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Oct

2022

How To Make Money Even With No Job

By Rebecca Lake | Budgeting & Goals, Financial Independence, relay | Comments Off

If you currently don’t have a job, finding ways to make money may be at the top of your to-do list. The good news is that there are numerous ways to earn income when you aren’t working a steady gig. Some opportunities require Wifi and a laptop or smartphone, while others require little more than your physical presence.

Starting a side hustle can be a great option for making money from home. Or if you’re interested in how to “make money with money,” you might lean toward passive income ideas. Keep reading to learn some of the most popular ways to make money with no job.

How To Make Money With Money With No Job

What does it mean to make money with money? In simple terms, it means finding ways to make the money that you already have work for you, without necessarily getting a traditional first or second job.

Learning how to make money with money often involves various ways to earn passive income. Passive income is money that you earn with little to no work involved. That doesn’t mean you don’t do any work at all: Some degree of work is required in the beginning to create passive income streams before you can start making money on autopilot.

If that sounds good to you, then you might consider these passive income ideas.

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1. Sell Your Plasma

Selling plasma can be an easy way to make extra money without a job or without doing any real work. Plasma donation centers pay healthy people real cash to donate their plasma. Depending on where you donate, you can make $1,000 your first month as a new donor.

Keep in mind that there may be a limit on the number of times you can donate plasma each month. You may also want to read up on potential side effects of donating plasma and how the process works.

2. Sell Your Clutter

If you have things around the house you no longer need or use, you could sell them to make some quick cash. Some of the places you can sell items you don’t need include:

• Craigslist

• Facebook Marketplace

• Facebook bargain groups

• eBay

• Etsy (for vintage items)

• Consignment stores

You can also try selling items through an app like Mercari or Decluttr. Selling items for cash could generate a steady income if you’re interested in flipping.

Flipping simply means taking things you get for one price, then selling them for a higher price. For example, you might be able to find bargains on clothing or accessories at thrift stores and flea markets, then turn around and flip them on Facebook Marketplace or eBay. You might need to spend a little money to purchase your first items to flip, but this can be a great option for how to make money with money.

3. Get Paid To Do Market Research

Companies are always interested in figuring out how to gain a competitive edge. One way they do that is by paying everyday consumers to participate in market research.

For example, there are numerous apps and websites that pay you cash to complete surveys, share your opinions, or participate in focus groups. The amount you can make largely depends on which apps or sites you’re signing up for. But this can be an easy way to make money from home using your cellphone or laptop.

Recommended: Does Net Worth Include Home Equity

4. Earn Cash Back

Cash-back apps are another option for making money without a job. When you download cash-back apps, you can link your debit card or credit cards, then earn back a percentage of what you spend at partner retailers.

There are several different cash-back apps to choose from, and they all pay different cash-back reward rates. Some of the apps you might consider for online shopping, grocery shopping, or travel include:

• Rakuten

• Ibotta

• Dosh

• Mr. Rebates

You can sign up for one or multiple apps to maximize your cash-back earnings potential.

5. Start a Blog

Blogging can help you to generate passive income in a variety of ways. For example, you might earn passive income from advertisements on your site, affiliate marketing, or product sales. You can also make a more active income by writing sponsored posts or offering some type of service, like coaching or consulting.

There is a certain amount of work that goes into setting up a blog and growing various income streams. But it’s entirely possible to make a full-time income from home as a blogger, even if you’re starting with no experience and very little money. For more on blogging, check out this story on the costs of running a blog.

6. Invest in Real Estate

Real estate can be a great investment, especially when there’s uncertainty in the stock market and inflation is on the rise. But how can you afford to invest in real estate and buy a rental property if you don’t have a job?

The simple answer is that you figure out how to make money with money in real estate a different way. Investing in a real estate investment trust (REIT), for example, offers the benefits of real estate ownership without the hassles of operating a rental property. You can also invest in real estate mutual funds or exchange-traded funds (ETFs) to gain exposure to a variety of properties in a single investment.

These investment options might be offered through your online brokerage. You may also consider real estate crowdfunding platforms, which allow you to pool your money along with other investors in a variety of property types. You make money through any of these investments in the form of dividends, which is another type of passive income.

7. Childcare, Senior Care, and Pet Care

If you want to make money offline, consider babysitting, pet sitting, or dog walking within your social circle or local area. You might also branch out to offer help to seniors who need it. For example, if you don’t mind leaving the house, you can hire yourself out to run errands for elderly people who may not have transportation. Or you may earn extra money by sitting with a senior for a few hours a day while their regular caretaker does the grocery shopping or cleaning.

