain countries.

•   What do I need to do to ensure I’m covered? Ask what you can do on your end to ensure your rental car is covered by the credit card’s insurance benefit. This may include putting the entire purchase on the card, declining supplemental rental insurance coverage from the rental company, or other requirements stipulated by your insurer.

•   What’s the process for filing a claim? Knowing how to swiftly file a claim after an incident can offer some peace of mind during an already stressful situation.

Recommended: When Are Credit Card Payments Due

Guide to Choosing the Right Credit Card for Car Rental Insurance

If you have multiple credit cards in your rotation that offer differing levels of credit card car insurance protection, consider using the card that offers primary coverage. This helps you avoid the added step of going through your own auto insurance company before being able to successfully file a claim through the card issuer.

The next factor for consideration is coverage amounts. Your maximum reimbursement amount will vary between insurance coverages, so be mindful about how high or low this limit is. Also, pay attention to the exclusions for coverage, including ineligible countries, activities (e.g. off-roading in the rental vehicle), and restrictions on vehicle type.

Other Ways Your Card Can Protect You When You Travel

When a credit card is used responsibly, it can offer many travel-related benefits. In addition to rental car insurance coverage, some credit cards provide protection for lost luggage expenses and trip interruptions. Credit card travel insurance is especially useful if your travel plans are canceled due to reasons like severe weather or illness.

Keep in mind that many premium travel credit cards will have higher credit score requirements, which is another reason why good credit is important if you’re interested in accessing these benefits.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

The Takeaway

If your credit card covers rental car insurance, in many cases, you can decline the duplicative car rental company’s offer for collision coverage. However, it’s worth learning whether your credit card car rental insurance coverage is primary or secondary and what its coverage limits are in case you need to file a claim

If you’re comfortable using a credit card strategically when renting a car, compare the rental car insurance credit card benefits offered by different credit cards. Depending on your credit card, you might even be able to earn cash back rewards on your next car rental.

For example, the SoFi credit card offers cardholders 2% unlimited cash back rewards when redeemed to save, invest, or pay down eligible SoFi debt. Cardholders earn 1% cash back rewards when redeemed for a statement credit.1 Plus, the SoFi credit card offers cell phone protection, and the incentive to lower your APR by 1% when you make on-time payments of at least the minimum amount that’s due for 12 months.

FAQ

Do you need a credit card to rent a car?

No, you generally do not need a credit card to rent a car through many national car rental companies, like Enterprise, Hertz, and Avis. Major car rental companies often accept a debit card to secure your rental. Depending on the rental company, your debit card may need to have the logo of a credit network, such as Visa, MasterCard, Discover, or American Express.

Do all credit cards have car rental insurance?

No, not all credit cards provide car rental insurance benefits. However, many credit cards offer this protection to some extent, whether as a primary or secondary coverage. If you’re interested in accessing this benefit, make sure to familiarize yourself with what credit cards cover rental car insurance.

How do I know if my card comes with primary or secondary insurance?

You can refer to your credit card’s terms and conditions to learn whether your credit card offers car rental insurance protection, and if it does, whether it’s primary or secondary coverage. You can also contact the customer support phone number listed on the back of your credit card to speak to a representative about your specific card’s car rental insurance benefits.


Photo credit: iStock/g-stockstudio

Third-Party Brand Mentions: No brands or products 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.
The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
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Credit Card Refunds: Everything You Need to Know

Getting a credit card refund is usually a straightforward process, whether you’re asking for one because a product is defective or you’ve simply changed your mind. When you get a refund on a credit card, you’ll receive a credit on your account for the amount you paid for returned goods that you’d charged to your card.

Although credit card refunds are routine, there are some important things to know about the process. Read on to learn more about how credit card refunds work.

What Is a Credit Card Refund?

A credit card refund is the money you get back when you return something that you’d paid for with your credit card. Rather than getting cash back for the full amount of the returned item, you’ll receive a credit to your credit card account for that amount. The process of a credit card refund is started when you go to return the item, and it can take a few days or longer to see the money credited to your account.

How Do Refunds on Credit Cards Work?

When using a credit card to make a purchase, there’s a third party involved in your transaction. The store or other merchant at which you swipe or tap your card to buy something requests their payment from the credit card issuer. When your credit card issuer pays the charge, it adds the amount of the purchase to your account balance. Then, you pay your credit card bill to pay back the credit card issuer for the purchase you made.

