In the age of paperless transactions, identify theft is something that virtually all of us are susceptible to. If your identity is stolen, the consequences can be severe, and in some cases, can take years to recover from. One way to be proactive against fraud and defend yourself from identity theft, is to freeze your credit report with each of the three major credit bureausâExperian, TransUnion, and Equifax.Â
Placing a credit freeze on your credit report will stop identity thieves from being able to open new accounts, lines of credit, or make any large purchases in your name, regardless of whether or not they have your Social Security number or any other sensitive information.Â
What a credit freeze means
A credit freeze is a process that shuts off access to your credit reports at your request. Without your verified consent, your delicate information cannot be acquired. This means that if someone were to attempt to apply for credit in your name, your report would come up as âfrozen,â and therefore the creditor would not be able to see the information needed for the application to be approved.
You can unfreeze your credit at any time by using a PIN or a password.Â
Reasons to freeze your credit
It might be a good idea to freeze your credit if youâre experiencing any of the following situations:
Your data has been compromised in a data breach: It happens. If youâve been a victim of a data breach and personal information related to your identity has been leaked or made vulnerable to cyber criminals, a credit freeze can offer you some extra protection.Â
You have reason to think youâve been a victim of identity theft: Perhaps youâve checked your credit recently and noticed open accounts that you donât recognize. Maybe youâve been getting phone calls from collections agencies requesting payments from accounts you know you didnât open. While a credit freeze wonât be able to stop them from using accounts a thief has already opened, it can stop them from opening any more.Â
You want to protect your child from identity theft: According to the Economic Growth, Regulatory Relief and Consumer Protection Act, parents and legally guardians of children 16 years old and younger have the right to open a credit account for their child with the sole purpose of putting a freeze on it to protect them from identity theft.Â
How to freeze your creditÂ
The process of freezing your credit is simple but does require a few steps. You will need to get in touch with each of the three major credit bureaus one by one and request a credit freeze:
Experian: Contact by phone at 800-349-9960 or go to their website.
Equifax: Contact by phone at 888-397-3742 or go to their website.
TransUnion: Contact by phone at 888-909-8872 or go to their website.Â Â
The credit bureaus will ask you for your Social Security number, your date of birth and other information to verify your identity.
Once you freeze your credit, your file will be unattainable even if a thief has sensitive information such as your social security number or date of birth. If you need to use your credit file, you can unfreeze your credit report at any time.Â
How to unfreeze your credit
Once youâve frozen your credit file, it will be remain blocked until you decide that you would like to unfreeze it. You will need to unfreeze your credit report in order to open a new line of credit or make a major purchase.Â
Unfreezing your credit file is simple. All you will need to do is go online to each credit bureau website and use the personal identification number (PIN) that you used to place the freeze on the account. If you donât want to complete this task online, you can also unfreeze your credit file over the phone or through postal mail.Â
When the unfreezing process is done online or by phone, it is completed within minutes of submitting the request. However, if you send your request via mail, it will take much longer.Â
Keep in mind that you donât necessarily need to unfreeze your credit through all three of the major credit bureaus if you donât want to. For instance, letâs say you plan to apply for credit somewhere. You can ask the creditor which credit bureau it will go through to pull up your report, and only unfreeze that one credit bureau.Â
You may also have the option to unfreeze for a specific amount of time. Once the time is up, your credit file will automatically freeze again.Â
Credit freeze pros and cons
There are a few reasons why you might want to freeze your credit in this day and age, but just like with anything else, there are pros and cons to credit freezing. Here is a general breakdown of the benefits and downfalls of putting a freeze on your credit report:
It prevents thieves from opening new lines of credit: With a credit freeze placed on your account, no one will be able to open a new line of credit or any other type of account requiring a credit check using your personal data. Anyone trying to commit fraud will be stopped in their tracks as soon as lenders notice that the report is frozen.Â
It wonât affect your credit score: Freezing your credit report will not damage your credit score. Additionally, if youâve been a victim of identity theft, freezing your credit report could actually protect your credit score from being damaged due to fraud.Â
Itâs free: It used to be the case that some credit freezes would cost a fee, but that is no longer the way it works.Â
It requires some effort: Putting a credit freeze on your credit report takes some effort. You will need to get in touch with all three credit bureaus.Â
You will need to remember your PINs: A PIN is required to lift or freeze your credit report. If you lose it, you will need to jump through extra hoops to create a new one.
It canât stop thieves from accessing your existing accounts: Credit freezes can only stopfraudstersfrom opening new accounts using your information.If youâve already been a victim of identity theft, a credit freeze canât block thieves from committing fraud with your current accounts. This means that thieves can still make a purchase using a credit card they stole from you.
Freezing Your Credit is a post from Pocket Your Dollars.
After months spent scouring career boards and hours of networking, interviewing and submitting applications, landing your first job is a major reliefâand a big accomplishment. It also brings new responsibilities as you learn how to manage your first salary, budget for your lifestyle and develop the smart savings habits that will serve you your entire life.
As you prepare for your first day, itâs critical to start thinking about how much of your paycheck you should save.
To help you find the answer, financial experts provide tips on how to manage your first salary, offer strategies to help you save money at your first job and explain how to adjust your savings as your career flourishes.
Save money at your first job: The case for starting now
You may feel intimidated by the commitment to save money at your first job, especially if youâre carrying student debt or feeling like you arenât making quite enough. Joy Liu, head trainer at personal finance company Financial Gym, certainly felt that way.
âWhen I got my first job, I made $35,000 a year,â Liu says. âIt was easy to just throw my hands up and say, âI can’t save right now on this salary.ââ But she urges young savers to reconsider.
âLooking back, with the knowledge that I have now, I could have made it work if I knew that saving was something I needed to do,â she says.
In fact, saving money at your first job will put you in a better place when youâre a seasoned professional, Liu says. When you deposit some of your paycheck into a savings account, youâll earn interest on the balance. Your now larger balance will itself earn interest (youâve got compound interest to thank for that). The earlier in your career you start to save, the more time youâll have for your money to grow exponentially.
Saving money at your first job might also make sense because you likely arenât juggling the large financial commitments youâll face later in life.
âYou may have student loans, you may have some credit card debt, but you most likely donât have a mortgage, which is a huge lifelong commitment,â says Ashley Dixon, a CFPÂ® and lead planner at financial planning firm Gen Y Planning.
Determine how much of your paycheck you should save
You now know you need to sock away part of your earnings from your new job, but how much of your paycheck should you save?
While your specific savings rate will depend on your goals and circumstances, Dixon recommends saving 20 percent of your monthly take-home pay. If thatâs too challenging, start with 10 percent, Liu says.
If you donât think you have enough to save, review your essential expenses, like rent, student loan payments, utilities and groceries. Save from whatever cash is âleft overâ each month, and see how close you can get to that 10 to 20 percent goal.
When determining how much of your paycheck you should save, you might initially find that there isnât enough cash left over. If thatâs the case, create a budget to keep your spending and savings on track, or review your existing budget to see which unnecessary expenses you can cut.
âBeing mindful of where youâre spending your money and keeping track of spending in real time is the hardest part and is where people struggle the most,â Liu says. âBut knowing where your money is at any given point is how you stay on track, whether thatâs creating a spreadsheet or using a budgeting app.â
If youâre not able to hit these savings benchmarks right away, donât sweat it. The key is to save what you can, and you can gradually work to increase your savings over time.
Define your savings goals to gain momentum
To help you get in a groove saving money at your first job, define exactly what youâre saving for. Need some ideas?
When learning how to manage your first salary, Liu recommends prioritizing an emergency fund. A top reason you need an emergency fund is the stability and peace of mind that this stockpile can offer, Dixon says. Should you face an unexpected expense like a costly car repair or lose your job in the future, youâll then have a backup fund to dip into.
âIf youâre young and single, you should try to strive to save six months of living expenses in your emergency fund as a guideline, but that can be different for every individual depending on where they live and family situations,â Dixon says.
