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First you take out a credit card because it has a great airline rewards program. Then you take out a card because it gives you a fabulous discount at your favorite retail spot.

Maybe you had some bills you couldn’t pay off right away, and so you decided to open up another card to cover those costs. And on and on you went, until suddenly you have a wallet full of credit cards—and a hard time keeping track of them.

If you find yourself in this situation, you may want to stop and assess to be sure you haven’t set yourself up to overspend, forget to make payments, and run up a heap of credit card debt. Consolidating your cards can sometimes provide a solution, allowing you to ditch keeping track of your excess cards and focus your energy on just one bill.

How Credit Card Consolidation Works

Credit card consolidation is the practice of combining your credit card balances with one new loan from a financial institution or another credit card company. Ideally, the new loan or credit card consolidation terms will allow for multiple credit cards—perhaps some with sky-high or variable interest rates—to be consolidated with one loan, ideally at a more manageable interest rate.

If you’re not quite sure how that could help your debt management, think of it this way: We all have that one closet or drawer that is just filled to the brim with random stuff—knick-knacks, boxes, childhood toys, and clothes that you just don’t have room for. It gets so bad that either you’re too afraid to open your closet, or the closet is so full that you physically can’t open it.

That closet represents your credit card debt. You might have one, two, three, or four or more cards—and you may even be making minimum payments—but with so many cards to juggle, you may not be paying attention to details on the bill, like how much interest and fees you’re accruing.

It may seem easiest to put this debt out of sight and out of mind. This feeling is understandable; credit card debt can be overwhelming to the point that it seems easier to just keep the closet door closed.

When you consolidate your credit cards, instead of having to remember multiple payment deadlines (and accruing multiple separate fees and interest balances), you’ll only have one payment.

Not only is debt easier to manage and pay off when you only have one loan, consolidating your credit card debt may mean that you could also get a lower interest rate, which may help reduce how much you pay over the long-term.

This factor may be especially helpful considering that the average credit card interest rate hovers around a whopping 17%.

Here’s a look at some of the common methods you may consider using in order to consolidate your cards.

Consolidating with a Credit Card Balance Transfer

One common way to consolidate your credit card debt is with a credit card balance transfer that puts all of your credit card debt onto one new card. In fact, many credit card companies will offer low interest—or even 0% interest—transfers for a certain period of time to encourage you to use a balance transfer for consolidation.

However, if you’re considering this route, there are a few things to remember. First, as mentioned, the low or 0% interest rate may only be introductory rates, which means you’ll have a limited amount of time to take advantage of them.

After the introductory period, rates my skyrocket, perhaps becoming even higher than your interest rates from before. So, this strategy may work best if you have a manageable amount of debt and could pay it off within the introductory period or shortly thereafter.

You may also have to pay a balance transfer fee, which may be a fixed fee or a percentage of the amount that you owe. If you carry a high balance on your cards, this fee could be prohibitively expensive.

Additionally, new purchases on this card may not be treated the same way as your transferred debt. For example, you may have to start making interest payments on new debt immediately.

Using a Debt Consolidation Loan

Your bank may offer a specific debt consolidation loan that allows you to corral your credit card debt—and even medical debt or personal loan debt—under one loan. One single loan can simplify your payments, and may even carry a lower interest rate than your credit cards.

As with credit card balance transfers, beware the teaser rate with these loans. Low interest rates may only last a short period of time before your bank hikes your interest rate. Consider the cost of fees to take out the loan as well.

Another important factor to consider is the term of the loan. While your interest rates may be lower, the length of time over which you’ll be paying may actually increase the amount of money you pay over time.

Taking out a Personal Loan

You may also want to consider a personal loan to help you consolidate your debt. Banks and lenders typically offer these unsecured loans. Interest rates may be lower than those you are currently paying, but you may want to consider that, depending upon your credit history and the lender’s criteria, the lowest interest rates may not be offered to you. Also, personal loans may come with origination fees, which may be between 1% and 8% of your loan.

Potential Benefits of Credit Card Consolidation

Credit card consolidation is an option to help make your debt more manageable. While it won’t magically whisk away your debt, better terms may give you the confidence, organization, and time you need to get rid of it altogether.

A credit card consolidation loan may help you pay the debt off sooner, or at a lower interest rate, and give you emotional and financial relief.

And because with consolidation all of your debt will be combined into one new loan, you’ll only have to remember one payment deadline, helping to reduce the likelihood of late payments and fees.

Unlike filing for bankruptcy or defaulting, although credit card consolidation may have an initial negative effect, if you do pay off your debt you may be able to raise your credit score in the long run. It may provide you with a tangible solution to tackle your credit card debt head on.

Should You Consider Credit Card Consolidation?