8. Invest in Dividend Stocks

A dividend represents a share of a company’s profits. Some companies pay out dividends to investors who own shares of their stock as a reward for their loyalty. Dividend investing is something that might appeal to you if you’re specifically interested in passive income or residual income, since you can make a one-time investment, then collect dividends as they’re paid out.

When comparing dividend stocks, it helps to familiarize yourself with how the stock has paid out historically. You’ll also want to consider how often dividends are paid out and what kind of tax liability you’ll incur by receiving dividend payments.

9. Rent Out a Room on Airbnb

If you’ve got a spare room, you might have an easy solution for how to make money without a job. You can rent out a spare room or part of your home on Airbnb to create passive income. Or you might take on a regular roommate, which can help to reduce your share of monthly expenses.

You’ll need to register for an account on Airbnb to start hosting guests in your home. Before you do that, however, it’s important to check the zoning laws where you live to determine whether you need any special permits to act as an Airbnb host.

Recommended: Should I Sell My House Now or Wait

10. Rent Out Your Car

Have a car that you rarely drive? You can rent it out to people who need a vehicle short-term through a site like Turo. Renting your car for cash is similar to renting out a room on Airbnb, in that you’re effectively sharing your vehicle with someone else. This can be a easy option for making money with your car passively versus driving for Uber or Lyft.

11. Become a Tutor

Tutoring is something you might consider if you’re comfortable helping students learn and you want to be able to make money from home. You might offer tutoring services virtually through a site like Tutor.com or from the comfort of your home if you’re helping students locally. Keep in mind that with tutoring websites, you may be required to pass a skills test or show proof of a college degree in order to get approved.

12. Freelance Online

You might try freelancing to make money without a job if you have some marketable skills. Some of the ways you can make money as a freelancer include:

• Proofreading

• Virtual assistant services

• Graphic design services

• Website design

• Freelance writing or editing

If you’re not sure where to get started with making money as a freelancer, you might try a site like Fiverr. With Fiverr, you can list your freelance skills and services, along with your preferred rate. Potential clients can browse freelancer profiles and if yours is a good fit, hire you for their project.

13. Sell Photography

Selling photography online is another way to make money from home. You’ll need a good camera (or smartphone camera) to take pictures, and it’s helpful to have good editing software on hand. Once you have some pictures to sell, you can upload them to a site like Shutterstock or Foap.

These sites allow you to license the rights to your photography. When someone purchases a license, you earn royalty income. Once again, this is another good way to make money passively without leaving home.

14. Peer to Peer Lending

Peer to peer loans are funded by money pooled from different investors. Those investors make passive income from the loans by collecting interest from borrowers.

You might consider P2P lending as an investor if you’re looking for another idea on how to make money with no job passively. Keep in mind that with peer-to-peer lending, a higher potential rate of return usually equates to higher risk. If the borrower defaults on the loan you’ve helped fund, you won’t be able to collect any remaining interest.

For that reason, you might want to diversify the types of loans you invest in. You can also balance risk by investing in other things, such as real estate, dividend stocks, or even fine art.

15. Sell eBooks or Low Content Books

Ebooks and low-content books like blank journals or lined notebooks can be an excellent way to create steady income without a lot of ongoing work. You can create an ebook or low-content book, upload to a self-publishing website like Amazon Kindle Direct Publishing (KDP), and collect income each time you sell a copy.

You typically don’t need much to get started with self-publishing, other than a great idea for a book and some graphic design software to create your covers and interiors. When deciding where to sell your finished books, take time to research the fees each platform charges, since they can eat into your earnings.

How To Make the Most of Extra Income

Figuring out how to make money with money can increase your cash flow, sometimes significantly. But it’s important to think about what to do with extra money that you’re earning from side hustles or passive income ideas.

Some of the best ways to put extra income to work include:

• Paying down high-interest debt

• Increasing your savings

• Investing money in the market, where it can grow through compounding

• Reinvesting it into new passive income ideas

Those are just a few ways to make the most of supplemental income, versus simply spending all of the extra cash you’re bringing in.

If you’re struggling to manage the extra money you’re making, using a free budget app can help. Budgeting apps help you keep track of your expenses and budget categories each month so that you know where your money is going. Seeing how you’re spending money can make it easier to pinpoint areas to cut back.

The Takeaway

Extra income is one of the main benefits of a side hustle, along with flexibility and the ability to earn money on your own schedule. If you’re testing out different ideas for how to make money with money, there are plenty of passive income ideas you can try. You can also research ideas for how to make money with no job that might require a little more work, such as low-content ebooks. Others require little more than your physical presence.

