Advertiser Disclosure

College Students and Recent Grads

Can’t Pay Your Student Loans? You Can Lose Your License in These 16 States

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

iStock

In many states, failing to repay student loans could cost one a professional license to perform a job, and in the case of Iowa and South Dakota, even losing a driver’s license.

Sens. Elizabeth Warren (D-Mass.) and Marco Rubio (R-Fla.) in June introduced legislation that would prevent states from suspending, revoking or denying state licenses because borrowers default on their student loans, in the hopes of alleviating some of the financial burdens on Americans who are already saddled with student loan debt.

Americans owe a whopping $1.53 trillion in student loan debt, and almost 11 percent of the debt was at least 90 days delinquent or in default at the end of the first quarter of 2018, according to the Federal Reserve Bank of New York. Meanwhile, almost 30 percent of workers in the United States need a professional license to perform their job, according to The Brookings Institution.

In recent years, six states — North Dakota, Washington, New Jersey, California, Oklahoma and Virginia — have repealed laws that allowed states to suspend or revoke professional licenses as a penalty for student loan default. The Warren-Rubio bill exercises such efforts at the federal level.

After reading state laws, MagnifyMoney found that as of Aug. 24, 2018, at least 16 states deny, suspend or revoke state-issued professional or driver’s licenses if loan borrowers default on their student loans. In some states, such laws impact a wide range of professions requiring a state license, such as teachers, nurses and barbers; in others, only certain jobs are affected. Here are the states where these penalties exist and may be enforced:

Alaska

Overview of the law

When borrowers default on student loans (payments are 180 or more days past due) made by the Alaska Commission on Postsecondary Education, the state’s higher education agency may order licensing entities to not renew the debtors’ licenses. The licensing authority can take action to stop granting a license renewal once they receive notice of unpaid student loans.

Jobs affected

All jobs that require state-issued professional licenses, certificates, permits to perform, including teachers, nurses, pharmacists, security guards and pesticide applicators.

If you lost your license because of student loan debt

The licensing agency will notify you of the refusal of non-renewal. Within 30 days of receiving the notice, you may request a review by the commission. However, in order to have your license renewed after the review, you have to prove that: 1) you have paid off the entire loan, including interest and principal, along with all the collection costs; or 2) you have entered into a payment plan with the commission and have made on-time payments in full for the four most recent and consecutive months under the plan.

Arkansas

Overview of the law

The Arkansas State Medical Board may revoke or suspend a license, impose penalties or refuse to issue a license when a physician in this state has breached a Rural Medical Practice Student Loan and Scholarship contract. Recipients of rural medical practice loans are obligated to practice medical care in rural Arkansas full time and follow the terms in the contract they signed with the state’s student loan and scholarship Board.

Jobs affected

Physicians on Rural Medical Practice Student Loan and Scholarship contracts.

If you lost your license because of student loan debt

The loan recipients who get their medical licenses suspended won’t be able to practice for a period of time equivalent to the time they failed to follow their loan obligations. They can’t get their licenses back until they pay off their loan and penalties.

Florida

Overview of the law

In Florida, the Department of Health may suspend a state-licensed health care practitioner who has failed to repay a student loan issued or guaranteed by the state or the federal government. The borrower will be fined 10 percent of the defaulted loan amount.

Jobs affected

More than 50 professions that require state health department licenses, including nurses, medical physicists, body piercers, septic tank contractors and dentists. See the full list here.

If you lost your license because of student loan debt

To lift the suspension, the borrower has to enter a new payment term agreed by all parties of the loan and pay the fine within 45 days after he/she was notified of the suspension.

Georgia

Overview of the law

A professional licensing board can suspend the license of anyone who has defaulted on any federal education loan. Authorities may also suspend licenses of people who failed to comply with service obligations under any service-conditional scholarship program.

Jobs affected

More than 40 professions that require state-issued professional licenses. A few examples: chiropractors, dietitians, librarians and physical therapists. See a full list on this page, under the drop-down menu “Boards and Licensed Professions.”

If you lost your license because of student loan debt

When the licensing board receives written notification that you are making payments on the loan or satisfying the service, it can restore your license.

Hawaii

Overview of the law

Hawaii licensing authorities can deny a license application or a renewal or suspend a professional license if you default on a student loan made or guaranteed by the state, state agencies or the federal government. License suspension can also occur if you are not complying with obligations under a student loan repayment contract or a scholarship contract. Your license could also be in jeopardy if you are at least 60 days past due with payments under a repayment plan.