If you have a large amount of high-interest debt and want a simple, more streamlined way to manage your credit card payments, you may want to consider credit card consolidation via a fixed-rate, unsecured personal loan.

Understanding whether this is the right avenue for you also depends on your personal financial situation. Here are a few hypotheticals:

You…

Have a plan to pay off your debt.

Is credit card consolidation right for you?

Credit card consolidation isn’t a quick fix. It typically works best if you have a long-term debt management plan that includes budgeting and a plan to cut spending.

You…

Have manageable debt.

Is credit card consolidation right for you?

One possible way to figure out if your debt is manageable is if you answer “yes” to either of the following questions: Can you pay off your debt in five years? Is your debt less than half your yearly income?

You…

Are serious about paying off your debt.

Is credit card consolidation right for you?

Sometimes credit card consolidation can boost your confidence a little too much, resulting in a more relaxed approach to debt payoff. You can potentially avoid this pitfall by taking your debt payment plan seriously and committing to making the necessary payments (at least the minimums) each month.

You…

Can pay off your credit card debt in six months or less.

Is credit card consolidation right for you?

Probably not. If you can pay off your debt that quickly, then the savings you’d receive from consolidating your credit card debt would likely be minimal.

Potential Cons, and Other Factors to Consider

When you consolidate your credit cards, it’s easy to feel like you have a new lease on life. But in taking out a consolidation loan (or balance transfer), you are still taking on debt and will still need to make payments on time to avoid late fees and damaging your credit. Avoid simply kicking the proverbial can down the road by making a plan to pay off your new loan.

Lenders take your credit history, income, and other factors into account when considering you for a personal loan to consolidate your credit card or other debt.

If you’ve been making on-time payments, meet income criteria, and have a credit history that meets the lender’s eligibility requirements, then consolidating your credit card debt might be worth looking into. The sooner you can set yourself up to pay off your debt successfully, the better (generally), and credit card consolidation can be one way to go about it.

With a SoFi personal loan, you can check your rate and terms without affecting your credit score1 and if you like what you see you can apply to consolidate your credit card debt into a new loan with no origination, prepayment, or late fees—and that could help give you that confidence, organization, and time you need to get a better handle on your debt.

Visit SoFi to learn more about consolidating your credit card debt with a personal loan and see what rates you may qualify for.

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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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.
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 .
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL17107

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Emergencies happen. Even with the most carefully planned budget, you can run up against unexpected costs, fees, or expenses you didn’t anticipate. You might have to pay off unexpected medical expenses or cover moving costs. Sometimes it’s not even necessarily an emergency, but you need money and you need it as quickly as possible.

The thing is, most of us don’t have it—only 40% of Americans are able to cover an unexpected $1,000 expense without resorting to credit. In some cases, a personal loan can provide an alternate strategy for filling in financial gaps. Credit cards often carry high interest rates, the average annual percentage rate (APR) on existing credit card accounts is around 14.14% , according to WalletHub. For some borrowers, a personal loan can offer a lower interest option for filling in financial gaps or paying for a large expense.

While personal loans can help someone get funds, the loan would still accrue interest. Relying on an emergency fund as a first option for unexpected expenses might be a more responsible alternative. But in cases where an emergency fund or long-term savings plan aren’t enough to help make ends meet, a personal loan could provide a lower interest option than credit cards.

There are plenty of other reasons to consider a personal loan. Maybe you want to lock down a home remodel or consolidate high-interest credit card debt. If you’re looking to speed up the approval process for a personal loan there are a few tips that could help you qualify more quickly.

If you’re hoping for swift approval on your personal loan application, there are at least two stages of the process to consider:

•   How you stack up as an applicant

•   The lender you’re borrowing from

If you want to get approved quickly for a personal loan, you’ll first want to get your finances organized and then you’ll want to compare various lenders’ approval times.

Setting Yourself Up as a Better Personal Loan Candidate

There are specific qualifying criteria most lenders, including SoFi, look at when considering approving a personal loan application. Lenders typically review at least some of the following borrower information when reviewing an application for a personal loan:

•   Credit history, score and debt

•   Proof of ongoing stable income

In order to increase their chances of getting approved quickly, borrowers typically want to put their best financial foot forward. That means showing that they have steady income, an unblemished financial history, and a solid credit score.

It’s worth noting that there are a variety of different scoring models and each lender might have their own criteria for reviewing a potential borrowers credit. With that in mind, Experian does offer some insight into interpreting credit scores—generally a score FICO® Score above 670 can be considered “good,” above 740 as “very good,” and above 800 as “exceptional.”

But credit score is just a portion of the information a lender will need. While it is usually a primary factor, it’s likely not the only factor that will determine if your application is approved or not.