Having a money tracker to record income and expenses can help you stay on top of your financial situation. SoFi, for instance, lets you see your expenses at a glance, monitor your credit, and get a snapshot of your financial situation right from your mobile device. The best part is that it’s free to use.

Begin tracking your financial life with SoFi.

FAQ

How can I make money with no job?

Starting a side hustle or online business, or doing gig work, are great ways to make money without a job. It’s possible to make money online or from home doing things like market research, shopping with cash back apps, mystery shopping, or offering freelance services. The more side hustles you have, the more money you can make even without a job.

How can I make $100 without a job?

The fastest way to make $100 without a job is to sell something. For example, you might sell items around the house that you no longer need, or resell bargain items that you find on Facebook or at flea markets. If you’d like to make $100 a day or $100 a week consistently, then you might consider different side hustle options like pet sitting, dog walking, freelancing, or blogging.

How do I live without a job?

Living well without a job starts with creating a realistic budget and understanding how you spend your money. Having savings to rely on can make it easier to live without a job if you expect to be out of work temporarily. You can also work on finding ways to make money without a job, including passive income ideas, side hustles, or gig work.

Photo credit: iStock/Natalia Bodrova

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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

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

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

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Oct

2022

Guide to Credit Card Outstanding Balance

By Timothy Moore | Credit, credit card, Debt Payoff | Comments Off

Your credit card statement can feel like information overload with all of its numbers and terminology. Understanding the definition of terms like outstanding balance, statement balance, and billing cycle can help you to navigate this monthly statement a little more easily.

So what is an outstanding balance, how is it different from a statement balance, and can it affect your credit score? Put simply, the outstanding balance on a credit card is what the amount of money you still owe to the credit card company is called. Knowing this figure is important to avoiding interest and potential effects on your credit.

What Is an Outstanding Balance on a Credit Card?

Outstanding balance is another way to express current balance. In fact, depending on your credit card issuer, your monthly statement and mobile app may use the term “current balance” instead of “outstanding balance.”

But what is an outstanding balance in credit card terminology? A credit card outstanding balance is simply the amount of money you have not paid to the credit card issuer — i.e., it’s what you still owe.

Your outstanding balance includes any purchases you have made on your credit card but have not yet paid off (from the current and previous billing cycles), but it also includes:

• Interest earned on previous balances

• Balance transfers (and any balance transfer fees)

• Cash advances

• Any other fees you may owe, like late fees or foreign transaction fees

Recommended: Closing a Credit Card with a Balance

Where to Find Your Outstanding Balance on a Credit Card

You can check your outstanding balance by calling your credit card issuer or accessing your account online or through the mobile app. Depending on the terminology the company uses, you may see the outstanding balance listed as your current balance or simply your credit card balance.

Current Balance vs Outstanding Balance

Current balance is simply another term for outstanding balance. Depending on your credit card issuer, you might see one term or the other used. In some cases, it may simply be labeled “account balance” or “credit card balance.”

Recommended: How to Avoid Interest On a Credit Card

Statement Balance vs Outstanding Balance

So what’s the difference between a credit card statement balance and outstanding balance? Your credit card statement balance is the total amount owed after a billing cycle. It can include any purchases made during the billing cycle, plus any balance, interest, and fees carried over from the previous billing cycle.

Once issued, the statement balance amount does not change, even if you continue to swipe your card for more purchases during the grace period (this is the period between statement closing date and due date, during which you won’t earn interest on your unpaid statement balance). As long as you pay off the statement balance in full by the due date, you should not accrue any interest.

Your outstanding balance encompasses everything you owe at a specific moment in time. Sometimes your outstanding balance can be higher than your statement balance; sometimes it may be lower. Consider this example:

Your billing cycle ends, and you now have a statement balance of $1,000. In the next week, you spend $500 more with your credit card. Your statement balance remains $1,000, while your outstanding balance grows to $1,500. But as long as you pay that $1,000 statement balance by the due date, you will not incur any interest — and your statement balance will drop to $0 until the end of the next billing cycle.

Remaining Balance vs Outstanding Balance

Remaining balance refers to whatever amount is still due after you’ve made your monthly credit card payment. For example, if your statement balance is $500 but you only pay $300, your remaining balance is $200. This, along with the interest it accrues, becomes a part of your outstanding balance.

You can avoid accruing interest on a remaining balance by paying off your statement balance in full each month rather than only the credit card minimum payment.

Recommended: When Are Credit Card Payments Due

What Is an Average Outstanding Balance?

