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Applying for credit cards isn’t something you should take lightly because it can lower your credit score with each application you submit. Reviewing a credit card application typically involves a hard credit inquiry, which usually lowers a score by perhaps five points or so. If you were to fill out several credit card applications at one time, that could have a significant impact on your score.

Still, while applying for a credit card can hurt your credit, there are a number of potential pluses to credit cards, from allowing you to build your credit history to earning rewards. Here’s how to navigate the effects of applying for credit on your credit score, as well as some alternatives to consider if you don’t think your score can currently weather it.

Hard vs Soft Credit Inquiries

To understand how applying for a credit card can hurt your score, it’s first important to know the difference between hard and soft credit inquiries.

A hard inquiry, also known as a hard pull or hard credit check, generally occurs when a lender is determining whether to loan you the funds you’ve applied for. This might happen if you’ve applied for a mortgage or a new credit card, for example.

On the other hand, a soft inquiry, or soft credit pull, tends to happen when someone runs a credit check to gather information without the express purpose of lending you money. For instance, a credit card issuer may do a soft pull in order to make a preapproval offer, or a potential employer might perform a soft inquiry as part of the application process. A soft credit inquiry also may happen when you check your credit report.

Perhaps the most important difference between a hard pull vs. a soft pull is how it impacts your credit scores. While hard credit inquiries show up on your credit report and affect your score, soft inquiries do not. Further, while soft pulls can be done without your consent, creditors need your approval to do a hard inquiry.

How Applying for Credit Cards Can Hurt Your Score

While your credit score won’t take a huge hit when you apply for a credit card, it will get dinged. Why? When you apply for a credit card, the card issuer will perform a hard inquiry to determine whether you’re a good candidate to lend money to.

Hard inquiries can lower your credit score because a new application can represent more risk for the card issuer. According to FICO®, a hard credit inquiry will generally affect the score on your credit report by five points or less. Those with few accounts or a thin credit history can experience a greater impact on their score. Additionally, multiple inquiries within a short period of time can exacerbate the negative effect on your credit score.

Hard pulls stay on your credit report for two years, though their impact on your credit scores typically vanishes after a year. It’s important to note that your score will see an impact whether or not you’re approved, as the hard inquiry is conducted either way.

Should You Apply for Multiple Credit Cards at Once?

Simply put, probably not. Applying for multiple credit cards at one time is likely to have a negative impact on your credit score. While it might make sense to apply for more than one job at a time, that’s not the way to go with credit cards. Instead, you should approach applying for credit cards strategically.

By applying for several cards over a short period, you might send the signal that you’re desperately seeking funds and headed for — or already in — trouble. You’ll appear risky to lenders and that will likely be reflected by a dip in your credit score.

Of course, this doesn’t mean you can’t have multiple credit cards. You’ll just want to take your time and space out your acquisitions. If you get rejected for a card, pause to figure out why, and then take steps to address the suspected weak spots. Once you’ve had time to build your credit, consider trying again.

How Often Can I Apply for a Credit Card Without Hurting My Credit?

Per Experian, one of the three major credit bureaus, it’s wise to wait at least six months in between credit card applications. If you apply for a number of credit cards within a few months, you could see more than the usual ding to your score that new credit inquiries typically cause. While the effects may be brief, Experian states that you could see a “potentially significant drop” in your score.

While six months is the minimum waiting period suggested, how often it’s appropriate to apply for new credit cards also depends on your financial specifics. For instance, if your application was denied due to your credit score and you still haven’t built it, then it may not make sense to apply again, even if six months have passed. Similarly, you might not choose to apply for a new card if you know you have another big lending application coming up, such as for a mortgage.

On the other hand, if you have a strong credit profile, your score may not take as much of a hit if you decide to apply for another card sooner to try to cash in on generous rewards or a hefty welcome bonus offer. Those who don’t yet have a credit history and are beginning to build a credit profile may also find it’s worthwhile to wait less time between applications.

Recommended: What Is the Average Credit Card Limit?

Can Applying for Credit Cards Help Your Score?

There are two sides to a coin and so it goes with applying for credit cards — there can be some upside when you apply for a new card.

This is partly because opening a new account effectively increases your credit limit. In turn, this can lower your credit utilization ratio, which is your outstanding balances compared to your overall credit limit. Credit utilization accounts for 30% of your credit score and is second in importance only to your payment history.