When you return a purchase, the merchant issues a refund to the credit card issuer, not directly to you. In turn, your credit card company posts the credit to your account. This process is why credit card refunds aren’t immediate like cash refunds.

Recommended: When Are Credit Card Payments Due

Types of Credit Card Refunds

There are two basic types of credit card refunds. It can be helpful to know the difference between the two and how a refund to a credit card works in each instance.

Refund at the Point of Sale

This is when you return an item, either by going to the store in person or sending back an online purchase. The retailer then credits you for the return when the item is received.

Disputed Transaction

Disputed transactions are different from straightforward returns. With a disputed transaction, you’re making a complaint about the purchase as opposed to just making a return. For instance, you might dispute a credit card charge for an online purchase that never arrived. Or, you might dispute a charge for a canceled event.

In most cases, you must file a dispute within 60 days of the transaction. From there, your credit card company has 90 days to investigate the issue and resolve the issue. Especially because of the investigation and the documentation that you’re asked to provide, falsely disputing a credit card charge isn’t something to try to do.

While it’s best to start with the merchant when you have an issue with the goods or services provided, you do have options if the merchant will not grant you a credit card refund. In this instance, you can request a credit card chargeback, which reverses your original charge after you have filed a claim with your credit card company. With a chargeback, the refund process is initiated by the credit card company, whereas with a credit card refund the merchant initiates the process.

Recommended: What is a Charge Card

How Long Does a Credit Card Refund Typically Take?

The amount of time it takes to receive a credit card refund depends on the retailer and the type of refund you’re requesting. It typically takes about three to seven business days to see your refund from a routine return you make in person, and sometimes it’s even faster than that.

Online merchants may take a bit longer to issue a credit card refund because you need to allot time for shipping and processing the returned merchandise. As mentioned above, chargeback or disputed charge refunds can take much longer — sometimes as long as 90 days due to the time allowed to file and investigate a disputed charge.

Do Credit Card Refunds Count Toward Payments?

No, credit card refunds are not considered a payment or partial payment, and they do not automatically go toward that month’s minimum payment on your card.

Instead, you’ll see a credit in the amount of the refund in your account statement and, depending on where you are in the billing cycle, this could reduce the total amount you owe by the amount of the refund. You will still need to make your monthly minimum payment while you’re waiting for a refund credit to appear on your account. In fact, one of the cardinal credit card rules is to always make your minimum payment on time.

Keep in mind that interest will continue to accrue on your charge until the refund credit appears. Depending on how much the purchase is for and where you are in the billing cycle, this can affect your overall balance.

How Credit Card Refunds May Affect Your Credit Score

To understand how credit card refunds work when it comes to your credit score, it’s important to understand something called credit utilization ratio. This term refers to the percentage of your total credit limit that you are currently using. Credit utilization can be an important factor in calculating your credit score — the lower your credit utilization ratio, the better.

In some situations, a refund may give your credit score a boost if the refund reduces your balance and lowers your credit utilization ratio. On the other hand, a delayed refund could hurt your credit score if the amount of the purchase pushes your credit utilization too high during a certain billing period.

Recommended: What is the Average Credit Card Limit

What to Do With a Negative Account Balance

Sometimes a refund will give you a negative balance, meaning your available credit is more than the amount you owe on the card. This can often happen with cardholders who pay their balance in full each month.

If you have a negative balance, it’s usually not a problem. The negative balance will be applied to the next purchase you make on that card, eventually bringing your balance back to $0 or above. A negative balance will not affect your credit score because that’s something that credit card companies report to credit bureaus.

However, a negative balance can be problematic if you’re receiving a large refund and don’t often use that credit card. In these instances, you can ask your credit card company to issue a refund via check, money order, or direct deposit. Your credit card issuer may require this request in writing in order to issue the refund.

How Credit Card Refunds Affect Your Rewards

Any credit card rewards you earned on a purchase that was returned, such as cash back rewards or miles, will not be awarded after your refund is processed.

If you decide that it makes more sense to keep the rewards, you can ask the merchant or service to refund you in the form of a merchant credit. However, that means you will still have to pay for the purchase on your credit card.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

The Takeaway

Knowing how credit card refunds work will help you manage both your budget and your credit rating. Credit card refunds are usually straightforward transactions. But they can take longer than a purchase made with cash, and they can affect your credit score. Additionally, you usually won’t be able to hang onto the rewards you’d earned from the purchase you returned.