The typical amount of an outstanding balance can vary widely from person to person — it all depends on how much you use your credit card, what your credit limit is, and whether you carry a balance. That being said, your average outstanding balance is simply the amount you owe on a credit card, averaged over a certain period of time.

The average outstanding balance formula for a statement period would be the total of your balance for each day of the statement period, divided by the number of days in the cycle. This can be helpful to know given most credit card issuers calculate interest on a daily basis, based on your average daily account balance.

Recommended: What is the Average Credit Card Limit

Paying Your Credit Card Outstanding Balance: What to Know

The nuances of credit card balances can be tough to nail down, but understanding how they work — particularly outstanding balances — may help you avoid interest and impacts to your credit score.

Here’s the short version:

• Paying the minimum balance due each month will help you avoid late fees and negative marks for late payments on your credit report.

• Paying the statement balance in full by the due date will keep you from accruing interest.

• Paying down the outstanding balance, or current balance, even outside of your normal payment cycle, can reduce your overall credit utilization, which influences your credit score.

How Interest Contributes to Outstanding Balances

When you make purchases with your credit card throughout a billing cycle, the card issuer has lent you money to cover the expenses. And if you don’t pay the lender the statement balance in full by the specified due date, any remaining balance will become part of your outstanding balance — and it will start accruing interest.

The best way to avoid paying credit card interest is to pay your statement balance in full by each due date.

How an Outstanding Balance Affects Your Credit Score

When you carry over unpaid balances, you’ll do more than earn interest that you have to pay. You’ll also increase your overall credit utilization, which is the amount of your total available credit you’re using. That’s because your outstanding balance counts toward your credit limit.

For example, if your credit limit is $5,000 and your outstanding balance is $2,500, you’ve utilized 50% of your credit limit. In general, creditors prefer to see a credit utilization of 30% or lower. This signals to them that you can responsibly pay back your debts.

In fact, credit utilization is the second most important factor affecting your FICO credit score. It accounts for 30% of your overall credit score. Thus, carrying a high outstanding balance regularly can adversely affect your credit score.

For this reason, experts typically recommend paying off your full statement balance every month if you’re able. And if you make a large payment on your credit card during a billing cycle that increases your outstanding balance tremendously, you may want to pay it off early to reduce your credit utilization — or else you chance a drop in your credit score.

The Takeaway

Credit cards can be confusing, especially when you’re new to the terminology. But once you understand how your statement and outstanding balances work and can responsibly make payments in full and on time, credit cards can be a great tool for boosting your credit score.

Interested in applying for a credit card with cash-back rewards? Try the SoFi credit card.

The SoFi Credit Card offers unlimited 2% cash back on all eligible purchases. There are no spending categories or reward caps to worry about.¹

Take advantage of this offer by applying for a SoFi credit card today.

FAQ

Does outstanding balance mean past due?

Having an outstanding balance does not necessarily mean it’s past due. Your credit card requires a minimum monthly payment; if you have satisfied that payment, you do not need to immediately pay your outstanding balance. But keep in mind that you generally need to pay the full statement balance each month to avoid accruing interest.

How do I clear the outstanding balance on my credit card?

To clear the outstanding balance on a credit card, you can make a payment equal to the amount. This should bring the balance down to zero. However, you do not always have to pay your outstanding, or current, balance to avoid interest. Paying your monthly statement balance in full should keep you from accruing interest, even if your outstanding balance is higher.

Why is my outstanding balance negative?

Your credit card outstanding balance can go negative if you pay off the card and then receive a credit for a returned item or claim cash-back rewards from your purchases. If you want, you can request a check from the credit card issuer in the amount of the negative balance. Or, you can apply the negative balance on a credit card toward future purchases on the credit card.

Photo credit: iStock/SARINYAPINNGAM

¹Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points into your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, or Student Loan Refinance, your rewards points will redeem at a rate of 1 cent per every point. For more details please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

¹See Rewards Details at SoFi.com/card/rewards.

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 SoFi Bank, N.A. pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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Oct

2022

How Does Being an Authorized User Affect Your Credit Score?

By Jennifer Calonia | Credit, credit card, Family Finances | Comments Off

If you’re new to credit or want to rebuild your credit, becoming an authorized user on another person’s credit card account can help. As an authorized user on a credit card, your credit score can be positively impacted when the account and its activity are reported to the credit bureaus. The card’s activity is still also reported under the primary account holder’s credit profile, in addition to yours.

Being an authorized user does have its share of responsibilities. You’ll want to make sure to maintain responsible credit card habits as an authorized user to help your credit, as well as to avoid adversely impacting the primary account holder’s credit.

Recommended: How to Avoid Interest On a Credit Card

What It Means to Be an Authorized User

When you’re an authorized user, you have a credit card that’s attached to another person’s account. This duplicate credit card, also known as a supplementary credit card, will have your name on it, and you’ll be able to use it to make purchases. Since you’re not the primary account holder, you won’t have the authority to make changes to the account.

As an authorized user, you’re not legally responsible for making a payment after each billing cycle. That responsibility remains solely with the original cardholder, which marks a major distinction between an authorized user relationship and a joint credit card account. Since you’re not liable for repaying the charges as an authorized user, you might not get a monthly statement.

In terms of getting started as an authorized user, be aware that some issuers impose an annual fee to add authorized users to a card account. Additionally, some credit cards have limits for the maximum number of authorized users permitted on an account.

Further, card issuers often have a minimum age requirement that you must meet as an authorized user. The age requirement depends on the issuer. For example, SoFi requires authorized users to be at least 15 years old, while the minimum authorized user age for an American Express Platinum Card is 13 years old.

Recommended: What is the Average Credit Card Limit

How Being an Authorized User Affects Your Credit Score

There are a couple of ways that being an authorized user on a credit card can affect your credit score.

If the Lender Reports Authorized Users to Credit Bureaus

If your main goal in becoming an authorized user is establishing credit or rebuilding your credit history, this can be a viable option to pursue. Card issuers don’t require a credit check to become authorized use.

However, your credit score can be positively affected if the issuer reports satisfactory payment activity and usage to the credit bureaus for all persons named on the account. Keep in mind that not all credit card companies send activity data to the bureaus for authorized users though. So before going this route, ask the primary user to confirm whether it does.

How You Use the Shared Account

If the bank reports the card’s positive activity to credit bureaus for all users, it will also report unsatisfactory activity. Being an authorized user can hurt your credit if a late or missed payment is reported and included on an authorized user’s credit profile, for example. On the flipside, on-time payments or a low credit utilization rate can help the credit of both the primary and authorized users.

Since the card data that’s included for an authorized user depends on the credit bureau, ask the credit issuer to specify which credit agency it reports to. That way, you’re aware of the factors that affect credit scores.

Recommended: When Are Credit Card Payments Due

Risks Associated With Being an Authorized User

A major risk of becoming an authorized user on a credit card is that it can adversely affect your credit score. If the primary user fails to make at least the minimum monthly payment on time, for instance, that will also impact your score, assuming the bureau reports payment history for authorized users.

Additionally, the purchase behavior of all users on a card could put a strain on the account’s limit, pushing balances near or at the borrowing limit. This will affect the credit utilization on the account, which also can impact the credit score of all users on the account.

With so many factors that need to be in balance, each user associated with the card must have a clear understanding of purchase and repayment expectations. If an individual drops the ball, it can put a strain on the relationship in addition to the users’ credit scores.

Who Should You Ask to Add You as an Authorized User?

Asking another person to add you as an authorized user on their credit card is significant. It requires the utmost mutual trust, which is why this individual is typically someone who’s very close to you. This might include your:

• Spouse or partner

• Parent

• Grandparent

• Adult child

• Adult sibling

• Aunt or uncle

It’s helpful to clarify expectations around payment before being added as an authorized user. For example, do they want to cap your spending power on the card? When do they want payment for your charges? What’s the expectation if, for any unforeseen reason, you can’t cover your part of the bill?

Even though the primary cardholder is liable for the payments, it’s helpful to come to an agreement about how you two will settle your purchases, one-on-one.

Recommended: What is a Charge Card

Using Your Credit Card Responsibly

Receiving authorized user status on a credit card is a convenient way to build your credit profile. It also can help you practice responsible borrowing habits. A few sensible practices when using a credit card as an authorized user include to:

• Avoid overspending. Examine your budget before using your card to verify that you can afford the purchase.

• Ensure payments are made on time. Communicate with the primary cardholder to confirm that at least the minimum payment is made by the due date. If you’re covering your portion of the charges, make sure to get the money to the primary cardholder by the date you agreed upon.

• Be mindful of the card’s limit. Avoid keeping an ongoing, high balance, which can negatively affect credit. Authorized users might not have access to the account history or statements, so regular communication with the primary user is essential.

The Takeaway

As an authorized user, your credit score can benefit from the positive borrowing activity on the card, assuming the the issuer reports the account activity to the credit bureaus. Additionally, the card must be managed responsibly — otherwise, your credit could be negatively impacted. Getting added to a card that doesn’t charge an authorized user fee can be a frictionless way to get started.