Consider your emergency fund one of multiple savings accounts, or buckets. âYou want to have all of these different buckets of money set aside for different goals, and move and prioritize how much money you save for each goal based on their priority level to you and what is realistic within your budget,â Liu says.
In addition to your emergency fund bucket for lifeâs surprises, you can also save money at your first job and contribute to other funds that align with your financial goals, like a car fund to help you buy new wheels or a vacation fund to save up for a getaway.
However you define your goals, the important thing is that theyâre clear to you and that youâre actively saving money at your first job. This positive momentum can guide smart savings habits even once your first day of work is a distant memory.
Use automation to make saving a habit
Even with the best savings goals and intentions, it can be easy to get tripped up. Enter automation. By automating your savings, you reduce your chances of overspending or skipping savings altogether.
There are a couple ways you can use automation to help manage your first salary. You could set up a weekly or a monthly automatic transfer from your checking account to your savings account, Liu suggests. Or, you could ask if your companyâs payroll department allows you to split your direct deposit, sending some of each paycheck into your checking account and some into savings.
Choose a high-yield savings account
Another consideration when learning how to manage your first salary is where youâll keep your hard-earned funds. Many people opt to open a savings account from the same bank where they have their checking account, but Dixon says thatâs not always the best approach.
âYou want to look for a high-yield savings account,â she says.
You earned it. Now earn more withÂ it.
Online savings with no minimum balance.
Discover Bank, Member FDIC
By keeping your money in a high-yield savings account, it will earn a higher-than-average interest rate. Remember compound interest? The higher your interest rate, the more your money will be able to grow over time.
As you do your research to find the right savings account for saving money at your first job, Dixon recommends comparing interest rates from different banks.
âTypically, online banks offer higher interest rates than traditional brick-and-mortar banks,â Dixon says. âMost online banks donât have an actual storefront for you to visit so theyâre saving overhead costs and are able to pass that interest down to the customer.â
In addition to contributing to your savings account, enroll in your employer-sponsored 401(k) plan and take advantage of employer matches if theyâre offered.
In addition to interest rates, pay attention to fees and required minimum balances, says Liu. Fees can eat away at interest earnings, and you may not want to worry about keeping a minimum balance when youâve just landed your first job and are gradually ramping up your savings.
Lastly, consider your access to your funds. âBecause your savings account is separate from your checking account, consider how long it may take to get your funds,â Dixon says.
If youâre looking for a high-yield savings account, the Discover Online Savings Account has no minimum balance requirement and no fees1, so you can turn your savings from your first job into something meaningfulâwithout any hassle or stress.
Keep retirement in mind
As you manage your first salary, saving for emergencies and other short- and medium-term goals is essential. But you also want to start saving for retirement, even if that seems like ages away. Thanks again to compound interest, time is on your side, Dixon says.
âWhen youâre in your 20s, you donât see the large effect compound interest will have because you are just starting your savings; all you see is the money sitting there,â she says. âBut when you get to your 60s, that accountâs going to glow because itâs been growing over time.â
In addition to contributing to your savings account, enroll in your employer-sponsored 401(k) plan and take advantage of employer matches if theyâre offered, Liu says. Your 401(k) contributions automatically come out of your paycheck, so you wonât even have time to miss the funds.
How much you save for retirement depends on your goals and age, but when it comes to benchmarks for 401(k) contributions, many personal finance experts recommend saving 10 to 15 percent of your income, according to the Financial Gym. That said, be careful to not overfill your retirement âbucketâ and run the risk of locking away money you may need in the short term for your emergency fund or other priorities.
Adjust your savings strategy as your career flourishes
As you advance in your career, youâll likely see an uptick in your take-home pay. After a bonus, promotion or new job, your first inclination may be to spend more because youâre earning more.
âYou donât want to create a lifestyle that you canât keep up or maintain,â Dixon says.
While you deserve to celebrate your career wins, determine how you can maintain (or even accelerate) your savings progress as you increase your earning potential.
If youâre earning more and youâre maintaining a manageable cost of living, Dixon recommends putting extra income toward your 401(k) or another savings goalâlike going from renter to homeownerârather than spending.
If you keep these tips on how to save money at your first jobâand beyondâin mind, youâll gain financial security and be prepared to hit all or your financial goals.
Now that you know how to manage your first salary, learn how to negotiate your next one. Here are four tips to successfully negotiate your salary as your career grows.
Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
1 Outgoing wire transfers are subject to a service charge.
The post How to Manage Your First Salary and Grow Your Savings appeared first on Discover Bank – Banking Topics Blog.
Mortgage Q&A: âWhat is a streamline refinance?â While qualifying for a mortgage refinance is generally a lot harder than it has been in the past (now that lenders actually care how your home loan performs), there are less cumbersome options available. In fact, many lenders offer âstreamlinedâ alternatives to existing homeowners to lower costs and [&hellip
The post What Is a Streamline Refinance? first appeared on The Truth About Mortgage.
While COVID-19 has affected all parts of daily life, the travel industry has certainly been put on hold as people have had to cancel plans and stay at home. Since most travelers plan many months in advance, this also leaves many holding tickets they can no longer use. Frequent flyers and hotel loyalty members are left wondering what recourse they have, if any, when it comes to their member status and points or miles.
We researched the major players in the hotel and airline industry to find out how these companies plan to accommodate their valued members â by extending points, status levels and more â in the wake of the coronavirus pandemic.
Coronavirus relief measures by loyalty or travel program
IHG Rewards Club
World of Hyatt
American Airlines AAdvantage
Southwest Rapid Rewards
In addition to donating up to one million rooms to medical professionals, Hilton has promised to compensate its Hilton Honors loyalty program members in a number of ways.
Lower status requirements
Hilton has cut status qualification requirements by half.
Previous status requirements
New status requirements
4 stays, 10 nights or 25,000 base points
2 stays, 5 nights or 12,500 base points
20 stays, 40 nights or 75,000 base points
10 stays, 30 nights or 37,500 base points
30 stays, 60 nights or 120,000 base points
15 stays, 30 nights or 60,000 base points
For any Silver, Gold or Diamond members that were due to downgrade in 2020 or 2021, statuses will be extended through March 31, 2022.
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Weekend night rewards on eligible Hilton credit cards that were not expired by May 1, 2020, will now be valid through August 31, 2021, and certificates issued from May 1 through Dec. 31, 2020, are valid for 24 months from the date of issuance. All free weekend night certificates issued in 2021 can be used any night of the week and expiration is extended until Dec. 31, 2022.
Additionally, bonus points will continue to count as base points on eligible purchases through Dec. 31, 2021, and toward elite status tier qualification, including Lifetime Diamond Status.
All 2020 elite qualifying nights will be rolled over to the 2021 status year. This applies to all nights members have already completed or will complete this calendar year.
On top of that, Hilton has lowered the requirements to earn Milestone Bonuses for 2021. Previously, you could earn 10,000 bonus points every 10 nights after completing 40 nights in a calendar year. Starting in January, that requirement has been changed to 20 nights stayed to align with the new Gold qualification level. However, 60 nights will still earn you 30,000 points.
Diamond members will be able to gift Gold status for staying 30 nights in 2021 instead of 60 nights which was the previous requirement. The requirement to gift Diamond status is lowered to 60 nights instead of 100.
To ensure member safety, Hilton is providing flexible cancellations and full points refunds for all Hilton Honors experiences booked through May 31, 2021.
You can follow further updates for Hilton Honors members on the loyalty program website.
Marriott plans to compensate its Marriott Bonvoy members, although benefits may vary depending on membersâ location.
See related: Marriott data breach involves 5.2 million hotel guests
Bonvoy members who earned elite status for 2020 can now enjoy their benefits through February 2022.
Points set to expire by February 2021 will be paused, and no points will expire until after that time period.Â
Active free night awards (as part of Marriott credit cards or packages) set to expire beginning March 1, 2020, will be extended through Aug. 1, 2021. Additionally, more recent certificates set to expire before July 31, 2021, will be extended through that date as well. Suite night awards set to expire by Dec. 31, 2020, will be extended another year through Dec. 31, 2021.
