Advertiser Disclosure

Credit Cards, Featured, News

Average Credit Card Debt in the U.S. in 2018

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews 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.

Even as household income and employment rates are ticking up in the U.S., credit card balances are at all-time highs. And as the Fed raises rates, credit card rates rise in tandem, meaning consumers could pay billions in extra interest charges.

We’ve updated our statistics on credit card debt in America to illustrate how much consumers are now taking on.

  • Americans paid banks $104 billion in credit card interest and fees in 2018, up 11% from the prior year, and up 35% over the last five years, as Fed rate increases have been passed on to consumers. MagnifyMoney analyzed FDIC data through March, 2018 for each bank whose deposits are insured by the FDIC.
  • With potentially four Fed rate hikes left to come this year, we estimate the increase in interest and fees paid in the coming year will once again be above 10%, putting Americans on track to pay over $110 billion. Our analysis of the impact of Fed rate hikes found credit card rates are the most sensitive to Fed rate hikes, rising more than twice as fast as mortgage rates.
  • Average APRs on credit card accounts assessed interest are now 15.5%, up nearly 300 basis points in five years, according to the Federal Reserve.

  • Total revolving credit balances are $1.04 trillion as of May, 2018. The figure, reported monthly by the Federal Reserve, is the total amount of revolving credit balances reported by financial institutions, the overwhelming majority of which are credit and retail card balances, according to the CFPB. As of March 2018, non- card-related revolving balances such as overdraft lines of credit were approximately $73 billion according to our analysis of the FDIC data used by the Federal Reserve to calculate total revolving balances.

  • Americans carry $687 billion in credit card debtthat is not paid in full each month. This estimate includes people paying interest, as well as those carrying a balance on a card with a 0% intro rate. We based the estimate on a CFPB study of credit card account data that found 29% of total credit card balances are paid off each month, implying 71% of credit card balances revolve each month. We applied the percentage to the Federal Reserve’s revolving credit balance data less $72 billion in non-credit card revolving debt to reach $687 billion in credit card balances carried over month to month.
  • 44% of credit card accounts aren’t paid in full each month, according to the American Bankers Association. Those that don’t pay in full tend to have higher balances, which is why the percentage of balances not paid in full (71%) is higher than the percentage of accounts not paid in full (44%).
  • The average credit card balance is $6,348 for individuals with a credit card, according to Experian. This excludes store credit cards, which have an average balance of $1,841. Both figures include the statement balances of individuals who pay their balance in full each month.

Credit card use

  • Number of Americans who actively use credit cards: 175 million as of 2018, according to Transunion
  • Average number of credit cards per consumer: 3.1, according to Experian. That doesn’t include an average of 2.5 retail credit cards.
  • Number of Americans who carry credit card debt month to month: 70 million.

Credit card debt

The following estimates only include the credit card balances of those who carry credit card debt from month to month — they exclude balances of those who pay in full each month.

  • Total credit card debt in the U.S. (not paid in full each month): $687 billion
  • Average APR: 15.54% (also excludes those with a 0% promotional rate for a balance transfer or purchases)
    • This estimate comes from the Federal Reserve’s monthly reporting of APRs on accounts assessed interest by banks.

Credit card balances

The following figures include the credit card statement balances of all credit card users, including those who pay their bill in full each month.

  • Total credit card balances: nearly $1.04 trillion as of May 2018, an increase of 5% percent from the previous year. This includes credit and retail cards, and a small amount of overdraft line of credit balances.
  • Average credit card balance: $6,358, according to Experian (excludes retail credit cards, which have lower balances. The average consumer has $1,841 in balances on retail cards and we estimate combining all consumers with retail or credit card debt the average is approximately $5,000 per individual). All averages include those who pay their bill in full each month.

Who pays off their credit card bills?

According to the American Bankers Association, as of the end of 2017, accounts that are paid in full versus carrying debt month to month comprise the following mix of open credit card accounts:

  • Revolvers (carry debt month to month): 44 percent of credit card accounts
  • Transactors (use card, but pay in full): 29.5 percent of credit card accounts
  • Dormant (have a card, but don’t use it actively): 26.5 percent of credit card accounts

Delinquency rates

Credit card debt becomes delinquent when a bank reports a missed payment to the major credit reporting bureaus. Banks typically don’t report a missed payment until a person is at least 30 days late in paying. When a consumer doesn’t pay for at least 90 days, the credit card balance becomes seriously delinquent. Banks are very likely to take a total loss on seriously delinquent balances.

Delinquency rates peaked in 2009 at nearly 7%, but in 2018 they have remained below 3%. 

Debt burden by income

Those with the highest credit card debts aren’t necessarily the most financially insecure. According to the 2016 Survey of Consumer Finances, the top 10 percent of income earners who carried credit card debt had nearly twice as much debt as average.

However, people with lower incomes have more burdensome credit card debt loads. Consumers in the lowest earning quintile had an average credit card debt of $2,100. However, their debt-to-income ratio was 13.9 percent. On the high end, earners in the top decile had an average of $12,500 in credit card debt. But debt-to-income ratio was just 4.8 percent.

Income Percentile

Median Income

Average CC Debt

CC Debt: Income Ratio

0%-20%

$15,100

$2,100

13.9%

20%-40%

$31,400

$3,800

12.1%

40%-60%

$52,700

$4,400

8.3%

60%-80%

$86,100

$6,800

7.9%

80%-90%

$136,000

$8,700

6.4%

90%-100%

$260,200

$12,500

4.8%

 

Although high-income earners have more manageable credit card debt loads on average, they aren’t taking steps to pay off the debt faster than lower income debt carriers. In fact, high-income earners are as likely to pay the minimum as those with below average incomes. If an economic recession leads to job losses at all wage levels, we could see high levels of credit card debt in default.

Generational differences in credit card use

In 2017, Generation X surpassed the baby boomer generation to have the highest credit card balances. Experian estimates that on average, Generation X has a balance of $7,750 per person, 21.94% more than the national average ($6,354). Boomers carry nearly as much as Generation X with an average balance of $7,550.

At the other end of the spectrum, millennials, who are often characterized as frivolous spenders and are too quick to take on debt, have nearly the lowest credit card balances. Their median balance clocks in at $4,315. The youngest generation, Gen Z, has the smallest average balance of $2,047 per person.34

How does your state compare?

Using data from the Federal Reserve Bank of New York Consumer Credit Panel and Equifax, you can compare median credit card balances and credit card delinquency.