Given many credit cards offer valuable rewards, this may be a disappointment. With the SoFi credit card, for instance, you can earn 2% unlimited cash back rewards when redeemed to save, invest, or pay down eligible SoFi debt. Cardholders earn 1% cash back rewards when redeemed for a statement credit.1 Learn how to apply for a credit card with SoFi today.

FAQ

Do credit card refunds affect your credit

Yes, refunds can affect your credit score. A refund can lower your credit utilization — or the total amount of credit you’ve used compared to your overall credit limit. Credit utilization is something credit rating agencies look at closely when determining your credit score. A delayed refund could hurt your credit score because it may increase your credit utilization ratio, thus negatively impacting your store. On the other hand, when you receive a refund, that may lower your credit utilization, helping your credit score.

Do credit card refunds affect the rewards earned from a refunded purchase?

In most cases, you will not receive the rewards that you may have earned from a purchase you’ve returned. You may want to consider getting a store credit for your refund if you want to keep your rewards, but you will then have to pay for the full amount of the purchase on your credit card.

What happens if I have a negative balance after a credit card refund?

Sometimes you’ll get a refund credit and it will exceed the balance you have on your card. This is usually not an issue, as the amount of the credit will be applied to the next purchase you make on the card. If the refund is quite large and you don’t use the card often, you may want to ask your credit card issuer for a refund via check or direct deposit.


Photo credit: iStock/Amax Photo

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
website
.

The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) 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.
1See Rewards Details at SoFi.com/card/rewards.
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Can You Overdraft a Credit Card?

In most cases, it isn’t possible to overdraft a credit card. If you opt in to over-the-limit charges, it may be possible to exceed your credit card’s limit. However, “overdraft” usually refers to overdrawing a bank account, not a credit card.

It’s more likely that your purchase will be denied rather than overdrawn. If you do go over the limit, you might get hit with additional fees, and your credit could suffer as a result.

What Does It Mean to Overdraft a Credit Card?

Each time you use your credit card, your balance increases, given how credit cards work. If you aren’t making payments against that balance, it will move closer and closer to your credit limit. Eventually, your balance could get high enough that you run up against that limit.

Usually, though, you won’t be able to go beyond your credit card spending limit. Instead, your card will be declined if you attempt to make a purchase that would put you over the limit. This is the result of the CARD Act of 2009.

Since the CARD Act, you can’t go over your card’s limit unless you specifically opt in to allow overages. In that case, it may be possible to go beyond your credit card’s limit.

What Happens If You Overdraft Your Credit Card

What happens when you try to overdraft your credit card depends on whether you have opted in to over-limit charges. If you haven’t, your card will likely be declined; otherwise, you could incur fees and a hit to your credit.

Recommended: What is a Charge Card

Declined Transactions

By default, most credit cards today should not allow you to go over your credit limit. Instead, your card will probably be declined.

For example, imagine you have a credit limit of $5,000 with a current balance of $4,800. If you try to spend $250, in most cases it will not result in a $5,050 balance on your card. Because your limit is $5,000, your card will probably be declined when you attempt to complete the transaction for the $250 purchase.

Over-Limit Fees

Since the CARD Act of 2009, you can’t be charged over-limit fees unless you opt in to them. In that case, you will be charged an over-the-limit fee that is usually up to $35. However, the fee is limited to the amount you exceed your limit. For example, if you go $15 over your credit limit, the over-limit fee can’t be more than $15.

The CARD Act also says that banks must disclose over-limit fees in your credit card contract. If for some reason you have opted into over-limit fees, you should be able to opt out of these fees at any time.

Impact on Credit Score

If you go over the limit for your credit card, your credit score might take a hit. While there’s no magic number for credit utilization, the rule of thumb is usually that you should limit your utilization to 30%. Your utilization is your outstanding balances divided by your credit limit. Because your balance for the credit card in question is greater than the limit, your ratio would exceed 100%. That might cause your credit score to drop until you lower the ratio.

One thing to keep in mind is that credit utilization is calculated using all of your outstanding credit. In other words, if you have five different credit cards, your utilization takes all of their balances and credit limits into account. If you have many credit cards and most of them have no balances, going over the limit on one credit card won’t necessarily hurt your credit score.

Either way, it’s best to avoid this situation due to the over-limit fees. This is also why it’s important to discuss spending habits with any authorized users on a credit card to avoid hitting your limit.