Jobs affected

Jobs that require professional licenses issued under 25 state licensing boards.

If you lost your license because of student loan debt

Your license can be renewed or reinstated when the licensing authority is notified that you are making payments or satisfying the terms of the student loan, student loan repayment contract or scholarship contract and are no longer in default or breach of the loan or contract.

Illinois

Overview of the law

The Division of Professional Regulation of the Department of Financial and Professional Regulation can deny licenses or renewals to those who have defaulted student loans or scholarships provided or guaranteed by the Illinois Student Assistance Commission, any governmental agency of the state or any federal government agency. Your license can also be suspended or revoked if you are proven to have failed to make satisfactory repayments for a delinquent or defaulted loan after a hearing.

Jobs affected

Jobs that require state-issued professional licenses. The professions include physicians, nurses, pharmacists, physical therapists, dentists, barbers, accountants and more. Check out the full list of state-licensed occupations in Illinois here.

If you can’t apply for a license because of student loan debt

If you have established a “satisfactory repayment record,” the department may issue a license or renewal.

Iowa

Overview of the law

Any license authorized by state laws, including a driver’s license, can be denied, revoked or suspended if a borrower has defaulted on a loan owed to or collected by the Iowa College Student Aid Commission.

Licenses affected

Professional licenses issued by the state that workers need to engage in a trade, profession or business. There’s no single, full list of affected licenses, but such licenses include those for massage therapists, social workers and interior designers; those who drive; and recreational licenses for hunting, fishing, boating or other activities.

If you lost your license because of student loan debt

You can get a license approved or reinstated if you schedule a conference with the commission to enter into an agreed on a repayment plan or pay off the debt within 20 days after you receive a mailed notice about your alleged loan default or a notice of suspension, revocation, denial of issuance or non-renewal of a license.

Kentucky

Overview of the law

In Kentucky, licensing agencies may not issue or renew a professional or vocational license to someone who’s in default or has failed to meet any repayment obligation under any financial assistance program administered by the Kentucky Higher Education Assistance Authority.

Jobs affected

Jobs that require state-issued professional licenses, including home inspectors, athlete agents, alcohol and drug counselors and more.

If you lost your license because of student loan debt

You should receive a notice either from the Kentucky Higher Education Assistance Authority or from a relevant licensing authority giving you a deadline to respond to the notice and enter into a “satisfactory” repayment agreement. Assuming you do, the authority will send the licensing agency a notice certifying that you are no longer in default and have made satisfactory repayments, repaid the loan in full or have been waived from repaying the debt. At that point, you may resume your professional or occupational license.

Louisiana

Overview of the law

The state of Louisiana can deny an application for or renewal of any professional or occupational license to anyone who has defaulted on a federal student loan guaranteed by the Louisiana Student Financial Assistance Commission (LOSFA).

Jobs affected

Jobs that require state-issued professional licenses, which include dentists, nurses, physical therapists, insurance agents and more.

If you lost your license because of student loan debt

LOSFA has entered into a contract with the Educational Credit Management Corp. (ECMC) for the servicing its LOSFA-guaranteed federal student loans. LOSFA advises borrowers to contact ECMC to enter a payment arrangement with ECMC or repay the loan. LOSFA needs to confirm compliance with your loan obligations for your license to be released.

Massachusetts

Overview of the law

A professional or occupational license can be denied for any applicant who is in default on an educational loan under any program administered by the Massachusetts Education Financing Authority (MEFA) or the Massachusetts Higher Education Assistance Corp. (MHEAC). MEFA offers loans to students who are residents of or attend college in Massachusetts. MHEAC, known as American Student Assistance, provides federal student loan programs.

Jobs affected

Nearly 170 jobs that require state-issued professional licenses from 39 boards of registration. The professions include architects, psychologists, physicians and more. See a full list of state licensing boards here.

If your license is denied because of student loan debt

You should receive a notice of denial and can then ask your loan agency for a review of the alleged default within 30 days of receiving the notice. If you enter into a repayment agreement or other arrangement with the loan agency, or if the agency determines that the notice of default was in error, the educational loan agency will notify the relevant licensing authority, which will then issue the license to you.

Minnesota

Overview of the law

In Minnesota, health professionals who have defaulted on a federally secured student loan or failed to fulfill a repayment or service obligation can face denial of a license by a health-related licensing board. The board can also take disciplinary action against the debtor.

Jobs affected

Health-related professionals, including physicians, nurses, dentists, therapists and barbers. See a full list of the state’s health licensing boards here.

If your license application is denied because of student loan debt

A licensing board has to consider the reasons for the default. It cannot impose disciplinary action against anyone with total and permanent disability or long-term temporary disability lasting longer than a year.

Mississippi

Overview of the law

When certain health care practitioners and hospital employees fail to comply with an educational loan contract obtained through a state-paid educational leave program, their professional licenses can be revoked. Grantees of the paid education leave program entered a contract with a state health institution, where they agreed to work in a health care profession, such as a physical therapist, or as a licensed practical nurse in the same sponsoring institution for a period of time equivalent to the amount of time when the applicant receives paid leave compensation.

Jobs affected

Health-related professionals and hospital workers who earned their licenses through educational paid leaves offered by state health institutions. This includes nurses, nurse practitioners, speech pathologists, psychologists, occupational therapists, physical therapists and any other needed professions determined by the sponsoring state health institution.

If your license is revoked because of student loan debt

A revoked license will be restored if you can prove that your contract is no longer in default.

New Mexico

Overview of the law

Under the state law, New Mexico barbers and cosmetologists may face denial of issuance or renewal, suspension or revocation of their occupation licenses if they have defaulted on a student loan. The state statute doesn’t specify what kind of student loans they are. (Repeal of this rule was scheduled in 2014 but delayed to 2020.)

Jobs affected

Barbers and cosmetologists.

If your license is denied renewal because of student loan debt

Before the Board of Barbers and Cosmetologists takes any action against your license, you can request a hearing within 20 days after being served a written notice about the default. After the hearing, the board will take steps to impose a fine up to $999 or take other disciplinary actions, which may include suspension, revocation or refusal to renew a license. The state statute doesn’t offer information about resolutions for those who’ve lost their licenses because of student loan default. The New Mexico Board of Barbers and Cosmetologists has not responded to MagnifyMoney’s inquiry regarding the remedies.

South Dakota

Overview of the law

South Dakota established the Obligation Recovery Center in 2015 to recover debts owed to the state, including unpaid university tuition or fees. The state law demands a number of licenses, registrations and permits, including a driver’s license, be withheld from anyone who owes money to the state. While South Dakota is not in the student loan business, students have reportedly had their driver’s licenses suspended because their unpaid student debt got transferred to the Obligation Recovery Center, which at that point became debt owed to the state.

Affected licenses

Driver’s licenses, a hunting or fishing license, a state park or camping permit, a registration for a motor vehicle, motorcycle or boat.

If you lost your license because of student loan debt

In order to restore the license or permit, the debtor has to either pay the debt in full or has entered into a payment plan with the center and be current on payments.

Tennessee

Overview of the law

State licensing authority may suspend, deny or revoke the license of anyone defaulted on a repayment or service obligation under any state or federal student loan or service-conditional scholarship program.

Jobs affected

Jobs that require government-issued professional licenses, including teachers, dentists, massage therapists, nurses, barbers, geologists, accountants and many more. (There is no single, full list of affected licenses.)

If you lost your license because of student loan debt

Within 90 days after you receive notification of the alleged default, you can keep your license if you pay off the debt, enter into a payment plan or service obligation or comply with an approved repayment plan.

Texas

Overview of the law

Licensing agencies in Texas can deny a renewal for a license to anyone who has defaulted on a student loan or a repayment agreement guaranteed by the Texas Guaranteed Student Loan Corp.

Affected jobs

All professions that require state-issued professional licenses. The rule applies to auctioneers, electricians, midwives, physicians and many more.

If you can’t renew your license because of student loan debt

Your license can be renewed if the Texas Guaranteed Student Loan Corp. issues a certificate to clarify that you have entered a repayment agreement or the loan is not in default anymore.

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.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at shenlu@magnifymoney.com

TAGS: , ,

Advertiser Disclosure

Earning Interest

APY vs. Interest Rate on Savings and CD Accounts — Explained

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

apr vs interest rate
iStock

When you’re signing up for a checking or savings account, the first thing you are likely to review is the account’s APY and interest rate. They may seem similar but they are actually two very different terms.

