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Setting up your first credit card is a major money milestone: When you get one, you join the more than three out of four Americans with plastic in their pocket. A credit card can allow you to buy goods and services pretty much whenever, wherever you like. You’re starting on an important credit-building journey as well.

As you comparison-shop and fill out an application or two, it’s valuable to understand the ins and outs of setting up a credit card. This can help you select the right card for your needs and use it responsibly. So read on to learn the full story on:

•   The basics on credit cards

•   What you need to get one

•   How to apply

•   The smart way to purchase with plastic once you’ve been approved.

What is a Credit Card?

A credit card is a physical card (typically a plastic one, rectangular in shape) that allows you to use your credit card account. By physically presenting the card to a vendor or keying in its details online, you can use your credit card to make purchases, donate funds, and withdraw cash up to your credit card limits. Some details:

•   The average credit limit in the U.S. now is almost $30,000, but the amount you’ll be given will vary based on such factors as payment and account histories, how much debt you are carrying, and your income.

•   A higher credit limit isn’t necessarily better (you’ll learn more about why below) as it can allow you to rack up more debt than might be financially healthy for you. Also, note that if you are new to credit, your limit may start low and rise as you show you can responsibly pay it back on time.

•   A credit card is a revolving form of a short-term loan. You then make payments to the credit card issuer. There are various types of credit cards (including all kinds of points to be earned and other rewards) to consider.

•   Depending on your particular situation and what kind of purchase you are trying to fund, there’s also the personal loan vs. credit card difference to ponder.

As you mull over your options, let’s be clear: Credit cards aren’t giving you this purchase power for free.

•   You may pay an annual fee and other credit card fees, and you are charged a typically high rate of interest on the balance you carry on your card.

•   The latest figures say that offers of new credit card accounts have an average interest rate of more than 20% at the start of 2024. In addition, if you miss a payment’s due date, you will probably be assessed late fees as well.

•   The latest Fed intel shows that Americans carry more than $1 trillion in credit card debt. That means a lot of people may have considerable debt. Paying careful attention to keeping your credit card account and your personal debt in good shape is an important responsibility.

Why You Might Need a Credit Card

Let’s look on the bright side of why so many of us have and reply upon credit cards.

•   They definitely make our lives easier. If you’d like to make purchases or pay bills online, then a credit card can be ideal.

•   It’s a convenient way to make in-person transactions without needing to carry around cash.

•   If cash is lost or stolen, it may be gone forever. With a credit card, though, you can report yours as lost or stolen and the issuer can cancel your old account and provide you with a new number and card.

•   When you’re short of cash, a credit card can help you to make necessary purchases. Say your washer/dryer breaks and you’d need about six months to save up for a new one. A credit card lets you get the appliance right now (and clean your laundry) while paying over time. Or maybe you get hit with a major car repair or dental bill. A credit card gives you the power to pay upfront and then gradually whittle that balance down.

•   Another reason you probably need a credit card: Many lodging facilities and car rental companies, as just two examples, may ask for a credit card number to hold your reservation.

Basic Requirements to Get a Credit Card

Credit card issuers may differ somewhat in the specifics of their requirements to get a card. In general, though, the financial institutions look for good credit scores and the financial ability to make credit card payments. Here are some pointers as you get set to apply:

•   Before you apply for a credit card, you can get copies of your credit reports from the three major credit bureaus for free at AnnualCreditReport.com. If there are any errors, dispute the data, and provide correct information, sending it to each of the credit bureaus that list incorrect details. The better your credit reports look, the higher your scores should be. This makes you a better candidate for loans and lines of credit.

•   A credit card issuer will also use financial criteria to help ensure that you’re able to make the payments. This can include your income and employment stability. In fact, the CARD Act of 2009 requires credit card issuers to consider a consumer’s ability to make required payments — at least the monthly minimum based on the outstanding balance.

•   Other requirements include being at least age 18 and having a Social Security number.

Recommended: How Many Credit Cards Should I Have?

How to Apply For a Credit Card

Next up: how to open a credit card. It basically requires filling out an application and then submitting the application for approval.

You can apply for your credit card in multiple ways:

•   in person at a financial institution

•   by mail

•   by phone

•   online.

After checking your credit scores, you may want to compare offers (including interest rates and APRs). As we’ve noted, interest rates can be high, so do research; there are plenty of online tools and sites that allow you to scan various offers.