How to Avoid Overdrafting Your Credit Card

If you go over the limit on your credit card, there are several steps you can take to rectify the situation. These steps will help you prevent the situation in the future and improve your credit.

Make Additional Repayments

One of the most important credit card rules is that you should pay more than the minimum amount due each month. Indeed, paying more than you normally pay might be a good idea, especially if the credit card that’s over its limit is a significant part of your total credit picture.

Say you have a minimum payment of $40, and you normally pay that amount each month. In that case, consider upping your payment to $50 instead. Anything you can pay above the minimum will help you reduce your credit utilization; the more you can pay, the better. This can also help you from falling into credit card debt (and here’s what happens to credit card debt when you die).

Recommended: When Are Credit Card Payments Due

Request a Credit Limit Increase

Another way to reduce your credit utilization is to request a credit limit increase. For instance, if you have a total credit balance of $5,000 and a total credit limit of $10,000, your utilization is 50%. If you currently have a credit card with a limit of $3,000 and can increase that limit to $4,000, your total credit limit becomes $11,000. Hence, even if your balances stay the same, your credit utilization ratio will drop to about 45%.

Recommended: What is the Average Credit Card Limit

Contact Your Provider

Sometimes, credit card issuers will increase your credit limit automatically, such as you if you’ve used your credit card responsibly over time. If not, you can call your card issuer and ask them to increase your credit limit. Usually, it’s best to do this after you’ve had the card for at least a few months.

When you make the request, the credit card company may review one or more of your credit reports. Keep in mind that this could result in a hard inquiry into your credit history; these checks cause a temporary dip in your credit score. The card issuer may also request proof of income, employment status, or monthly rent or mortgage payments.

Recommended: Tips for Using a Credit Card Responsibly

The Takeaway

It usually isn’t possible to overdraft a credit card. You may be able to go over the credit limit, but only if you opt in to over-limit fees. If you do opt in, your credit could take a hit, and you might have to pay additional fees if you exceed your credit card’s limit.

And paying fees is never something you want. If you want to avoid credit card fees, the SoFi credit card has no foreign transaction fees. Plus, your APR will go down by 1% if you make 12 consecutive on-time monthly payments. Learn how to apply for a SoFi Credit Card today.

FAQ

Do credit cards allow overdrafts?

Credit cards usually do not allow overdrafts. In fact, “overdraft” is usually a banking term that refers to your checking or savings account balance dropping below $0. With credit cards, it may be possible to go over the limit if you opt in to over-limit fees.

Can you overdraft with no money on your card?

With credit cards, your balance increases as you make purchases. Hence, in this scenario, it would only be possible to overdraft a credit card if a single purchase would put you over the limit. And even then, you must have opted in to over-limit charges; otherwise, the transaction will simply be declined.

Can you overdraft a credit card at an ATM?

In most cases, you won’t overdraft a credit card at an ATM. You might be able to overdraft when requesting a cash advance, but even then, it may not be possible unless you have opted in to overdraft protection.

How can you ask for a credit limit increase?

Sometimes, credit card companies will increase your limit automatically. If that doesn’t happen and you want an increase, you can call your credit card issuer directly and ask for an increase.


Photo credit: iStock/AsiaVision

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.
The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) 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.
1See Rewards Details at SoFi.com/card/rewards.
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30 Ways to Save Money on Food

Outside of housing and transportation, Americans spend more on food than any other category. According to the Bureau of Labor Statistics, in 2020 the average U.S. household shelled out $7,316 on food, including groceries and eating out.

While food is an essential expense (since we all need to eat), many of us could probably stand to spend less than what we’re currently spending on groceries, restaurants, and morning lattes.

Fortunately, with a little planning and some smart shopping hacks, you may be able to significantly cut the amount of money you spend on food but still eat well.

Here are 30 ways you can save more on your food purchases. Let’s start with the grocery store:

Saving at the Grocery Store

1. Having a Plan

Before you craft your grocery list, it’s wise to plan what meals and snacks you want to prepare for the week or weeks ahead. If you write it all down and then create your shopping list, you’re less likely to forget key items for certain recipes and you’ll know exactly what you need when you enter the store.

2. Scanning Your Fridge

While you’re making your meal plan, check your pantry and refrigerator for items you already have on hand. Not only can you avoid buying something you already have, but you may find some hidden veggies in the fridge you’d forgotten about that could otherwise spoil.