Additionally, Marriott will depositÂ Elite Night Credits into Bonvoy elite membersâ accounts in the amount of 50% of the nights required for the status they earned in 2019. This can make it easier for the members to reach the next tier.
Elite Night Credits deposit breakdown
Annual tier requirements
Extra elite night credits
100 Qualifying Nights and $20,000 stay spend
50 Elite Night Credits
75 Qualifying Nights
38 Elite Night Credits
50 Qualifying Nights
25 Elite Night Credits
25 Qualifying Nights
13 Elite Night Credits
10 Qualifying Nights
5 Elite Night Credits
Stay up to date on relief measures for Bonvoy members on the companyâs COVID-19 page.
Coronavirus: What to do if youâre unemployed and have credit card debt
How to manage your credit cards during the coronavirus outbreak
IHG Rewards Club
Due to travel constraints and shortened travel periods, IHG has lowered its requirements for elite status membership by 25% or more, as well as extended statuses and points for all members (since elite membersâ points never expire).Â
Lower status requirements
Previous qualification requirements
New qualification requirements
10,000 qualifying points in a calendar year or
10 qualifying nights in a calendar year
7,000 qualifying points in a calendar year or
7 qualifying nights in a calendar year
40,000 qualifying points in a calendar year or
40 qualifying nights in a calendar year
30,000 qualifying points in a calendar year or
30 qualifying nights in a calendar year
75,000 qualifying points in a calendar year or
75 qualifying nights in a calendar year
55,000 qualifying points in a calendar year or
55 qualifying nights in a calendar year
See related: The benefits of IHG Rewards Club elite status
Program statuses will be extended through January 2022 for all members. Spire elite members will also retain their Choice benefit of 25,000 bonus points or gifting of Platinum Elite status to someone each year.
Anniversary night certificates (U.S. and U.K. only) set to expire before March 1, 2020, will be extended through the end of the year. All 2020 certificates will be redeemable for 18 months, instead of the usual 12. Some members have also reported that free night certificates expiring before Dec. 31, 2020, will be extended until August 2021.
Follow updates to IHG Rewards Club benefits on the programâs travel advisory page.
World of Hyatt
The World of Hyatt loyalty program will extend all statuses and rewards to compensate valued members.
All active elite statuses, as of March 31, 2020, will be extended through Feb. 28, 2022.Â
Forfeiting points due to inactivity will be suspended through June 30, 2021. No points will expire until that date.
Any earned rewards, such as free nights or upgrades, set to expire between March 1 and Dec. 31, 2020, will be extended through Dec. 31, 2021.
Check the updates to Hyatt relief measures on the programâs COVID-19 page.
Keep an eye on Wyndhamâs COVID-19 statement page for updates.
It took Choice some time to follow suit and join other hotel chains in extending elite statuses and offering other promotions amid the outbreak. On May 21, 2020, the company announced a series of offers to expand the benefits of its Choice Privileges loyalty program.
“Even during this crisis, our members found a number of ways to engage with us and make a difference,” saidÂ Jamie Russo, vice president, loyalty programs and customer engagement, Choice Hotels. “Some of them are essential and frontline workers who chose to stay in our small-business hotels, and others showed their generosity by donating their Choice Privileges points to aid recovery efforts. Our latest loyalty program changes tell our members that we appreciate their continued support and our hotels are here to welcome them whenever they feel safe traveling again.”
All membersâ current elite statuses will be extended through Dec. 31, 2021.
Lower status requirements
Choice is also easing requirements to qualify for elite status in 2021.
Previous status requirements
2021 status requirements
Additionally, Choice is giving current elite members a limited-time upgrade to the next tier. Gold members will be upgraded to Platinum status and Platinum members will be upgraded to Diamond. Additionally, members who stayed at least five nights by Dec. 31, 2020, will be able to keep their upgraded tier through 2021.
United has said it would compensate their MileagePlus members by extending all annual memberships, subscriptions and checked bag benefits for six months. United also plans to make status membership requirements easier and will release information later in 2020.
All MileagePlus Premier members will get to retain their 2020 status through Jan. 31, 2022.
Lower status requirements
MileagePlus Premier membership now has easier requirements, reduced 50% for each status level.
Premier qualifying flights
â¦ or PQP
All valid travel certificates issued on or after April 1, 2020, will be extended to be valid for two years for booking, as well as up to an additional 11 months to travel. All redeposit fees for flights booked through May 31, 2020, will be waived, as well as all fees for members who cancel within at least 30 days of departure.
Follow more updates to United MileagePlus on the programâs travel notice page.
Delta has stepped up to say they will compensate their Medallion members by extending their Member status.
2020 Medallion Member status will be extended through Jan. 31, 2022, and this change should be reflected on the memberâs SkyMiles account by Feb. 1, 2021. Additionally, all 2020 Medallion Qualification Miles will roll over into 2021.
Follow updates to the Delta SkyMiles program on the coronavirus travel update page.
American Airlines AAdvantage
As AAdvantage members experience reduced travel opportunities due to the coronavirus, American Airlines is offering elite status extension, lowering elite status requirements and allowing eligible cardholders to earn miles toward Million Miler status with credit card spend.
Members whose elite status expires on Jan. 31, 2021, will automatically get an extension until Jan. 31, 2022.
Lower status requirements
Members will be able to qualify for a higher elite status in 2021 with lower requirements, including Elite Qualifying Dollar (EQD), Elite Qualifying Mile (EQM) and Elite Qualifying Segment (EQS).
Gold oneworld Ruby
Platinum oneworld Sapphire
Platinum Pro oneworld Sapphire
Executive Platinum oneworld Emerald
$2,000 EQDs and 20,000 EQMs or
$2,000 EQDs and 20 EQSs
$4,500 EQDs and 40,000 EQMs or
$4,500 EQDs and 45 EQSs
$7,000 EQDs and 60,000 EQMs or
$7,000 EQDs and 70 EQSs
$12,000 EQDs and 80,000 EQMs or
$12,000 EQDs and 95 EQSs
The CitiBusiness® / AAdvantage® Platinum Select® Mastercard® cardholders who hold a companion certificate expiring Dec. 31, 2020, will receive a six-month extension as well, bringing the expiration date to June 30, 2021.
Learn more about AAdvantage program updates on aa.com.
JetBlue took a bit longer to join other airlines in taking measures to support loyal customers. On May 14, 2020, JetBlue announced it’s extending Mosaic elite statuses, as well as making it easier to earn one.
All currently valid Mosaic elite statuses will be extended through Dec. 31, 2021.
Lower status requirements
JetBlue is reducing the qualifying thresholds for Mosaic status by 50% for 2021. To earn the status this year, you’ll need to earn 7,500 qualifying TrueBlue base points or 6,000 qualifying TrueBlue base points and 15 flight segments.
Alternatively, you can get the elite status by spending $50,000 in annual net purchases on the JetBlue Plus card â this spending requirement hasn’t changed for 2020.
Virgin Atlantic has also made it easier for customers to earn and maintain elite status amid the pandemic.
In March 2020, Virgin Atlantic extended status for Gold and Silver members, allowing them an additional six months to meet the requirements.
On Aug. 20, 2020, the airline added another six months to the extension, making it one year in total.
Starting Sept. 1, 2020, the Flying Club program members will be able to earn tier points on award flights, meaning they’ll be able to earn elite-qualifying points on flights where they used Flying Club miles to redeem for travel.
On top of that, Virgin Atlantic makes it easier for members to earn and redeem Companion Vouchers, Upgrade Vouchers and Clubhouse Vouchers.
Members can now use Companion Vouchers with any ticket in any booking class, regardless of status. Gold and Silver members can book their companion into any cabin for zero miles, and Red members can book their companion into Economy and Premium for zero miles or upper class at a 50% discount.
Upgrade Vouchers can also be used with any ticket in any booking class, excluding Economy Light, for a one-cabin upgrade on a return flight.
Clubhouse Vouchers can be used for one entry to any clubhouse when booked on a Virgin flight or with Air France, Delta or KLM when flying internationally. Gold members will continue to receive two vouchers.
Southwest Rapid Rewards
On April 16, Southwest announced a status extension for A-List and A-List Preferred members and companion passes. The company is also giving a points “boost” to all Rapid Rewards members.
“As we continue to navigate our way through this unprecedented time and deal with extraordinary challenges, we are committed to keeping you informed and updated on the steps we are taking to manage through the COVID-19 pandemic,” Southwest said in a message to Rapid Rewards members.
Companion Pass Members who received an extension of their earned Companion Pass benefits through June 30, 2021, will have their benefits extended for another six months. Members will be able to keep their status through Dec. 31, 2021.
Southwest is giving all Rapid Rewards members with an account opened by Dec. 31, 2020, a âboostâ of 25,000 Companion Pass qualifying points and 25 flight credits toward Companion Pass status, as well as 15,000 tier qualifying points and 10 qualifying flight credits toward A-List and A-List Preferred.
Southwest cardholders can also spend their way all the way to A-List status, with no cap on tier qualifying points (TQPs) earned through card spend. Previously, cardholders could only earn up to 15,000 TQPs per year via card spend.
Additionally, travel funds created or expiring between March 1, 2020, and Sep. 7, 2020, will now expire on Sep. 7, 2022. Alternatively, Rapid Rewards members can convert those funds into Rapid Rewards points. According to Southwest, the conversion ratio is âthe same rate you would be able to purchase a ticket with points today.â
On June 11, British Airways finally joined other airlines in extending the elite status for its members. Additionally, the carrier is reducing the number of tier points needed to reach a higher membership tier.
British Airways is extending tier status by 12 months for members who have a tier point collection end date of July 2020, through to June 2021.
Lower status requirements
The carrier has also reduced the number of points needed to retain and upgrade a membership status by 25%.
Here are the new tier qualification thresholds:
Bronze: 225 Tier Points or 18 eligible flights
Silver: 450 Tier Points or 37 eligible flights
Gold: 1125 Tier Points
Members who have earned heir Gold Upgrade Vouchers, Companion Vouchers and Travel Together Tickets with a British Airways credit card will get a 6-month expiration extension to any current vouchers.
CLEAR is a program that makes it quicker for travelers to get through airport security lanes by using biometrics for ID verification. Since many people are currently avoiding traveling due to the coronavirus outbreak, a CLEAR membership might not be useful at the moment.
Originally, CLEAR offered customers to pause their membership for three months. Now CLEAR is allowing members to request a three-month extension to their membership, which can be done by contacting the company directly. With customer service channels such as phone lines overloaded by requests, the fastest way to do so is via CLEARâs online chat. However, some users have reported experiencing difficulties finding the chat box on the website. Alternatively, you can reach CLEAR by text, email or phone.
TSA Precheck is a five-year membership that provides expedited security checks at select domestic airports in the U.S. At this time, TSA is planning to keep enrollment centers open while working to determine if any temporary closures are required. Some centers have been closed or changed hours.
If youâre planning to visit an enrollment center, itâs recommended that you schedule an appointment â as walk-ins may be deferred.
Visit TSAâs enrollment questions page for more information.
Global Entry, a program run by U.S. Customs and Border Protection that allows travelers to get expedited clearance through automatic kiosks when arriving in the U.S, has reopened its enrollment centers on Sept. 8, 2020. After a six-month hiatus, the program will finally allow conditionally approved Global Entry applicants to complete in-person interviews at most Trusted Traveler Programs enrollment centers in the U.S. The interviews must be scheduled in advance online, and their availability will vary by location.
Since the COVID-19 outbreak has also affected processing times for Global Entry renewals, CPB has increased the renewal grace period to 18 months. This means that if you apply for your Global Entry renewal before its expiration date, you’ll be able to use Global Entry for another 18 months.
As the coronavirus situation is unprecedented and changing rapidly every day, hotels and airlines continue to make updates to their travel policies, including their loyalty programs. Travelers should continue to check airline and hotel websites as the situation evolves. If they cannot find the information they need online, they should contact their hotel, airline or travel agencyâs customer service number.
If you buy or lease a car, youâll need to arrange for insurance coverage. Not only is it the law in most states, it will also protect your bank account in the event of an accident. However, if youâre involved in an accident and the other driver doesnât have car insurance, you could run into problems. Thatâs the thinking behind uninsured motorist insurance.
Compare checking accounts here.
Uninsured Motorist Insurance Basics
If two people who both have car insurance get in a car crash, they exchange insurance information. The other driverâs insurance company generally pays your expenses if youâre in a crash. So what happens if the other driver doesnât have insurance? Thereâs no one to pay you, cover your car repair or replacement or foot your medical bills if youâre injured. Your own car insurance may cover those costs, but it depends on the plan.
Thatâs where uninsured motorist insurance comes in. Uninsured motorist insurance policies offer protection against property damage or personal injury resulting from a run-in with an uninsured driver. There are a lot of bad drivers out there, and plenty of people who drive regularly but canât afford car insurance. Have a run-in with one of them and you could end up covering your own medical and car repair bills.
In 22 states and the District of Columbia, drivers are required to have uninsured motorist insurance, so if you have vehicle insurance youâre covered in the event of a crash with an uninsured driver. But if you live in a state that doesnât require uninsured motorist coverage, your regular car insurance policy may not protect you from bills if youâre in a crash with a driver who doesnât have car insurance.
Check out our budget calculator.
Is Uninsured Motorist Insurance Necessary?
If you live in a state that requires uninsured motorist coverage as part of the minimum coverage requirement for all auto insurance policies, you have at least some protection from uninsured drivers. You can always call your insurance company to check on the kind of coverage you have and discuss your coverage options.
If you live in a state that doesnât require uninsured motorist coverage, the question becomes: Should you buy uninsured motorist insurance as an add-on policy to your regular car insurance? Before you decide, itâs worth pricing it out.
First, you can call your car insurance provider and check what level of coverage you already have against uninsured motorists. Your existing plan may provide some level of protection against medical bills and/or car repair bills resulting from a crash with an uninsured motorist.
If you donât have any coverage or if you think your coverage levels are insufficient, you can ask your insurance provider how much it would cost you to add uninsured motorist insurance to your coverage package. You can also get quotes from other car insurance companies and opt for the policy that provides the best coverage for the lowest price.
Uninsured motorist insurance can give you some extra protections, too, such as coverage in the event that a hit-and-run driver crashes into your car or in the event that youâre struck by a vehicle as a pedestrian. So even those with built-in protection against uninsured motorists through their regular car insurance may be tempted to add extra coverage.
Related Article: All About Car Loan Amortization
Just because you have car insurance that youâre paying for every month doesnât mean youâre protected in all eventualities. If reading this article has made you nervous that you might not have enough â or any â protection against uninsured motorists, this could be a good time to get your insurance company on the phone, particularly if you live in a state with a high percentage of uninsured drivers.
It would be easy to fill up a wallet with just credit cards. A card to maximize airline miles. A card targeted at your favorite hotel chain. A card that gives you cash back on groceries. Even a card that earns you points when you spend at NFL games. So, where to begin? And where to end?
How many credit cards should I have?
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The short answer: you should have at least two – ideally each from a different network (Visa, Mastercard, American Express, Discover, etc.) and each offering you different kind of rewards (cash back, miles, rewards points, etc.). How many credit cards is too many? That depends on the individual – you should never have more than you can handle.
Experts say the number of cards one should have varies according to individual and circumstance. “Generally speaking, there is no one perfect number,” said Ethan Dornhelm, a vice president at FICO.
While the number varies by generation, credit score and other factors, the average American has three credit cards and 2.4 retail store cards, according to a 2020 survey by the credit reporting agency Experian.
To ensure a mix of credit cards and keep your credit score climbing, credit expert John Ulzheimer suggests asking yourself two questions about the cards in your wallet:
Do you have cards across more than one network? If you have three cards, but all of them are Mastercards, this could be a problem if you run into a merchant who only takes Visa. An example? Costco only accepts Visa now, though you can use your Mastercard on the wholesaler’s website.
Do you have a low credit card utilization ratio? Your average balances across all your cards for the past 24 months “should represent no more than 10% of your overall credit limit,” Ulzheimer says.
Credit utilization – how much credit you’re using each month, on average, of all the credit available to you from all your cards combined – accounts for 30% of your credit score under FICO’s traditional model.
If you can add another credit card while keeping your overall spending the same, you’ll lower this ratio – and boost your score.
See related: What is a good credit utilization ratio?
Two? Twenty? The answer is personal
That former number sounds about right to John Corcoran, a hotel industry executive in Aspen, Colorado.
He’s got two for personal use – both airline mileage cards – and a third for work. He added the second mileage card solely for the points bonus, and is thinking about dropping it before the $90 annual fee comes due. “I don’t like credit cards,” he said. “I don’t like debt.”
On the other end of the spectrum is Naomi Sachs, an international business executive in San Rafael, California. Sachs estimates she has 20 or 30 cards “sitting in a sock drawer, unused” – generally retail cards she signed up for to lower the cost of a purchase at that store or credit cards she acquired for the points boost.
Sachs is carrying around in her wallet about 10 more cards, of which she uses two or three with regularity. As for cash? Maybe there’s a $20 bill in there somewhere. Debit? “I don’t put anything on debit, ever, ever,” she said.
Instead, she charges strategically, and checks her card balances a few times a week to stay on top of her finances. “I aggressively try to maximize my spend, for almost every single dollar, every single time,” she said.
Credit expert John Ulzheimer suggests two things that can help you determine the number of cards that is right for you. Always keep your overall credit card utilization low, and secure access to more than one credit card network.
While merchants in the U.S. accept the big four card networks – especially Mastercard and Visa, and, to a lesser extent, American Express and Discover – you can still find places where some of them are not accepted. Costco is one example. The warehouse club switched in 2016 from American Express as its card partner to Citi, so now the only card Costco accepts in-store is Visa.
And if you travel abroad, you should pack credit cards from a variety of card networks. While Visa and Mastercard are most universally accepted, and American Express signs are increasingly common in store windows across the globe, you will inevitably wind up in a place that doesn’t accept the type of credit card you have with you.
Beyond those two key elements, Ulzheimer explains, many approaches are valid, so long as they work for you.
See related: How to use your credit card wisely
How many cards should you have if…
Want to get more specific? Here’s a list of some particular situations you may find yourself in, and some experts’ thoughts on how that might affect what kinds of cards, and how many, you may want to carry in your wallet:
You’re new to credit cards, or just recovering from a bankruptcy or other bad credit incident
Start with one card, a secured card if necessary, then add a second card when you can prove to yourself that you are making your payments on time and paying your bill off in full each month, says Netiva Heard, a credit counselor in Chicago.
“It’s a learning period,” she said. “That’s why you start with just one card first, to get adjusted to those good habits.”
You want to take advantage of rewards programs
Cards that don’t offer rewards “are a complete waste of your time,” Heard says. She recommends thinking about what rewards would benefit you the most, and whether you want to pay an annual fee to get them.
Cards that don’t charge an annual fee generally come with lower introductory bonuses than cards that do and may not be as generous with rewards points on day-to-day spending. But be careful that you don’t sign up for more rewards cards than you can manage to juggle.
Heard advises most people to keep no more than three to five credit cards total in their wallets. Ulzheimer said two rewards cards seems like more than enough – one for airline points and one for cash back.
You plan to buy a new house or car soon
You should stick to the number of cards you already have, at least temporarily. Don’t open even one new credit card within at least six months of applying for a so-called installment loan. Opening a new card will lower your score by a few points due to the hard inquiry on your credit, “and you want it to be in the best shape possible when you go out to get that expensive loan,” Ulzheimer said.
That said, he added, installment lenders will pay the most attention to whether you’ve had a mortgage or auto loan before, if you paid it off on time and whether you tend to pay off your bills in general on time.
You want to improve your credit score
This is not a reason to get a new credit card, Ulzheimer said. “Opening a new card can actually backfire,” he said, because it will, at least initially, lower your score.
When you apply for a credit card, the issuer pulls your credit report, which triggers a hard inquiry. A hard inquiry can lower your score by five points, but it only affects your credit score for one year. After two years, the inquiry falls off your credit report. Note that applying for multiple credit cards at once can exacerbate the negative credit score impact of inquiries, at least in the short term.
A new credit card can also reduce your length of credit history, a key credit scoring factor that considers the average age of all your credit accounts. While length of credit history only counts for 15% of your FICO score, the effect can be significant if you only have one or two existing credit accounts.
On the other hand, if your new credit card has a high credit limit and you keep your balance low, the card can eventually boost your credit score by increasing your overall available credit.
debit card, or cash, Ulzheimer said.
If you need to close your credit cards to avoid using them, then do it, but know that every time you close a credit card, it can lower your score, he said – because it may reduce your available credit, thus increasing your aforementioned credit utilization ratio.
Divorce hits women harder financially: Here’s how to survive it
So, whether you have two or 20 cards doesn’t really matter. What’s important is that your cards give you access to more than one network and offer you the rewards that best meet your needs (which can change over your lifetime).
And, of course, you need to be sure you’re not juggling so many cards that you can’t keep track of all the payment due dates The whole point of having two to 20 or more credit cards is earning points or cash back on your everyday spending that you pay off every month. All the while, keep your credit utilization low so that your credit score climbs.
Today, I have a fun interview to share with you that will show you how to become a freelancer.
I recently had the chance to interview Ben Taylor. Ben has been freelancing since 2004, and he has worked for dozens of companies.
Yes, this is a career path that you can learn!
As Ben will tell you in the interview below, a freelancer can be anything. You can be a freelance designer, personal trainer, nutrition coach, online teacher, virtual assistant, writer, and more.
If you are looking for a new business or even just a side hustle so that you can learn how to make extra money, learning how to become a freelancer may be something that you want to look into.
In this interview, you will learn:
What a freelancer is, who they work for, what they do, etc.
How much a new freelancer should expect to earn
How a person can find their first freelancing job
The steps needed to take to make money as a freelancer
And much more!
He also has an informative course called Freelance Kickstarter. This course takes you through the step by step process of creating your own freelance business.
Check out the interview below for more information.
How to become a freelancer.
1. Please give us a background on yourself and how you started as a freelancer.
I’m Ben, and I live by the sea in England with my wife and two young sons.
I started a career in tech back in 1998, and by 2004 was Head of IT for a government department. It didn’t take long for me to tire of company politics, and the endless meetings that were more about displays of ego than really getting anything done.
I came from an entrepreneurial family and my parents both had businesses rather than jobs. The businesses weren’t always successful, and there were definitely periods of “feast and famine.” However, I was well used to that and I think that branching out on my own was something I was destined to do.
My move into freelancing splits into a couple of clear phases:
Initially, in 2004, I quit my IT job, walking away from business class travel and a gold-plated pension with nothing more than a vague plan to begin to work as a freelancer!
I started to provide IT support and consultancy to both businesses and individuals. I do actually still do some of that work for a select group of long-term clients, but by 2009 I had managed to burn myself out with it. The business was going well, but I was working ridiculously long days and every holiday I tried to take was interrupted by constant phone calls and emails.
So phase two began when I sold off most of my client-base and moved to Portugal! That’s when I really started to broaden my freelance horizons. I had to start from scratch, with an unclear intention to start writing for a living, and no real plan for how to do it.
I did lots of things, including wasting a LOT of time down fruitless blind alleys. I wrote for content mills, started blogs, found clients on freelance job boards, and – slowly and steadily – started to build my income back up. The difference was that I was doing it all completely on my terms with work I really enjoyed.
I was also living in a dream destination whilst doing it.
2. Can you explain what exactly a freelancer is, who they work for, what they do, etc.?
This seems like a basic question, but it’s very worthwhile. There’s a considerable difference between freelancing and remote working that not everybody appreciates.
First off, a freelancer can be anything. For some reason many people immediately think of writing when they think about freelancing. But you can be a freelancer designer, personal trainer, nutrition coach, online teacher, virtual assistant, and dozens of other things.
It’s also worth noting you don’t only have to be one of those things. I AM a freelancer writer, but I also still dabble in IT consultancy, run my own blogs, provide coaching, and even build websites for people (if they ask nicely and the price is right!)
Regardless of what you do as a freelancer, the important thing to realise is that you are running your own business. The big plus of this is that you are in total charge. But the big negative is that you don’t have any of the safety nets you have if you are employed by a single company. This means you’re responsible for everything from your own insurance and healthcare to your own technical support!
Freelancers typically work for several different clients. There are myriad places to find those clients. It’s quite common for freelancers to find clients within their existing professional networks, and not at all unusual for ex-employers to be among them. Then there are freelance job boards like Upwork and PeoplePerHour, which provide an endless stream of new opportunities.
3. How much should a new/beginner freelancer expect to earn?
This is an incredibly difficult question to answer! I can think of one freelancer I coached who’s in a very specific writing niche. He went onto Upwork with an initial rate of $100 per hour and found lots of work. I started out in IT consultancy charging a similar rate and was quickly earning more than I did in my full-time job.
However, at the other end of the scale there are people with limited experience or specialist skills who will need to pay their dues. This means building the foundations of a freelance career by proving yourself and taking low paying jobs to build up examples of work and positive feedback. My move into writing was much more like this!
I think “job replacement income” is a useful target for new freelancers to keep in mind. That can vary vastly from individual to individual. Obviously replacing and exceeding a corporate-level income takes much more than freelancing as an alternative to a part-time, entry-level job. That said, people with senior-level experience command much higher freelance rates.
Related content: 20 Of The Best Entry Level Work From Home Jobs
4. What do you like about being a freelancer?
Not having a boss!
The difference in lifestyle is massive when you work for yourself. This is always brought home to me when I’m making plans with friends and family, and people say “I’ll see if I can get the time off.”
This makes me shudder, because it’s SO alien to me now. The example I always use is that I never have to ask anybody before I can tell my children I’ll be at their sports day or nativity play.
When you have what I call a “traditional job,” you DO have the security of healthcare, and perhaps things like holiday and sick pay. But you give up a tremendous amount of freedom in return. Freelancing is profoundly different, and it’s rare to find people who’ve given it a go that would ever choose to go back to full-time employment.
So that’s a huge thing for me, but there are other huge benefits too. I love the fact I can pivot into different things, which always allows me to keep things fresh.
About four times a year I reassess my priorities and lay out new goals for the short, medium and long term. They might involve starting a new blog, writing another book, learning a new marketable skill. For somebody like me who relishes variety, I love having total control of this.
5. How can a person find their first freelancing job?
There are SO many ways to find freelance jobs. I have an article listing 50 different options!
However, they broadly split into two categories that I call “real world” and “online world.”
It’s always worth starting out by thinking of your real life networks. As I’ve said, many freelancers do their first self-employed work for people who already know them. I’d advise people to think about any contacts who’ve already seen the kind of work they’re capable of. These are “warm leads” that are well worth perusing.
It makes sense to think about personal contacts as well as business contacts, too. Plenty of freelancers find clients who are their “wife’s best friend’s brother” or something like that!
Remaining in the “real world,” there are also options like local business groups and networking events – although they are obviously far less accessible at the present time.
Moving to the online world, the freelance job boards are the place to be. They can be intimidating places initially, and it’s crucial to learn how to use them and how to avoid scammers and low paying clients. But there are plenty of great clients out there, including many household name companies who use those boards to hire freelancers.
Often, a quick one-off $50 job can evolve into a long and lucrative client relationship. My wife and I both have clients who we first met on the freelance boards years ago. We still work with them now.
There’s no one-size-fits-all answer to where to find the first client, but there are options for everybody.
6. How does a freelancer decide what to set their rates at?
This is a question I’m asked a LOT! The answer leads to lots more questions, and I think many of my readers are disappointed when I don’t just give them an answer of “$x per hour” or “$x per article!”
It’s a subject I cover in my Freelance Kickstarter course, and I’m happy to share a slide from that particular lesson here. The factors to consider include tangible things like the “market rates” for specific types of work, and how each client’s geographical location could impact how much they expect to pay.
But there’s much more to consider beyond that: How much does the gig align with your long-term goals? Will the job produce a great example of work that will help you win more clients in the future? Is this a job that could lead to on-going, long-term work?
I guess a simpler answer is that your rate needs to be fair and competitive, and sufficient to make it worth your while to do the job. However, the rate for each job really needs to be assessed on a case-by-case basis.
The reality is that there are millions of freelancers out there charging vastly different rates, often for very similar services. There’s a bit of an art to working out where you sit on the pricing spectrum, but it’s an art you can learn, and it gets easier with experience.
7. What steps does a person need to take to make money as a freelancer?
The first and most important is working out what it is you actually want to do. That may seem obvious, but my inbox is full of emails from people asking what they should do, without telling me what they’re capable of and what kind of work would make them happy.
I will attempt to lay it out in a fairly simple series of steps:
Work out what skills you have and what market there is for them.
Look at who else is providing those services, what they charge, and what you can provide that will make you stand out and appeal to clients.
Identify any gaps in your knowledge and experience, and work to fill them. This could mean doing some training, or doing some voluntary jobs to bulk out your portfolio.
Establish a personal brand. This isn’t as big a deal as it sounds, but does mean having a solid resumé and LinkedIn profile, and sometimes some other ways to demonstrate your expertise.
Learn how the freelance job boards work. Even if you have a rich personal network to draw on, it’s wise to understand the wider world of freelancing.
Put yourself out there, and start pitching and applying for things.
Make sure you provide perfect work and delight your clients, so that they want to work with you again and recommend you to others.
Repeating and refining these steps is the essence of becoming a successful freelancer.
8. How much does it cost to start this type of business and how much on a monthly basis to maintain it?
Freelancing is generally a low-cost venture, but that’s not to say it’s free. Depending on what you do, you may need specialist equipment and / or software. And if you’re switching from an employed position, you may have to buy things like this yourself for the first time.
A good computer is a must, as it’s often the key tool of your trade. You may also need to budget for things like insurance, possibly including healthcare cover if you are somewhere like the US where this isn’t covered by tax payments.
When it comes to monthly costs, the main things I pay for include software subscriptions and insurance policies. Thankfully these tend to build over time and no individual thing is particularly expensive. You can start out as an online freelancer without even having a personal website, and add things like that once you gain some momentum.
I also recommend budgeting for ongoing training and learning. Thankfully there are all kinds of ways to learn online inexpensively. Companies have training budgets, but when you’re a freelancer, keeping your skills on point is on you.
9. What kind of training is needed to become a freelancer?
I’d say the training splits into two: learning about freelancing itself, and building skills around the specific work you want to do.
Courses like my own Freelance Kickstarter cover the first part. Freelancing is a skill in itself, and we’ve covered some of the important areas in this interview already. Stuff like setting rates isn’t immediately obvious, so learning from those who have been there and done it already is very valuable.
When it comes to skills-specific training it depends what work you’re doing. Let’s say somebody wanted to work as a freelance social media manager. Not that long ago it would have been all about Twitter and Facebook. Nowadays Pinterest is a much bigger deal for many people, and TikTok is emerging as the latest trend.
So as that freelancer, you need to decide what you’re going to focus on. Do you want to be the “go-to guru” for TikTok, or be more of a generalist with social media in general?
It’s wonderful to have the choice.
10. Are there any other tips that you have for someone who wants to become a freelancer?
I have many!
The one I repeat over and over is that you have to eventually go for it and make the jump. I see a lot of people who never get past the “thinking about it” phase. Meanwhile the go-getters have taken the leap of faith and started to build success.
Moving to freelancing is one of those things where there may never be a perfect time to do it. Those who keep waiting for that time to arrive can easily find themselves looking back ten years later with the same commute and the same job.
Another thing I’m like a broken record about is the importance of “paying your dues.” There are often plenty of less-than-ideal gigs to finish successfully before you arrive at the amazing ones.
I wrote about some really dull topics in my early days of freelance writing, for example. But I had to wade through that stuff to build my reputation. It all felt thoroughly worth it a few years later when I was being well paid for travel articles and restaurant reviews!
You learn something from every job along the way: How to handle clients, renegotiate rates, refine your skills, and get work done more efficiently so that you’re boosting the value of your time. Freelancing isn’t supposed to be easy but it’s almost always challenging, interesting and rewarding.
And let’s face it, many people don’t feel that way about their jobs.
11. What can a person learn from your course? Can you tell us about some of the people who have successfully taken your course?
OK, so Freelance Kickstarter expands on all of the topics I’ve touched on here, and many others. It’s intended to remove confusion, and that feeling of overwhelm that often descends when researching this stuff online. It helps new freelancers make a clear plan for getting started. As the strapline goes, the idea is that people “stop wasting time, and start making money!”
I never intended to create a course, but after running the HomeWorkingClub website for several years, it became clear there was a space for something like this. I make it very clear that it’s not some kind of “get rich quick” scheme.
To be brutally honest, I don’t want students who are looking for shortcuts. There is real hard work involved in being a successful freelancer, but it’s a more than viable option for those willing to do what’s required.
The course starts with the basics of working out what you can do and want to do, and presents LOTS of different options. It then moves on to auditing your skills and experience, building your brand, and working out your own personal goals. I particularly like that section because it helps people learn the exact process I use myself every few months to keep things moving forward.
The next lessons cover finding clients, and there’s a big module on learning how to use freelance job boards like Upwork. Once people have completed this, they will know how to uncover the good and genuine jobs, and how to side-step the time-drains and scams.
Students also learn about setting rates, and all the other practicalities of running a freelance business, from getting the tech right to taking undisturbed holidays! We also cover side gigs, and long-term slow-burn projects like blogs and self-published books.
I provide personal support on the course, and people can ask me all the questions they need as they go along. There are also regular exclusive podcasts with extra advice and news of industry developments and new opportunities.
In terms of people who have already taken the course, I recently published a case study from a lady called Lyn. She now has “more work than she can handle” as a freelance writer working via Upwork. Two things that have particularly pleased me about her situation is that she’s cherry-picking projects that interest her, and that she’s been able to do exactly what I suggest in increasing her rates as she builds experience and reputation.
I’ve also had great feedback from people at a much earlier stage. I’ve kept the course price low so that people can use it to help decide if freelancing is for them – just dipping their toes in for the first time.
As one student said, the course is “ideal if you are considering going freelance and don’t know where or when to start, or even if freelancing is for you.”
Several of the testimonials so far have aligned perfectly with the original objective, which was – essentially – to help people see the wood for the trees in an environment than can seem very daunting to begin with.
I set out to create the course I wish I’d had! I’ve made more than my fair share of mistakes in over 16 years of freelancing. The people taking Freelance Kickstarter should hopefully be able to avoid the same ones!
Click here to learn more about Freelance Kickstarter.
Are you interested in learning how to become a freelancer?
The post How To Become a Freelancer and Make a Full-Time Income appeared first on Making Sense Of Cents.
Around 6.1% of employed Americans worked for themselves in 2019, yet the ranks of the self-employed might increase among certain professions more than others. By 2026, the U.S. Bureau of Labor Statistics projects that self-employment will rise by nearly 8%.
Some self-employed professionals experience high pay in addition to increased flexibility. Dentists, for example, are commonly self-employed, yet they earned a median annual wage of $159,200 in 2019. Conversely, appraisers and assessors of real estate, another career where self-employment is common, earned a median annual wage of $57,010 in 2019.
When you work for yourself, you might have to jump through additional hoops to qualify for credit.
Despite high pay and job security in some industries, thereâs one area where self-employed workers can struggle â qualifying for credit. When you work for yourself, you might have to jump through additional hoops and provide a longer work history to get approved for a mortgage, take out a car loan, or qualify for another line of credit you need.
Why Being Self-Employed Matters to Creditors
Hereâs the good news: Being self-employed doesn’t directly affect your credit score. Some lenders, however, might be leery about extending credit to self-employed applicants, particularly if youâve been self-employed for a short time.
When applying for a mortgage or another type of loan, lenders consider the following criteria:
Generally speaking, lenders will confirm your income by looking at pay stubs and tax returns you submit. They can check your credit score with the credit bureaus by placing a hard inquiry on your credit report, and can confirm your debt-to-income ratio by comparing your income to the debt you currently owe. Lenders can also check to see what assets you have, either by receiving copies of your bank statements or other proof of assets.
The final factor â your employment status â can be more difficult for lenders to gauge if youâre self-employed, and managing multiple clients or jobs. After all, bringing in unpredictable streams of income from multiple sources is considerably different than earning a single paycheck from one employer who pays you a salary or a set hourly rate. If your income fluctuates or your self-employment income is seasonal, this might be considered less stable and slightly risky for lenders.
That said, being honest about your employment and other information when you apply for a loan will work out better for you overall. Most lenders will ask the status of your employment in your loan application; however, your self-employed status could already be listed with the credit bureaus. Either way, being dishonest on a credit application is a surefire way to make sure youâre denied.
Extra Steps to Get Approved for Self-Employed Workers
When you apply for a mortgage and youâre self-employed, you typically have to provide more proof of a reliable income source than the average person. Lenders are looking for proof of income stability, the location and nature of your work, the strength of your business, and the long-term viability of your business.
To prove your self-employed status wonât hurt your ability to repay your loan, youâll have to supply the following additional information:
Two years of personal tax returns
Two years of business tax returns
Documentation of your self-employed status, including a client list if asked
Documentation of your business status, including business insurance or a business license
Applying for another line of credit, like a credit card or a car loan, is considerably less intensive than applying for a mortgage â this is true whether youâre self-employed or not.
Most other types of credit require you to fill out a loan application that includes your personal information, your Social Security number, information on other debt you have like a housing payment, and details on your employment status. If your credit score and income is high enough, you might get approved for other types of credit without jumping through any additional hoops.
10 Ways the Self-Employed Can Get Credit
If you work for yourself and want to make sure you qualify for the credit you need, there are plenty of steps you can take to set yourself up for success. Consider making the following moves right away.
1. Know Where Your Credit Stands
You canât work on your credit if you donât even know where you stand. To start the process, you should absolutely check your credit score to see whether it needs work. Fortunately, there are a few ways to check your FICO credit score online and for free.
2. Apply With a Cosigner
If your credit score or income are insufficient to qualify for credit on your own, you can also apply for a loan with a cosigner. With a cosigner, you get the benefit of relying on their strong credit score and positive credit history to boost your chances of approval. If you choose this option, however, keep in mind that your cosigner is jointly responsible for repaying the loan, if you default.
3. Go Straight to Your Local Bank or Credit Union
If you have a long-standing relationship with a credit union or a local bank, it already has a general understanding of how you manage money. With this trust established, it might be willing to extend you a line of credit when other lenders wonât.
This is especially true if youâve had a deposit account relationship with the institution for several years at minimum. Either way, itâs always a good idea to check with your existing bank or credit union when applying for a mortgage, a car loan, or another line of credit.
4. Lower Your Debt-to-Income Ratio
Debt-to-income (DTI) ratio is an important factor lenders consider when you apply for a mortgage or another type of loan. This factor represents the amount of debt you have compared to your income, and itâs represented as a percentage.
If you have a gross income of $6,000 per month and you have fixed expenses of $3,000 per month, for example, then your DTI ratio is 50%.
A DTI ratio thatâs too high might make it difficult to qualify for a mortgage or another line of credit when youâre self-employed. For mortgage qualifications, most lenders prefer to loan money to consumers with a DTI ratio of 43% or lower.
5. Check Your Credit Report for Errors
To keep your credit in the best shape possible, check your credit reports, regularly. You can request your credit reports from all three credit bureaus once every 12 months, for free, at AnnualCreditReport.com.
If you find errors on your credit report, take steps to dispute them right away. Correcting errors on your report can give your score the noticeable boost it needs.
You typically need two years of tax returns as a self-employed person to qualify for a mortgage, and you might not be able to qualify at all until you reach this threshold. For other types of credit, it can definitely help to wait until youâve earned self-employment income for at least six months before you apply.
7. Separate Business and Personal Funds
Keeping personal and business funds separate is helpful when filing your taxes, but it can also help you lessen your liability for certain debt.
For example, letâs say that you have a large amount of personal debt. If your business is structured as a corporation or LLC and you need a business loan, separating your business funds from your personal funds might make your loan application look more favorable to lenders.
Having more liquid assets is a good sign from a lenderâs perspective, so strive to build up your savings account and your investments. For example, open a high-yield savings account and save three to six months of expenses as an emergency fund.
You can also open a brokerage account and start investing on a regular basis. Either strategy will help you build up your assets, which shows lenders you have a better chance of repaying your loan despite an irregular income.
9. Provide a Larger Down Payment
Some lenders have tightened up mortgage qualification requirements, and some are even requiring a 20% down payment for home loans. Youâll also have a better chance to secure an auto loan with the best rates and terms with more money down, especially for new cars that depreciate rapidly.
Aim for 20% down on a home or a car that youâre buying. As a bonus, having a 20% down payment for your home purchase helps you avoid paying private mortgage insurance.
10. Get a Secured Loan or Credit Card
Donât forget the steps you can take to build credit now, if your credit profile is thin or youâve made mistakes in the past. One way to do this is applying for a secured credit card or a secured loan, both of which require collateral for you to get started.
The point of a secured credit card or loan is getting the chance to build your credit score and prove your creditworthiness as a self-employed worker, when you canât get approved for unsecured credit. After making sufficient on-time payments toward the secured card or loan, your credit score will increase, you can upgrade to an unsecured alternative and get your deposit or collateral back.
The Bottom Line
If youâre self-employed and worried that your work status will hurt your chances at qualifying for credit, you shouldnât be. Instead, focus your time and energy on creating a reliable self-employment income stream and building your credit score.
Once your business is established and youâve been self-employed for several years, your work status wonât matter as heavily. Keep your income high, your DTI low, and a positive credit record, youâll have a better chance of getting approved for credit.
With mortgage rates at or near all-time record lows, youâve likely pondered a refinance if youâre an existing homeowner. But you probably have a lot of questions too, especially if itâs your first time refinancing a home loan. Letâs clear up some of the confusion by tackling some of the most common refinance questions out [&hellip
The post The Top 15 Refinance Questions Answered first appeared on The Truth About Mortgage.
Is 2021 the year you’re going to buy a real estate investment property? If you have your sights set on flipping a house for a big profit, you likely know how much work is involved. Sure, popular real estate reality shows like “Flip or Flop” and “Flipping Across America” make fix-and-flip investing look like a feasible endeavor, but you’re wise to the magic of TV, right?
The truth is that flipping a house is rife with challenges, from financial setbacks to breakdowns in communication with your construction crew. Plus, low interest rates mean properties are flying off the market, especially in up-and-coming neighborhoods.
So how can house-flipping newbies compete today? By learning from those with more experience. We spoke to successful home flippers about what they wish they had known when starting out. Hopefully their tips below will help you minimize pain and maximize profits.
1. Stick to your maximum allowable offer
Our experts all agree that buying a fix-and-flip investment should not be an emotional decision. There are certain formulas that every house flipper needs to calculate in order to make a profit.
“Real estate investing is a numbers business, and if the deal doesn’t make sense when you crunch the numbers, you should be able to walk away,â says Hayden Lyon of Cowtown Home Buyers, a real estate investment firm in Fort Worth, TX.
âStick to your maximum allowable offer. Going above your MAO is just asking for trouble,” says Ryne Lambert, co-founder of Sell My House, a real estate investment firm in Green Bay, WI.
The general rule when determining your MAO is not to pay more than 70% of the property’s after-repair value, or ARV, minus repair estimates. For example, if the property’s ARV will be $150,000, you would subtract the costs to flip (including the cost of a loan, repairs, and other fees) and then multiply that number by 70%. That will give you the MAO you should make on the property.
However, Lambert recommends a more exact formula: âWe calculate MAO as ARV minus rehab estimates, selling costs, and minimum gross profit,â he says. âOur detailed formula makes our offer more competitive for sellers while still providing us a nice profit.â
2. Build a buffer into your renovation budget
Anyone whoâs undertaken repairs on their house or an investment property knows things rarely go as planned. Permit delays, bad weather, and unforeseen expenses can all throw a wrench in the worksâand revise your bottom line.
That’s why Lambert advises new investors to build a buffer of up to 25% into their rehab estimate.
3. Donât always go with the cheapest contractor
Finding the right contractor can help keep renovation costs in checkâbut right does not always mean the least expensive.
âWhen I was new, I thought in order to keep as much profit margin in the flip as I could, I needed to choose the lowest contractor bid,â says Jonathan Faccone of Halo Homebuyers, a real estate consultant in Bridgewater Township, NJ.
âYou do have to manage costs prudently, but going with the lowest contractor bids usually end up costing you more in the long run,” says Faccone. “Be cautious about choosing the cheap price and, instead, go with the contractor who offers the best quality and most professional work for your money.â
4. Make sure the contractors have a clear scope of work
You may be able to head off issues with contractorsâincluding plumbers, electricians, and general contractorsâby ensuring they present a clear scope of work for the project, experts advise.
âThe scope of work usually includes working with the city to obtain permits, ordering materials and equipment, and confirming the house plans. This section will save you a lot of time and money on the back end of the project,â says Shawn Breyer of Breyer Home Buyers, a real estate investing firm in Atlanta.
Most importantly, start building relationships with contractors in the areas where you invest, so you know whom you can trust for any project.
5. Provide a quality product
As fast as homes are selling today, the market is filled with many discerning buyers.
âOften, the ultimate buyer of a flip expects the home to compare with existing homesâor even new constructionâin quality and value,â says Greg Kurzner, a Realtor Â® for ERA Atlantic Reality in Alpharetta, GA.
Lyon agrees: âFocus on value-add renovations and amenities. Research shows buyers want a nice kitchen and bathrooms. Of course, everything should be functional and up to code, but you want to create an instant emotional connection for potential buyers.â
6. Get your own finances in order before you start
Several investors pointed out the importance of running your blossoming home-flipping company as a businessâbecause it is. That means tracking all of your expenses so you can make better decisions for greater profits. Be extremely organized, and document every purchase order, utility bill, and closing fee that’s involved in the project.
Itâs also important to have your own financial house in order before you start.
âIf all goes well, youâre about to start making money in large chunks. If you lack proper discipline, youâll wind up worse than when you started,â says Billy Ross, CEO at RFTA Properties, a residential real estate investment company in Winter Park, FL.
7. Expect to put time and money into marketing
James Fitzgibbons of Ledge Real Estate Solutions, in Windermere, FL, says he wishes he had spent more time in his early years learning how to market homes efficiently.
âWe have a wrapped car that we drive around town,â he says. âWeâve driven for dollars, and weâve used direct mail marketing. Today, we advertise online through Google and Facebook. All of these methods have potential if done right.”
The post 7 Insider Secrets About House Flipping To Put You on the Path to Profitability appeared first on Real Estate News & Insights | realtor.comÂ®.