Another potential plus to opening a new card is that if you make on-time payments on your new card, your positive payment history can build your score over time. However, if you’re a credit card newbie and still working on establishing credit, you may not see the uptick in your score as quickly. This is because FICO requires you to have at least one account that’s been open for six months and one account that’s been reported to the credit bureau within the last six months to qualify for a credit score.

If you don’t already have a handful of credit card accounts, a new card also can positively impact your score because it’s adding another revolving account to your lineup. While your mix of account types only comprises 10% of your credit score, credit scoring models do look at and reflect this.

Recommended: When Are Credit Card Payments Due?

Does Applying for a Credit Card and Not Getting Approved Hurt Your Credit?

Your credit will be affected whether or not you’re approved for a credit card. That’s because when you submit a credit card application, a hard credit inquiry is conducted to determine if you’re eligible. The effects of that hard pull will apply regardless of the results.

However, your credit won’t face any consequences for the fact you were denied a credit card. That information won’t be reflected in your credit score, nor will it show up on your credit report.

Recommended: Tips for Using a Credit Card Responsibly

Things to Consider Before Applying for a Credit Card

Before you rush to apply for credit, make sure you’re ready. Here’s what to consider doing prior to applying.

•   Check your credit report: The first step is to get a copy of your credit report. To get your free report each year, go to AnnualCreditReport.com . As you review your credit report, look for any errors. If there are any, take steps to fix them before you approach a credit card issuer. Also check to see if you’ve had any other recent hard inquiries.

•   Consider any other upcoming credit applications: Be mindful about what’s on your horizon before moving forward with applying for a new credit card. For example, if you think that you will be applying for a mortgage or car loan soon, you may not want to apply for a card and rack up multiple inquiries at once. It may make sense to get your mortgage or car loan first and wait for a little while to go after the credit card.

•   Don’t plan to ditch your old cards: Just because you hope to get a new card, don’t start canceling the other cards in your wallet. Remember, length of credit history makes up 15% of your credit score. By canceling old cards, you’d also reduce your total available credit, which could drive up your credit utilization ratio if you have hefty balances on other cards.

•   Think about why you want to apply for a credit card: Lastly, have a little talk with yourself. A credit card rule of thumb is just because you can get a credit card doesn’t mean you need one. If you already have a credit card, what’s driving you to apply? How are you managing your existing credit card? If you’re not 100% sure you’ll be able to pay off the balance in full each month, think twice about getting it. When balances linger from month to month, it becomes costly due to interest racking up.

Recommended: How to Avoid Interest On a Credit Card

Alternatives to Credit Cards

If you’re worried about the effects that applying for a credit card may have on your credit score, know that you have other options. Instead of getting a credit card, you may also consider the following alternatives for financing:

•   Debit card: If you’re simply looking for another way to easily make purchases and avoid carrying around a wallet full of cash, consider a debit card. While a debit card does not allow you to build your credit score, applying for one does not require a hard pull and is often as easy as opening a bank account. Do note that debit cards tend to have less robust security protections on purchases compared to credit cards though.

•   Loan from a family member or friend: If you’re wary of weathering a hard credit inquiry right now, consider approaching a close family member or friend about borrowing the funds you need. Make sure to clearly agree to the terms of the loan agreement, including when you’ll pay back the money. Also realize the potential implications for your personal relationship if you don’t make good on paying this person back.

•   Salary advance: Another option may be to ask your employer if you can borrow funds from a future paycheck. This can allow you to borrow money in a pinch without needing to go through the formal credit application process. Employers typically won’t charge fees or interest, though you may have to pay an administration fee or interest if your employer relies on a third party for the service.

The Takeaway

Applying for a credit card may be a simple process in terms of filling out the forms, but that doesn’t mean it’s something to take lightly. It can have very real effects on your credit score due to the fact that a formal application requires a hard credit inquiry. Thus, applying for a credit card is always something you should consider carefully and do responsibly.

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

How much does my credit score go down when I apply for a new card?

Typically, when you apply for a new credit card, your score will only go down temporarily by five points or even less. This will, however, depend on other factors related to your credit status.

How bad does a credit application hurt your credit?

In most cases, a hard credit inquiry as part of a credit card application will temporarily decrease your credit score by five points or less.