To make the application process a little easier, you can assemble the financial information that might be requested. It can save time during the application process if you’ve already gotten together all the information you need to apply for a loan. To apply for an unsecured personal loan, you may need items like:

•   Proof of Identity: The exact documents requested may vary, but you might need to submit a government-issued ID such as a driver’s license, proof of your Social Security number

•   Proof of Address: Certain laws are influenced by your state of residence. Some lenders may also want to know if you rent or own a home.

•   Proof of income: Lenders want to know you can pay back your debt. Some may request your W-2 tax forms, recent pay stubs, or bank statements. Some may require verification from your employer of stated income and to confirm current employment.

Most lenders look at your credit history, credit score, income, and debt-to-income (DTI) ratio when considering your personal loan application (among other factors). Lenders use DTI ratios to get an idea of a borrower’s ability to repay a loan based on how much money a person is making compared to how much money they already owe. The ratio can be calculated by adding up the total monthly debt a person owes and then dividing that total by the individual’s gross monthly income.

The exact criteria used to determine a borrower’s creditworthiness may vary by lender. Compiling commonly reviewed information, like your credit score and DTI, ahead of actually applying, can sometimes shed light on whether you’ll be approved for a personal loan or not. Some things a lender might see as problematic include:

•   A short work or credit history

•   Low, unstable, or no income

•   High debt-to-income ratio (varies by lender)

•   Too many credit inquiries in the recent past

In addition to having all your information ready, you’ll also want to consider how much money you need to borrow. Too small, and you might not fully cover your expenses.

Too large, and you’ll have to pay interest on money you don’t even need. Knowing that magic number before you apply for a loan can save you the back and forth that could be required if you’ve been approved.

If you’re in need of money quickly, but have a less-than-strong credit history, another option may be to apply for a personal loan with a co-borrower. A co-borrower takes out a loan with you, so you’re essentially borrowing the loan together. The co-borrower is equally responsible for loan payments, and if either of you miss any payments on the loan, both of your credit scores could be impacted.

Finding a Faster Lender

The other half of the personal loan equation is determining which type of lender works best for your needs. Not all lenders work on the same timeline, some will grant approval faster than others. But, speed can sometimes come at a premium.

Traditional banks and credit unions typically take a few days or a few weeks to review and approve applications before disbursing funds. If you have less than ideal credit and are looking for a smaller loan, you might consider shopping rates and terms at a few local lending institutions. However, if speed is required, you may be able to find faster alternatives.

There are a handful of traditional bank lenders who can approve a personal loan for well-qualified applicants in less than a week. Many quick-approval personal loan lenders, however, are online or non-traditional lenders.

With online lenders, like SoFi, funds should generally be available within a few days of approval. One of the major benefits of the online route is the fast application time. If you have all your information ready, it can be quick and easy to apply using an online form.

Since it can be easier and faster to apply for personal loans online, you might take some time to compare rates against different lenders. Another benefit of online lenders is that you can pre-qualify and see your rate before you fill out a full application.

At the pre-qualification stage, you’d usually provide some basic personal information and the lender typically performs a soft credit check to determine the amount of money you could be approved for and at what interest rate and loan term.

A soft credit check shouldn’t impact your credit score (but make sure that’s what the lender is doing during their pre-qualification check—they should make that clear).

After you have gotten quotes from a few different lenders, it’s typically easier to determine which loan meets your needs. Once you have a few different quotes, take time to compare:

•   Each lender’s terms. This includes loan terms, late fees, insufficient funds (NSF) fees, etc.

•   Repayment periods—a typical repayment term can range from 12 to 60 months depending on the lender.

•   Origination fees—some lenders may charge a one time fee up front for processing your loan application and closing the loan. Origination fees on personal loans can range from 1% to 8% of the loan amount in some instances and can typically be rolled back into the loan or paid for through the loan proceeds.

•   Any additional fees or premiums

Once you feel comfortable with the lender and their terms, then you’re probably ready to formalize the loan. As you explore personal loan options, consider a loan with SoFi where there are absolutely no fees — including no prepayment penalties or origination fees required.

Looking for a personal loan? Consider SoFi where the application process can be completed easily online. 

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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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.
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.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

PL18205

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If you’re currently in the process of planning a wedding, you’re likely enjoying the endless cake samples and making difficult decisions, like whether to have a donut bar or a candy station at the reception.

Unfortunately, wedding planning isn’t just about delicious dessert samples and seating arrangement logistics.

It can be stressful, especially when it comes to figuring out how you’ll pay for all those savory and sweet treats and gift bags for your guests—let alone the rest of it like, you know, a dress, the actual reception hall, a minister, food, and an open bar if you’re lucky.

According to The Knot’s 2018 Real Weddings Survey, the costs of planning a couple’s special day now averages $33,931, though this number can vary greatly depending on where you live.

Expensive, densely populated cities like New York and Chicago will likely be more expensive than hosting a wedding in a more rural locale.