If you’re looking to get a credit card like this, the SoFi credit card is one option to explore. It allows up to five authorized users on an account at no extra charge. Plus, purchases made by all users — the primary cardholder and their authorized users — earn cash-back rewards.

The SoFi Credit Card offers unlimited 2% cash back on all eligible purchases. There are no spending categories or reward caps to worry about.¹

Take advantage of this offer by applying for a SoFi credit card today.

FAQ

Can authorized users affect your credit?

Having an authorized user on your credit card doesn’t directly impact your credit score. However, if they rack up charges, it might adversely affect your credit utilization ratio, which in turn can lower your credit score.

Additionally, you’re legally liable for all charges the authorized user makes on the card. If they’re unable to pay and you also can’t keep up with the payments, missed or late payments can negatively impact your credit.

Does an authorized user get a hard inquiry?

Typically, authorized users who are added onto an existing account don’t undergo a hard inquiry. Since the primary cardholder is the person who opened the account and is still 100% liable for all charges made to the card, credit issuers usually don’t need to verify the authorized user’s credit background or ability to repay the debt — even if they make charges.

Photo credit: iStock/tolgart

Oct

2022

Guide to Pending Credit Card Charges

By Dan Miller | Credit, credit card | Comments Off

When you make a transaction with a credit card, it’s common for a temporary hold to be issued to your account. These pending credit card charges are often used by merchants to verify your account details. While pending credit card charges may affect your total available credit, they don’t have any impact on the amount you owe.

There are several different reasons why you might see a pending charge on your credit card account. If you check into a hotel, the hotel company may put a pending charge on your account to cover any damage or incidental expenses you charge to your room. Similarly, a sit-down restaurant may place a hold or pending charge or hold on your credit card for the amount of the bill, only finalizing the charge once you’ve elected how much to tip.

What Are Pending Transactions on a Credit Card?

Pending transactions on a credit card are temporary holds on your credit card account, often representing transactions that have not been finalized. These transactions usually show up on your online account, but often in a different color or font, differentiating them from posted transactions.

Pending transactions may affect how much credit you have available. However, you won’t have to actually pay them until and unless they actually post to your account.

Recommended: What is a Charge Card

What Causes Pending Credit Card Charges?

There are a number of things that can cause pending credit card charges. Here are some of the most common.

Credit Card Holds

One of the most common causes of pending credit card charges are credit card holds. Credit card holds happen when the merchant places an initial hold when you start a transaction.

One common scenario for a credit card hold is when you check into a hotel. The hotel company will put an initial hold on your card when you check in. This initial hold may be for more than your actual hotel bill, so as to cover any potential damages or expenses you charge to your room. Then, when you check out, the hold is removed and a final charge is posted to your credit card account.

Billing Errors

Another potential cause of pending credit card charges are billing errors. If there is a mistake on a billed transaction, it may show up as pending until the merchant corrects the error. This can happen during credit card processing, and it may take several days to resolve.

Fraud

It’s also possible that a pending charge can be the result of fraud. Most credit card issuers regularly and proactively monitor accounts for potential fraudulent transactions. If your issuer spots a transaction that might be fraudulent, they may deny the transaction or keep it in a pending status until they can verify its authenticity.

Anti-Fraud Preauthorizations

Because credit card issuers are actively monitoring accounts for fraud, they may also place a pending charge that serves as an anti-fraud measure. Most credit cards have a $0 fraud liability policy, meaning that you are not liable for any unauthorized transactions. As part of this, you may see pending charges or refunds from your card issuer as an anti-fraud measure.

Changing Your Mind About a Purchase

If you’ve changed your mind about a purchase and the transaction is still showing up as pending, you may be able to more easily cancel it with the merchant. Contact the merchant as soon as possible to see if you can get a credit card refund before the transaction officially posts to your account.

How Long Do Pending Credit Card Transactions Take?

Most pending credit card transactions will stay in a pending state for a few days. After the initial pending period, they will either post to your account, getting added to your total credit card balance, or fall off, in the case of a temporary hold.

In certain rare cases, some pending transactions may stay on your account for a longer time. If that has happened to you, reach out to your credit card issuer to see what options you have.

How Does a Pending Charge Affect My Balance?

Any pending charges do not count toward or affect your statement balance. This means that they won’t be included in your required payment or the amount of credit card purchase interest that you’re potentially charged.

However, pending charges do typically count against your total available credit (here’s more on the difference between credit card available and current balance). This could mean you have less available to spend than you might otherwise think.