How often can I apply for a credit card without hurting my credit?

Typically, hard inquiries stay on your credit report for two years, but only impact your FICO score for one year. You might therefore want to space out applying for a credit card and do so only once every six months or so.

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 .

*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.

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A health savings account (HSA) and a flexible savings account (FSA) are both tax-advantaged savings accounts that help you pay for out-of-pocket medical expenses. To contribute to an HSA, you must be enrolled in a high-deductible health plan. To contribute to an FSA, you can have any type of health plan but your employer must offer an FSA as a benefit. Here’s a closer look at the similarities and differences between FSAs and HSAs and how to choose between them.

HSA and FSA, Explained

A health savings account (HSA) is designed to help individuals with high-deductible health plans (HDHPs) save for medical expenses. Contributions to an HSA are tax-deductible (or deducted from your paycheck pretax), and the funds can be used for a wide range of qualified medical expenses. HSAs also offer investment options and grow tax-free. In addition, withdrawals for qualified expenses are tax-free.

In 2024, a health plan is considered an HDHP if it has a minimum deductible of $1,600 for individual plans and $3,200 for family coverage.

A flexible spending account (FSA) is a benefit offered by employers that allows employees to set aside pretax dollars for eligible healthcare expenses. Unlike HSAs, FSAs do not require an HDHP. However, FSAs typically have a “use-it-or-lose-it” rule, meaning that any unused funds at the end of the plan year are forfeited unless your employer offers a grace period or a certain amount to roll over.

If you leave your job, you lose your FSA unless you’re eligible for FSA continuation through COBRA.

Differences Between HSA and FSA

Even when you have health insurance, you may run into medical expenses that your plan doesn’t cover, such as copays, eyeglasses, dental expenses, medications, diagnostic tests, and hospital fees. Both HSAs and FSAs allow you to set aside pretax money to cover these costs. But there are some key differences between them. Here’s how these two types of savings accounts compare at a glance.

Similarities Between HSA and FSA

Despite their differences, HSAs and FSAs share several similarities:

•   Funds from either type of account can be used for qualified medical expenses.

•   With both accounts, you can save significantly on medical expenses due to tax advantages.

•   Employers are allowed to contribute to both HSAs and FSAs (though this is not common with FSAs).

•   You can access funds immediately with either type of account. With an FSA, however, you’ll have access to full elected contribution at the start of the year.

Recommended: HSA vs HRA: Main Differences and Which Is Right for You

Can You Have an HSA and FSA at the Same Time?

Generally, no. However, there is one exception: If you have a limited-purpose FSA (LPFSA), which only covers dental and vision expenses, you can contribute to both an HSA and an LPFSA. This allows you to put more pretax dollars aside for your healthcare expenses than you could with an HSA alone.

Just keep in mind that you can’t “double dip,” meaning you cannot get reimbursed twice for the same expense — you must decide which account you want to use for reimbursement.

Recommended: HSA vs. HMO: What’s the Difference?

How Do You Choose Between an HSA and FSA?

Choosing between an HSA and FSA depends on your healthcare needs, financial situation, and employment status.

Scenarios When You Should Consider an HSA

•   You have a high-deductible health plan. If you have an HDHP, you are eligible for an HSA. The tax advantages and ability to save for future healthcare expenses can make opening an HSA a smart choice.

•   You’re interested in long-term savings. HSAs allow you to roll over unused funds year to year, making them ideal for long-term healthcare savings. And at age 65, you can treat an HSA like a traditional 401(k) or IRA — you can withdraw funds for any reason, though you will pay taxes on any funds not used for qualified medical expenses.

•   You want to grow your healthcare savings. HSAs offer investment options like stocks, bonds, and mutual funds.

•   You want to be able to take your healthcare savings with you if you leave your job. HSAs are portable and remain with you even if you change jobs, providing consistent coverage regardless of employment status.

Recommended: 15 Easy Ways to Save Money

Scenarios When You Should Consider an FSA

•   You don’t have (or want to enroll in) an HDHP. FSAs do not require a high-deductible health plan, making them accessible regardless of current health insurance.

•   You have fairly predictable healthcare costs. If you’re able to anticipate regular healthcare expenses each year, an FSA can help you save money by using pretax dollars for these predictable costs. If you over-contribute, however, you forfeit any unused balance (unless your employer allows a grade period or a certain amount to roll over).