While there are ways to save on wedding costs—like cutting back on pricey place settings, keeping the wedding parties smaller, opting for a cash bar, and doing a bit of do-it-yourself craft work on flower arrangements—more couples are finding that they need a little bit of extra cash to get them through the wedding planning process. This is especially true when every vendor seems to require an immediate deposit.

That’s why some turn to wedding loans as an alternative to funding their weddings upfront.

Find a venue right out of a Pinterest post, but need a $10,000 deposit by next week to secure it?

Try on the dress of your dreams, then discover it’s $2,500 more than you have in your checking account?

Want the band of your dreams to play but need to plunk down cash to get them?

If your savings are coming up short, an unsecured loan could be just what you need to keep your dream wedding from being derailed. Here’s some more information about the ins and outs of wedding loans to help you decide if it is the right choice for your big day.

What Is a Wedding Loan?

A wedding loan doesn’t come from a wedding fairy godmother with a wave of her wand—although that would make for a better story. Instead, a wedding loan is simply a personal loan that you use to pay for wedding expenses.

So, what’s a personal loan then? A personal loan is just as the name implies—a loan you take out for (almost) any personal reason at all. You could use a personal loan for everything from renovating your home, to consolidating high-interest credit debt, to paying for a vacation or a wedding.

Personal loans are typically given out as one lump sum. For example, a person could take out a $10,000 personal loan for their wedding. They’d receive this payment upfront and could use the cash immediately.

The lender and the recipient would agree upon a repayment plan as part of the terms of the loan. These specific terms will vary by lender but, typically unsecured personal loans are paid back within one to five years.

A personal loan can be either secured or unsecured. With an unsecured personal loan, a lender won’t require a collateral asset. With a secured loan, the lender could require collateral or could require a co-signer on the loan—like a house or other asset of value.

Most lenders also allow borrowers to pay off the loan early, regardless of the loan term. That means if you happen to get a lot of cash as a wedding gift, you could use it to pay on your loan in part or in full.

Consider reviewing the terms and conditions completely before borrowing any loan, while not all lenders do, some may charge a prepayment penalty.

Variable-rate loans may also help save money on interest in the short-term, but it could rise in the long run. Fixed-rate loans mean the interest will remain the same as when the borrower signed on the dotted line, even if other interest rates shoot up faster than the price of a good DJ on a Saturday in the summer.

Considering a Personal Loan for a Wedding?

Personal loans can be a good option for those who have budgeted to pay for their wedding expenses, but just don’t have the cash on hand to cover immediate deposits or a slew of bills at once.

Maybe your parents committed to helping out with wedding costs and promised to send a cash infusion next month, but the florist whose work looks like a living Instagram photo will go with another couple if you don’t book now.

Or maybe you and your betrothed are putting aside a certain amount each month for wedding expenses, but you don’t want to put the catering deposit on your credit card because all the travel rewards points in the world will not outweigh the interest you’ll be charged.

In other words, if you have a good plan for paying your personal loan back and you just need it to bridge the gap, then a personal loan for your wedding might be perfect for you.

However, if you don’t know how you will pay off your loan but you really want a little extra room in your budget to buy that Vera Wang dress, you might want to think twice before signing on the dotted line for a personal loan.

The last thing you want to do is start your marriage off knee-deep in debt you can’t pay back, even if the pictures look amazing.

Pros and Cons of Wedding Loans

Need a little help weighing your options? Here are a few pros to getting an unsecured personal loan to help pay for your big day.

•   Personal loans are typically fast, easy ways to get some extra cash when you have to pay for deposits or cover expenses quickly for a wedding.

•   Many lenders allow you to apply for a personal loan online, making it easy and efficient to secure funding if you qualify.

•   Funds may be available in as little as one business day, depending on the lender. That way you won’t have to wait around to start putting down deposits and checking things off your wedding to-do list.

•   Personal loan lenders typically charge less interest than credit cards. This could make it a more financially viable option for those looking to pay off their vendors without paying extra in interest.

•   Personal loans are one way that could help build your credit over the long-term, if you pay them back on time, which is an excellent gift to give both you and your spouse on your wedding day. But, like all good things in life, personal loans have many downsides. Here are a few cons to be wary of before signing on the dotted line.

•   Personal loans can tempt people to spend more than they can afford. If you take one out, remember you have to pay it all back—plus interest.

•   Some personal loan lenders have prepayment or origination fees. Make sure to check the fine print before agreeing to anything.

•   It’s always a better bet to save up for anticipated expenses rather than financing them. Try to budget and save first, see if your vendors are willing to work out a payment plan, and think about what you really need versus what you want at your wedding.

•   You might be paying off your party years later, with interest. If you still feel like you need extra cash to fund your big day, check to ensure your personal loan has a lower interest rate than credit cards before taking one out.

