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Millennials Are Better Savers Than Older Generations

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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As a Millennial (at 25, I can’t possibly claim another generation), I’ve grown tired of the trite adjectives being used to describe my demographic of Americans. We’re generally called a narcissistic, lazy, over-indulged, entitled group of underachievers who were crippled by too many participation trophies and ran home to Mom and Dad after college graduation.

Some of my peers may still be holed up at Mom and Dad’s, unable to face the potential rejection associated with finding a job and growing up. But many of us are in the process of phasing out of the Peter Pan syndrome. An integral part in the process of becoming an adult centers around understanding and properly using money.

Save a percentage of each paycheck. Live below your means. Plan for retirement.

These are all pieces of advice thrown at young women and men, as they strike out on their own. It seems like this advice would fall to register with a generation known for self-centeredness and indulgence.

Not so.

Millennials aren’t completely failing

According to our recent survey, MagnifyMoney discovered millennials* are the most likely to save money when compared to Generation X, boomers and seniors. 74.8% of millennials surveyed saved money each month. No need for a participation trophy here. Millennials placed first outright.

While tucking away money to build a nest egg is part of the foundation towards financial health, saving alone doesn’t make us financially fit nor does it guarantee wealth in the future.

Millennials’ costly mistake

39.5% of millennials go overdraft and incur the fees associated with this costly mistake. On average, millennials go overdraft 2.7 times in a year and pay $101 in fees. Unlike other generations, millennials cite forgetfulness as the main reason for going overdraft (as opposed to a lack of funds).

The simplest fix would be for the young generation to do a better job of paying attention of their account balances and not make any purchases without sufficient funds. But taking the time to whip out a smartphone and login to your bank app (assuming you even have one) before making a purchase appears to be too cumbersome. The other option is to find a financial product that offers protection for when you inevitably make a mistake with your money.

Embracing the path to reduced fees

Traditionally, overdraft protection doesn’t entirely protect you from paying a fee. Banks can still charge an overdraft, transfer or non-sufficient fund (NSF) fee. If you link your checking to a savings account, the bank may charge you $10 to $12 to transfer money out of your savings account to cover the overdraft. Even worse, linking a credit card to cover an overdraft could result in interest automatically accruing at rates close to 30%.

Instead of sticking with the status quo when it comes to banks and their fees, millennials have started to eye another option.

Internet-only banks offer more than just real overdraft protection (for no added charge), they provide lower fees and much higher interest rates on savings accounts. They even reimburse you for ATM fees and save you gas money and time by letting you deposit checks with your mobile phone.

Millennials have already started to embrace the idea of Internet-only banks with 55.1% considering an online account and 18.8% already making the switch.

Handling the debt factor

Coverage about the Millennial Generation’s issue with debt has become as ubiquitous as the name-calling and stereotyping. Student loans are often the focus of the millennial debt issue, but our survey found 39.5% of young Americans carry $8,864 in credit card debt.

Unfortunately, most millennials carrying credit card debt are also paying more than a 15% interest rate. A high interest rate can cripple the debt repayment process, incurring thousands of dollars spent in interest instead of chipping away at the principal debt.

Instead of throwing away money on interest, some millennials turn to a balance transfer to reduce their interest rates. Our survey indicated that millennials, at 80.9%, have the highest success rate in paying off their debt during the balance transfer period.  A whopping 93.6% of millennials would use a balance transfer again (but we hope they don’t have to).

The Millennial Generation’s ace in the hole

Millennials may be ridiculed in the press and the target of jokes about work ethics and becoming independent, but the MagnifyMoney survey shows they’re doing all right when it comes to their finances. And lest we forget, millennials have the distinct advantage their elders don’t: time to fix their mistakes.

Find other details about our MagnifyMoney survey here.

*Millennials were identified as women and men between the ages of 18 and 34.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at [email protected]

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MagnifyMoney’s Editorial Code of Ethics

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

At MagnifyMoney and our parent company, LendingTree, all of our writers — both freelance and full-time staff — must adhere to a strict editorial code of ethics whether they are developing product reviews, recommendations, personal finance guides, features, investigative reports, or videos.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Credit One Bank Review: Average Credit Welcome But Complicated Terms

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Credit One Bank (not to be confused with Capital One Bank) specializes in credit cards for people who do not have the best credit. Credit One provides access to credit when other people do not. However, it does come at a price.

The potential drawbacks of choosing a Credit One Bank credit card are the fees and conditions that can apply to your account, depending on your creditworthiness.

Credit One Bank Credit Card Terms

Creditone Currently, Credit One Bank offers three main credit cards including the Credit One Bank® Platinum Visa® with Cash Back Rewards, the Credit One Bank® Platinum Visa® for Rebuilding Credit, and the Credit One Bank® NASCAR® Visa® Credit Card. However, the account terms for each card above including the interest rate, annual fee, and rewards program varies, depending on your creditworthiness. This means Credit One Bank will take a look at your credit history and income before offering your credit card terms and conditions.

There are 26 available credit card agreements you may be offered by Credit One Bank after applying. Fortunately, you can prequalify to review which specific terms you will receive, and the good news is this pre-qualification won’t impact your credit score.

Interest Rates, Fees, and Fine Print

Credit One Bank does provide an easier to read terms-and-conditions disclosure document with a range of the possible fees, interest rates, and terms you may encounter as a cardholder.