•   Your employer offers FSA contributions. Some employers offer contributions to FSAs, providing additional savings and making FSAs a valuable benefit.

•   You want to have immediate access to your healthcare savings. FSAs provide immediate access to the full annual contribution amount at the beginning of the year, which can be beneficial for upfront medical expenses.

The Takeaway

Both HSAs and FSAs offer valuable tax advantages and can help you manage healthcare costs, but they cater to different needs and situations.

If you have a high-deductible health plan and want long-term savings with investment opportunities, an HSA can be a great choice. On the other hand, if you don’t have a high-deductible health plan and your employer offers an FSA, you’ll likely want to take advantage of this benefit. An FSA can help you save for (and save money on) healthcare expenses in the coming year.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Is it better to have an HSA or FSA?

It depends on your healthcare plan and employment situation. A health savings account (HSA) can be a good fit if you have a high-deductible health plan (HDHP), since it offers higher contribution limits and allows you to carry funds forward. An FSA can work well if your employer offers this benefit, you do not have an HDHP, and you have predictable healthcare expenses (since these plans are often “use-it-or-lose-it”).

Is it good to have both an HSA and FSA?

Generally, you cannot contribute to or spend from a health savings account (HSA) and a flexible spending account (FSA) simultaneously, as both accounts are designed for medical expenses and have overlapping benefits.

However, there is one exception: You can have an HSA and a limited-purpose FSA (LPFSA) at the same time. An LPFSA specifically covers dental and vision expenses. This combination can be beneficial if you have significant dental and vision expenses in addition to regular medical costs, providing comprehensive coverage and enhanced tax advantages.

What happens if I switch from an HSA to an FSA?

If you switch from a health savings account (HSA) to a flexible savings account (FSA), you can no longer contribute to your HSA once your FSA becomes active. However, you still own the HSA and can use the remaining HSA funds for qualified medical expenses. In addition, the funds in your HSA will continue to grow tax-free.

Can I have an HSA if my wife has an FSA?

If your wife’s flexible savings account (FSA) is a general-purpose FSA, which covers a range of medical expenses, you cannot contribute to a health savings account (HSA). However, if her FSA is a limited-purpose FSA (LPFSA), which only covers dental and vision expenses, you can contribute to your HSA.

It’s important to review the specific rules and eligibility criteria for both accounts and coordinate with your spouse to optimize your tax savings and healthcare benefits.

Photo credit: iStock/zimmytws

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

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Big life changes can mean both excitement and nervousness. It’s normal to feel both happy and anxious about starting college. New experiences can introduce a lot of pressure. And it may be the first time that many students leave home and are surrounded by new people.

Not only is feeling nervous about college normal, it’s also manageable. For high school students still getting ready for college, here are five tips that may help ease the nerves.

1. Make a List and Pack Early

To lessen anxiety, preparation for college is key. For students who are planning to live on campus, packing can feel like a monumental task. It’s already stressful to imagine living away from home, and on top of that students don’t want to forget anything important.

One of the best ways to help ensure a smooth transition is to make a list early and start packing ahead of time. When dealing with a large task, it helps to break it down into smaller pieces that are easier to tackle.

For example, students who are nervous for college could break up their packing list into sections like clothing, school supplies, and living essentials. Even just taking the small step of making the lists could ease some of the worries.

Some schools will provide guidelines for packing and lists of items that are prohibited on campus, so it can be worth checking the website or contacting a rep from Residential Life, a program that helps students with on- and off-campus housing. Once students know what they’ll need to purchase, they can go through the items they already have and make a list of which of these are coming with them, and which items are staying behind with Mom and Dad.

Depending on the weather where students are moving to, they can start by packing the clothing they know they won’t need to wear for the next few weeks. If it’s currently warm, start packing up those winter clothes!

This is one task that high school students not ready for college can tackle early on to build some confidence and feelings of preparedness.

💡 Quick Tip: Make no payments on SoFi private student loans for six months after graduation.

2. Learn About Independent Living

Students who are planning to go away for college should spend time before they go learning what they can about living independently. This can cover a wide range of tasks, such as learning how to cook, how to make a doctor’s appointment, and how to use public transportation. It can help students to work with their parents to make a list of tasks that the students need to get familiar with.