How Much Can You Borrow for Your Wedding?

To qualify for a personal loan with a competitive rate, you’ll likely need a good credit score and a well-paying job, among other important financial factors, or potentially a co-borrower who has both of those things. Many lenders consider a good credit score to be anything above 700 , though this may vary depending on the scoring model used by the lender.

You might be able to get a loan if your score is below that, though it’s possible you’ll have to pay more in interest or you might qualify to borrow less money.

Things like how much debt you currently have, including student loans or a mortgage, can also impact how much you can borrow. At SoFi, we offer personal loans up to $100,000.

But unless you’re planning a wedding at the Plaza Hotel in Manhattan complete with champagne towers and children dressed as cherubs, it’s unlikely you’ll need that much.

Getting the Funds You Need for Your Wedding Day

Just like any loan, you need to have all your financial information and documents in order before you apply. Be sure to have things like proof of income, bank statements, information about your other debt, your Social Security number, and your identification ready.

With most online lenders, you can get pre-qualified and then decide whether to move forward with the online application. From there, you typically choose your rate, answer any additional questions, send copies of the necessary documentation, and sign the loan agreement all within a day or two.

Again, while saving up for your wedding is probably preferable to taking on debt before you say “I do,” expenses can arise that you may not expect, so knowing what your options are for personal loans can be helpful.

Don’t forget to do your research and understand everything you should be looking for in a lender so that you don’t get stuck with a loan that’s about as appealing as that ugly set of grey serving platters your Aunt Ina bought you for your wedding shower.

Ready to say “I do” to a wedding loan? Check out your options with SoFi now.

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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 .
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.
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.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

PL17107

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You don’t need to know a lot about investing to be an investor.

You can hire someone to do the work for you, and let a professional make a plan, choose the products, and sweat the small stuff for you.

You can …

… But you may find that you’re still sweating the big stuff. Literally sweating when you look at your statement every month and wonder if you’re getting the maximum return possible based on your age, risk tolerance, and goals.

A Strategy Sampler

It’s natural to be nervous about your nest egg. But a little knowledge about the methods that go into building and maintaining a successful portfolio could help reduce the worry and make you feel better about what’s going on with your accounts.

Here are a few strategies you might want to look into as your investing career evolves:

1. Investing in What You Know or Want to Know More About

Having some knowledge about, or an interest in, a certain industry, sector, or type of investment can offer a few advantages when looking at assets to build a portfolio.

•   It could help in deciding if a product or company has the potential for long-term growth or if it’s a short-lived trend.

•   It can help with understanding how a company makes money and how—or if— that money is used in a way that benefits stakeholders.

•   It can offer some insight into a company’s products, strengths and weaknesses, and overall reputation.

•   And it could help keep you more engaged with the investment as time passes.

If, for example, you’re into technology, and every new digital gadget grabs your attention, you may want to look at investment opportunities in that sector.

Do you feel you’ve found something that could have a meaningful impact on businesses and consumers and/or has long-term potential? It might be worth researching or talking to your advisor about investment possibilities.

2. Diversifying Across Different Industries and Asset Classes

Even if you’re new to investing, you’ve likely already been told many times to avoid “putting all your eggs in one basket.” When building a portfolio, that means spreading your money across different asset classes (cash and cash equivalents, stocks, bonds, commodities, real estate) and different industries or sectors (health care, tech, utilities, consumer goods, financial, etc.) to limit risk.

The idea is that if one investment goes down, the whole portfolio won’t be sunk. Portfolio diversification also offers the potential to catch the next hot stock or hot sector without taking unnecessary risks.

Buying a mutual fund or exchange-traded fund (ETF) can help an investor achieve diversification faster and with less expense than purchasing individual securities, but fund investors still have to be careful about concentration. Buying ten technology ETFs doesn’t necessarily mean you’re well-diversified.

Owning two (or more) different funds doesn’t necessarily equal diversification. If the funds own the same stocks—perhaps because they follow the same index—you might not be getting any more diversification than you would by investing in just one fund.

3. Giving Cash Some Credit

Compared to most other investments, cash doesn’t register much excitement.

It’s generally safe. It’s usually easy to access. And, yes, most financial advisors will tell you, it’s a good idea to have a decent amount of cash set aside in an emergency fund in case an unexpected expense comes up.

But even though interest rates have been on the rise—making the returns from online deposit accounts and CDs more appealing to savers—compared to stocks or mutual funds, the money to be made on cash and cash equivalents can seem pretty meager. Some wouldn’t call cash an “investment” at all.

But investors can still find it useful, because keeping some cash available at all times can allow them to take advantage of opportunities in the market. Investors can use it to hunt for deals during a bear market or correction, with the goal of purchasing high-quality investments at bargain prices.