3. Going Semi-Vegetarian

Meat tends to be one of the most expensive ingredients in many meals. But there are plenty of tasty recipes out there that use other sources of protein, such as beans, eggs, and tofu. Also, don’t count out using tasty veggies or grains as the star of a dish.

Planning just one or two meatless meals each week can automatically cut your food spending — and also help you eat a little healthier.

4. Sticking to a Grocery Budget

If you don’t include your groceries in your monthly budget, you may want to consider doing so. It can help you track exactly how much you’re spending and where you can cut back (like those cookies or snacks you may not always need but are in the habit of buying).

5. Using Only Cash

Do you have trouble skipping over tasty treats and passing up deals and discounts when you’re at the grocery store? If so, you may want to consider taking only cash to the store to limit your ability to purchase items not on your grocery list.

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6. Outsmarting the Supermarket

Grocery stores use a number of marketing tricks to get shoppers to spend more. These include stocking the most expensive items on the shelves right at your eye level, using end caps to grab your attention, and placing staples like milk, eggs, and bread at the back of the store so you’re forced to pass through several aisles to get to them.

You can avoid falling for these marketing ploys by carrying a list (and sticking to it) and also by keeping your eyes on the upper and lower shelves, as this is where you’ll tend to find the more affordable brands.

7. Going Generic

Brand name products in the supermarket can often cost 35 to 45 percent more than store brands. Yet many store brands offer essentially the same quality as their brand name counterparts, and in some cases are produced at the same facilities (just packaged with a different label).

While not all store brands are built the same, it’s worth trying a few if you’re grocery shopping on a budget. If you find that you can’t tell the difference, you may be able to enjoy some solid savings.

8. Using Store Loyalty Apps

If you shop at a large grocery store chain or mass retailer, you can often get special promotions and additional savings by downloading the store’s app.

Target, Walmart, Wegmans, Whole Foods, and other major stores have apps that offer exclusive coupons to frequent shoppers. Often, taking advantage of these deals is as simply as letting the cashier scan a barcode on your phone as you’re checking out.

9. Pruning Your Produce

Before you put fruits and veggies in the plastic bag, you may want to take a moment to remove any stalks, leaves, or stems that aren’t edible. Since you’re paying by weight, anything that you remove to lower the weight lowers the price.

10. Shopping In Season

Fruits and vegetables tend to be cheaper, and also taste better when they are in season locally. While you may be able to purchase fresh strawberries year-round, they’ll likely be more expensive (and less sweet) in the winter when they’re being harvested and shipped from somewhere far away.

You can check out this seasonality chart to find out when foods are in their prime where you live, and then adjust your menu, planning accordingly.

11. Avoiding Pre-Cut Products

If you just love that bag of grated cheese, you may want to consider comparing it to the price of the non-grated block. There’s a big difference in price, and grating cheese is really not a daunting task. The same goes for pre-cut fruits and vegetables. Sure, they’re handy for snacking, but extra money in your savings account could be nicer.

12. Eating Before You Shop

Yes, this may be a common tip, but it’s a good one. Going grocery shopping while hungry can increase your chance of impulse buying. Shopping after you’ve already had a meal is a great way to keep any hunger pains from adding items to your shopping cart.

13. Keeping an Eye on Unit Price

Comparing price and value can be tough when items don’t come in the same size. When in doubt, you can always turn to unit prices, which are often listed on the shelf tag.

Unit price gives you an apples-to-apples comparison, such as ounce to ounces or liters to liters.

For example, the cheapest bottle of olive oil on the shelf might not be the best value. If you bought a larger one, it might cost a few bucks more, but its overall cost per ounce is lower, saving you more in the long run.

14. Using Rewards Credit Cards

Some credit cards offer extra cash back for groceries and even eating out. If you use one of these cards for your purchase, you could end up saving a pretty nice amount of money each month — sometimes as much as 5% depending on which card you carry.

Saving When Eating Out

15. Dining out for Lunch Instead of Dinner

Cutting down on food expenses doesn’t mean you can’t still enjoy your favorite restaurants. One way to get that experience for a cheaper price is to go for lunch, not dinner.

Lunch menus often offer many of the same entrees (in slightly smaller portions) for a lower price than dinner menus. You can sometimes also find affordable lunch specials or Prix fixe options.

16. Enjoying Membership Discounts

Some organizations, like AARP, offer special member discounts at many restaurants (and even at some grocery and big-box retailers). If you eat out often, the savings could add up quickly.