State

Credit Card Debt Per Debtor

Credit Card Debt Per House

Alabama

$3,710.56

$7,198.48

Alaska

$5,879.85

$11,406.91

Arizona

$4,299.70

$8,341.42

Arkansas

$3,289.01

$6,380.69

California

$4,569.51

$8,864.85

Colorado

$4,898.56

$9,503.20

Connecticut

$5,171.89

$10,033.47

Delaware

$4,338.88

$8,417.42

Florida

$4,318.35

$8,377.59

Georgia

$4,727.46

$9,171.27

Hawaii

$5,330.46

$10,341.09

Idaho

$3,791.84

$7,356.18

Illinois

$4,412.71

$8,560.65

Indiana

$3,624.05

$7,030.65

Iowa

$3,169.16

$6,148.17

Kansas

$3,854.05

$7,476.85

Kentucky

$3,457.67

$6,707.88

Louisiana

$3,767.91

$7,309.75

Maine

$3,905.56

$7,576.78

Maryland

$5,287.61

$10,257.96

Massachusetts

$4,720.53

$9,157.83

Michigan

$3,458.51

$6,709.51

Minnesota

$4,257.26

$8,259.08

Mississippi

$3,204.95

$6,217.60

Missouri

$3,763.46

$7,301.11

Montana

$3,732.83

$7,241.69

Nebraska

$3,594.46

$6,973.25

Nevada

$4,263.19

$8,270.59

New Hampshire

$4,943.44

$9,590.27

New Jersey

$5,361.06

$10,400.47

New Mexico

$4,185.93

$8,120.71

New York

$4,969.84

$9,641.50

North Carolina

$4,124.04

$8,000.63

North Dakota

$3,756.19

$7,287.00

Ohio

$3,738.95

$7,253.56

Oklahoma

$4,038.90

$7,835.47

Oregon

$3,881.17

$7,529.48

Pennsylvania

$4,209.21

$8,165.86

Rhode Island

$4,376.34

$8,490.10

South Carolina

$4,187.65

$8,124.04

South Dakota

$3,608.28

$7,000.07

Tennessee

$3,903.24

$7,572.28

Texas

$4,937.00

$9,577.78

Utah

$3,775.21

$7,323.92

Vermont

$4,199.77

$8,147.56

Virginia

$5,404.32

$10,484.38

Washington

$4,568.09

$8,862.09

West Virginia

$3,381.36

$6,559.84

Wisconsin

$3,410.29

$6,615.96

Wyoming

$3,944.72

$7,652.76

 

State

Silent

Boomers

Gen X

Millennials

Gen Z

Alaska

$5,456

$9,495

$8,995

$4,464


$1,518


Alabama

$3,511

$6,461

$6,485


$3,324


$1,455




Arkansas

$3,194

$5,995

$6,197


$3,240


$1,803


Arizona

$4,149

$6,967

$6,778


$3,575


$1,555


California

$4,232

$7,050

$6,578


$3,654


$1,596


Colorado

$4,004

$7,499

$7,439


$3,833



$1,514


Connecticut

$4,091

$8,179

$8,046


$3,716



$2,567


Dist. of Columbia

$5,486

$7,976

$7,393


$4,596



$2,814


Delaware

$4,147

$7,128

$7,144


$3,285



$1,608


Florida

$4,311

$7,047

$6,615


$3,639



$1,837


Georgia

$4,356

$7,517

$6,972


$3,540


$1,835


Hawaii

$4,386

$7,073

$7,355


$4,203


$1,657


Iowa

$2,367

$5,297

$6,163


$2,857


$935


Idaho

$3,477

$6,147

$6,332


$3,193


$928


Illinois

$3,641

$7,054

$7,040


$3,537


$1,556


Indiana

$3,137

$5,998

$6,174


$3,003


$1,402


Kansas

$3,187

$6,514

$6,930


$3,292


$1,421


Kentucky

$3,044

$5,727

$6,080


$3,082


$1,372


Louisiana

$3,679

$6,598

$6,561


$3,425


$1,971


Massachusetts

$3,481

$7,017

$7,022


$3,479

$1,882


Maryland

$4,341

$7,994

$7,458


$3,671


$1,749


Maine

$3,107

$6,054

$6,531


$3,375


$1,286


Michigan

$3,436

$6,049

$6,113


$2,971


$1,523


Minnesota

$3,025

$6,299

$6,898


$3,244


$1,338


Missouri

$3,265

$6,333

$6,757


$3,279


$1,346


Mississippi

$3,218

$5,634

$5,718


$3,043


$2,011


Montana

$3,285

$5,977

$6,868


$3,385


$1,506


North Carolina

$3,481

$6,566

$6,710


$3,397


$1,486


North Dakota

$2,141

$5,362

$6,646


$3,326


$1,467


Nebraska

$2,717

$5,909

$6,498


$3,136


$1,388


New Hampshire

$3,582

$7,140

$7,443


$3,519


$1,666


New Jersey

$4,126

$8,011

$7,882


$3,928


$2,241


New Mexico

$4,373

$6,906

$6,534


$3,532


$1,207


Nevada

$4,733

$6,993

$6,357


$3,700


$1,185


New York

$3,906

$7,127

$7,234


$3,986


$2,495


Ohio

$3,313

$6,383

$6,530


$3,135


$1,465


Oklahoma

$3,484

$6,789

$6,900


$3,493


$1,641


Oregon

$3,618

$6,502

$6,481


$3,245


$856


Pennsylvania

$3,282

$6,550

$7,059

$3,457


$1,545


Rhode Island

$3,524

$7,162

$7,313


$3,371


$1,786


South Carolina

$4,019

$6,537

$6,559


$3,281

$1,375


South Dakota

$2,584

$5,710

$6,900

$3,250


$1,531


Tennessee

$3,388

$6,309

$6,505


$3,308


$1,737


Texas

$4,350

$7,591

$7,119


$3,779


$1,945


Utah

$3,364

$6,411

$6,713


$3,070


$932


Virginia

$4,132

$7,956

$7,968


$3,985

$1,692


Vermont

$3,681

$6,197

$6,547


$3,297


$2,511


Washington

$3,947

$7,365

$7,190


$3,500


$1,355


Wisconsin

$2,740

$5,673

$6,289


$2,914


$992


West Virginia

$2,914

$5,573

$6,158


$3,238


$1,166


Wyoming

$3,523

$6,356

$6,889

$3,663

$1,442

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.

Hannah Rounds
Hannah Rounds |

Hannah Rounds is a writer at MagnifyMoney. You can email Hannah here

TAGS:

Advertiser Disclosure

News

What You Need to Know About the New Student Loan Servicing Plan

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews 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.

student loan payment platform
Source: iStock

More than 11% of America’s student loan payments are more than 90 days delinquent or, even worse, in default. But the Department of Education is hopeful its new student loan servicing system, slated to debut in 2019, will get federal loan borrowers back on track.

The platform, called Next Generation Financial Services Environment, or “NextGen” for short, aspires to be a one-stop shop for anyone with federal loans to manage.

In advance of NextGen’s arrival, here’s what’s new, plus how it could affect you.

How NextGen came to be

Secretary of Education Betsy DeVos created a stir in May 2017 when she announced an overhaul to the federal student loan system. At the time, DeVos proposed awarding a trillion dollars’ worth of federal loans, spanning 42.3 million customer accounts, to a single loan servicer — instead of keeping them spread out among the nine servicers, the contracts for which expire in 2019.

Reactions to the plan cited various pros and cons of a single-servicer platform, but there was pushback from critics who saw a potential monopoly forming, one that would be hard for the government to rein in, let alone serve borrowers best.

After hiring Dr. A. Wayne Johnson to lead the department’s Federal Student Aid (FSA) office, DeVos changed plans. In August 2017, the secretary announced a single online platform accessed by multiple servicers — NextGen.

The latest proposal kept DeVos’ initial promise of a simpler, more streamlined repayment experience for borrowers but balanced it with more competition among servicers.

What to expect from NextGen

If you’re a federal loan borrower, you’re probably familiar with StudentLoans.gov and the FSA’s main website, plus the sites of your loan servicers.

With NextGen, you’d only have one URL to bookmark. Even if you have a number of outstanding loans with varying servicers, you would manage every step of your repayment in one place, whether you want to adjust your repayment plan or consolidate your debt.

“It should be easier for borrowers to manage their student loans and to be placed into the most advantageous repayment programs,” said student loan lawyer Stanley Tate. “For instance, a public service employee should get bright, loud, ringing alarms that tell them some of their loans aren’t eligible for forgiveness.”

One complication is that NextGen will feature two sets of user experiences: one for older federal student loan types (such as now-defunct Perkins loans) and another experience for newer loans.

Still, housing all servicers in one place is bound to be a boon for borrowers with multiple accounts. You’d no longer have to track down the customer service phone number for each of your loans or keep track of sending payments to different places.