That means flexibility and liquidity are key—so short-term investments and accounts that can be easily accessed tend to be more appropriate for the cash sidelined for this purpose than long-term CDs or annuities.

4. Taking a Contrary Approach to Typical Investor Emotions

You may have heard the old Warren Buffett quote about the best way to react to the stock market’s unpredictable movements: “Be fearful when others are greedy,” the Oracle of Omaha says, “and greedy when others are fearful.”

In other words, buy low sell high.

But that’s easier said than done. Fear, greed, excitement, and disappointment can override logic when making investment decisions.

According to research from Dalbar Inc., which has been tracking investor behavior since 1994 with its Quantitative Analysis of Investor Behavior (QAIB), the average market investor consistently earns below-average returns—and that’s in large part because of bad decisions driven by emotions.

When the markets are doing well, everybody wants in—even if it means buying high. When the markets get shaky, investors tend to jump out—and that means selling low.

Those who understand market cycles and take a contrary approach—buying when stocks are “on sale,” and selling when others in the market are buying high—may find they benefit. But they have to be ready to push down their emotions and stick to a disciplined plan.

5. Growth Stock Investing

There’s no telling which stocks will be the next big winners, but investors sure like to try to figure it out. Buying shares of a growth company early in its drive to greatness is the holy grail of stock picking.

The goal of this stock investment strategy is to hang on as revenue and earnings rise sharply, and then reap big returns as other investors catch on and jump aboard.

Growth investors look for stocks that are likely to produce market-beating returns by making educated choices based on information, not speculation. (See No. 1: Investing In What You Know.)

That means looking at a company’s historical earnings growth, but also its future growth potential. It also can help to research the company’s core values: What’s its reputation for innovation, how strong is its management, can it sustain its current momentum, what’s in the future for its industry, and what’s the stock’s short- and long-term potential?

People often think of growth stocks as being limited to small companies or companies in the tech sector. But these investments can come from any sector, and they can be small-, mid-, or large-cap stocks.

Growth stocks aren’t necessarily a fit for income investors, as they typically don’t pay dividends. Volatility is another factor to consider—higher potential upside comes with higher risk of downside. But the earnings growth rate can be dramatic, and growth stocks can be a worthy addition to a long-term portfolio if they fit within your strategy.

6. Value Investing

Value investors look for stocks they think the market has undervalued for some reason. Perhaps a scandal has temporarily damaged a company or industry’s reputation, or a company cut its dividend and the market overreacted to the news. Or it could be that no one is paying attention and other investors are missing out on a good thing.

Whatever the reason, value investors look for opportunities to buy stocks at what they believe is a discounted price.

One way to screen for value stocks is to look for a low price-to-earnings ratio (P/E ratio), which tells you how much you’re paying for each dollar of earnings. (Just remember: Past earnings don’t guarantee future results.) Some other metrics to consider might be price-to-book, debt-to-equity, and price-to-earnings-to-growth.

7. Playing Defense With Stop-Loss Orders

One way to help mitigate market risk in a portfolio is to set up a stop-loss order that will automatically sell all or part of a position in a stock or ETF if it falls below a predetermined price limit.

A stop-loss order strategy can be especially useful for new or nervous investors, because it can be an easy way to get some control over an investment without selling out too soon. When the preset level is reached—for example, you’ve asked your broker to sell if a stock drops to $150—the stop will become a market order and any shares held will be liquidated.

Stop-loss orders are considered a short-term trading strategy. They can be effective for investors who have concerns about a painful loss but can’t or don’t want to constantly monitor their holdings.

But they aren’t necessarily a fit for buy-and-hold investors who are thinking long-term. (Just because a stock drops in price doesn’t mean it won’t recover or that it should be sold.) The goal is to set the price low enough that the investment won’t be affected by a market blip, but high enough that in case of much larger drop, the stock is dumped before too much pain is inflicted.

8. Rebalancing on a Regular Basis

Rebalancing is a strategy that can help investors keep their investments in line with their target allocations as the markets move up and down.

For example, if a person wanted to have a moderate 60% stock allocation, and stock prices went up (yay!) over a period of months, that investor might end up with 70% or more in stocks instead. That might be a good time to sell some stocks to get back to the original allocation.

Portfolios can be rebalanced at regular intervals (e.g., quarterly, monthly, annually) or at set allocation points (when the assets change a certain amount). A popular rule of thumb is to rebalance when an asset allocation changes more than 5%.

Robo-advisors may offer an automatic rebalancing feature, or you may choose to make the changes on your own, when you see a need.

9. Starting Early and Staying Consistent

This is as basic as it gets: The longer money is invested, the more potential it has to grow. Investors who start saving early and stick to a plan are the most likely to see their nest egg thrive.

Saving any money at all can seem improbable when times are tight—when you want to buy a car, go to college, own a home, and—you know—just pay your bills every month.