Some ways to get ready for college and living on their own can include:

•   Gathering a list of important phone numbers and addresses and entering them into their phones (doctor’s office, school counselor, roommate, etc.).

•   Making a few simple meals so they feel confident in the kitchen.

•   Practicing household chores like doing laundry and dishes if they don’t already.

If students are nervous about finding their way around campus, it may be helpful to explore the campus before classes start and find their classes.

For students who will be attending online classes, they will need to develop extra self-discipline and get familiar with online programs like Zoom. Doing this ahead of time can help minimize the stress of trying to log on the first time.

Recommended: 11 Strategies for Paying for College and Other Expenses

3. Develop Coping Skills

Students who are feeling nervous or anxious about beginning college can take the time before classes start to develop coping skills that will help them manage those feelings. Setting up a self-care routine that includes taking care of physical and mental health can help students manage the stress of college more easily.

Parents can also get involved in this process by sharing the coping skills that work for them and providing emotional support. Teens who know their parents are supportive are more likely to open up and actually use that support.

Recommended: College Planning Guide for Parents of High School Students

4. Ask Questions

Sometimes, not knowing what to expect can contribute to feelings of anxiety, but this can be minimized by asking questions. Students who have family members that went to college or are currently in college may want to set aside time to chat with them about their experiences.

High school guidance counselors can also be helpful in preparing students for college and easing their nerves.

There may also be an opportunity to go on a campus tour and ask questions there. High school students nervous about college may also benefit from attending their college’s orientation, so they show up on their first week prepared. Asking questions from others who’ve been to college will take away some of the scary mystery of the experience and may increase feelings of preparedness for high schoolers.

5. Focus on the Positives

Is college going to be tough? Of course! The classes will be more intense than high school level classes, and there will certainly be an adjustment period. In addition to these things, though, there are also numerous positives. College will give students opportunities to meet new people, learn about themselves, and have fun!

Some students may be overwhelmed at first at the prospect of making friends on a large campus, but there are many clubs and organizations that students can join. Getting involved in extracurricular activities can help students to form friendships and build a support system that may make their college experience more positive.

It may be a challenging four years, with adjusting to adult life and tackling finals every semester, but college can also be fun. High schoolers can help ease their nerves by embracing this aspect of college as well. Having a more realistic and balanced view of the experience may help them enter into it with less apprehension.

💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.

Paying For College

Another source of anxiety when it comes to preparing for college is the finances. College can be expensive, and figuring out how to pay for tuition, books, and living expenses is a confusing process. Luckily, there are multiple options that students can utilize to help cover the cost of their education.

The Free Application for Federal Student Aid (FAFSA) allows students to apply for federal student aid. This aid can come in the form of scholarships, grants, work-study, or federal student loans. Grants from the government usually do not need to be repaid, whereas loans do need to be repaid.

Students who are eligible to take out federal loans may benefit from doing so before looking into private student loans. Federal loans come with certain benefits, such as deferment and income-based repayment plans, that private loans may not.

If students are not eligible for federal aid or the aid isn’t enough to cover their costs, applying for additional scholarships is one option. Scholarships are widely available and the eligibility criteria varies for each scholarship. Some scholarships are need-based, whereas some are merit-based. Scholarships are offered by schools, private corporations, community organizations, religious groups, and more.

Taking out private student loans is another option for helping to fund a college education. The eligibility for private loans will usually depend on a student’s (or cosigner’s) credit history and income. When considering private student loans, students should remember that each institution will have its own terms for the loans.

The Takeaway

It’s normal to be nervous about attending college. To help settle your nerves, you can make a list of all the essentials you’ll need, learn about living independently, develop coping skills, ask questions, and focus on the positive aspects of attending college.

If finances are stressing you out, you have options, too. You can work a part-time job to help cover expenses, apply for grants and scholarships, and rely on federal and private student loans. It’s recommended to take out federal loans first, as they come with borrower protections that private student loans do not.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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A 30-day no-spend challenge is a set period of time — 30 days, in this case — during which you can only spend money on absolute necessities. Allowed expenses include utility bills, rent, transportation costs, and groceries. Anything that falls outside the necessity bucket is banned for the 30-day duration.

With many people looking to cut back on expenses due to recent price increases, a 30-day no-spend challenge can be a great way to take stock of your spending habits and find ways to use your money more wisely.

How Does the 30-Day No-Spend Challenge Work?

Again, a no-spend challenge is a time period during which you stop spending money on anything other than what you absolutely need to live. To get started, you create a list of items and services you consider essential. When you review the list, ask yourself if all of your so-called essentials really are that important, or are some superfluous or impulsive?

Keep in mind that this challenge is designed to help curb troublesome overspending or more specific bad spending habits. So don’t beat yourself up if you do spend some money on wants versus needs.


💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. An online budget planner can give you the same insight into your budgeting and spending at a glance, without the extra effort.

Allowed Expenses During the 30-Day No-Spend Challenge

During the no-spend challenge, you will still need to pay your rent or mortgage, gas, utility bills, insurance, and things like your internet and phone bills. You can purchase essential personal care items, too, such as medications, groceries, and cleaning products. A budget planner app can help you decide on your “needs” list.

But the lines can get blurry. For instance, what happens if you wear out your shoes and want/need a new pair? After all, walking in cheap, poorly made shoes could lead to injury or avoiding activity. Feel free to give yourself some wiggle room in deciding what’s essential for you.

Recommended: The 70/20/10 Rule for Budgeting

Forbidden Expenses During the 30-Day No-Spend Challenge

Remember that before you begin the challenge, you’ll be questioning what’s essential and how strict you want to be. It’s smart to decide in advance which of the following will be on your do-not-spend list:

•   Eating out: fast food, restaurants, takeout, alcohol, coffees, etc.

•   Personal care items or services

•   Clothing

•   Gifts and gift cards

•   Home decor and furnishings

•   Hobbies

•   Entertainment: movies, concerts, books, streaming services

You may determine ahead of time that there will be certain exceptions to these categories. For example, you can decide on “no gifts” except for your mom’s birthday. Or no salon appointments except for a needed haircut.

Tips for Completing the 30-Day No-Spend Challenge

Anticipate what will be the most difficult part of the challenge for you, and create strategies for coping. Is your busy social life going to tempt you to break the rules? Or will the siren call of online shopping be your undoing?

Come up with a plan on how you will get past your specific spending challenges. If your social life will be tough to navigate that month, recruit pals to join the challenge and make it a friendly competition. If online shopping is your budget-killer, unsubscribe from retail email lists and delete shopping apps from your phone. The point is to make the challenge as easy on yourself as possible.

Here are a few additional ways to set yourself up for success:

•   Unsubscribe from memberships and apps

•   Set aside time during the week for meal prep, and bring lunch to work

•   Dust off your travel mug, and skip the coffee shop

•   When you get an urge to buy something, add it to a post-challenge wish list

•   Print out a 30-day calendar and make a checkmark at the end of each successful day. Visual reinforcement can motivate you to keep going.

10 Free Things to Do Instead of Spending Money

Taking part in a 30-day no-spend challenge doesn’t have to mean isolating yourself at home in an effort to save money. This is a time to get creative and search out free activities. You may find that some free experiences are more fun than what you normally spend money on.

1. Take a Hike

Whether you’re walking a mile or seven, hiking is a great way to spend the day outdoors. You can invite friends or go solo and get in tune with nature.

2. Get Some Exercise

Many great athletes and trainers offer workouts on social media and YouTube. Or download one of the many free apps that feature yoga, strength training, and high-intensity workouts.

3. Set Up a Sports League

Call your friends and organize a weekly game of flag football, basketball, or frisbee. Encourage folks to BYO beverages and snacks so that there’s no need to visit a restaurant or bar after the game.

4. Dine Al Fresco

Get your picnic blanket and paper plates ready, and propose a pot-luck in the park.

5. Host a Movie Night

Try a free, library-affiliated streaming service like Hoopla or Kanopy, and immerse yourself in a great film. If you’re feeling inspired, select a classic film, and ask friends to come dressed in the style of that time period.

6. Sand and Surf

Sticking to your challenge budget during summer is simple: Head to the nearest free parking beach. Bring towels, chairs, and umbrellas and set up shop for the day. And of course, pack a cooler full of sandwiches and drinks.

7. Have an At-home Spa Night

You don’t need to spend hundreds at the spa. Set the tone with candles and music.
And use personal care items that you already have to pamper yourself.

8. Check Out a Local Park

Odds are, there’s at least one park near your home that you’ve never visited. If you live near a botanical garden, even better. Also, see if any national or state parks nearby have free visitor days.

9. Visit Art Galleries and Museums

Support local artists by visiting small art galleries, or see if any local museums have free visitor days.

10. Whip Up a Gourmet Meal

Instead of dining out, try recreating your favorite meal yourself. Take your time, find recipes, get groceries, and have fun with it. You can pull up an online recipe or follow along with a cooking show.

The Takeaway

Intended to encourage better spending habits, the 30-day no-spend challenge asks you to limit your purchases for one month to essential items and services only. Utilities and groceries are allowed; dining out and other “treats” are not. You’ll likely learn a lot about your money habits, and perhaps let go of some “needs” that you really aren’t.

Before the challenge, review your monthly spending habits with SoFi.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the no-spend challenge?

A no-spend challenge is a stretch of time during which participants vow not to spend money unnecessarily. Essentials are still allowed, such as bills, transportation, and groceries. Anything that falls outside of your predetermined needs has to wait until the challenge is over.

How do you do a no-spend month challenge?

Don’t spend any money you don’t have to — it can be as simple as that. Before you begin the challenge, ask yourself which items are essential (such as groceries) and how strict you want to be. The goal is not to purchase anything unnecessary.

How do you challenge yourself to not spend money?

Make spending less money a game by trying a 30-day no-spend challenge. Motivate yourself to stick with it by setting up a reward once the challenge is over. And be sure to track how much you save over those 30 days.

Photo credit: iStock/Seiya Tabuchi

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.

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

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

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A bump-up certificate of deposit (CD), also known as a step-up CD or raise-your-rate CD, is a type of savings account that allows the account owner to “bump up” or increase the interest rate they earn if rates rise during the CD term. Typically, one bump up is allowed, and the other terms of the CD remain the same after that.

The initial interest rate of a bump-up CD is lower than other types of CDs, but it comes with the potential opportunity to earn a higher rate.

What Is a Bump-Up CD?

A bump-up certificate of deposit is a type of savings account that is similar to an ordinary CD in many ways.

If an investor opens a bump-up CD account, it will start out with a certain interest rate. The investor will be required to deposit a certain amount of money to open the account and agree to keep it there for a specified period. The major difference between a bump-up CD and a traditional CD is that the account owner can potentially increase the interest rate they earn if rates go up during the term of the CD. This bump up is typically allowed only once during the CD term.

How a Bump-Up CD Works

If, during the term of a CD, the issuer’s interest rates increase, the CD account owner can ask the issuing bank to raise the interest rate they earn on their CD. This is quite different from a standard savings account, where the account owner has no control over the interest rate. So if the initial rate on a bump-up CD is 4.00%, and during the maturity term the rate increases to 5.00%, the account holder can request a bump up to 5.00%.

If the interest rate drops to 4.50% sometime after that, the investor is protected and keeps their bump up to 5.00%.

Usually, interest rates can only be increased one time during a CD term, but some banks do offer multiple bump-ups if the term of the CD is long. Also important to note is that some banks may put a cap on how high the interest rate can be bumped on a CD. So if interest rates go up a lot, CD owners may not be able to fully take advantage. Generally, bump-up CDs have a two- to four-year term. Like a regular CD, these accounts are FDIC-insured.

Recommended: How to Invest in CDs

Example of a Bump-Up CD

Say an investor opens a bump-up CD with a two-year term and a rate of 4.00%. One year into the CD term, the issuing bank’s interest rates rise, and they now offer 5.00% on the same type of CD. The investor can request that the rate on their CD be increased to the new rate of 5.00% for the second year of its term.

In this example, if the investor deposited $10,000 into the CD when they opened it and earned 4.00% on their money for the full two-year term, by the end of the term they would have $10,816.00 at the maturity date. However, if they earned 4.00% for the first year and 5.00% for the second year, at the maturity date they would have $10,900.00, or about $84 more. That might not seem like a lot, but when you’re saving and investing for the future, every little bit helps.

Advantages of Bump-Up CDs

There are some benefits to bump-up CDs, including:

•   Ability to raise the CD’s interest rate during its maturity term instead of having to wait or open a new CD

•   The potential to get new, higher rates without any early withdrawal penalties

Disadvantages of Bump-Up CDs

Bump-up CDs come with some drawbacks as well. Here are some to consider.

•   Since bump-up CDs typically allow only one bump up, they are recommended for investors who have a deep understanding of the interest-rate system and what might happen during their investment term.

•   The initial interest rate on bump-up CDs tends to be lower than other types of CDs. So even though there is the ability to raise the rate later, a traditional certificate of deposit may still earn more interest since it likely starts at a higher rate.

•   Interest rates may not go up during the CD term, locking the investor into the initial lower rate.

•   If interest rates do start to increase, timing the bump-up on a CD can be challenging. By bumping up earlier you can take advantage of a higher interest rate for more time, but you could miss out on an even higher rate that might come later.

How to Open a Bump-Up CD

Banks and credit unions offer bump-up CDs just like they offer checking and savings accounts. To open a bump-up CD, an investor deposits a certain amount, and the CD has a particular starting interest rate and term. Once the bump-up CD is open, the account owner can contact the issuing bank or credit union to increase the rate if it rises during the CD term. As mentioned, bump-up CDs typically offer the account holder just one opportunity to request a rate increase.

Factors to consider when opening a CD include:

•   Maturity term of the CD: Bump-up CDs tend to have longer terms than traditional CDs, such as two years or more.

•   Bump-up frequency: Does the CD offer the opportunity to bump up more than once? Many don’t but some may.

•   Initial interest rate: If interest rates don’t rise, the initial rate will be the ongoing rate throughout the CD term. And bump-up CDs tend to have lower interest rates to begin with.

•   Minimum deposit to open the account: Some bump-up CDs may require higher minimum deposits than traditional CDs, depending on the issuer.

•   Early withdrawal rules and penalties: Inquire with the financial institution what the consequences might be for cashing in the CD before the term ends.

•   Fees: Typically, there aren’t fees involved with CDs, but that isn’t always the case. Find out if there are any fees and how much they are.

Alternatives to Bump-Up CDs

There are several other types of interest-bearing deposit accounts and CD investment strategies that investors may want to consider, such as:

Traditional CD

A traditional CD has a fixed interest rate over the course of its maturity term. Traditional CDs often earn higher rates than bump-up CDs. They also usually have shorter terms.

CD Laddering

Since it can be hard to predict what will happen with interest rates in the future, another investing strategy is to create a CD ladder.

A CD ladder is a portfolio of CDs that each have a different interest rate and maturity term. This strategy provides an investor with a range of interest rates, allowing them to take advantage of changes in the market. Each time one of their CDs matures they have some funds to put into a new CD or cash out. Usually, a longer-term CD will have a higher rate, but by opening some shorter-term CDs as well, investors can put their money into new ones if interest rates increase, rather than opening a bump-up CD.

Here is an example of how an individual might set up a CD ladder with five rungs if they have $10,000 to invest:

•   $2,000 in a one-year CD

•   $2,000 in two-year CD

•   $2,000 in a three-year CD

•   $2,000 in a four-year CD

•   $2,000 in a five-year CD

As each CD matures, they can reinvest the funds into a new CD if interest rates are rising.

Step-Up CD

Similar to a bump-up CD, step-up CDs allow investors to take advantage of rising interest rates. The difference is, with a step-up CD, the issuer automatically raises the interest rates at certain intervals throughout the CD term. With a bump-up CD the rate is not automatically increased.

If you are looking for ways to bump up your savings, there are some other options in addition to CDs that you may want to consider. For instance, one way to potentially increase your savings is with a bank account with competitive rates, such as a high-yield savings account. You can shop around and explore the different savings options to see what might be right for you.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What is an 18-month bump-up CD?

An 18-month bump-up CD is a certificate of deposit savings account that earns a certain amount of interest over the course of 18 months. If interest rates rise during that time, the account owner can request that the interest rate their CD earns be increased to the new rate.

When should I bump up my CD?

If you have a bump-up CD, you may want to consider a bump up when interest rates rise. However, remember that you are typically only allowed to bump up the rate once during the term of the CD. For this reason, bump-up CDs are generally best for investors who have a deep understanding of the interest-rate system and what might happen to rates during their CD term.

Who has bump-up CDs?

Bump-up CDs are typically offered by banks, online banks, and credit unions. You can explore bump-up CD options at different financial institutions to find one with the best rates and terms for you.

Photo credit: iStock/sihuo0860371

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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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3.30% APY
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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