How NextGen will keep loan servicers in check

Of course, it’ll be a monumental task to upload about 42 million borrowers’ worth of loan information to NextGen. That would fulfill the FSA’s promise of achieving a “single data processing platform” that not only serves borrowers but also delivers excellent data about how they’re being served.

Via the Consolidated Appropriations Act of 2018, Congress mandated the education department use “common metrics” to judge the performance of servicers before deciding to award them federal borrowers’ accounts.

Once it’s live, NextGen could take that to the next level.

“There is a lot more latitude for Federal Student Aid to measure servicers against one another, because they will have more data available to them on how servicers interact with borrowers than they currently do,” said Colleen Campbell, who wrote a detailed report on NextGen’s development for the Center for American Progress (CAP).

As Campbell noted, however, the education department’s latest solicitation for servicers doesn’t include information on how they would be held in check.

“There has historically been such poor oversight of servicers and other Federal Student Aid contractors that I think it’s difficult to have faith that the organization will do what’s best for borrowers rather than what’s most cost-efficient,” Campbell said.

Navient might not be a match for NextGen

If you peruse the list of companies contending for government contracts to build NextGen, you might notice some familiar names, including Nelnet and the Missouri Higher Education Loan Authority (MOHELA). You’ll also see technology companies without a background in student loans — IBM Corporation is the most recognizable — as the education department looks to build the back end of its new servicing platform.

However, Navient — currently one of the country’s largest loan servicers — is notably absent. It remains involved, however, as a subcontractor teamed with other servicers.

The company itself is a frequent target of lawsuits, and announced in November that it was taking the Trump administration to court over the education department’s handling of servicer contracts, as first reported by Politico. Navient alleges the department broke federal procurement rules during its search for NextGen contractors and put it at a “competitive disadvantage,” according to the lawsuit.

According to government data, Navient has been one of the most complained-about student loan servicers in recent years. NextGen on the other hand, if it lives up to its promise, could offer improved customer service, easier loan management and a clearer path to being debt-free.

“Navient has such a history of poor past performance, it would be difficult to imagine them making it into the new system if there is any integrity in the selection process,” Campbell said. “Their suit strikes me as another blow to that relationship.”

If you have student loans serviced by Navient, you may or may not be happy to learn that either way, it won’t be operating on its own in the future. When the time comes, you’ll need to lean on NextGen instead.

This article was originally published on Student Loan Hero, which like MagnifyMoney, is owned by 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.

Andrew Pentis
Andrew Pentis |

Andrew Pentis is a writer at MagnifyMoney. You can email Andrew here

TAGS: , ,

Advertiser Disclosure

News

Resources for Repairing Your Home After Hurricane Florence

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews 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.

Hurricane Florence
iStock

Many homeowners are beginning to make repairs after Hurricane Florence’s devastating crawl across the Carolinas and Virginia in September 2018.

According to real estate data provider CoreLogic, the storm affected 624,000 homes, the vast majority unprotected by flood insurance. Standard homeowners and renters insurance policies do not cover damage from storm surges and other flooding. That requires a separate policy, typically purchased from the U.S. government, but consulting and actuarial firm Milliman said fewer than 10% of homeowners in the Carolinas had such coverage.

Many families facing large out-of-pocket costs from Hurricane Florence may be wondering what the next steps are to begin rebuilding. To help you get started, we’ve rounded up some resources available to people in the Carolinas affected by the storm.

If you’re looking for more general information on options for repairing your home after a hurricane, see our guide here.

Answers to insurance questions after Hurricane Florence

Flood insurance vs. homeowners insurance

While standard homeowners and renters insurance policies do not cover damage from storm surges or other flooding, they should cover damage from, say, a neighbor’s tree that fell on your house and left a hole on the roof where water came through. South Carolina residents with questions about claims may visit the S.C. Department of Insurance. North Carolinians can visit NCHurricClaims.com for information. Insured residential damages in that state may total as much as $7.5 billion while uninsured damages may nearly be twice as much. Total storm damage in the Carolinas and Virginia is expected to add up to $28.5 billion.

Wind insurance

Wind must be insured separately and sometimes this coverage is available only from a state-run insurer of last resort. In North Carolina, the Coastal Property Insurance Pool is available to coastal homeowners, with a similar wind pool in South Carolina.

Filing for federal disaster assistance after Hurricane Florence

If your home is in a declared presidential disaster area, you can apply for FEMA individual disaster assistance. If you do not have internet access, you can call 800-621-3362.

Coverage

Disaster aid may cover:

  • Temporary housing
  • Lodging reimbursement
  • Home repairs
  • Home replacement
  • Permanent or semi-permanent housing construction
  • Child care expenses
  • Medical and dental expenses
  • Funeral and burial expenses
  • Essential household items, clothing, tools required for your job and necessary educational materials
  • Heating fuel
  • Cleanup items
  • Damage to an essential vehicle
  • Moving and storage expenses

Disaster areas

As of this writing, DisasterAssistance.gov shows residents in the following North Carolina counties may be eligible for disaster assistance after Hurricane Florence:

  • Anson
  • Beaufort
  • Bladen
  • Brunswick
  • Carteret
  • Chatham
  • Columbus
  • Craven
  • Cumberland
  • Duplin
  • Durham
  • Greene
  • Guilford
  • Harnett
  • Hoke
  • Hyde
  • Johnston
  • Jones
  • Lee
  • Lenoir
  • Moore
  • New Hanover
  • Onslow
  • Pamlico
  • Pender
  • Pitt
  • Richmond
  • Robeson
  • Sampson
  • Scotland
  • Union
  • Wayne
  • Wilson

In South Carolina, Chesterfield, Darlington, Dillon, Florence, Georgetown, Horry, Marion and Marlboro counties are federally declared disaster areas. As of this writing, there are no declared disaster areas in Virginia.

FEMA may require you to have evidence that your insurance company declined your loss claim and will not cover your disaster-caused loss. When you apply for disaster assistance, you’ll need to provide identifying information like your Social Security number and a current mailing address.

It’s important to remember some FEMA funds are funneled through the state government, so depending on how your state allocates its resources, your reimbursement or assistance may take months. Some North Carolina survivors are still waiting on FEMA disaster assistance aid from Hurricane Matthew in 2016.

According to a FEMA spokesperson, those still waiting on aid from a previous disaster may still qualify for FEMA assistance.

Final thoughts

If you were one of the estimated 624,000 homeowners affected by Hurricane Florence, help is available. Sources of financial assistance range from your own insurance policies, to government assistance and loans, to charitable organizations, to simply borrowing from a private lender.

Rebuilding may be costly and seem overwhelming, so look to resources like United Policyholders and the Insurance Information Institute or your state’s emergency management office. North Carolina residents may visit ReadyNC. South Carolina residents may go here.

If you need advice when deciding between options, consult a fee-only financial professional who has experience working with homeowners following a disaster.

If you are considering bankruptcy, it’s recommended you speak with a bankruptcy lawyer about the options available to you and any protections provided by your state.

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.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

TAGS:

By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.

Advertiser Disclosure

News

What Midterm Election 2018 Results Mean for Your Student Loans

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews 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.

From health care to the economy, voters had many concerns in mind as they headed to the polls for this year’s midterm elections.

But one major issue that might not have gotten as much attention in news coverage was the government’s handling of student loans, a subject which impacts 44 million Americans. As our national student debt has exceeded $1.5 trillion, many borrowers are hoping for relief.

But while Democrats call for an expansion of financial aid and forgiveness programs, conservatives warn that increasing aid could be a burden for taxpayers.

Given the election results that gave the Democratic Party a majority in the House of Representatives, we might see them looking to influence the education policies moving forward. Still, they won’t have much hope for passing their own legislation without working out deals with the Republican-led Senate and White House.