But if you can commit to making investing a part of your monthly budget—whether it’s a 401(k) contribution that automatically comes out of your paycheck or an investment account you set up online through SoFi Invest®—your future self will thank you. Making investing routine can remove the temptation to spend the money elsewhere.

And those investments can be expected to compound over time; investors earn interest on the money they deposit and the interest that money accrues.

Someday, that money could provide retirement income, pay for vacations, and help take care of loved ones.

Picture Yourself at a Supermarket

Today’s investors have an overwhelming array of available products to choose from. It’s more than just the stock market—it’s a supermarket, and you can find just about anything you want there.

That’s not a bad thing. Investors can move down the virtual aisles and discover what works for them. Stocks, bonds, all kinds of funds, real estate, commodities—if they don’t like something, they can move on.

But if you’ve ever gone to the grocery store hungry and without a list, you know what can happen.

You can end up getting too little. Or too much. You might find some new things you end up liking—or decide your impulse buys were a total waste of money.

It’s the same with investment vehicles and types of investment strategies. It can’t hurt to do a little sampling, but it can help to have some understanding of what you want and how your choices will blend together into an overall portfolio plan. That just might be the best investment strategy of all.

Investing doesn’t have to be scary or overwhelming if you research your options carefully and start with an investment account that gives you as much control as you feel comfortable with.

With SoFi Invest, for example, you can trade stocks and ETFs yourself with active investing or let SoFi’s advisors build a portfolio for your long-term goals with automated investing. (SoFi members get one-on-one access to financial advisors at no cost.)

SoFi Invest is built to grow with you and your goals—no matter what your skill level is when you start. You won’t pay any transaction or management fees, which can eat up your hard-earned investment savings. And you don’t need a ton of money to get started–you can open an account with just $1.

Ready to develop your own investing plan? With SoFi Invest, you can be as hands-on or hands-off as you like.

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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.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
Advisory services are offered through SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at adviserinfo.sec.gov .

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Credit card debt is an increasingly severe problem in the U.S. As Americans become more dependent on their small plastic cards, the amount of debt seems to just get bigger. And bigger.

According to Experian , the average American has a credit card balance is almost $6,200. Along with individual and household debt, the total amount of credit card debt in the U.S. has reached its highest level ever.

Whether debt has got you down, or you’re wanting to consolidate your existing credit cards and opt for ones that have the best perks and benefits for your circumstances, the question of canceling a credit card can be an extremely sticky one.

Many of us find ourselves wondering the best course of action to reduce credit card debt without affecting credit score, and the concern is valid.

While closing an account may play a role in getting a better handle on any existing debt, it’s important to understand ways to cancel a credit card in a way that doesn’t end up setting you back even more.

Ahead are some common steps that are typically needed to be taken in order to fully cancel a card, including sending a written confirmation and keeping a watchful eye on your credit report after you’ve put through a cancelation request.

Do You Really Need to Cancel?

It can be tempting to cancel cards or close accounts when things get overwhelming. But sometimes this may not be the best option.

In many cases, canceling a credit card can actually damage one’s credit score. In fact, canceled accounts may remain on a credit history for several years after the date they are closed. (With a card in negative standing, it will remain on your credit history for up to seven years, and a cancelled card in positive standing typically remains for 10 years.)

It’s important to take the time and analyze your motivations behind canceling an account before you actually do. After all, it may be smarter to simply cut up or hide a credit card rather than officially canceling.

As always, the decision is up to you, but it’s helpful to take these considerations into account before finalizing a decision that may have a long-lasting impact on your credit health and your long-term financial future.

Closing One Account at a Time

If you’ve decided that canceling your card is the best way to go for you, there are some things you may want to keep in mind before getting started.

First of all, when it comes to canceling credit cards, it’s important to remember that not all of them are created equal.

Depending on the exact reasons that led you to wanting or needing to cancel a card, you may want to consider a few things before pulling the trigger.

For example, if you’re thinking of canceling a card, you may want to consider canceling new ones instead of old ones to avoid impacting your credit score.

In the world of credit, older, more established credit in good standing is looked upon more favorably than new, and so you may want to keep this in mind when choosing which card you would like to cut.

On top of this, some credit cards may offer more appealing rewards programs for your lifestyle than others, so you may want to take stock of the perks that come with each card before deciding which one you want to stop using.

Paying Off or Transferring Your Balance

Depending on the total amount of credit you have available, closing a card account with a high credit limit could run the risk of damaging one’s credit score.

If you are carrying high balances on other cards or have active loans, this damage could be especially noticeable, since your debt-to-credit ratio (also called your credit utilization ratio) may affect your credit score. (Typically, you’d want to stay at 30% or below.)

If you’re planning on canceling a credit card, you will likely want to ensure that you’ve paid off any remaining balances on that account. If you fail to do so, you may end up having to pay interest charges on any remaining balance.