Some cards may be no-interest credit cards during a promotional period. Benefits can be obvious (not paying interest) but also check the length of the promotional period, what happens when it ends, and what fees may be involved.

Then apply for the card of choice that you believe you can qualify to receive. Many people opt to apply for a credit card online. You fill in basic information about yourself, and agree to a “hard inquiry” credit check (which may briefly lower your score when it shows up that you are applying for credit). Typically, there is no application fee involved to seek out a credit card.

How to Use a Credit Card Once You Have It

Once you’re approved and receive your card, it’s important to use a credit card responsibly. Strategies for doing that include the following:

•   Don’t make too many impulse buys. ”Too many,” of course, will depend upon your budget and how much your impulse purchases cost. But the truth is, when you are not pulling out cash to pay for an item, it may feel almost like it didn’t happen. Using a debit card in some situations can counteract this.

•   Use the appropriate credit card. If you have more than one card, consider which one is best to use; for example, will you earn rewards on a certain card?

•   Take advantage of perks. If your card comes with a reward or cash-back program, take advantage of the benefits.

•   Sign up for automatic payments or for payment due-date reminders. That way, you can make payments on time, which helps with credit scores. If you fall behind, this can lower your credit scores and make it more challenging to get good interest rates going forward.

•   Check your monthly statements for errors. This is how you can catch identity theft and other credit card fraud. Let the issuer know ASAP when you spot something that’s not right — and report a lost or stolen card as soon as possible.

After you make purchases on your card, you’ll receive monthly statements, typically with a minimum payment (perhaps 1% to 4% of the balance or a fixed amount) and the outstanding balance. Credit card companies usually give you a grace period in which you can pay off the balance in full to avoid owing interest.

Consider these two caveats:

•   A common mistake new credit card holders make is thinking that the minimum payment due is the “right” amount to pay and somehow improves their credit. Wrong! The minimum payment is just what it says: the minimum to avoid certain fees. It is actually preferable to keep your balance low or non-existent (meaning pay the entire amount owed each month). What’s best for your credit score and financial health is often using only 10% or less of the credit limit on your card.

•   If your credit card allows you to take cash advances, know that interest rates are often higher than what you’d pay on purchases, plus there may be cash advance fees. If you take the money from an ATM or a bank, there will likely be additional fees. Also, it’s standard that interest accrues from the date of withdrawal with no grace period. In other words, this can be a very costly way to get your hands on some cash.

Recommended: Understanding Purchase Interest Charges on Credit Cards

The Takeaway

Getting a credit card is a major rite of passage as well as a big responsibility. As you’ve learned, it can be simple to apply and get approved for a card, but staying on top of your debt can take some attention and effort. Given how many Americans have at times unwieldy credit card debt and how high the rates are, use credit carefully, and you’ll enjoy its convenience and credit-building powers for years to come.

Whether you’re looking to build credit, apply for a new credit card, or save money with the cards you have, it’s important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What are the benefits of having a credit card?

You can use credit cards to make purchases in person and online, and then make payments over time (although interest will accrue if you don’t pay the balance in full each month). Also, many offer rewards, among other benefits.

What are the requirements for opening up a credit card?

Requirements vary, but typically issuers want to see a good credit score and the financial ability to make payments on the card. Additional requirements:The applicant must be 18 years old with a valid Social Security number.

How should you use your credit card?

There are a wide range of ways to responsibly use your credit card. In fact, one of its key benefits is its flexibility. So, as long as you follow the credit card rules and manage the balance responsibility, how you use it is really up to you.

Photo credit: iStock/Alesmunt

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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SOCC0124001

You probably like your home to be clean, but when it comes down to breaking out the mop and bucket, the vacuum cleaner, the wood polish, sponges, and bleach, do you really have the time or inclination to dive in?

If you feel like groaning just reading about tidying up, it could be worthwhile to hire a cleaning person or service.

There are many factors to consider when thinking about hiring out this task, and that’s where this guide will come in handy. Read on to learn:

•   What’s the difference between a cleaning person and a cleaning service?

•   How much does hiring a cleaning person or service cost?

•   What are the pros and cons of hiring a cleaning person vs. a cleaning service?

•   What are the alternatives to hiring a cleaning person or cleaning service for your home?

What Does a Cleaning Person or Service Do?

A cleaning person or service takes care of basic tasks such as dusting, vacuuming, sweeping, mopping, disinfecting the toilets, cleaning the sinks and bathtub/shower, and taking out the garbage.

There are typically add-on services available: laundry, changing the sheets, and doing the dishes for starters. Some of these could be included in the cost depending on the cleaning person or service.

“But, I can (or should) do all that myself!” you may be thinking. In which case, you are likely wondering: Is hiring a cleaning person worth it?

If a spic-and-span home is high on your checklist for maintaining a house, a little research can help determine if a cleaning person or service is right for you. Read on for more detail which can assist you as you make your decision.

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How Much Does a House Cleaner Cost?

The cost for hiring a cleaning person (or independent contractor) will depend on where you live, the size of your home, and how often they will come, but individual cleaners typically charge between $50 and $100 an hour.

Going with an individual generally costs less than hiring a cleaning service. However, they may not offer as many guarantees as a large company.

How Much Do Cleaning Services Cost?

Full-service cleaning companies can charge between $175 and $300 per visit. You can typically get a customized quote based on the size of your home and services you want before you hire a cleaning service. Some companies may have a minimum fee per visit. Generally the more frequently a service comes, the lower the cost per cleaning.

You can also hire a service for specialized, one-time cleaning services, such as after an event or before moving out or moving into a home.

Things to Consider When Hiring a Cleaning Person or Service

When deciding if hiring a house cleaner or cleaning service is worth it, you’ll benefit from addressing a few questions about your monetary situation, schedule, and level of desired cleanliness.

Your Budget

The first step in determining if you can afford a cleaning person or service is to set up a basic budget if you don’t already have one up and running.

If you’re wondering how to make a budget, consider using the 50/30/20 rule. This means putting 50% of the household income toward necessities or musts (which typically includes housing, utilities, food, and debt); 30% towards wants (like dining out and entertainment); and 20% on saving (including retirement) and debt payments beyond the minimum.

Once you see how much cash you have coming in and going out, you’ll be better able to assess if you can afford to pay for cleaning from that 30% that covers “wants.”

Recommended: What is the 50/30/20 Budget?

How Valuable Is Your Time?

A good way to decide whether hiring a house cleaner is worth it is to remember this saying: Time is money. If paying a professional $50 an hour frees you up to make $65 an hour while working, the cost might be worth it, since you’ll come out ahead financially.

Schedules (How Often Are You Home?)

If you work long hours at an office or other workplace, outsourcing your house cleaning will allow you to enjoy your time at home without having to clean. And if the cleaning person or team comes while you’re at work, you won’t have to worry about staying out of their way.

However, if you are someone who works from home, or you or your spouse are a stay-at-home parent, a cleaning person or service can potentially be disruptive.

How Often You Need Your House Cleaned

Frequency of cleaning will matter. While a service may charge less per cleaning if they come weekly vs biweekly or monthly, you’ll still likely save money by having your home cleaned less frequently.

Worth noting: Do you sometimes list your house for renters? If you rent out on Airbnb, you’ll be asked to adhere to Airbnb’s cleaning protocol standards. A cleaning crew is helpful for a quick turnaround between renters.

Cleaning Requirements

The price of a house cleaner or cleaning service can go up depending on what is required of them:

•   Level of mess. Do you entertain frequently or have small children? It may take longer to clean up the aftermath. Or maybe you haven’t done a deep-clean in ages. That too may make cleaning take longer.

•   Area of mess. Does the whole house always have to be cleaned? You can save money by only having the common areas and bathrooms tidied up.

•   Pets. Vacuuming dog and cat hair can add many minutes to a cleaner’s timesheet.

•   Are you a neat freak? A deep-clean or super detailed job will cost more than basic dusting, vacuuming, and mopping.

How Good You Are At Cleaning

If you are a disciplined and effective cleaner who loves getting your place spotless, there may be no need to hire someone. That said, there might be times you get too busy to clean or want some help tidying up before the holidays or a houseguest’s arrival.

If you’re the kind of person who ignores dust bunnies or the sight of a broom stresses you out, perhaps you should outsource household tasks and enjoy some time elsewhere.

Cleaning Services vs Individual Cleaners: What’s the Difference?

An individual cleaning person typically costs less than a cleaning service. A cleaning person often works alone, while a cleaning service can be a crew of two, three, or more who clean simultaneously.

An independent cleaner generally keeps 100% of the earnings, while a portion of the money for a cleaning crew goes to the service provider.

There are other key differences between individual cleaners and cleaning services:

Pros of Hiring a House Cleaning Person

Here are some of the perks that can make a cleaning person worth it:

•   Lower costs. An independent contractor can be less expensive than a cleaning service. Fewer workers can mean cheaper rates.

•   Price flexibility. You may be able to negotiate cleaning add-ons more easily (and affordably) with an individual.

•   Familiarity. The same person comes to your home every time. This can provide a sense of comfort and trust for you and your family.

•   Personal recommendations. You can get referrals from someone you trust — a friend or a neighbor.

Recommended: 15 Creative Ways to Save Money

Pros of Hiring a Cleaning Service

If you’re considering getting help tidying up around the house, a cleaning service can be worth it. They come with several benefits:

•   Vetted employees. Full-service cleaning companies typically check their employees’ backgrounds, so you don’t have to.

•   Set standards. Many companies train their employees to uphold a certain level of cleaning criteria.

•   Faster service. Since cleaning services are composed of crews, a team of workers can get the job done faster than an individual house cleaner.

•   Customer service. If a job isn’t up to snuff, professional companies will deal with any complaints you may have.

Cons of Hiring a House Cleaning Person

•   You’ll do the vetting. The responsibility of getting references and background checks on the cleaning candidate will fall to you.

•   Longer cleaning time. Since a house cleaner usually works solo, they might not be as fast as a cleaning service with multiple workers.

•   Unpleasant boss duties. If your cleaning person is not meeting your expectations, it will be up to you to address the problem and, possibly, terminate the arrangement.

•   Inflexible schedule. If the contractor has a lot of clients, there could be fewer timeslot options available.

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Cons of Hiring a Cleaning Service

•   Higher prices. A cleaning service generally costs more than an independent maid.

•   Lack of familiarity. The company could send different people every time.

•   Add-ons can be costly. Since the company sets the prices, you could spend a lot for a deep-clean of the fridge. A cleaning person, on the other hand, might not charge extra if they can get the job done within their hourly time frame.

Alternatives to House Cleaners or Cleaning Services

House cleaners and cleaning services are generally the route people take when hiring help, but there are a few other options:

•   Gig-based workers. Apps and online services such as Taskrabbit and Fiverr feature a variety of folks willing to do odd jobs, including house cleaning. Whether they pursue this full-time or as a side hustle, you may well find affordable options.

•   College students. If you live near a campus, check the online or physical job boards. Students are generally eager to make extra dough.

•   Your kids. Shelling out for an allowance can be a lot cheaper than a cleaning service.

Tips for Saving Money on Cleaning Services

There are a few things you can do to potentially reduce the cost of a cleaning person or service:

•   Shop around. It’s a good idea to interview more than one house cleaner or get estimates from multiple cleaning services.

•   Make the terms clear. You’ll want to clarify exactly what tasks need to be done, so you won’t get charged for any unexpected add-ons.

•   Consider a trial run. It can be a good idea to try out a house cleaner or cleaning service for a month or so before committing to a long-term agreement.

•   Inquire about fees. It’s a good idea to ask about any potential extra fees so you don’t hit with any surprises. Some cleaning services may tack on a processing fee if you pay with a credit card vs. direct deposit.

•   Look for promotional deals. Cleaning services will occasionally run specials. They may also offer package deals and referral bonuses.

•   Tidy up before they come. Keeping your house orderly in between appointments allows the hired cleaner to perform more efficiently.

Recommended: How to Set and Reach Savings Goals

The Takeaway

If your messy home is stressing you out, a cleaning person or service can take some of the weight off your shoulders. As long as you can justify the extra expense, hiring a professional can make your home look great and improve your mood, plus leave you with more free time to enjoy your favorite pursuits.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Are individual house cleaners better than cleaning services?

Both are good options if you need help cleaning your house. Typically, a cleaning person can be cheaper and is someone you see regularly and can build a relationship with. A cleaning service, on the other hand, may be able to get the job done faster and may have more professional training and customer service.

Is it safe to hire a cleaning person or service?

To feel secure, it’s a good idea to get recommendations and references (and check them) for an individual cleaning person. Cleaning service companies generally vet their employees for you.

Should you hire a house cleaner if your house is not very dirty?

Whether to hire a cleaning person or not depends on how clean you want to keep your home, and how much time you are willing to personally spend on it. Even if you’re a regular duster, a house cleaner can help with larger tasks like cleaning the fridge and oven, heavy-duty vacuuming, and/or window washing.

Photo credit: iStock/Tatiana

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SoFi members with direct deposit activity can earn 4.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.20% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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