Recommended: When Are Credit Card Payments Due

Tips for Canceling a Pending Credit Card Charge

Because pending credit card charges have not officially been posted to your account, you generally can’t cancel them by doing a credit card chargeback with your issuer. Instead, if you want to dispute credit card charges that are still pending, you’ll need to contact the merchant directly.

If the merchant is not willing to cancel the charge, you can follow up with the credit card company once the charge is posted to your account.

The Takeaway

It is common for new charges to show up as pending when they’re first created. This may be because the merchant is still processing the transaction or due to the placement of temporary hold until the transaction is completed (like with a hotel or rental car). Pending charges do not count toward your statement balance, but they usually do reduce your total available credit. Most pending transactions either post to or fall off of your account within a few days.

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

FAQ

Are pending credit card charges included in the current balance?

Pending credit card charges are not usually included in your current credit card balance. They should not be part of the calculation of your minimum payment due or interest charges. However, pending charges may affect the total amount of credit that you have available to you.

Do pending transactions show on credit card statements?

Pending transactions do not typically appear on your credit card statement as charges that are included in your statement balance. That means that any pending transactions that you have will not be subject to credit card purchase interest charges or credit card fees. You will not be charged fees or interest until the charge actually posts to your account.

Can you pay off pending transactions on a credit card?

Because pending transactions are not officially posted to your account, you won’t be able to make payments against them. One reason for this is that pending charges are by their nature temporary — so it’s possible they may end up posting for a different amount or being removed completely before they hit your account. You’ll want to keep an eye on your account to see what happens when a pending transaction actually posts.

Photo credit: iStock/damircudic

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

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Oct

2022

Private Label Credit Cards, Explained

By Dan Miller | Credit, credit card | Comments Off

Private label credit cards are a particular kind of credit card that’s typically only good at one specific store. Some stores or other merchants offer private label credit cards to give better terms to certain customers than they might otherwise be able to offer. Many merchants also provide these cards as an incentive for customers to spend more, since they can potentially defer payment and/or earn loyalty rewards.

These perks are among the reasons why private label credit cards are popular. But before you start thinking about how to get a private label credit card, it’s important to consider their pros and cons.

Recommended: Can You Buy Crypto With a Credit Card

What Is a Private Label Credit Card?

Also called a store credit card or a closed loop credit card, private label credit cards are credit cards that can only be used at one particular store or merchant.

Generally, a merchant’s private label credit card is partnered with and issued by a third-party financial institution, such as a bank. These institutions act as private label credit card issuers, and they’re responsible for funding the credit line and collecting all payments.

How Do Private Label Credit Cards Work?

If you understand how credit cards work, you’ll know they usually can be used anywhere the processor (often Visa or Mastercard) is accepted. In contrast, private label cards are intended for use only at the store or merchant where they are issued.

In other respects, private label cards work in much the same way as traditional credit cards. These cards offer a revolving line of credit that cardholders can borrow against, up to their predetermined credit limit. It’s necessary to make at least a minimum credit card payment to avoid a late payment fee. Balances that carry over from month to month will accrue interest.

Recommended: What is the Average Credit Card Limit

Getting a Private Label Credit Card

In most cases, the easiest way to get a private label credit card is to apply at the store that’s issuing or sponsoring the private label credit card. Many stores offer incentives for applying for their private label card while you’re shopping in the store. You also may be able to sign up for a private label card on the store’s website.

But even if you can get one, should you get a private label credit card? Choosing a credit card depends on your specific financial situation. However, if you have sufficient income and strong credit, you may be able to get a traditional credit card that may offer rewards and more flexibility than a private label card that’s only good at one store may provide.

How to Set up a Private Label Credit Card

Because banks or other financial services companies serve as the credit card issuers for most private label credit cards, you’ll likely be familiar with the setup process if you’ve ever had any other credit card.

Once you’ve applied for and been approved for a private label credit card — assuming you met the credit card requirements — you’ll typically go through the process of setting up your card. You’ll want to make sure to log in to your online account, review your statements, and set up payments.

Recommended: When Are Credit Card Payments Due

Benefits of Private Label Credit Cards

Wondering why are private label credit cards popular? Here are some of the upsides of these types of credit cards:

• Easier to qualify for: Private label credit cards are often thought of as being easier to get approved for than general purpose credit cards. So if you don’t have an excellent credit history, you may consider a private label credit card as a way to help build your credit.

• Earn rewards and other benefits: Another benefit of private label credit cards is that stores often use them to build loyalty with their best customers. This might include offering rewards, loyalty points, or even nixing the credit card annual fee some cards have.

Drawbacks of Private Label Credit Cards

Even if the pros of private label credit cards may seem enticing, it’s also important to account for the downsides. These include:

• Lack of flexibility in use: The biggest drawback of a private label credit card is that it typically can only be used at one specific store or merchant. The lack of flexibility means that it is difficult for a private label credit card to be your only or main credit card.

• Potentially higher APRs: Another potential drawback is that many private label cards have annual percentage rates, or APRs. Make sure you read the terms and conditions before signing up for a private label credit card to ensure you know the consequences of carrying a balance. Otherwise, you could end paying exorbitant interest — which is how credit card companies make money.

Recommended: How to Avoid Interest On a Credit Card

Private Label vs General Purpose Credit Cards

As you can see, slightly different credit card rules apply to private label credit cards. Here are the major differences to keep in mind when comparing a private label card to a general purpose credit card:

Private Label Credit Cards	General Purpose Credit Cards
Can usually only be used at one store or merchant	Can be used anywhere the issuer (e.g. Visa, Mastercard, etc.) is accepted
Only offers store-specific rewards or perks	May offer cash back or travel rewards on every purchase
Generally are easier to get approved for than traditional credit cards	Often more difficult to get approved for than private label cards

Private Label vs Co-Branded Credit Cards

Some merchants offer a co-branded credit card that offers specific perks for their particular store but is issued by a major credit card processor (i.e., Visa or Mastercard). This means that you can also use the co-branded credit card at other merchants. As one example, Old Navy and Barclays offer the Navyist Rewards Mastercard, which offers Old Navy perks but can also be used anywhere that Mastercard is accepted.

Here’s a breakdown of the key differences to keep in mind to distinguish between private label credit cards and co-branded credit cards:

Private Label Credit Cards	Co-Branded Credit Cards
Can usually only be used at one store or merchant	Can be used anywhere the issuer (e.g. Visa, Mastercard) is accepted
Only offers store-specific rewards or perks	Also offers store-specific rewards or perks but can also offer rewards on purchases at other merchants
Generally are easier to be approved for than traditional credit cards	Often more difficult to be approved for than private label cards

Alternatives to Private Label Credit Cards

Two alternatives to private label credit cards are general purpose credit cards and co-branded credit cards. Here’s what you need to know about each of those other options as you’re deciding which type of card is right for you:

• General purpose credit cards are what you probably think of when you think of a credit card. These cards can be used anywhere that processing network, such as Visa or Mastercard, is accepted.

• Co-branded credit cards are cards that share branding between a bank or credit card issuer and another merchant or company. Examples include airline or hotel credit cards or the credit cards of some retail stores. With a co-branded credit card, you can also use the card anywhere the processing network is accepted, and you’ll often earn brand-specific perks on every purchase.

Recommended: What is a Charge Card

The Takeaway

A private label credit card is a type of credit card that can typically only be used at one particular store or merchant. Many merchants use private label cards as a way to incentivize and reward their most loyal shoppers. It can also motivate shoppers to spend more, since they have the convenience of a credit card and can defer payments to a later date.

While it may sometimes be easier to get approved for private label credit cards, if your credit and income support it, you may be better off with a cash-back rewards credit card like the SoFi Credit Card.

The SoFi Credit Card offers unlimited 2% cash back on all eligible purchases. There are no spending categories or reward caps to worry about.¹

Take advantage of this offer by applying for a SoFi credit card today.

FAQ

How can I get a private label credit card?

The easiest way to get a private label credit card is to apply on the website or in the store of the merchant that offers the card. If you meet the credit card requirements, you will be approved for the card. Then you can start using it while shopping at this particular merchant.

How do private label credit cards make money?

Private label credit cards make money in much the same way that any other credit card companies make money. They make money from the fees associated with the card (late fees, possible annual fees, etc) and interest paid by cardholders who carry a balance. Additionally, they may rake in money from “swipe fees” paid by the merchant each time the card is used.

Who do you make payments to when using a private label credit card?

While a private label credit card often has the logo of a particular merchant or store, the day-to-day processing is handled by a bank or other financial services company. You’ll make your payments directly to the processing company, usually not to the store itself. One of the credit card rules for successfully managing your credit is to pay your bill in full, each and every month, so make sure you understand who and when you need to pay.

Photo credit: iStock/gazanfer

¹Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points into your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, or Student Loan Refinance, your rewards points will redeem at a rate of 1 cent per every point. For more details please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

¹See Rewards Details at SoFi.com/card/rewards.

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

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

The SoFi Credit Card is issued by SoFi Bank, N.A. pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points into your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, or Student Loan Refinance, your rewards points will redeem at a rate of 1 cent per every point. For more details, please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

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