17. Splitting the Entree

A lot of restaurants serve portions that are far larger than what most people really need (or sometimes even want) to eat. So, instead of getting a doggy bag for your leftovers that may end up sitting forgotten in the refrigerator, consider splitting a big entree with a dining companion. Even if you start with an app or a salad, you’re probably going to see some significant savings.

18. Skipping the Cocktails & Dessert

At the end of every meal, the waiter comes back around and asks the dreaded question, “Will there be anything else?” Unless you’re going out for a special occasion and you want to splurge, you can end up saving a lot of money by skipping the alcohol and dessert, and simply requesting the final bill.

19. Looking for Special Restaurant Discounts

Restaurants sometimes provide online coupons or special deals during events like restaurant week. So, if you’re eager to try a new eatery, you may want to check out their website first for any special deals they may be offering. And keeping up with your city’s restaurant week deals and other special events can really pay off, too.

Saving When Cooking at Home

20. Cooking More Meals at Home

Restaurants typically charge around a 300% markup on the foods they serve. That means spending $30 eating out would only cost you $10 if you made it at home. Just swapping one or two restaurant meals with a home-cooked meal and/or brown-bagging lunch a few days a week, can add up to significant monthly savings.

Also, grabbing a cup of Joe every morning from the local coffee shop adds up. Consider brewing your coffee at home a few times each week to save a few dollars.

Recommended: Examining the Price of Eating at Home vs Eating Out

21. Learning How to Meal Plan

Eating out less is easier said than done. If you don’t plan meals ahead of time, you may find yourself struggling in the kitchen during mealtimes, and thus even more tempted to simply order out. To save both time and money, meal planning could be the way to go.

Meal planning entails thinking ahead and creating a menu for the week, then using your menu to create a shopping list. You don’t have to plan every meal to the letter, but picking a few simple recipes you can whip for dinner can save you from having to get take-out after a long workday.

Recommended: How Much Should I Spend on Food a Month?

22. Prepping in Advance

Bagged salads, pre-made pizzas, and cut-up fruits and vegetables can be enticing on a busy weeknight, but these conveniences come at a high markup.

If you don’t have time to slice and dice raw ingredients in the evenings after work, you may want to consider doing some meal prep for the week on Sundays.

Having your ingredients ready to go also makes it easier to throw meals together, and eating out or ordering take-out becomes less tempting.

Recommended: Does Buying in Bulk Save Money?

23. Reducing Portion Sizes

Many Americans eat more than they actually need. The average person needs about 4 ounces of protein at any given meal, so if you’re consuming more than that, you could save a lot on your overall grocery expense by cutting back.

More Ways to Save

24. Reducing Food Waste

The average household wastes 31.9% of the food it buys, according to a study published in the American Journal of Agricultural Economics . The total annual cost of the wasted food was estimated to be $240 billion or $1,866 per household.

Food waste is often the result of food spoiling before the household can eat it. One way to reduce how much food — and money — gets tossed into the garbage each week is to only buy what you need for the week (by meal planning and making a list). Another way is to make sure you’re storing your fresh foods properly so it lasts.

For example, you can increase the lifespan of lettuce by wrapping it in a paper towel to absorb moisture while it sits in your fridge. Also, placing herbs in a jar of water can help prevent them from wilting quickly, giving you more time to use them.

25. Taking Advantage of Rebate Apps

When you’re searching for easy ways to save money, it’s worth checking out all the many grocery rebate apps that are now available.

Apps, such as Ibotta, Receipt Hog, Checkout 51m and Fetch Rewards, will often give you cashback for things you’d purchase anyway. While rebates don’t give you a discount upfront (like a traditional coupon), you should see savings in the long run.

Some apps send checks once you reach a certain cash-back amount, such as $20.

26. Starting a Kitchen Garden

Fresh herbs at the grocery store can be expensive, and often, recipes call for only a few sprigs or leaves, leaving the rest of a purchase to go to waste.

To avoid having to buy fresh herbs at the store, you may want to consider setting up a window sill garden containing the herbs you reach for most often, such as parsley, mint, thyme, or basil.

Start-up costs are minimal, and these plants tend to be easy to grow — no green thumb required.

27. Hitting the Farmer’s Market Later in the Day

If you love shopping at the local farmer’s market but don’t enjoy the dent it makes in your wallet, you may want to consider showing up near closing time.