If you normally carry a balance from one month to another, you may need to take extra care to pay the full statement balance before canceling a card in order to make sure there is no money left in your balance and avoid future interest charges.

You may also want to take some time to brush up on your knowledge of credit card utilization, as it can be important to understand when it comes to canceling your credit cards smartly.

In order to lessen the negative impact of closing one of your credit card accounts, you may want to pay off all of the balances you carry on all of your cards first.

If you cancel a card while carrying zero balances on all your cards, your credit utilization rate should stay at zero, so even if you cancel a card and remove its balance, your rate shouldn’t be impacted.

Contacting a Credit Card Company

Once you’ve paid off your credit card balance, you will want to contact your credit card company to put through your request to close your account.

Sometimes, you will be able to cancel a credit card without making a phone call. It may be helpful to look up how to cancel a particular credit card online to see if your credit card company offers this option.

In most cases, you will want to contact your credit card company by phone. Usually, your customer service number will be printed on your credit card.

From there, you’d inform your credit card company that you are canceling your card. Keep in mind that some companies require you to speak to a customer service representative in order to complete this process, while others are more flexible.

It’s helpful to know that credit card representatives may be trained to try to convince you to keep your account open. Remember that you have the right to close your account at any time.

Before you hang up the phone, you may want to ask your representative for their name so that you can include it along with your written notice of cancelation.

Sending Written Confirmation

Once you’ve called and canceled your card, you may choose to mail a written confirmation letter to your credit card company. This can be a good option in order to protect yourself generally, but also in the event that the customer service representative made a mistake while putting through your card cancelation request.

In the letter, you would write things like your name, phone number, address, and account number as well as the details from the call you had with your credit card representative. If you got their name, you may want to also include it here.

You might choose to also state that you’d like your credit report to show that the account was closed at your request.

If you choose to mail a letter, consider sending it via certified mail so that you can ensure the company receives it, and make sure to keep a copy for your records.

Keeping an Eye on Your Credit Score

When canceling credit cards, patience is key. From the moment you begin the process to the moment your credit card is officially canceled, it may take one month or even longer, depending on the company.

After your account has officially been canceled, you may wish to keep tabs on your credit report to ensure that your credit card has in fact been listed as closed.

If, for some reason, the card is still marked as open, you may need to get back in touch with your credit card representatives and, possibly, repeat some or all steps in this process.

Know that it can sometimes take several weeks for changes to show up on your credit card report. For this reason, it’s good practice to get into the habit of checking your credit score regularly, whether or not you’ve recently closed a card.

Of course, if you did just cancel a card, you may want to wait a month or so to see whether or not closing your account impacted your credit score.

Keep in mind that, every twelve months, you can get one free copy of your credit report online through AnnualCreditReport.com . Some credit card companies may also offer apps that allow you to check your score for free.

Destroying Your Card

Once you’ve confirmed that your card is canceled, then you’re almost done with the process.

If you’ve ensured that the account is in fact closed, then you can officially destroy your card in the manner of your choosing.

Though cutting up a credit card may provide a feeling of freedom and catharsis, it’s important to be careful to choose a method that makes sure the information on your card is not recoverable.

If you have access to a shredder, shredding your card may be the most efficient and secure way of destroying it.

If you’re using scissors, make sure that you properly cut up all the identifying pieces of information on the card, including your signature, the expiration date, CVV number, and the credit card number itself.

From there, ensure you properly dispose of the shards. For an added layer of security, consider throwing them away in more than one garbage can.

Maintaining a Healthy Relationship with Credit

Despite the array of credit card-related woes many Americans experience, it is possible to leverage credit cards in a healthy and productive way.

Depending on your needs and financial circumstances, finding ways to use credit to your advantage is a great way to ensure that you don’t wind up with more debt than you can handle.

A credit card cancelation can often offer an opportunity to take stock of the way you’re using credit, and establish better practices moving forward.

Once you’ve familiarized yourself with your credit utilization, and taken a look at the rewards you are currently signed up for, you may choose to go about things differently in the future.

One of the best ways to help you keep tabs on your credit is to build a practice of checking your balance and your credit score regularly.

This may look like downloading an app that lets you see all of your savings, checking, and credit card accounts in one place, or just getting into the practice of logging into all of your account on a regular basis.

Whichever way you choose to go about it, there are several strategies you can try out that may help you to keep your credit in check.

From leveraging balance transfers to using the snowball method to help pay off any debt balances you currently have, there are ways to help you get your credit card debt and finances under control—regardless of whether or not you decide to get rid of some of that seemingly precious plastic.

Looking for a way to manage credit card debt? With SoFi Personal Loans, you can consolidate with a potentially lower interest rate.

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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.
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
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