On the other hand, a few ballot measures across the country and the presence of some lawmakers with a personal interest in student debt are enough to cast educational debt in a bigger spotlight.

Whether you’re a student, loan borrower or parent preparing for the costs of colleges, find out what the 2018 midterm election results could mean for you.

Democrats to weigh in on education policies

While some races are still too close to call, Democrats have locked in a majority in the House of Representatives, taking the gavel from the Republicans, while the GOP has added to its majority in the Senate.

This shift in the House could mean Democrats have greater influence when it comes to Department of Education policies, particularly those related to for-profit colleges and student loan forgiveness programs.

Critics of Secretary of Education Betsy DeVos have accused her of protecting for-profit schools at the expense of students. They have also objected to her efforts to scale back certain Obama-era protections, such as borrower defense to repayment, which discharges loans for defrauded borrowers.

Democrats have sent letters objecting to education policies under the Trump administration, but as the minority, they were unable to conduct oversight of the department. Now that they lead the House, however, Democratic members will likely be active on this front.

“Expect a Democrat-led House, for instance, to conduct hearings, demand documents and press the Trump administration on its appointment of officials with ties to for-profit colleges — and its reversal of Obama-era policies meant to crack down on the industry,” wrote Michael Stratford, education reporter for Politico on Tuesday.

Ally Bernstein, legislative counsel for the Association of Young Americans (AYA) agreed, “The [Democrats will] hold the department’s feet to the fire on its controversial rewrites of rules governing for-profit institutions, including whether federal student loan borrowers are protected from continuing to repay loans if these institutions committed fraud against them.”

The free-college movement shows up at local level

When running for president in 2016, Sen. Bernie Sanders (I-Vt.) supported the movement to provide free public college for all. In 2017, Sanders and Sen. Elizabeth Warren (D-Mass.) proposed a bill that would provide $41 billion a year to states to help eliminate tuition.

While there hasn’t been much progress on the national level, various state politicians have voiced their support for free community college during this midterm election season. For example, Ned Lamont, who won his bid for governor of Connecticut, supports two years of community college for state residents who agree to remain in state following graduation.

In fact, both the Republican incumbent Larry Hogan and his Democratic opponent for the governor’s seat of Maryland, Ben Jealous, proposed expanding Maryland’s free tuition college program, which currently provides no-cost community college to residents. Hogan, who won the race, said he supported expanding the tuition-free program to include four-year institutions.

And it’s not just the state governments. Seattle voters approved a measure to offer two free years of community college for public school students. The move will be funded by a property tax hike which the city predicts will raise over $600 million over several years.

So although the free college movement hasn’t gained much traction nationally, these city- and state-level victories could be signs of changes to come.

Politicians have student debt, too

For some politicians in this election, student loans are a personal issue. According to CNBC, one in 10 current members of Congress are repaying student loans, either for themselves or a family member.

Some of them are also trying to address the issue more broadly. Consider Rep. Tom Reed (R-N.Y.), who was re-elected to the House Tuesday.

“This is an area that affects the futures of so many young men and women, and it’s time to address the issue before it gets even worse,” Reed told Student Loan Hero in an interview earlier this year. “We’re shackling our children and grandchildren to debt if we don’t do something.” (Note: Student Loan Hero and MagnifyMoney are both part of LendingTree.)

Reed introduced a bill this year that would force some universities to use a portion of their endowments to help low- and middle-income students.

And there may be more such elected officials on the way, as millennials join the political arena and move up the ranks of state government.

Natalie Higgins of Massachusetts and Matt Lesser of Connecticut are two re-elected state representatives who have been open about their struggles with student debt.

Higgins, for example, borrowed more than $130,000 to pay for law school.

Lesser, also a student loan borrower, has made student debt a signature issue in his past few years on Connecticut’s state senate. In 2015, he sponsored a “student loan bill of rights,” aimed to make student loan companies follow consumer protection rules.

Committed to easing the burden for student borrowers, both Higgins and Lesser introduced a state bill requiring student loan servicers to abide by consumer protections.

“Having representatives who have experienced or are still experiencing student loans and understand the burdens and problems is really important,” said Ben Brown, founder of AYA.

Student loan legislation remains murky

With divided affiliations in Congress, competing visions for higher education from the Republicans and Democrats look less likely to become law.

Late last year, Republicans proposed the PROSPER Act, which would reduce regulation of for-profit schools, limit student loan forgiveness and increase funding for community colleges and apprenticeships, among other things.

Democrats, meanwhile, have proposed the Aim Higher Act, which would expand Public Service Loan Forgiveness (PSLF), increase funding for Pell Grants and revise income-driven repayment plans.

While the Republicans could pass PROSPER during the “lame duck” session before the new Democratic-majority House sits, any overhaul of the student loan system by the new Congress would require a deal between the two sides.

Student loans have become a political issue

With millions of Americans dealing with student loans, and with the cost of college higher than ever, it’s not surprising that higher education issues are increasingly part of the political conversation.

Now that Democrats have won a majority in the House, the current push to roll back Obama-era protections is likely to come under a lot more scrutiny. Likewise, previous plans for major changes to student debt through the PROSPER Act might need bipartisan consensus to move forward.

As a student loan borrower, make sure to stay informed about any changes to federal programs, such as income-driven repayment or loan forgiveness. Also know that even though the election is over, you can still make your voice heard. Contacting your elected officials is easy and can have an impact if enough people take action.

Even if these debates feel far away, they could have a very real effect on your life and finances.

This report originally appeared on Student Loan Hero. Both MagnifyMoney and Student Loan Hero are part 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.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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 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:

Advertiser Disclosure

News

How 4 Teachers Use Side Hustles to Stay Afloat

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews 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

It’s no secret that American educators as a whole aren’t well-compensated. Throughout 2018, in multiple states across the country, educators have publicly demanded salary increases, benefits and more funding for public education through staged walkouts and marches at state capitols. The protests have intensified a national debate about how we value teachers and the future of public education.And then there are the statistics:

  • The Bureau of Labor Statistics (BLS) reports the average annual pay was $58,780 in 2017 for the nation’s 4.2 million preschool, primary, secondary and special education teachers. The average annual expenditure per consumer — the average spending budget for American households — for 2017 was $60,060.
  • An analysis of teacher salaries by the National Education Association reports the average classroom teacher salary is up 15.2% over the past 10 years. However, after adjusting for inflation, the average salary has actually fallen by $1,823 or 3.0% over the same period.
  • In 2017, teachers earned 19% less than similarly skilled and educated professionals, what’s referred to as a “teaching penalty,” according to the Economic Policy Institute.
  • Nearly one in five teachers leave the profession because of low pay, according to the Learning Policy Institute.

Meanwhile, many teachers have taken on side hustles or second jobs as a solution to stagnant wages in their chosen profession. Some sell their expertise by sharing lesson plans and other tools to be used by other educators via platforms like Instagram and sites like TeachersPayTeachers.

Others have taken on side hustles in the gig economy. Airbnb, for example, reports nearly 10% of its U.S. hosts — more than 45,000 people — are teachers. And, based on a Brookings Institution analysis of BLS data, elementary and secondary school teachers are about 30% more likely to work a second job than non-educators.

With that in mind, MagnifyMoney spoke with four educators about what they do on the side to make ends meet at home, and to share their advice for any educators considering taking on a side hustle.

Lorri Lewis

The 12th grade English teacher worked as a driver for Uber and Lyft to fund her wedding planning business. Now she has a fully funded emergency fund and can afford to take vacations.

Lorri Lewis, 50, of Southfield, Mich., told MagnifyMoney she has always been an advocate for having multiple streams of income. So when the 12th grade English teacher and newly single mother of two saw an opening for a paid wedding coordinator at her church in 2002, she jumped at the opportunity to try out a longtime interest. Then, about five years ago, Lewis started driving for Uber and Lyft to raise the seed money she needed to launch her own wedding coordinating business. Lewis also made Instacart deliveries once her youngest son entered college.

“Having multiple streams of income is a big thing in my life now because I’m at the top of the pay scale and want to do other things in my life, like travel,” said Lewis, referring to educator salary schedules set by school districts. The educator notes because there’s no room for a raise, her pay technically decreased a couple of years ago when she and her co-workers started paying a larger portion of their health care expenses.

Earlier in 2017, Lewis ditched the gig economy in favor of running her business.

“The nice thing about being a wedding coordinator is that it allows me to work on the weekends and the summers, which is “off time” for teachers anyway,” said Lewis.

Where the side hustles help

Lewis’ teacher salary is just enough to cover the basics, including her mortgage, utilities and student loan payments. Until recently, the majority of her side income went to raising her kids as a single parent, completing necessary home repairs and funding her business. She said it was a struggle, but now that both of her sons are out of the house, Lewis has enough to build a financial cushion.

“I’m at the point now where I’m actually accumulating an emergency fund since becoming an educator,” Lewis told MagnifyMoney. Lewis’ career in education spans 20 years.

Advice to other teachers

Lewis’ main suggestion to other educators looking to start a side hustle is to find something you can do in the off-hours, like on weekends and during summers.

“Outside of the emails and phone calls, I schedule rehearsals on Fridays and weddings are on Saturdays, so I still have Sunday to regroup and organize for the new school week,” Lewis said. She added that it’s nice to do something that doesn’t involve working with students or children so teachers can get a break from their work environment.

Cecily White-Cooper

The middle school English for Speakers of Other Languages (ESOL) teacher tutors online, sells T-shirts she designs and creates teaching materials so she can travel and fund the holidays.

Image courtesy of Cecily White-Cooper

Cecily White-Cooper, 40, in Laurel, Md., told MagnifyMoney the predominant side hustle throughout her 18-year teaching career has been tutoring. It was a necessity, both when she started her career in California and when she moved to Maryland.

“I was on the bottom tier of the pay scale,” White-Cooper said. “I was not making enough money either here in Maryland or California in order to survive.”

In California, she began by finding clients on Craigslist and tutoring students at the local public library. After moving to Maryland, she tutored with a company based in Washington, D.C., until it became too much of a hassle to travel and find a babysitter after having twins in 2009. At that point, White-Cooper turned online, teaching English to students in China through VIP Kids.

Though tutoring has always been a staple side hustle, White-Cooper also has other income streams. She designs and sells T-shirts through Merch by Amazon, Redbubble and Etsy. White-Cooper also produces her own teaching material and sells that on TeachersPayTeachers.

White-Cooper’s experience as a lifelong side hustler inspired her blog, TeacherCes.com — from which she earns some advertisement income — and a podcast of the same name, where she shares advice and interviews with other moonlighting educators.

Where the side hustles help

“Initially when I started up until when I got married, every year I had to have something going on. It was hustle, hustle, hustle annually,” White-Cooper told MagnifyMoney. White-Cooper married about eight years into her teaching career. Having a dual-income household means the extra income is no longer a necessity, but she maintains her side hustles because they provide extra money she can use to travel or pay for seasonal expenses like holiday debt.

Advice to other teachers

“There will be something that will suffer,” White-Cooper said. “For me, it’s my social life.” But she makes up for the lost time with vacations once in a while, like a trip to Las Vegas with her friends.

White-Cooper added that having a side hustle and a family has also forced her to manage her time more efficiently to be successful.

“I’m very selective about what I do and where I go in order to get my tutoring projects and all of that finished,” she said. “I do my personal projects during my lunch hour. Then once the day is over at 3 p.m., I eat lunch.”

White-Cooper said she also gets to bed earlier so she can be up early on the weekends to work in her home office before the twins wake up.

Shannon Mitchell

The high school English teacher turned to multilevel marketing companies to get the money her family needed to fix their home sewer system. Now, she runs her own jewelry business.

Image courtesy of Shannon Mitchell

It was a poor housing market, low wages and a broken sewer system that drove high school English teacher Shannon Mitchell, 40, in Fredericksburg, Va., to seek side income through multilevel marketing (MLM) companies in 2013.

“With teaching, there’s no overtime — there is no other way to make money unless you get a second job,” Mitchell said.

Upon realizing there was no other option to earn the funds to fix the sewer system, she told herself, “‘Here I am, 35, and I have to ask my parents for money.’ I was like, ‘No way. I’m taking the bull by the horns.’”

Where the side hustles help

Mitchell became a representative for Rodan and Fields, where she said she quickly made the money she needed to repair the sewer system. She later worked for an MLM called Keep Collective before ending her side gigs with MLMs in 2016.

Although Mitchell says she and her husband have always generally lived beneath their means, she says the side income from her work with multilevel marketing firms helped them have a more flexible lifestyle and extra funds for life’s emergencies. Mitchell no longer has these income streams, but she started a porcelain jewelry business, which she runs outside of teaching, and hopes it will eventually become profitable.

Advice to other teachers

While many teachers seek extra-income opportunities within the world of education, Mitchell recommended not limiting yourself to the profession. She encouraged teachers to follow their interests.

“Don’t feel like it’s all or nothing with teaching,” Mitchell said. “You can be a good teacher and also explore other things as well.”

Finally, Mitchell warns any educators interested in multilevel marketing to “be smart about it” and weigh the pros and cons.

“Don’t buy into their hype,” said the MLM veteran, who mentioned that she didn’t have the control over her business the way she thought she would when participating in an MLM.

Jessica Cioffi

The 5th-grade teacher walks dogs with Wag! to fund humanitarian trips.

Jessica Cioffi, 32, an educator based in Los Angeles, told MagnifyMoney she first looked into dog walking in June 2017.

“The summer came and some of my travel plans had fallen through, so I had some extra time on my hands that I needed to fill,” said Jessica. With travel out of the picture, she said she decided to turn to her other love: dogs. She started walking dogs through an app called Wag!

Where the side hustles help

At first, dog walking was a fun way for her to exercise, hang with dogs and get paid, but when Cioffi realized the income could help her pay humanitarian trips she wanted to do, she was motivated to walk more often. She dog walks up to 8 miles a day on the weekends and in the summer.

Advice to other teachers

Cioffi advised using breaks to earn extra income with a side hustle.

“Summer is a great time to take on extra work, especially if it is something you can find joy in,” Cioffi said. “For myself, regardless of income, Wag! was a great way to interact with animals, get outside and meet incredible people.”

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.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

TAGS: , , , ,

Advertiser Disclosure

News

New Court Ruling Allows Obama-Era Student Loan Protections to Take Effect

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews 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.

A U.S. district court ruled Oct. 16 that Obama-era rules to protect student loan borrowers defrauded by colleges will take effect without further delay.

Initially slated for July 1, 2017, this policy was put on hold by Education Secretary Betsy DeVos, who said the rules made it too easy for borrowers to have their student loans canceled.

With this new ruling, the delay has come to an end, meaning that students who attended predatory for-profit schools might now qualify for cancellation of their student loans.

No more delays: Borrower defense to repayment will take effect

The legal decision impels the Department of Education to enact borrower defense to repayment, a policy approved during the Obama administration that offers student debt forgiveness to students found to have been misled by for-profit schools.

Critics of the decision to delay the policy say these schools target vulnerable populations such as veterans and those living in poverty, with former for-profit college enrollment officer Tressie McMillan Cottom telling NPR that these groups are the focus because they “qualify for the maximum amount of student aid.”

The policy is meant in part to address cases in which students take on debt to attend but leave without the skills or certifications they were promised or credits that could transfer to another institution. CNN cited an estimate from The Century Foundation that more than 1,400 schools closed between 2013 and 2015 and meet this description, and that their former students might now be eligible for loan forgiveness.

Almost 48,000 claims for debt forgiveness have been granted so far, most of which were processed under the Obama administration. Currently, 106,000 applicants are waiting for a decision, which should come faster with this latest ruling.

Consumer advocates celebrate ruling; conservatives uncertain

The latest court ruling is a major victory for students, according to consumer advocates.

“Today’s decision is a huge win for defrauded borrowers around the country,” said Julie Murray, an attorney who represented students who sued the Department of Education, in a statement after the announcement. “The rule is finally in effect. No more excuses. No more delays.”

Murray added, “Industry will continue to challenge the rule in court, but we will work as long as it takes to defeat those corporate interests and an administration beholden to them.”

But while students and their advocates support the ruling, it represents a defeat for DeVos and her fellow conservatives, many of whom claim loan cancellation could hurt taxpayers.

Although DeVos’ office said it wouldn’t argue against the ruling, it signaled that it intends to revise these regulations.

“Regardless of what the court decides, many provisions of the 2016 regulations are bad policy, and the department will continue the work of finalizing a new rule that protects both borrowers and taxpayers,” DeVos spokesperson Elizabeth Hill said in a statement.

The policy is one of many dealing with borrower protections that the Department of Education under DeVos has sought to roll back.

News comes on the heels of startling student loan statistics

Student protections such as the borrower defense to repayment policy are more important than ever, as the national student loan debt burden has never been heavier.

According to a report by Bloomberg based on data from the Federal Reserve, student loan debt, which stood at $1.5 trillion as of mid-2018, is the only debt category that has grown continuously since the Great Recession.

Student loan debt has increased by 157% in the past 11 years, while mortgage and credit card debt have gone down.

At the same time, rates of student loan delinquency and default have seen increases. This time last year, there were 4.6 million student borrowers in default on their educational debt.

Find ways to protect yourself as a student loan borrower

If you think you qualify for borrower defense to repayment, you can complete the application on Federal Student Aid.

You will need to provide documentation to support your case, including transcripts, enrollment agreements, promotional materials from the school and the school’s course catalog. If you have questions, contact your loan servicer or BorrowerDefense@ed.gov for guidance.

More generally, if you have student loans, educate yourself about your options for repayment and forgiveness. There are a variety of ways to get your loans discharged or forgiven, especially if you commit to working in a public service organization or a high-need area. Plus, some employers now offer a student loan repayment assistance benefit to help employees shed their debt.

Even if you don’t qualify for loan forgiveness, you could adjust your payments on an income-driven repayment plan or extended repayment plan. Or if your budget allows, you could make extra payments to get out of debt faster.

Many consider our national student debt to be a crisis, and Federal Reserve Chairman Jerome Powell has said it has long-term negative effects on borrowers and could hurt economic growth. But by finding the right strategy for your debt, you can avoid default and the harmful consequences that go with it. And hopefully, U.S. education officials will implement rules to help borrowers manage their debt and not stand in their way.

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.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

TAGS: , ,

Advertiser Disclosure

News

Study Shows Student Debt Can Kill 75% of Millennials’ Average Net Worth

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews 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.

It’s no secret that millennials are swamped with student loan debt. While more millennials have obtained bachelor’s degrees than those in generations past, they also borrowed the most to earn those degrees. As of 2018, outstanding student loan debt in the U.S. surpassed $1.48 trillion, almost one-and-a-half times what Americans owe on credit cards.

According to a MagnifyMoney analysis of Federal Reserve data, all this debt is hampering millennials’ chances for long-term financial success.

In fact, this study revealed that the average net worth of a millennial with student loans is only 25% of the net worth for a fellow millennial without them. What’s more, the data suggest student loan debt is preventing some millennials from saving for retirement or buying homes.

And while it’s likely that those without student loans tend to include more people from wealthy homes, the massive disparity between those who owe and those who don’t suggests that educational debt can supercharge the difference in income.

If you’re a millennial, your financial journey since graduation has probably been an uphill battle. Here’s how student loan debt has held your generation back, along with our advice on how to conquer your debt once and for all.

Key facts

Millennial households with student loan debt have…

  • An average net worth of $29,087, compared with $114,376 for student loan-free households.
  • 46% less in their savings and checking accounts (median balance of $5,500 vs $10,180 for those without student loans).
  • $21,160 in retirement savings versus an average of $39,905 for those with no student loan debt.

 

Student loans weigh heavily on millennials’ net worth

The wealth divide between households with student loan debt and those without it has been widening over the past few decades.

In 1989, under-35 households with student loan debt had just 13% less in average net worth than households without any student loan debt.

That difference had nearly tripled by 1998, when under-35 households with student loan debt had a net worth 36% less than their debt-free peers. The former had an average net worth of $68,687, while the latter held an average of $108,146.

In 2016, the gap had grown to 75%, with student loan-saddled millennial households having an average net worth of $29,087, compared with $114,376 for student loan-free households. In other words, millennials unburdened by student loans held over $85,000 more than those who still had debt from college or graduate school.

Even though a college degree typically leads to a higher-paying job, the student loans that often go with it can significantly undermine your ability to build wealth after graduation.

Student loans mean less money in the bank (and more credit card debt)

If you’ve got student loans, you know those payments can be a struggle to make month after month. According to our analysis, millennials with student loans are putting a significant amount of their paychecks toward their debt — leaving them with less money in the bank.

In fact, holders of student loans had 46% less in their savings and checking accounts in 2016 than millennial college graduates without debt. The former group had a median bank balance of $5,500, while the median for other millennial grads was nearly twice that, at $10,180.

Perhaps because millennial borrowers have less liquid cash, they also end up taking on more credit card debt. Fifty-five percent of those with education debt also had credit card debt, compared with just 32% of those without student loans. They also carried larger balances — $2,888 — as opposed to $1,476 for debt-free millennial graduates.

If student loan bills are eating up a big part of your income, you might use credit cards to finance big purchases. But credit card debt tends to be even harder to pay off than student loan debt because of high interest rates and the temptation to overspend. Caution is key when it comes to paying with plastic.

Student loans get in the way of saving for retirement

Considering that millennials with student loans have less money in the bank, it should come as no surprise that they also have less saved for retirement. After all, once you’ve paid your student loan bill and other recurring monthly expenses, you might not have much left over to contribute to your 401(k), individual retirement account (IRA) or other nest egg account.

Our analysis found that millennials with education debt have an average of $18,745 less in retirement savings than their debtless counterparts. The average grad with debt had saved $21,160 in 2016, while those without student loans had an average of $39,905 in their retirement savings accounts.

When it comes to preparing for the future, the earlier you can start, the better. Thanks to the power of compound interest, any amount you can set aside today can grow significantly over time.

Student loans seem to be an obstacle to homeownership

When it comes to buying a home of their own, millennials can encounter many challenges.

The high cost of rent is one of them, with nearly 21 million households paying more than 30% of their income on rent, according to Harvard’s Joint Center for Housing Studies. While rent costs have gone up, wage growth has remained stagnant, even for those with college degrees. This makes it all the more difficult to save for a down payment and other costs associated with buying a home.

And student loans create further obstacles, resulting in lower rates of homeownership among millennial graduates with student loans (34%) than among those without (36%). Those who have managed to buy a home end up with a lower-value home and a bigger mortgage, compared to their contemporaries who don’t carry education loans.

According to MagnifyMoney’s analysis, the home values of millennials younger than 35 with student loan debt are 5% lower than those without student loan debt. The median value for those with student loans was $157,000 in 2016, while millennial homeowners without student debt had homes with a median value of $165,000.

What’s more, homeowners with student loans had to take on even more debt to buy their homes, possibly because they weren’t able to save as much for down payments. Their median mortgage was $104,000, versus $98,000 for those without student loans.

Not only does student loan debt get in the way of buying a home, but it also forces millennials to take on even more debt to realize their goal of owning a home.

Get proactive about reducing your student loan burden

Although you might feel you got tricked into taking on debt at a young age, burying your head in the sand about your student loans will only make a difficult situation worse. Instead of giving up hope, try to get proactive about paying off your debt.

If you can make extra payments, you can get out of debt faster and save money on interest. Create a budget to see if you can spare any extra cash each month. Look for areas where you can cut down on spending. Some people even take drastic steps, such as downsizing their apartment or selling their car, to get rid of debt as fast as possible.

If you’re working, find out what steps you can take to get a pay raise. Or consider changing jobs altogether to boost your salary. Alternatively, you might take on a side hustle, such as driving for Lyft or running errands for TaskRabbit, to increase your income and throw that extra money toward your loans.

Another option is to move into a career that could qualify for student loan forgiveness. For instance, those who work in public service fields or as teachers in qualifying schools could be eligible for federal student loan forgiveness.

You can also look into state-based and private programs that offer student loan repayment assistance for your private or federal student loans. And some employers even offer a student loan matching benefit to help you pay off debt.

Finally, some borrowers could benefit from refinancing their student loans. If you have decent credit and a steady income — or can apply with a cosigner who does — you could qualify for a lower interest rate than what you have now, as well as choose new repayment terms. As a result, refinancing could save you money on interest and help you pay off your student loans ahead of schedule.

Whatever you decide, make sure you’re being strategic about the best way to manage student loan repayment. Even though student debt has held back millennials in major ways, there are steps you can take to overcome this obstacle and reclaim your financial freedom.

Methodology: MagnifyMoney examined the Federal Reserve’s Survey of Consumer Finances to compare households headed by someone under age 35 with student debt versus those without. All monetary amounts are expressed in 2016 dollars (the date of the latest survey).

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.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

TAGS:

Advertiser Disclosure

News

The Best Place to Exchange Currency

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews 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.

The most affordable way to spend money in a foreign country is by using your credit card, exchange rate-wise. However, credit cards may not be widely accepted in your travel destination, or perhaps you simply want to have foreign money on hand before you arrive for peace of mind.

You can purchase foreign currency from your local bank, at an airport kiosk or from an online currency exchange. You tell them the particular amount of foreign currency you need and pay for it in U.S dollars just like buying anything else.

Not every place offers the same exchange rate, though, and some places charge extra fees. It’s important to compare rates and avoid additional fees to make sure you are not paying a high price on the foreign money.

In this post, we will compare the pros and cons, and the cost of each currency exchange option for you before, during and after your travel.

Ways to exchange currency before your trip

Bank or credit union

Exchanging foreign currency before traveling gives many people peace of mind. Ordering foreign cash from your bank or credit union is a common way to do so.

This will save you time and headaches from queuing up at money-exchange facilities at the airport and sweating over the math on the spot. Most banks and credit unions offer somewhat similar exchange rates. The trickier part is to compare fees. Some banks don’t charge fees, but others do. Fees will affect the exchange cost significantly if you don’t exchange much money in the first place.

Pros

  • Banks offer relatively competitive rates compared with retail currency exchange bureaus or airport exchange kiosks because of the bigger volume they sell and buy.
  • Some banks offer online currency order and delivery. Constraints and fees may apply. For example, Bank of America customers can order up to $10,000 in foreign currency online over 30 days. But if they need more, they have to stop by a Bank of America location.
  • You can choose to receive your order in small, large or mixed denominations depending on availability.

Cons

  • If you go to a bank branch, they may not have the amount of foreign cash you need. It would usually take a few days for the bank to get the money ready for you. Don’t wait too
    long to exchange currency. Call your bank in advance for availability of specific currencies.
  • Each institution limits on amounts. With Bank of America, for instance, your order amount must be at least $100.
  • Some banks charge additional service or delivery fees.
  • Banks offer less competitive foreign exchange rates compared with credit/debit card rates.

Costs

The difference in rates offered by different banks is small. So the major factor that will affect the efficiency of your exchange is fees. We look into the fees for four major banks (they’re the largest by assets):

Bank of America

Rate: On Sept. 19, Bank of America provided an exchange rate of 1:1.2304 between euros and U.S. dollars. Purchasing 1,000 euros would cost $1,230.40. You can check the daily rates BOA offers here.
Fees: If you choose to get the foreign currency delivered, there is a delivery fee of $7.50 on all foreign currency orders less than $1,000; this fee is waived if the currency you buy is worth $1,000 or more.
Ways to purchase: You can order online if you have a BOA checking or savings account. BOA credit card holders only can order currency at a physical bank branch, but the purchase needs to paid in cash.

Chase

Rate: The exchange rate for buying euros at Chase on the same day was 1:1.251. The cost for 1,000 euros would be $1,251.
Fees: $0.
Ways to purchase: You have to show up at a branch to make an order; you can’t order online and have to pick up the cash later if they don’t have the currency you need in stock.

Citibank

Rate: On Sept. 20, Citibank offered a rate of 1:1.2462 for you to buy euros. That means if you bought 1,000 euros, the cost in U.S. dollars would be $1,246. You can check the rate of the day by calling its 24-hour Exchange Rate Hotline: 1-800-756-7050, option #1.
Fees: If you are a client with the Citigold® or Citi Priority Account Package, there are no additional fees. But if you are not, $5 service fee will be charged if the transaction amount is $1,000 or less. Additionally, Citi charges a fee from $10-$20 to deliver to your address, depending on the delivery option.
Ways to order: You will have to be a Citi client to buy foreign currency. To order, visit your nearest Citibank branch or call 1-800-756-7050, option #2.

Wells Fargo

Rate: On Sept. 19, buying 1,000 euros would cost $1,229.80 at Wells Fargo, not much different than other major banks. You can check the rates of the day here.
Fees: No fees.
Ways to purchase: Besides physically visiting a branch, Wells Fargo clients can also exchange currency through the bank by ordering money online or by phone to get it delivered to your home or a branch near you within 2-7 days.

Order cash online

No other method can beat ordering foreign currency online in convenience. You just click buttons and purchase foreign currency at your fingertips. But the rates are slightly higher than what banks have. The major player that dominates the online currency exchange space is Travelex.

Travelex charges delivery fees if you order a small sum of foreign currency. If you are seeking the convenience of getting foreign currency delivered, you will be better off ordering foreign currency from a bank that offers free delivery or charges a lower delivery free.

Pros

  • You can exchange currency without having to step out of your house.
  • Rates are better than kiosks at airport or hotels.
  • You can earn United MileagePlus® bonus miles if you buy currency through Travelex.
  • You can pick up money in a retail facility or get currency delivered as early as the very next day after you put in an order.

Cons

  • There’s a $9.99 shipping fee if the transaction is less than $1,000.
  • You have to order in advance for delivery.
  • The exchange rates won’t beat what banks offer.
  • Travelex does not give small denominations of foreign currencies for delivery, so you’re limited to converting to round numbers in the foreign currency.
  • The minimum amount required in each order is $50.

Costs

Rate: On Sept. 19, the euro-U.S. dollar exchange rate provided by Travelex was 1:1.285. The price of 1,000 euros would be $1,284.69. That’s $54 more expensive than you would pay Bank of America for the same amount of euros.
Fees: A UPS Standard Delivery fee of $9.99 is charged if the order is less than $1,000. The fee is waived on transactions of more than $1,000.

Airport kiosks

Departure or arrival terminals at major airports all have plenty of choices for exchanging currencies. Those are the places you should avoid because the exchange rates they offer are typically higher than bank rates and online rates. And oftentimes, those kiosks levy an additional transaction or service fee, making your purchase all the more expensive.

Take Travelex as an example, its physical locations offer different rates than its online rates. And the specific rate depends on the amount of foreign currency you order. The more you buy, the better the rate you will get. In addition, a flat $9.95 service fee applies to each transaction.

However, if you need cash but did not budget enough time ahead of your trip to order foreign currency from your bank, the currency-exchange kiosks would pretty much be your last option before departure. Many of these exchange facilities also have locations in downtown areas, hotels, train and bus stations. They may or may not carry the same rate and fees as the airports. One thing you can do to save money on exchanging money at the airport is to visit the airport’s website before you get there to compare fees from different merchants.

Pros

  • They are easily accessible at airports.
  • Their opening hours are long, if not 24 hours. Many stay open from 5 a.m. to 11:00 p.m. everyday.
  • Those physical kiosks usually have more denominations available than online orders.
  • There is no minimum amount required at a physical store; you can change small amounts of cash, but the transaction fee will still apply.

Cons

  • They offer worse rates than banks and online shops.
  • You likely will have to pay an added service fee

Costs

Rate: On Sept. 19, buying 1,000 euros at a Travelex kiosk would cost $1,370. The rate was 1:1.37. This is more expensive than what you’d get via its website (1:1.285). And if you buy 600 euros at the kiosk, the rate would be even higher — 1:1.38.
Fees: There is a flat service fee of $9.95 per transaction, however little money you exchange through Travelex. If you factor in the service fee, the cost for 1,000 euros would be 12% higher than what you would pay for the same amount of currency at Bank of America.

Ways to exchange currency during your trip

ATM

The least expensive way to access any local currency in cash is by using an ATM on the ground with a checking account that has no fee for out-of-network ATMs and no foreign transaction fees.

You would get the same exchange rate you’d get if you used a credit card at a merchant. Most ATM networks use either the Visa or Mastercard exchange rate, which is the best because it’s very close to the interbank rate banks give each other.

For example, the Mastercard euro-to-U.S. dollar exchange rate on Sept. 19 was 1:1.171, and the Visa offered a pretty close rate of 1:1.172, if the credit/debit card charges 0% fees. These rates were lower than rates of U.S. banks that day.

You don’t have to make this account your primary checking account — just transfer the money you need to your no-fee account in U.S. dollars before the trip, and withdraw on location in local currency.

For security purposes, it’s safer to withdraw cash on the ground as you need it than carrying a large sum of cash with you during the trip. It’s also better to have a separate checking account just for travel. That way if there is fraud, it’s less likely to hit your main account.

Aspiration Summit and Charles Schwab Checking are two nationally available accounts with no out-of-network ATM fees or foreign transaction fees.

With most U.S. debit cards, however, the banks levy a foreign transaction fee up to 3% of the withdrawal amount each time and a flat third-party ATM fee of $1-$5. The ATM operator may also charge a fee.

Still, ATMs would be a cheaper option than exchanging currency at banks or airport kiosks. Let’s say you withdrew 1,000 euros Sept. 19 through Visa at an ATM, if you factor in the exchange rate, the 3% transaction fee and the $5 ATM fee, the total cost would be $1,207 — less expensive than exchanging the same amount of euros at Bank of America.

To save costs on your trip, look for a debit card with low or no foreign transaction fees and no out-of-network ATM fees. If they do charge fees, try to take out a high amount of cash at one setting to avoid multiple fee payments if you need to access more cash later on.

Credit card

The reason why credit cards are the best option to spend money overseas is that a credit card’s exchange rate will certainly beat banks and kiosks, as we discussed above. More important, credit cards offer significantly better protection against fraud than debit cards. Many credit cards charge no foreign transaction fees, and even better, you may earn miles or cashback rewards by using credit cards. Here we’ve rounded up the best travel credit cards with no foreign transaction fees.

Pro tip: One of the key recommendations for international travelers is to make sure your transaction is done in the local currency, not in U.S. dollars. Your credit card will always have a better exchange rate in the local currency than what merchants can offer in U.S. dollars. Plus, a merchant may even slide in an extra fee that you might not know about.

Cash

If you have U.S. dollars in cash, you can also exchange the local currency when you are in your host country. In fact, exchanging money in your host country gives you a better exchange rate than exchanging foreign currency in the U.S. before you go.

This is because the local currency is more common than your U.S. dollar is in that country, and therefore it’s cheaper to buy there. Meanwhile, your U.S. dollars are worth more in a foreign country because it’s a less common currency. Therefore, you will get more local money for your U.S. dollars.

Banque de France, the central bank of France, showed that on Sept. 19, the euro-to-USD exchange rate was 1:1.1667. That means it would cost you $1,167 to get 1,000 euros in France, excluding fees, which is less than you would pay for the same amount of euros at a major U.S. bank.

What to do with your leftover currency after your trip

Try to use up the foreign currency before you return to the U.S. If you have leftovers after your international trip, there are several ways to handle it.

Sell it back to your bank or Travelex

Banks and Travelex will buy the major foreign currencies; but they may not be able to purchase some foreign currencies, such as Argentinian pesos (ARS) Cuban pesos (CUP) at Travelex.

The big caveat here is that you will inevitably lose money by returning the foreign currency. The banks and Travelex make money from the difference between the purchase and sale of foreign currency. The rate they would offer for buying foreign currency from you is always lower than their selling rate

For example, Chase would buy 1,000 euros for $1,085 on Sept. 19, whereas it sold 1,000 euros for $1,251. Travelex would buy 1,000 euros for $1,020 that day. But if you wanted to buy the same amount of euros from a kiosk, the cost would be $1,370.

On top of that, additional fees may be attached to your sale. Citi, for instance, charges $5 if you exchange less than $1,000. Travelex bureaus don’t charge a service fee when you return your foreign currency. However, if you choose to send your leftover currency in the mail, a $5 fee will be deducted from your final proceeds and a delivery fee may also apply.

Keep it

You will be better off keeping the leftover currency: you’ve already bought it with extra cost, and selling it at a cheaper price means you will lose even more money. Why not save the hassle and save it for your next trip?

Sell it to friends and family

Ask your friend, family and neighbors whether they have international travel plans. If they will make a trip to the country you have visited, offering to sell them the local currency at a better rate than what banks provide.

Donate it

You can donate your leftovers after you finish your vacation — brighten up someone else’s day.

On many American Airlines international flights, flight attendants pass around to collect unused currencies from travelers as donations to UNICEF “Change for Good” charity program.

“Change for Good” charity donation barrels are also available at 10 international airports. As you walk around the airport, look out for those barrels to drop your leftover currency.

If you were not able to donate your foreign currency on a flight or at an airport, you can still support the cause by sending your money to:

UNICEF USA
ATTN: Change for Good Program
125 Maiden Lane
New York, NY 10038

Key takeaway

International travel is expensive already. Finding an affordable way to exchange foreign currency can save you some money. For that, you want to look for the option with the most competitive rate and avoid extra fees. When you are on your foreign trip, use a credit card that carries no foreign transaction fees as often as possible. As far as cash goes, the best way to access foreign currency to withdraw money at an ATM using a debit card that doesn’t charge out-of-network ATM fees or foreign transaction fees when you are on the ground. If you need a small sum of cash on hand before traveling, your local bank would be your best option. Ordering foreign currency online can be convenient, but mind the delivery fee that may apply. Our last piece of advice: Avoid airport or hotel exchange kiosks whenever possible.

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: , ,

By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.