At the end of the day, farmers often don’t want to pack up their food and take it home with them. If you walk around and make a reasonable offer on a box of produce they have left, you might score a great deal on fresh (and delicious) fruits and veggies.

28. Watching for Seasonal Deals

After major holidays like Halloween, Christmas and Easter, you can often get good deals on holiday-related items like candy. If you don’t care about themed wrappers, you can save a nice chunk of change.

29. Shopping Online

Buying dry goods and other non-perishables online instead of at the grocery store can end up saving you a lot of money, especially if you buy in bulk sizes and get those items delivered on a regular schedule. For example, Amazon offers up to a 15% discount for consumers who schedule auto-shipments for their products.

30. Consider Subscribing to Meal Kits

If you already don’t like cooking and the cleanup that comes with it, meal kits can be a great option. And if you’re spending money eating out because you just don’t feel like cooking, they can be a great way to stick to your food budget.

The Takeaway

With a little planning and just a few habit shifts, you may be able to slash your food bills without sacrificing quality, taste, or nutrition. The cash you free up can then be put towards savings or another financial goal.

You may find that setting up a monthly food budget — and target spending amounts per week — can also help you spend less on food. Using a money management app can help you stick to your food budget.

SoFi Checking and Savings is a mobile-first checking and savings account that allows users to easily view their weekly grocery and restaurant spending right in the dashboard of the app.

Take control of your spending with the help of SoFi Checking and Savings.



SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.

SoFi members with direct deposit can earn up to 1.80% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 1.00% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.80% APY is current as of 07/26/2022. Additional information can be found at http://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.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Tips for Voiding a Check

Tips for Voiding a Check

If you’re asked to void a check, your response might be “Huh?” Checks are being used less often these days, what with the advent of online banking and shopping. Back in the olden days of pre-internet life, people widely used checks for everything from buying groceries to paying utility bills. But now, an increasing number of people are conducting transactions by card, autopay, or P2P platforms.

Although checks are becoming less common, there are still times when you may need a voided one. But how do you void a check?

Voiding a check is simple. All it takes is to write “VOID” on the face of a blank one with a permanent pen. However, there are some subtleties to the process that it’s wise to understand. Here, you will learn:

•   How to void a check

•   Reasons for voiding a check

•   How voided vs. canceled checks compare

•   What to do if you don’t have checks.

How Do You Manually Void a Check?

To manually void a check, all you need is a blank check and a pen. Sure, your personal checkbook may seem like an ancient relic from a bygone era, but there are circumstances when life may request that you open it to void a check.

If you’ve never done it before, here’s how to write a void check:

•   Take a blank check from your checkbook.

•   Grab a blue or black pen or marker.

•   Write “VOID” across the face of the check. Do not cover the account numbers at the bottom.

•   Note the check number, recipient, and date in your checkbook so you don’t get confused by a skipped check when you go to balance your funds.

•   You could also write “VOID” in the payee line, amount line, amount box, or the signature line. That’s all there is to writing a void check; you’re done.

Reasons for Voiding a Check

There are several reasons why you might need to make a void check. Blank checks in the wrong hands can be financially dangerous. Writing “VOID” across your check renders it useless. A thief will not be able to use it to take money out of your account.

But there are practical uses for voiding a check that go beyond protecting your money, including setting up direct payments or deposits, and automatic bill payments. Here’s a closer look at how voided checks work.

Setting Up Direct Payments

If you or your business needs the ability to pay your vendors electronically, providing a voided blank check may be part of the process in the steps to set that up. The voided check provides your bank’s routing and your account number, which are needed to get ACH funds flowing.

Direct Deposits

Direct deposits have become the preferred way for employees to quickly get their hard-earned dollars into their checking accounts. Your employer may ask for a voided check along with the paperwork in order to get you enrolled. Again, this voided check allows for the capture of your account details.

Recommended: How to Verify a Check

Regular/Automatic Bill Payments

You can set up monthly autopay payments with utility companies, student loan entities, landlords, and others by providing a voided check. The amount owed will automatically be withdrawn on a set date.

Any Mistakes Made When Writing a Check

If you accidentally write the wrong amount, or make an error in the recipient’s name, you’ll want to void the check and write a new one. Doing so will prevent a person or business from cashing the check.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning 1.80% APY on your cash!