We’ve also put together a quick overview of the facts:

  • The minimum credit line is $300
  • Variable interest rates vary by product. In general, the ongoing purchase variable APRs across products range from 20.24% - 26.24% Variable.
  • Accounts may or may not have a payment grace period
  • The annual fee ranges from $0-$99
  • If you add on an authorized user, the fee is $19 annually
  • The late payment fee is up to $38
  • The returned payment fee is up to $38

As you can see from the terms above, the cost of borrowing from Credit One Bank can vary greatly, specifically when it comes to the annual fee. You can pay an annual fee from $0-$99. That’s no small amount of money.

For the first year, the annual fee is charged to your account right away. This means when you first receive the card the annual feel will be subtracted from your available credit line. After the first year, the annual fee may be charged all at once or split into 12 monthly payments.

The payment grace period

Another area besides fees to draw attention to is the payment grace period. The account you qualify for may or may not have one.

A payment grace period is a certain amount of days that credit card issuers give you to pay the bill before applying interest. Credit cards that don’t have a grace period begin charging interest on the day the purchase hits your account. For example, if you were to buy a nice, new couch on a credit card today, interest would start applying to that purchase today.

Again, terms vary, depending on creditworthiness, so it’s possible you can get the best terms that Credit One Bank has to offer, including the lowest possible interest rate, no annual fee, and an account with a payment grace period. But you should be aware of the most expensive scenario.

Cash Back Rewards and Card Benefits

Credit One Bank offers five cash back rewards programs and a few additional card benefits.

There are three cash back programs that reward you for everyday spending like gas, groceries, and dining, and two other programs that reward you for auto and NASCAR.com related purchases.

Here are the five rewards programs:

Cash Back Rewards Program

  • 1% on eligible purchases, terms apply.

NASCAR Cash Back Rewards Program

  • 1% Cash Back on Eligible Purchases and Double Cash Back at the NASCAR.com Superstore, terms apply.

If you qualify for a cash back program, the cash back that you earn each month will be credited to your account statements. The cash back credited to your account doesn’t count as a payment, so you’ll need to make your regular minimum payment to keep your card in good standing.

Additional card benefits

As mentioned, free credit score tracking and a credit report summary are included. Visa Zero Fraud Liability is another benefit and means you won’t be held responsible for unauthorized purchases on your Visa account if you report them in a timely manner.

How to Prequalify for Credit One Bank Credit Cards

On the Credit One Bank website, you can prequalify for a card without a hard inquiry. You just need to type in your address, Social Security number, birthdate, and income.

Make sure to read through the terms you receive after pre-qualification for the interest rate, the fees, and whether you get a payment grace period before thinking about moving forward with the full application.

The Cost of Using a Credit One Bank Card

So, what’s the cost? That’s always the most important question.

Taking a look at the cost of cash back rewards first, the interest rate range offered by Credit One Bank is slightly higher than other rewards cards with similar cash back offers.

Here are a few cash back alternatives with lower interest rates and no annual fee:

  • The Citi® Double Cash Card – 18 month BT offer: Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases., and an APR of 15.99%– 25.99% (Variable) with a $0 annual fee.
  • The Capital One® Quicksilver® Cash Rewards Credit Card offers 1.5% Cash Back on every purchase, every day and 0% intro on purchases for 15 months an a 0% intro on balance transfers for 15 months, 16.24% - 26.24% (Variable) APR after that. There is a $0 annual fee.

For the most part, the cheaper cash back rewards cards listed above are also ones that require decent credit, which may be a reason why you would try applying with Credit One Bank instead.

However, Credit One Bank cards can come with fees you need to be mindful of before thinking they’re an ideal alternative. You may qualify for Credit One Bank with less-than-perfect credit, but the catch is you may also get approved for less-than-desirable credit card terms like high interest and a high annual fee.

Example of what it costs to borrow

To analyze the cost of borrowing from Credit One Bank, let’s take an example:

  • 24.15% variable APR
  • $99 annual fee
  • No payment grace period
  • 1% cash back on gas and grocery spending

If you charge $500 of furniture to this card as soon as you get it, it’ll cost you about $62 in interest to pay the balance off in 12 months with regular payments of $51 per month.

The exact interest cost will vary, depending on interest rate fluctuations and when you make the purchase during the month. (Remember, there’s no grace period.)

PaymentInterestPrincipal
$51$10$459
$51$9.23$417.23
$51$8.39$374.62
$51$7.53$331.15
$51$6.66$286.81
$51$5.77$241.48
$51$4.86$195.34
$51$3.93$148.27
$51$2.98$100.25
$51$2.02$51.26
$51$1.03$1.29

In total, you would pay about $161 (interest plus the $99 annual fee) to borrow $500 during your first year as a cardholder. The next year, you also have another $99 in annual fees ($8.25 per month) to look forward to paying before even swiping your card on new purchases.

From this example, you can see fees play a big role in costs and are a factor you want to measure if you prequalify for a Credit One Bank credit card.

Another caveat to this is if you planned to use this card for cash back specifically, you would need to pay off your balance the same day you make a purchase. Otherwise, interest charges from having no grace period can eat away at the cash back earned.

Other Ways to Borrow Money and to Build Credit

The big advantage of Credit One Bank is that you can prequalify without a hard inquiry so it doesn’t hurt to find out what terms you will receive. There are a few other credit card issuers that offer the same convenience. If you’re not sure whether you can qualify for cards with lower fees, you can search for providers that offer prequalification here.

To build or rebuild credit, you can also turn to store cards or secured cards. Learn more about how to build credit with a secured card here. It’s worth mentioning that not all store cards and secured cards are cheap either. You need to review the fees and interest rates to find the most affordable option just like you would with the Credit One Bank accounts.

Finally, if your focus is solely getting your hands on cash, a personal loan may offer you a better deal when you need to borrow money than a credit card. You can also prequalify for personal loans without impacting your credit score. You can shop for personal loans here.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor here