This is not a great time to be looking for career experience. Industries are suffering, opportunities are scarce and most people are working from home. But if youâre in need of an internship, there are still plenty of options to work virtually – if you know how to sniff them out.
Hereâs what you need to know in order to find a virtual internship: where to look, who to talk to, and how to make sure your application stands out from the competition.
Tips for Getting a Virtual Internship
Before you start applying for internships, you need to have the appropriate documents. Here are the most important.
Draft a Resume
Students who donât already have a resume can find free resume templates through Google Docs and Microsoft Word. These templates have clean designs and are easy to edit.
If you want something more unique, you can buy a template on Etsy. Choose a template that you can easily edit in Microsoft Word or Google Docs. If youâre applying for internships in a creative field like graphic design or advertising, pick a template that has more flair and shows your personality.
When writing your resume, focus on the skills youâve learned and your accomplishments. If you were a waitress at Waffle House (like I was for a summer), mention how it taught you multitasking and organizational skills.
Create a LinkedIn profile and start connecting with people you know. Ask past employers for recommendations and to endorse you for specific skills like Photoshop or Excel.
Work on a Cover Letter
Some internships will require a cover letter. A cover letter should express the value youâll bring to the company, like how your interests and skills fit with the organization and why you would be a good addition.
If youâre submitting a cover letter for an online application, make sure to use any keywords mentioned in the job description. Some companies use software that filters out cover letters missing these keywords.
Have a parent or adult mentor look over both your resume and cover letter. They can offer you advice on how to phrase specific ideas and remind you of jobs, awards, and other accomplishments youâve forgotten about.
Where to Find a Virtual Internship
Once youâve created a resume and basic cover letter, you can start applying. Here are the best places to find a virtual internship.
Talk to Your College
The first place to look is your college career center. Many large companies have direct relationships with universities and accept a certain number of interns from there every year.
Contact the university career center and ask them about internship opportunities. If you already have a declared major, your department may also have its own career counselor who can help. They may have more personal relationships with hiring managers and internship recruiters.
Sometimes colleges have their own internship and job boards, but it still helps to talk to a counselor directly. They may have more resources and can answer your specific questions.
Even though the pandemic has changed how colleges operate, some are still holding virtual career fairs. Youâll likely have to register in advance and choose a specific time slot, so look into these options as soon as possible.
Make sure to follow up regularly if you donât hear back from the career counselor. They may be busy, and your emails can get lost in the shuffle. Donât feel bad about reaching out multiple times- this is part of what you pay for as a student and youâre entitled to their help.
Contact People You Already Know
If youâve had internships before, contact people from those companies and ask if they need help. Itâs much easier to get an internship when you already know the people in charge – especially if you made a good impression during your tenure.
It doesnât matter if the people you worked with have different jobs now. They may still work in a similar industry and need an intern. Make a list of where youâve worked and all the people you remember. If youâre having trouble remembering names, go to the companyâs LinkedIn page to jog your memory and find their contact information.
After youâve contacted them, reach out to any professors you know who still have direct ties to the industry. They can forward your information or send you links to opportunities theyâve seen.
Donât be afraid to contact people at companies where you turned down an internship position. Most people donât take that personally and may still have positive memories of you – plus, getting a previous internship offer from a company indicates that youâre probably a good fit.
If youâre reaching out to professors you havenât talked to in a while, remind them what class of theirs you took and include a copy of your resume. This will make it easier for them to forward the email to any prospects.
Take your time when crafting emails to industry contacts. If you write an email with typos and grammar mistakes, your email may be deleted immediately. This is especially true if youâre contacting someone you donât know. They may receive dozens of emails from students like you and not have time to respond to them all.
Look at Job Sites
If youâve reached out to your networking contacts with no luck, itâs time to look for a virtual internship on a job site. Job sites should be the last place you look for a virtual internship because itâs harder to stand out among a sea of candidates.
Here are some of the best sites and apps to use:
Intern from Home
Remember not to discount an internship if thereâs no mention that the job will be remote. Some listings may be outdated and not reflect the current situation.
When you apply, check the companyâs website and LinkedIn profile to see if you have any personal connections. Having someone in common can help get your application into the right hands.
The post How to Get a Virtual Internship appeared first on MintLife Blog.
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A recent trend in credit card rewards is increased flexibility in how you can redeem your cash back, points or miles. You can book travel, invest, get gift cards and more â but one of the most common ways a credit card company will issue rewards is as a statement credit.
Statement credits may seem simple, but theyâre handled a little differently by each rewards program, and thereâs a lot to consider when youâre trying to decide if theyâre the best way to redeem cash back or other rewards.
See related:Â What is cash back?
What is a statement credit?
Put simply, a statement credit is money credited to your account. In its most basic form, a statement credit is not much different from a payment. Like a normal monthly payment, a statement credit is deducted from your card balance, reducing the amount of money you owe. But where cardholders are responsible for payments, credits come from either a merchant or card issuer.
rewards cards also allow you to redeem the points or miles youâve earned as statement credits. While some cards allow you to use a statement credit to reduce your balance with no restrictions, others only apply credits to your account after you meet certain criteria or make purchases in specific spending categories.
Statement credits on cash back cards
Cash back cards usually make it easy to redeem your points as a statement credit. In most cases, all you need to do is meet the cardâs minimum redemption criteria, then choose a statement credit as your redemption method. Once a credit is applied to your account, your card balance decreases accordingly.
If, for example, you were to spend $3,000 with a flat rate 1 percent cash back card, youâd earn a $30 credit; and if you were to redeem this entire credit, $30 would be deducted from your account balance.
While many cards give you the option to request your cash back in the form a check, some only allow you to redeem as a statement credit â so be sure to read your issuerâs terms carefully. After all, when you get your cash back as a check or direct deposit, the money is yours to spend or save as youâd like. With a statement credit, however, the funds are âtrappedâ in your account and only impact your card balance. If you stop using your card or close your account, you could lose any cash back or points you havenât redeemed.
Capital One Venture Rewards Credit Card, for example, allows you to book travel through the rewards center at a rate of 1 cent per mile. But if you redeem your miles for cash back as a statement credit, their value is cut in half to just 0.5 cents per mile.
If you prefer to redeem your rewards as a statement credit, make sure doing so doesnât dilute the value of your points or miles, as each rewards program grants and values statement credits a little differently.
Statement credits for an introductory bonus
Statement credits also frequently appear as part of a card introductory or annual bonus, when issuers offer to reward you if you spend a certain amount of money within a given timeframe. The Blue Cash PreferredÂ® Card from American Express, for example, offers a $250 bonus after you spend $1,000 with your new card in the first 3 months. Instead of simply sending you a check for $250, however, American Express credits your account $250 after youâve met the conditions of the offer. Once received, the credit will cover the next $250 you charge.
Statement credits for card benefits
Many cards also award extra perks in the form of a statement credit. The United Explorer Card and Chase Sapphire Reserve, for example, each offer up to a $100 credit to cover the cost of a Global Entry or TSA PreCheck application.
In these cases, a statement credit is applied to your account only after you make the eligible purchase and cannot be used for anything else.
How statement credits work with the major rewards programs
Hereâs how some of the major rewards programs treat statement credits:
Can you redeem rewards as a statement credit?
Rewards rate when redeemed as a credit
Discover cards Cashback Bonus
Bank of America Cash Rewards
None ($25 for automatic redemptions)
American Express Membership Rewards
Chase Ultimate Rewards
Should I redeem my points as a statement credit?
Once you know what a statement credit is and how itâs treated by your rewards program, youâll probably wonder if itâs smart to redeem your points or miles in this form. While the answer will depend on your spending habits, goals and financial situation, it makes more sense in certain circumstances.
If youâre trying to decide whether you should redeem your points as a credit statement, consider the following:
Are you going to carry a balance? If youâre not sure whether youâll be able to pay off your balance in full by the due date, redeeming your points as a statement credit makes sense. Youâll knock a chunk off your balance and make it easier to pay in full and avoid interest charges. Keep in mind, however, that statement credits are not usually considered payments, so if you canât help carrying a balance, youâll still have to make a minimum out-of-pocket payment.
Does your card offer an incentive for redeeming points as a statement credit? Some cash back cards offer redemption bonuses when you opt for a statement credit over âtrueâ cash back in the form of a check or direct deposit. If thatâs the case, and you plan to continue using the card, go with a statement credit to get more mileage out of your cash back rewards.
Are your points worth less when redeemed as a statement credit? If youâre using a card with a more flexible rewards program, redeeming your rewards as a statement credit is likely possible, but not necessarily wise. Check your issuerâs terms to see if your points lose any value when redeemed as a statement credit. If 1 point is worth 1 cent when used for travel purchases, but only 0.5 cents when redeemed as a statement credit, youâre missing out on a lot of the value youâve earned. If you have no interest in travel, see if you can get full value out of your points in a roundabout way, like redeeming points for gift cards at stores you frequent.
Other ways to redeem your credit card rewards
Many cards offer several other options for redeeming your rewards. In addition to statement credits, you may be able to redeem cash back, points, or miles for:
A direct deposit â You can link your bank account so that when you hit âredeem,â that money goes directly to your account. For some, this is more satisfying than receiving a statement credit.
A check â If you donât mind waiting, many credit card issuers will mail a check for the value of your rewards.
Gift cards â Some credit cards allow you to exchange your points or cash back for gift cards. Make sure that youâre getting the same or more value before you choose this option â sometimes the dollar value of gift cards is different from what you would get redeeming for a statement credit or direct deposit.
Merchandise â Credit card issuers sometimes have shopping portals that give you the option to use your cash back or points to pay for merchandise. This is another option that you should approach with caution. Do the math to make sure youâre getting the same dollar value as you would with a direct deposit or statement credit.
Travel â Travel redemption options vary from card to card, but there are two main methods, one of which is receiving a statement credit for travel purchases youâve already made. The other is using the issuerâs portal to book travel, such as flights or hotels, online.
A statement credit is just one way you can receive bonuses and redeem the rewards youâve earned. If youâre using a cash back card, it could be a smart, low-maintenance way to reduce your balance and build good spending habits. If youâre using a more flexible rewards or travel card, though, make sure redeeming as a statement credit still gets you fair value for your points or miles.
In the 1980s, self-driving cars and smartphones without antennas were only things youâd see in movies â unimaginable futuristic goals. Now, these âimpossibleâ inventions are part of peopleâs everyday lives. These innovative ideas were thought to be outlandish years ago until creators like Elon Musk and IBMâs team put their impossible goals to the test.
Impossible goals are things you want to achieve that seem out of the ordinary â ones that feel as if you may never reach them, even in your wildest dreams. These goals could be turning your dream side hustle into a full-time job or building your savings from zero in the next year to buy your dream home.
While the end result seems unreachable, a mix of motivation, determination, and hard work can get you further than you think. To see the strategic process of setting and achieving your biggest life goals, keep reading our jump to our infographic below.
Whatâs an Impossible Goal?
An impossible goal is a goal you think you could never achieve. Becoming a millionaire, buying your dream home, or starting a business may be your life goal, but one too big that you never set out to achieve. Instead, you may stick to your current routine and believe you should live life in the comfort zone.
Becoming a millionaire usually requires investing time, confidence, and a lot of hard work â things that may challenge you. But when you think about the highest achievers, most of them had to put in the effort and believe in themselves when nobody else did.
Flashback to 1995 when nobody believed in the âinternet storeâ that came to be Amazon. While that was considered impossible years ago, Amazonâs now made over $280 billion dollars.
In other words, when you make your impossible goals a priority, you may be pleasantly surprised by your progress. We share how to set hard financial goals, why you should set them, and how these goals could transform your financial portfolio this year.
4 Reasons to Reach for the âImpossibleâ
Impossible goals challenge you to shift your way of thinking â getting comfortable out of the safety zone. They help fine-tune your focus for daunting tasks youâre willing to put in the time and work for. Whether youâre looking to become a millionaire, buy your dream house, or pay down your debts, hereâs why you should set goals for things you think you could never achieve.
1. You May Be Pleasantly Surprised
Everything seems impossible until you do it. When youâre in elementary school, maybe you thought getting a four-year college degree would be out of reach. Regardless, you put in the time and hard work to become a college grad years later. The same goes for your potential goal to write a book. You may think itâs hopeless to write a few hundred pages in the next year, but you may find it attainable once you hit the halfway point.
2. You Check Off Micro-Goals Along the Way
Itâs hard to set your goals too low when youâre trying to reach for the stars. In the past, you may have set small goals like being more mindful with your money. While mindfulness practices are extremely beneficial for your budget, you may need more of a push to save for your dream home. By setting impossible goals, you may find it easier to reach your savings goal this year. You may have no idea how to do it, but your goal is to figure it out. Side hustles, a new job, or starting a business are all potential starting points.
3. It May Not Be as Hard as You Think
It can be uncomfortable to try something for the first time, so to avoid the doubts of reaching your goals, create a strategic plan. Download and print out our printable to breakdown each impossible goal. Start with your big goals and break them down into mini-goals. For example, if you want to start an online ecommerce store, researching the perfect website platform is a good starting point.
4. What Do You Have to Lose?
If you already live a comfortable life, you may only have experiences to gain and nothing to lose. When embarking on this journey, check in with yourself every month. Note all the lessons you learned and how far youâve come. You most likely will face failures, but youâll be failing forward rather than backwards. Your first ecommerce product launch may not have gone smoothly, but you may know how to improve for the next time around.
How To Set Impossible Budgeting Goals in 6 Steps
If your impossible goal is related to finances, your mindfulness, time, and dedication will be required to put you on a path towards your dream life. To get started, follow our step-by-step guide below.
Step 1: Map Out Your Dream Lifestyle
Get out a journal and map out your dream life. Some starter questions may be:
Do you want to afford that house youâve always dreamt about?
Do you want to have a certain amount of money in your savings?
Are you hoping to turn your side hustle into a full-time job?
What do you find yourself daydreaming about?
Track all these daydreams in a notebook and curate the perfect action plan to achieve each goal.
Step 2: Outline Micro-goals to Reach Your Financial Goals
Now, list out mini-goals to achieve your desires. Start with the big âunachievableâ goal and break it down into medium and small goals, then assign each mini-goal a due date. For example, saving $10,000 this year may take more than your current monthly earnings. To achieve this, you may create passive income streams. If that side hustle is to start a money-making blog, you may need to research steps to successfully launch your website.
Step 3: Believe and Act Like Your Future Self
Think of yourself as the future self you want to be. You may picture yourself with a certain home, financial portfolio, and lifestyle, but your current actions may not reflect your future self. Your future self may invest, but your current self is too intimidated to start. To act like your future self, consider doing the research and finding low-risk investments that suit you and your budget.
Step 4: If You Fail, Learn from Your Mistakes
When working towards your dream life, you may hit roadblocks and experience failures. As Oprah explains it, âthere is no such thing as failure. Failure is just life trying to move us in another direction.â While failure may happen, youâre able to learn from it and pivot. Every mistake you make, analyze it in your journal. Note what worked, what didnât, and what you want to do better tomorrow to surpass this roadblock.
Step 5: Track Your Results Consistently
Host monthly meetings with yourself to see how far youâve come. Consider creating a goal tracking system that suits you best. That may include checking your budgeting goals off in our app month after month. Find a system that works for you and note your growth at the end of each month. If youâre putting in the time and hard work, youâll get closer to your goals in no time.
Step 6: Be Patient With Your Budget Goals
Throughout this journey, practice patience. Setting goals may be exciting and motivating, but when youâre faced with failures, you may feel hints of disappointment. To avoid a failure slump, be patient and open to learn from your mistakes. If you didnât make what you wanted from your side hustle the first year, youâre that much closer than you were last year.
Why set your sights on hard goals? Everything feels out of reach until you do it. All it takes is motivation and determination to achieve the impossible. To boost your lifestyle, budget, and drive this New Year, consider setting goals that feel out of reach. Keep reading to see why these goals may be perfect for you. Why Set Impossible Goals for 2021? [The Ultimate New Yearâs Savings Hack] appeared first on MintLife Blog.
Cash back is a rewards benefit that many credit cards offer to cardholders. By taking advantage of it, youâll receive back a prespecified percentage of certain purchases you make. Many credit card companies will provide higher cash back rates on certain types of purchases, such as airfare, gas, food and more. Cash back is just one way that credit cards offer rewards, as mileage and points are some alternatives.
Before you spend too much money with your credit cards, make sure you have a financial plan in place. Speak with a financial advisor today.
What Is Cash Back?
The most commonly recognized style of cash back is what you have likely seen advertised as cash back credit cards. This specifically refers to earning a certain percentage of your credit card purchases back as cash rewards. However, cash back rates vary widely, as do the categories that they apply to.
You usually wonât see credit card cash back rates higher than 5%, while 1% is the typically minimum you will earn. Cash back categorization is significantly more complex though, with a merchant category code (MCC) system being the main organizing force.
MCCs run the entire cash back industry, as they ultimately decide how each purchase you make is classified. These designations coincide with cash back rates set by the issuer of your card. For example, you could use your card for a $50 dinner at a steakhouse, which has a ârestaurantâ code. If your card offers a 2% cash back rate on all spending at restaurants, youâd earn $1 cash back.
Familiar alternatives to cash back include point- and mile-based programs, though many cardholders are partial to cash back. Cash back affords cardholders an independence that is ideal, since you can redeem it for nearly anything.
Popular Cash Back Credit Cards
Discover, American Express, Mastercard and Visa all have cash back rewards credit cards available for prospective cardholders. Each abide by their own set of regulations, though card issuers decide on cash back rates, promotions and bonuses. Chase, Wells Fargo, Citi and Capital One represent some of the most active card issuers on the market today.
Below are a few examples of what you can expect to earn when looking for a cash back credit card:
Cash Back Credit Cards Card Name Cash Back Rates Cash Back Bonus Costco Anywhere Visa Card by Citi 4% cash back on eligible gas up to $7,000 per year, 3% cash back on eligible travel and restaurants, 2% cash back in-store and online with Costco and 1% cash back elsewhere None Bank of AmericaÂ® Cash Rewards credit card 3% cash back in a category of your choosing, 2% cash back at grocery stores and wholesale clubs and 1% cash back on all other purchases (up to a quarterly cap of $2,500 in combined grocery/wholesale club/choice category purchases) $200 bonus cash back for spending at least $1,000 over your first 90 days Capital OneÂ® QuicksilverÂ® Cash Rewards Credit Card Unlimited 1.5% cash back everywhere $150 cash back bonus when you spend $500 during your first three months Citi Double Cash Card 1% cash back on your purchases and another 1% cash back when you pay your bill None Capital OneÂ® SavorÂ® Cash Rewards Credit Card Unlimited 4% cash back on dining and entertainment, 2% cash back on groceries and 1% cash back elsewhere $300 cash back bonus for $3,000 spent over your first three months TD Cash VisaÂ® Credit Card 3% cash back on dining, 2% cash back at supermarkets and 1% cash back on everything else Earn $150 cash back when spending $500 within the first 90 days (See Terms) USAA Preferred Cash Rewards Visa Signature Unlimited 1.5% cash back on everything None Blue Cash Everyday Card from American Express 3% cash back on up to $6,000/year at U.S. supermarkets (then 1%), 2% cash back at U.S. gas stations and select U.S. department stores and 1% cash back on other purchases $150 bonus cash back for spending $1,000 over your first six months Getting Cash Back at Retailers
Picture this: youâre buying some groceries on a Sunday morning, but know youâll need $40 cash to fill up your car with some gas later. You could swipe your debit card at the supermarket and then head over to the ATM. Or you could ask for cash back right from the cashier, eliminating the extra errand.
The above situation represents the alternative definition of cash back. Itâs ultimately the use of a cash register as if you were swiping your debit card at the ATM. When you request cash back from a cashier, your bank account will be charged the amount you asked for. This enables the funds to be pulled from your account so the cash can be placed in your hand.
Although this generally only applies to debit cards, there are a few exceptions for credit cards. DiscoverÂ® allows cardholders to ask for cash back at more than 50 large retail stores without a transaction fee.
There are many benefits to utilizing credit card rewards programs. But spending money that technically isnât yours will always involve some level of risk. If youâre in good financial shape, though, cash back and other types of credit card rewards can help you take more vacations, save money on purchases and more.
Credit Card Tips
Managing your credit cards and any debt you accumulate using them is a major part of your long-term financial outlook. Consider working with a financial advisor to make sure youâre managing your money with your goals for the future in mind. SmartAssetâs free matching tool can connect you with up to three advisors in your area. Get started now.
If youâre someone who wants freedom when spending credit card rewards, you may prefer cash back to a points- or mileage-based reward system. However, keep in mind that cash back rates are sometimes less than those in point-centric programs.
Editorial Note: This content is not provided by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the authorâs alone, and have not been reviewed, approved or otherwise endorsed by the issuer.
Advertiser Disclosure: The card offers that appear on this site are from companies from which SmartAsset.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). SmartAsset.com does not include all card companies or all card offers available in the marketplace.
Nowadays, it is easy to score a generous introductory bonus on a credit card. Just by meeting eligibility requirements and a specified spend threshold, you can bring home hundreds of dollars in extra pocket change when you sign up for a new card.
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While cash back cards typically offer less valuable introductory bonuses than rewards cards offering points or miles, these bonuses come with a big advantage. Rather than having to redeem points a certain way to stretch their value, you can use a big cash back bonus to make a huge dent on any kind of purchase.
Plus, cash back cards are offering higher and higher bonuses to compete with other rewards currencies â even up to $500 or more.
Right now, $500 (or higher) intro bonuses are limited to business credit cards â but offers change regularly, so a personal card boasting an inflated bonus could be around the corner. Personal cards, including the Capital OneÂ® SavorÂ® Cash Rewards Credit Card, have offered intro bonuses up to $500 in their history. Though the sign-up offer on the Savor is not at its peak, keep an eye out for future limited-time offers on this and other cards.
Which cards are currently offering $500 introductory bonuses?
At the moment, only small business credit cards are offering intro bonuses of $500 or more. Take a look at four current offers below:
Ink Business Cash® Credit Card
$750 if you spend $7,500 in first 3 months
Ink Business Unlimited® Credit Card
$750 if you spend $7,500 in first 3 months
Capital One Spark Cash for Business
$500 if you spend $4,500 in first 3 months
U.S. Bank Business Cash Rewards World Eliteâ¢ MastercardÂ®
$500 if you spend $4,500 in first 150 days
As you can see, each of these generous intro offers requires a fairly high spend threshold to reach it. Before you sign up for one of these cards, ensure you can spend enough to earn the bonus without overextending your budget.
See related: How business credit cards can help you run a business from home
Who is eligible to earn these bonuses?
Before jumping at one of these generous offers, you should ensure you are eligible to earn the bonus. Issuers often have restrictions on who can take home a sign-up bonus.
For example, the Ink Business Cash and Ink Business Unlimited cards from Chase are subject to the 5/24 rule. This means if youâve opened five or more credit cards with any issuer in the last 24 months, you likely wonât qualify for either card.
On the bright side, Chase business cards will not count against your 5/24 standing for future applications.
For the Capital One Spark Cash card and U.S. Bank Business Cash Rewards card, the sign-up bonus is limited to new account holders. If you currently have or have previously had one of these cards, you might not be eligible for a new bonus on the same card.
Cash bonuses vs. points bonuses
The possibilities for a $500 sign-up bonus are endless â allowing you to book a trip, buy yourself a special something, offset your next major bill and so much more. It is easy to see how an extra $500 is valuable â but is it the best offer you can find?
The short answer is no. Points-based sign-up bonuses can offer incredible potential value when you redeem rewards strategically. Because the value of points and miles shifts depending on how you spend them, you can often get much more than the estimated cash value of a sign-up bonus by redeeming your points for well-priced flights, hotels or other promotions.
For example, check out some top points-based introductory offers and our estimated value. At first glance, the following bonuses seem to offer a similar value to a $500 cash bonus. But when you redeem your points for travel, they can actually take you much further.
Estimated value of introductory offer
IHGÂ® Rewards Club Premier Credit Card
140,000 points if you spend $3,000 in first 3 months
Chase Sapphire ReserveÂ®
50,000Â points if you spend $4,000 in first 3 months
$750 (when redeemed for travel in the Ultimate Rewards portal)
Chase Sapphire PreferredÂ® Card*
60,000 points if you spend $4,000 in first 3 months
$750 (when redeemed for travel in the Ultimate Rewards portal)
IHGÂ® Rewards Club Traveler Credit Card
100,000 points if you spend $2,000 in first 3 months
But there is a big drawback â point bonuses are typically only worth their full value when you redeem them for a specific kind of purchase. If a card offers an 80,000-point bonus â but points are only worth a full 1 cent each when redeemed for travel â then that bonus is only ideal for cardholders who already spend a significant amount on travel. If youâd sacrifice half the value of your bonus offer to redeem it for another kind of purchase â such as a statement credit to cover your bills â then you are better off opting for a more flexible cash back offer.
Should you sign up for a $500 bonus offer?
Before jumping at a high bonus offer, you should always consider the spend requirement. If you will have to charge more than you can afford to pay off in order to earn the bonus, it might not be worth it.
See related: Card APRs are at a record high. Is a sign-up bonus still worth the risk?
Additionally, cash bonuses donât always offer as much potential value as a points-based introductory bonus. Consider how you want to spend your rewards and which cardâs earning rate works best for you before you apply.
*All information about the Chase Sapphire Preferred Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. This offer is no longer available on our site.
Sending cash to friends and family? Before you reach for that credit card, grab a calculator. It’s time to do a little math.
With most everything you purchase online or through apps, credit cards have the edge. With plastic, you have chargeback rights. If you’re overcharged or receive the wrong item, broken merchandise or nothing at all, your card issuer will make it right. And if you use a rewards card, you collect points or miles, too. Win-win.
But it’s different story when you’re sending money through peer-to-peer platforms. Many of them (like Google Pay, Popmoney and Zelle), don’t allow consumers to use a credit card to send cash.
Others (like Cash App, PayPal and Venmo), allow credit cards but also charge a fee for the privilege – often about 3%.
See related: How to choose a P2P payment service
The hidden costs of using credit cards to send money
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Choose a credit card to send money and you might also end up paying additional fees to your card issuer. That’s because the combination of some peer-to-peer apps with certain cards are coded as cash advances, rather than purchases.
For many cards, that cash advance code triggers a higher interest rate that kicks in the moment you make the transaction, as well as a separate cash advance fee that’s often $10 or 5% of the transaction – whichever is higher. (Currently, the average interest rate for cash advances is 24.8%, while the average APR for purchases is 16.05%.)
So the combination of peer-to-peer service fees, credit card cash advance fees and that higher interest rate (with no grace period) could make sending a few hundred dollars a bit more costly than you’d planned.
No chargeback rights with credit cards
The real kicker: Unlike other venues, you don’t have chargeback rights when you use credit cards to make peer-to-peer money transfers.
When you present your credit card in an online or brick-and-mortar store, there’s a merchant involved – and the law provides chargeback rights for your protection in case you don’t get what you were promised in the deal. But in a peer-to-peer money transfer, there’s no merchant, so currently the laws don’t give consumers any chargeback rights, says Christina Tetreault, manager of financial policy for Consumer Reports.
“The chargeback right requires a merchant,” says Tetreault. “One of the hoops a consumer has to jump through is to try and work it out with the merchant.”
If you use a peer-to-peer service and send the wrong amount or send the money to the wrong person, most platforms advise that the only way to get it back is to contact the recipient and ask them to return it. And that’s often the same whether you use a credit card, debit card, bank account or funded account on the platform.
“Be doubly sure when you’re sending the money that you’re putting in the correct information,” says John Breyault, vice president of public policy, telecommunications and fraud for the National Consumers League. “It’s still a buyer beware world when it comes to peer-to-peer.”
If you’re sending money and want to use a credit card, it pays to do a little sleuthing first. Check out the peer-to-peer site. Does it allow users to send money with a credit card? If so what, if any, fees does it charge?
On some platforms (PayPal is one), you could see similar fees for using a debit card – while sending from a bank account or funded account on the platform is free.
The good news is that many peer-to-peer platforms clearly disclose it when there’s an extra charge to use a credit card, says Tetreault. With Venmo, for example, you’ll get a pop-up message.
Harder to decipher: Will credit card transactions on the platform be treated as a cash advance? If your preferred platform doesn’t post this information, you might need to contact customer service. (And how quickly and easily you get an answer can tell you a lot, too.)
Ask your card issuer the same question: Are peer-to-peer money transfers on the platform you’ve chosen treated as a cash advance? If they are, what’s the interest rate, and what’s the cash advance fee?
“What I would suggest is to ask that question, via email, of your financial institution,” says Tetreault. “It may be in their FAQs. And you want to save that email. If you have it in writing, if there’s an issue later, you’re better positioned to contest that fee.”
But “the hard truth is you may not be able to find out ahead of time,” she says.
Another solution: Opt to use a credit card issued by a credit union.
“With credit unions, the APR is usually the same” for purchases and cash advances, says John Bratsakis, president and CEO of the Maryland and District of Columbia Credit Union Association.
Likewise, with American Express cards you pay your regular interest rate and no cash advance fees on peer-to-peer transfers, says Elizabeth Crosta, vice president of public affairs for American Express.
And credit cards from U.S. Bank register peer-to-peer money transfers as regular purchases – with no cash advance fees or cash advance APRs, says Rick Rothacker, spokesperson for the bank.
See related: How do credit card APRs work?
What’s your reason for using a credit card?
Take a good look at the reason you’re using a credit card, too. If you want chargeback rights, that’s not an option. If you’re doing it for the rewards, will the value of those points or miles be eaten up by extra fees or a higher interest rate you have to pay to use the card?
And if you’re using a card because you don’t have the cash, that might be a good reason to rethink the idea of sending money in the first place.
That’s a huge red flag, says Bruce McClary, vice president of public relations at the National Foundation for Credit Counseling.
“The need to convert credit into cash is what really gets my attention – because that hints at a lack of savings,” he said. “It’s a reality a lot of people are facing, especially now.”
Cash advances aren’t as expensive or risky as payday loans and car title loans, but they should be among your last resorts. If you’re looking for short-term relief, you could ask your credit card issuer for help, or find out if you qualify for a personal loan. You could also borrow from a family member or trusted friend, but be wary of the potential relationship toll if you can’t pay them back.
Getting cash from credit cards
Fifty-two percent of Americans report that the pandemic has damaged their finances, according to a recent survey by the NFCC. More than a fifth of those had to tap savings for everyday expenses, while 16% increased their credit card spending.
And that’s a sign of financial stress, says McClary. “It means that, in some situations, they have run out of savings.”
There are ways you can use your card to get cash, though.
Cashing in rewards
Some rewards cards from issuers such as Chase, Bank of America and US Bank let you deposit cash-back rewards directly to your bank account.
And Wells Fargo also will let you deposit its Go Far Rewards directly into another Wells Fargo customer’s account, says Sarah DuBois, spokesperson for the bank.
Many credit cards let you convert rewards into retail gift cards. So a pile of points can help a friend or family member buy much-needed groceries or a few holiday presents.
Or simply “buy a gift card for someone,” says Bratsakis.
Retailer-specific gift cards and gift cards issued through local and regional retail associations and malls often come with no fees – meaning every dollar you spend goes toward your gift.
While you can get a cash advance or use convenience checks from your card issuer, both those options often come with fees and higher interest rates. Not a smart money move, especially in the current economy.
While some lenders may offer convenience checks with deferred interest, that’s not the same as “no interest,” says Bratsakis. Also, if you don’t pay the loan in full, will you owe the full interest retroactively?
“That’s where consumers have to be careful,” he says. With a convenience check or even a cash advance, “that’s usually where consumers can get themselves into trouble if they can’t pay it off and get hit with deferred interest.”
See related: What is deferred interest?
When it comes to peer-to-peer payments, cash really is king. You can then put it into a funded account with the money transfer platform or your bank account. And most peer-to-peer platforms let you do this for free.
“The safest way to use these services is to send money person-to-person and be diligent about getting all the details correct so it doesn’t go to the wrong person,” says Tetreault.
Only send to people you trust and know in real life, she says. “And before sending money make sure you understand what, if any, fees you might incur.”