An interest rate is the percentage of your deposit that banks pay you in order to hold your money with them. APY is an acronym that stands for for annual percentage yield. It refers to the total amount of interest you earn on your savings over a year, and it factors in compounding interest. APY gives a truer picture of how much money you will make from your certificate of deposit (CD), savings or money market account, than by looking at a simple interest rate alone.

The higher the APY, the more money you can expect to earn from your deposit in your CD, money market or savings accounts.

Understanding the various types of interest rates

For deposit accounts, there are two types of interest rates you need to know: simple interest and compounding interest.

Simple interest

Simple interest is easy to calculate — it’s calculated only on the principle you deposit in your bank account. It means if you invest $10,000 at an interest of 2%, for instance, you will earn $200 in interest at the end of the year.

Simple interest rates are typically used with brokered CD accounts purchased through brokerage firms like Fidelity, Vanguard or Charles Schwab, said Ken Tumin, founder and editor of DepositAccounts.com, a fellow LendingTree-owned site. Instead of receiving compounding interest, holders of brokered CDs normally get paid simple interest monthly, quarterly, semi-annually or annually.

Compounding interest

Compounding interest is more complicated, because it takes into account the interest you earn on both the interest and principle. When you leave the interest you earn in a bank account instead of taking it out, the overall interest paid is calculated based on the total balance, including the interest you’ve earned over time. So as each month passes, you are earning interest on an increasingly larger pool of money.

That’s why compounding interest can be such a powerful tool and why you’ll hear many experts encourage folks to save as early and often as they can so that they have more time to enjoy the power of compounding.

Here is how compounding interest works. Let’s say you put $10,000 in savings account that earns an interest rate of 2%. After one year, you will have earned $200. So you’ll start year two with a total balance of $10,200. Now, you’ll earn the same 2% but you’ll be earning it on a higher balance (your original deposit plus $200 in earned interest). At the end of year two, the total interest on your deposit will be $204 — ($10,000+$200) x 2% = $204 — and you’ll be left with a total of $10,404.

Annual Percentage Yield (APY) vs interest

Most deposit accounts where you earn the interest use APY.  It is a number that accurately represents how much you will make from a deposit in a given year, factoring in both the interest rate and compounding period.

If interest is paid on an investment once per year, which means it has an annual compounding period, as shown in the above-mentioned example, the APY and interest rate are the same.

But in reality, most banks offer more frequent compounding periods, which could be quarterly, monthly, weekly or even daily. In these situations, the compounding effect occurs on a much smaller scale but more frequently. As a result, the returns are higher.

Most banks offer an APY, so that account holders don’t have to calculate on their own. But if you are curious to know how an APY is calculated, the Federal Deposit Insurance Corporation (FDIC) provides the mathematical formula on its website.

Read more about the difference between APR and interest rate when it comes to mortgages here.

How to calculate APY

You can use DepositAccount.com’s compound interest calculator to calculate how much return you will eventually get on your investments over certain time periods. But if you’re someone who likes to see how the math works out, we’ll cover the formula as well.

APY = 100*[(1 + (interest rate/compounding cycles)^compounding cycles)) – 1]

Compounding cycles is the number of times a year your interest compounds.

Now if the 2% interest on that investment of $10,000 compounds daily (365 times of a year), at the end of the year, you will earn $202.01 in interest on that deposit. In this case, the APY is 2.0201%.

Here is how we arrived at the result:

APY = 100 * [(1 + (.02/365) ^ 365) – 1]

APY = 2.0201%

If the deposit compounds monthly, meaning it has 12 compound cycles:

APY = 100 * [(1 + (.02/12) ^ 12) – 1] = 2.0184%

Blended APY

Blended APY comes into play when there are rate tiers in accounts. That means depending on how much you’ve invested, a portion of your balance earns one interest rate, while another portion earns a different interest rate. A blended APY averages the different interest rates and also factors in compounding.

Some financial institutions reward low balance savers by placing the highest rate with the lowest deposit, but if the balance grows they start using a reverse tier system where they blend the APY as the balance grows, Tumin explained.

These tiered rates are typically applied in money markets, savings and reward checking accounts, Tumin said. There can be more than two rate tiers, which it can make it more complicated to determine the final amount of interest you’ll earn over time.

Banks and credit unions that offer products that apply blended APYs usually list the rate tiers for different ranges of deposits. In this example, the blended APY is neither 1% nor 2%. The exact blended APY is calculated based on how much you have invested.