Voided vs Canceled Check

You may wonder what the difference between a voided and a canceled check is. When you make a void check, you are canceling a physical check you have in your possession. After all, you can’t write “VOID” on a check you don’t have. If you’ve lost a check (especially a blank one) or have sent out a check in error, that’s a different situation. You can contact your bank about stopping payment on the check.

Worth noting, as it can complicate matters a bit: When banks and credit unions talk about canceled checks, however, they are likely referring to ones that have already been used to transfer funds. The work of these checks is done, so to speak, so they are considered canceled.

The differences between a voided check and a canceled check (in both senses) are:

•   You can void a check yourself. To cancel a check, however, a bank or credit union has already been involved.

•   Voiding is quick and free. If you seek to cancel a check by stopping payment, it will involve time (to speak to your bank), and there may be a fee charged to stop payment.

•   To void a check, all you need is a pen to write the word “VOID.” Typically, banks cancel checks after processing them. If you want to execute a stop payment so a bank doesn’t pay a check, you’ll need your check number, account number, the date you filled it out, and the exact amount of the check.

•   When you void a check, you can forget about anyone ever using it. When a check is canceled by a bank, it is no longer valid; it has been paid and no longer has value. However, if you issue a stop payment on a pending check, you may want to keep an eye on your account to make sure no funds were withdrawn as the stop was being initiated.

Recommended: How Travelers Checks Work

What if You Don’t Have Checks?

This discussion about voiding checks may not do you a lot of good if you don’t have any checks. Obviously, the first step to getting a checkbook is to open a new bank account. Many banks will give you pre-printed “starter checks” to use until your personalized ones arrive.

If you already have a checking account but no checks, you can contact your bank or credit union about ordering checks. They can usually be ordered online, via a mobile app, over the phone, or in person.

If you can’t provide a voided check, there are plenty of other ways to set up direct deposits, automatic bill payments, and perform other financial transactions.

Using Deposit Slips

A deposit slip is a check-sized form you can fill out whenever you need to deposit money into your checking or savings account. They are usually found at the back of your checkbook or at a bank.

Since a deposit slip in your checkbook will have your name and account information, you may be able to use the pre-printed slip to authorize auto-pay or direct deposits.

Electronic Images of Checks

In place of an original check, you could print out an image of your check if you have one, void it, and use that instead. When you sign up for checks online, some banking entities can provide an image of your check with your account information.

Submitting Bank Details Online

In this day and age, you usually don’t need a voided check to sign up for automated payments and direct deposits. Most companies offer the option to register for these services online by typing in your checking account and bank routing number.

Asking the Bank for Counter Checks

If you don’t have checks and need one, you can ask your bank for what’s known as a counter check. This is not unlike the temporary “starter checks” you receive when you first open a checking and savings account. You can get a counter check from a teller behind the counter at the bank (thus the name). The counter check will have the bank’s routing number, and either you or the teller will fill in your account information.

Getting Documentation from the Bank

If you can’t get a hold of a check to void, an electronic check image, or a pre-printed deposit slip, a last resort solution could be getting proof of your account from a bank. This should be a letter written on a bank’s letterhead, verifying your routing number, account number, and account type.

The Takeaway

In the world of financial transactions, checks may be used less and less these days. But they still have their time and place, and sometimes you need a voided check. It can help you sign up for speedy modern services like autopay and direct deposit. Knowing how to void a check is a good skill to have, and it’s part of becoming a savvy financial customer.

At SoFi, we are all about helping you bank smarter. Open our Checking and Savings with direct deposit, and you’ll receive free paper checks. Plus, your money will grow faster with our top-notch 1.80% APY and no account fees.

Get your checks and other SoFi account perks today.

FAQ

How do I void a blank check?

To void a blank check, take a blue or black pen or marker and write “VOID” across the face of the check. You could also write “VOID” in the payee line, amount line, amount box, or the signature line.

How do I void a check for direct deposit?

You void a check for direct deposit by writing “VOID” across the face of the check with a blue or black pen or marker. Or you could fill that in on the payee line, amount line, amount box, or the signature line.

How do I void a check I’ve already sent?

You can’t void a check you have already sent. You’ll have to cancel the check. To do this, first make sure the check hasn’t cleared yet. Then, make sure you have your account number, check number, dollar amount, and date you wrote on the check. Contact your bank or credit union to stop payment. This action may require a fee.


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 1.80% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 1.00% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.80% APY is current as of 07/26/2022. Additional information can be found at http://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.

Photo credit: iStock/AsiaVision
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