The formula that you can use to calculate the blended APY is:

Blended APY = (Amount1 * Rate1 + Amount2 * Rate2) / Total Amount

For example, let’s say you open a savings account that gives you 2% APY on your investments below $10,000 and 1% APY on deposits above $10,000.

You have $20,000 to deposit.

So, what we get from the $20,000 is:

Blended APY = ($10,000 * 2% + $10,000 * 1%) / $20,000 = an effective APY of 1.5%

Blended APY vs fixed APY:

Would you be better off picking an account with the blended APY or another account with a fixed APY of 1.5% on your entire balance?

It depends on your total balance.

Let’s say you put $15,000 in that same two-tiered account (2% on your first $10,000; 1% on deposits above $10,000).

Using the same formula from above, your blended APY would be 1.67%, beating a 1.5% APY.

But if you dump $50,000 into this account, your blended APY then would be 1.2%.

In this case, a fixed 1.5% APY would be a better deal for you.

When looking for savings accounts, you should shop around and compare the expected returns based on your initial investment.

Understanding the difference between APY, interest rate and APR

In the family of interest rates, APY has a sister called APR, which stands for annual percentage rate.

APR is often used to describe the interest rate you pay on loans and credit card debt. However, once in a while, you’ll see APR mentioned for deposit accounts, which essentially means a simple interest rate in that context, Tumin said.

When you are shopping for a loan, instead of looking at the interest rate, you should focus on APR, which provides a clearer picture of how much the loan will cost you.

An interest rate is the percentage of a loan amount that it costs to borrow money.

Essentially, APR reflects the amount of interest you pay on the money you borrow from a lender every year, and it also factors in how the interest is applied to your balance and associated fees and other costs. But unlike APY, APR does not take compounding into account.

If a lender charges no additional fees, the loan’s APR and interest rate are identical. But if you have to pay an origination fee for a loan, for example, it will increase the APR on that loan, making it higher than a simple interest rate.

Although lenders often advertise the interest rates, the Federal Truth in Lending Act requires that every lender to disclose the APR, so you can use the APR as a good basis to compare the true costs of loans. However, your monthly payment is calculated based on the interest rate, not APR. Here’s an example that shows how monthly payments are calculated using a loan calculator from LendingTree, the parent company of MagnifyMoney. The fees and other costs, such as discount points and origination fees are often paid at the closing of a loan or will be calculated into your loan balance.

This article contains links to DepositAccounts.com. Like MagnifyMoney, DepositAccounts.com is a subsidiary of LendingTree.

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.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at shenlu@magnifymoney.com

TAGS:

Advertiser Disclosure

News

Ebates for Groceries: 4 Grocery Rebate Apps Reviewed

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

iStock

People who frequently use rebate websites may have wondered if there are equivalent sites for grocery shopping — sure there are, and plenty of them.

As a quick refresher, popular sites like Ebates offer coupons and cash rebates to customers who shop at partner retailers such as Macy’s or Walmart. San Francisco-based Ebates is owned by Rakuten Inc., one of Japan’s largest online shopping malls. When you click on an Ebates link through the website or app, an email, or by installing its browser extension to start shopping, you’re eligible to receive cash back. You can also receive cash back at the store by linking a credit or debit card to your Ebates account.

Grocery store rebate apps work much the same way, with an extra step of submitting your receipts after you shop. There are a slew of such apps including Checkout 51, SavingStar and Receipt Pal, plus the four we’re reviewing below. Each of these turns your grocery receipts into cashback awards and each has its own special features, strengths and limitations.

Ibotta

Ibotta allows users to earn cash rewards for everyday purchases, both in-store and online. Partnering with almost 200 grocery store chains in the country, the Denver, Colo., based company offers rebates on a wide variety of fresh produce, liquor, processed foods and personal care products and household supplies.

How it works

Step 1: Find offers

Before your trip to the grocery, find offers on products from that particular grocery store listed on the app, and claim the ones you’ll need. Each deal is worth between 25 cents and $5. Some deals are only valid for items at selected stores, but there are also offers applying to products sold at any partnering grocery store. From time to time, there are rewards worth 25 or 50 cents just for submitting a receipt, even though you didn’t purchase anything eligible for cash back.

Step 2: Go shopping

You go buy groceries, including items that you’ve claimed cashback offers on. Keep the receipt.

Step 3: Redeem awards

Redeem your offers by taking a photo of your receipt via the Ibotta app. The app will match the items on the receipt to the offers previously claimed and deposit the cash into your account within 48 hours.

Note: your receipts are valid for rebates within 7 days of purchases, so don’t wait too long to submit your receipt.

You can also link your loyalty card or account with Ibotta, so that the app receives an electronic submission of your receipt to be automatically reviewed for cash rewards.

Step 4: Receive cash

Ibotta will deposit your credit within 48 hours. You can withdraw the funds from your account and transfer them to your Venmo or PayPal account every time once you’ve accumulated $20 of cash credit. Another option to use your earnings is to buy gift cards from stores partnering with Ibotta.

Where it works

Ibotta partners with nearly 200 grocery stores, drug store and wholesale markets. To name a few: Whole Foods Market, CVS, Walmart, Kroger and Costco. Find the entire list of stores where you can use Ibotta here.

Extra bonus

Beyond regular offers, you have opportunities to earn additional credit through special offers. A few examples below:

  • Once you redeem your first in-store offer, you earn an extra $2 cash from Ibotta.
  • You get a $5 bonus when a friend signs up through your referral.
  • When you reach $10 in credit, Ibotta will match the earnings with an extra $10.

Pros and cons

Pros

  • Cash rewards are straightforward and are deposited to your account within 48 hours.
  • Deals are available on a variety of groceries — it’s the only app we reviewed that offers rebates on fresh foods.
  • You can use Ibotta in some of the biggest grocery chains in the country.
  • Beyond groceries, you can earn cash credit from purchasing electronics, clothing, gifts, home and office supplies, restaurant dining both online and in-store.
  • Ibotta is the most outstanding among the four apps we reviewed when it comes to interface and design.
  • Ibotta offers generous bonus awards.

Cons

  • It takes time to browse deals every time before you go grocery shopping.
  • You can’t cash your rewards unless you reach $20, which can take a while to accumulate.
  • It doesn’t work with every grocery store — you can’t use it at mom-and-pop shops or bodegas.
  • Offers don’t last forever; sometimes they expire before you remember to redeem them in time.
  • After you claim offers, Ibotta will often ask you personal questions such as your age, gender, race and consumption references. You can’t proceed without answering, but Ibotta is not transparent as to why they are collecting such data and how they will use such information.

Receipt Hog

Receipt Hog is unique in the sense that it pays you for uploading pictures of your receipts for market research. Any receipt will work, whether it’s from a large grocery chain or corner bodega.

How it works

Step 1: Submit receipts

You earn coins from your receipts from any store, depending on the amount of money you spent. You earn:

  • 5 coins for a receipt total of less than $10
  • 10 coins for a receipt total of $10 to $50
  • 15 coins for receipt total of $50 to $100
  • 20 coins for a receipt total of more than $100

Note: A receipt must be uploaded to the app within 14 days of the transaction date. You can submit up to three receipts from the same store with the same transaction date and up to 20 receipts per week.

Step 2: Redeem points

Once you reach 1,000 coins, you’ll be eligible for a PayPal cash redemption or an Amazon gift card.

  • 1,000 coins = $5
  • 2,900 coins = $15
  • 4,300 coins = $25
  • 6,500 coins = $40

The more coins you redeem, the higher the payout — it’s worth waiting until you earn 6,500 coins to maximize your earnings. The redemption request will be approved within seven days.

Where it works

You can submit receipts from any store within the U.S., Canada and the United Kingdom.

Extra bonus

Receipt Hog offers extra points-earning opportunities:

  • You can earn additional rewards and bonuses by completing surveys or challenges, or by uploading more receipts.
  • You can connect your Receipt Hog account with your email address and Amazon to earn bonus points and awards.

Pros and cons

Pros

  • Uploading receipts is the simplest way to earn money, among these selections — you don’t need to spend time looking for eligible offers or deals with Receipt Hog.
  • It’s the most widely applicable app among the four. It can be used in all stores that sell groceries, big and small, and in three countries.
  • You won’t need waste money on items you don’t use just to get cashback rewards.
  • Receipt Hog also allows users to earn rewards from retailers that sell clothes, home improvement and furnishings, office supplies, electronics and arts and crafts and sporting equipment.
  • The company is transparent about its data collection purpose.

Cons

  • If you are a new user, you have to complete an introductory survey before you can access the cash-out page.
  • The reward system is a bit complicated: you earn points based on how much you spend on groceries on one receipt, and then you have to convert from points to dollar amounts to get rewards.
  • Because you earn points primarily by submitting receipts, your earnings from Receipt Hog may not be as substantial compared with other product- or band-oriented rebate apps.
  • There is a waiting period of up to seven days to receive funds, the longest cash-out wait of all apps reviewed.

Fetch Rewards

Unlike Ibotta, which has a limited choice of grocery stores and specific offers on products, Fetch Rewards allows you to scan any receipt from any grocery store in the U.S. Its offers are based on specific brands, not products or stores. Most of the brands partnering with Fetch Rewards are popular consumer brands that sell processed food or personal care items.

How it works

Step 1: Upload receipts

Scan your grocery receipt from any grocery store, convenience store, drug store or liquor store.

Note: Receipts must be scanned within 14 days of the transaction date. You can upload up to 14 receipts in a rolling seven day period.

Step 2: Earn points

If you have purchased a product from one of Fetch Rewards’ participating brands, you’ll earn points for that item. There are three categories of points: base, bonus and special.

Step 3: Redeem rewards

As your points accumulate, you can redeem them for gift cards to popular retailers that work with Fetch Rewards. Every 1,000 points are worth $1. There are four tiers of rewards: 5,000 points, 10,000 points, 25,000 points and 50,000 points; you can earn gift cards with a cash value of $5, $10, $25 and $50, respectively.

Where it works

Any U.S. grocery store that carries the 200+ popular brands in the app.

Extra bonus

You receive 2,000 points after you refer the app to a friend and their first receipt has been approved and accepted.

Pros and cons

Pros

  • Anyone who lives in the U.S. can potentially take advantage of the app.
  • The brands are common enough that most grocery stores carry them.
  • The gift-card options are extensive.
  • Deals don’t expire.

Cons

  • If an account is inactive for 90 days, the points will expire.
  • The deal options are limited to 200+ brands.
  • All offers are for processed foods. You won’t be able to get credit for buying fresh produce with Fetch Rewards.
  • You can’t convert points to actual cash that can be transferred to your own financial account.

BerryCart

BerryCart is a healthy answer to Fetch Rewards. Users earn rewards for buying organic, gluten-free or non-GMO foods. Rather than offering brand-based deals, BerryCart offers are based on specific products.

How it works

Step 1: Find deals

Browse BerryCart deals in the app. The deals are only valid for a certain period of time. It currently offers cashback rewards on nearly 50 items. The app tells you where the item is available near you based on your GPS location; most of the offers are worth from $0.25 to $2.

Step 2: Claim deals

In order to claim a specific deal that BerryCart offers, you have to click the “Fact” button on the offer page to learn information about that product.

Step 3: Upload receipts

After your grocery shopping trip, you can snap a picture of the receipt or the bar code to receive a rebate for the item you previously claimed. BerryCart will deposit the funds into your account within 24 hours.

Step 4: Get cash

Once your accumulated rebates reach $5, you can cash them out by transferring the money to your PayPal account, or you can buy a gift card to iTunes ($5 to $15) or Hotels.com ($10 to $20).

Where it works

You can use BerryCart in any store that carries the items BerryCart currently offers deals on.

Extra bonus

  • You can earn extra cash back by writing reviews on each product.
  • You earn $2 for each successful referral.

Pros and cons

Pros

  • If you buy mostly organic, all-natural, gluten-free and non-GMO foods, this app is for you.
  • It works at grocery stores across the country.
  • You can learn nutritional facts about the things you buy while claiming deals.
  • The credit you earn is deposited in 24 hours, the speediest among all four apps reviewed.

Cons

  • The app is limited, in that not many deals are available on BerryCart. Currently you can only earn cash back on about 50 products.
  • It requires many steps before you eventually receive the awards.
  • The BerryCart app is not very intuitive.

The bottom line

It’s fulfilling to earn cashback rewards just by scanning your grocery receipts. To maximize your earnings, you’ll probably want to check the apps when creating your shopping list. It’s even more gratifying if you can combine your app rebates with store discounts. But it’s also easy to overspend — squelch the impulse to buy something solely for the cash back because you may end up wasting money instead of saving it.

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.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at shenlu@magnifymoney.com

TAGS: