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All college students are required to declare a major, but what about a minor? This is a question many students find themselves asking halfway through their college curriculum.

Knowing about what a minor is, what it entails, and if it’s something that can bolster your career can help determine if it’s really right for you.

Keep reading to learn more about what a college minor is, how it differs from a major, and the pros and cons that come with it.

Defining a College Minor

A college minor, sometimes referred to as a “mini major,” is a group of courses you take in a certain discipline. Minors in college can complement your chosen college major or be totally unrelated.

While most colleges don’t require a student to declare a minor, some do. Schools may have a definitive criteria about your choice of minor. For instance, you may not be able to pursue a minor in the same department as your major.

For the most part a college minor is voluntary, and a student may not feel it’s important enough to take on the additional coursework in addition to their main area of study. Instead, they may want to have complete freedom to use those class credits for electives that may not be as labor intensive.

Differences Between a Major and Minor

Your major is the main area of specialty that determines the type of bachelor’s degree you’ll earn. It’s the field of study you’ve chosen based on your professional aspirations. One way to think of it is that your major is your primary job and your minor is more of a side gig.

When you’re finally awarded your college diploma, it will be for your major, not your minor. That’s because a college minor is typically considered optional and not a requirement for your core curriculum. Even if your school is one that does require you to choose a minor, it won’t be reflected on your degree unless your school is one with an exception to that rule. However, it will most likely be included in your college transcript.

Another key distinction between a college major and a minor is the amount of coursework you have to complete and how much it counts toward your final credits. Depending on your school, a major will make up one-third to one-half of the school’s credits needed to graduate, which is typically 120 credits for a four-year program.

In general, a college major will require you to complete at least 10 courses compared to five to seven classes for a minor. A minor typically requires anywhere between 16 and 30 credits.

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Benefits of Pursuing a College Minor

There are many upsides to tacking on a college minor. If you’re wondering whether or not it’s worth pursuing, consider these pros:

Explore Complementary Interests

A college minor related to your major allows you to expand your expertise in that related field. For instance, if you’re a biology major and decide to minor in chemistry, you’re already familiar with the basics of science and look at things from a scientific perspective. There are similar analytical skills you can apply.

But even if your minor is in a different area, there are still ways it can positively impact your major. An example is if you’re majoring in political science, you may want to minor in public speaking, which can be helpful if you have any ambitions to run for elected office.

You may even find your minor is more exciting and decide to change your major to that area of interest, or decide to combine the two disciplines and pursue a double major.

However, before making any big changes, it’s a good idea to talk to your academic advisor. Depending on when you decide to do a change-up, it could add extra time toward getting your degree. This can translate into additional costs and more student debt.

Develop Secondary Skill Sets

Regardless of whether your minor directly corresponds to your major, you’re acquiring and polishing both hard and soft skills. Those more technical hard skills can be directly applied to the type of work your career requires. Soft skills, on the other hand, are more of a social and interpersonal nature. Both are important to employers and offer skills they want their prospective employees to have under their belt.

Enhance Marketability and Job Prospects

Homing in on a subject offers you the opportunity to develop more of an in-depth knowledge and expertise. A minor shows your well-roundedness, flexibility, and the ability to wear other hats. For example, a marketing major who minored in communications can be an asset in the areas of advertising, journalism, and public relations.

A complementary minor can also give you a more solid base and deeper understanding of some issues you may deal with in your occupation. If a nursing major chooses to minor in psychology, it can help them better understand patient behavior.

Overall, a minor shows a level of seriousness and willingness to challenge oneself. These are qualities that can go a long way and put you at an advantage when applying for your first job out of school, graduate school, or even for a college internship.

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Popular College Minor Options

There are certain college minors that attract more students than others. Here are some popular ones:

STEM Minors

STEM, which stands for science, technology, engineering, and math, consists of natural, physical, and life sciences; computers; electronics and other types of tech; all kinds of engineering; mathematics; and areas that rely on the principles of math. Examples of STEM minors include computer science, kinesiology or exercise science, civil engineering, and statistics.

Deciding on a STEM subject for your minor can give you a leg up in the job market. According to the U.S. Bureau of Labor Statistics, job opportunities in the STEM field are expected to grow 7% by 2032, compared to 2% for all occupations.

Business Minors

With a business minor, you can take classes in accounting, marketing, human resources, and e-commerce. Choosing business as a minor allows you to learn the fundamentals of business, which can be extremely valuable and practical out in the real world.

Knowing more about how business is conducted and becoming more savvy about finance benefits you both professionally and personally. Career-wise, it can come in handy if you’re applying for a job that may require a deeper understanding of certain business practices. In your own life, you may even get a better handle on your own financial situation when it comes to managing private student loans and staying on top of how to pay for college.

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Liberal Arts Minors

Liberal arts is a field with a broad range of disciplines, including creative arts, social sciences, humanities, and more. People who decide to minor in liberal arts may choose sub-studies in English, psychology, sociology, anthropology, philosophy, or communication.

For someone with a very demanding major, a liberal arts minor can offer a less taxing curriculum. Instead of being geared toward technical skills, liberal arts classes give students an opportunity to focus on critical thinking, collaboration, creativity, and verbal and written communication skills.

Language and Cultural Minors

Minors specializing in different aspects of cultural heritage and language can expose a student to different world views, beliefs, and practices.

A foreign language minor allows you the ability to become bilingual or multilingual, which is a huge asset in the workforce where there’s an increasing demand for people who speak other languages. You may want to expand on your high school language classes or minor in a completely new one.

A language minor may also be one in linguistics, which is the study of language structure, including phonetics, syntax, semantics, and the history of how language has changed over time. Students may also find there’s an option at their college to minor in American Sign Language.

Cultural studies minors are designed to study all types of cultures, their histories, and perspectives. These can include groups based on class, gender, ethnicity, race, religion, and geographical location. Classes in popular culture, women’s studies, world religions, and African-American or Asian studies are some examples of cultural studies minors.

Choosing a Complementary College Minor

Picking a minor in general adds extra knowledge and allows you to build more expertise in another subject. Minoring in a complementary course of study, however, shows you’re serious about exploring an area that closely aligns with your major.

Regardless of whether your minor directly corresponds to your major, you’ve decided to use a portion of your credits toward another group of required classes, and that indicates a commendable level of focus and commitment.

Potential Drawbacks of a College Minor

There are some cons that can come with declaring a minor. For one, a minor can take up a lot of time, so you’ll want to make sure it’s an area you’re genuinely curious about and have a real interest in. Consider the amount of work you’ll have to do, such as writing papers, studying, and taking exams. These additional classes could end up adding unnecessary stress to your major’s workload.

A minor could also end up costing you more money, especially if you declare a minor late in the game. You may not be able to get all the necessary classes before graduation, which means you may have to extend your education by a semester or more.

The Takeaway

A minor is, in most cases, an optional supplementary course of study that can broaden your knowledge, expand your skill set, and open up more career options after graduation. Having a college minor can also make your undergrad studies a lot more fun, especially if it’s a topic where you have a strong personal interest.

Ways to finance your minor include cash savings, scholarships, grants, and both federal and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

What’s the difference between a minor and concentration?

A minor can be a secondary course of study in any area, while a concentration is a sub-group of structured classes that directly relate to your major. For example, if you’re an English major, your concentration may be in creative writing, made up of poetry, fiction, nonfiction prose, and dramatic writing classes.

Do minors appear on your diploma or transcript?

Minors will appear on your transcript, but the mass majority of colleges and universities don’t include it on your diploma. The standard practice is to list only the student’s major on their bachelor’s degree.

How late in your college career can you add a minor?

Most colleges ask students to choose their major by the end of sophomore year or beginning of their junior year, which can also be an ideal time to choose a minor. You could declare it before you start your senior year, but it’s important to consider the fact you’ll have to cram all of that minor’s classes into one year’s time. This could impact your graduation date if you need to carry your studies over to another semester in order to fulfill your minor’s requirements.

Do minors impact financial aid eligibility?

It depends. Federal financial aid rules mandate only courses required for your major and degree program are eligible. However, classes required for a minor may be eligible for financial aid if they also satisfy major, core, or elective requirements for your degree. Otherwise, financial aid will be reconfigured or removed to reflect eligibility based on qualifying courses.

Photo credit: iStock/Drazen Zigic

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SOISL-Q324-034

You might think that if you close a loan or credit card account it will no longer affect your credit report, but they can actually stay on your credit report for up to 10 years. During this time period, these accounts can help or hurt your credit score, depending on a number of factors.

Here’s what you should know about closing loan and credit card accounts from your credit report.

How Closed Accounts Affect Your Credit

Closed credit accounts and loans can have varying effects on your credit, some positive and some negative, due to the factors that make up your credit rating. Here’s a closer look at three of those that are significant in this situation: your credit history, your credit utilization rate, and your credit mix.

Your Credit History

A closed account on which you made on-time payments will help your credit score by building your credit history. The effect will be less than if it were an open account, but it would be a positive factor nonetheless, since it shows that you can manage credit responsibly.
However, if you made late payments on an account that is now closed, the negative impact may linger in your credit history for seven years and up to 10 years if you file for bankruptcy.

Longevity is a factor on your credit report. Credit scoring systems reward borrowers with a longer history of managing debt and repayment. That means that if you close an account and seven years pass, you’ll lose any benefit of having had that account. It won’t make a significant change, but it is another factor to be aware of.

Your Credit Utilization Rate

Part of your credit rating is based on how much debt or credit you already have. Creditors look at your credit utilization ratio, which is how much credit you have available to you versus how much you actually use. The best case scenario is to not use more than 10% of your accessible credit; otherwise, no more than 30% is a good move.

Two examples:

•   Say you have a $10,000 credit limit on your credit card, you might want to limit your balance to $1,000. That’s 10%.

•   Otherwise, keeping your balance to no more than $3,000 would be 30%, the upper end of what’s considered a good credit utilization ratio.

If you close a loan or a credit card account, that might reduce the amount of credit available to you, which will increase your utilization rate. If you open a credit card or take out a loan, that will increase the amount of credit available to you, thereby decreasing your utilization rate.

Your Credit Mix

Credit scoring systems, such as the FICO® Score and VantageScore® look at the types of loans you have and how you manage them. These systems reward a mix of loan types, such as installment loans (auto loans and mortgages), and revolving accounts such as credit cards. Eliminating a credit card account or other type of loan (such as when it is closed and eventually drops off your report) could limit your credit mix, and that could negatively impact your credit score. Worth noting though: Credit mix counts for 10% of your score vs. 35% for your payment history (meaning, how successfully you make payments on time).

Why Do Closed Accounts Stay on Your Credit Report?

Both closed and open accounts can contribute to your credit rating as they stay on your credit report. That’s because the credit agencies can gain a fuller picture of your risk as a borrower the more information they have.

Monitoring and understanding your credit report (perhaps with a credit score monitoring app; your bank may offer this) is an important part of your financial wellness.

When to Remove a Closed Account from Your Credit Report

If possible, remove a closed account from your credit report if it has a poor payment history. Also, remove any accounts that are found to be fraudulent. If an account shows that you made regular, on-time payments, don’t remove it because it will be helping your score.

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How to Remove a Closed Account from Your Credit Report

A few factors affect your credit score; one of which is your credit history. As noted above, your credit history shows the loans and credit cards you have obtained in the past seven to 10 years, along with your repayment patterns. Even closed accounts are part of that narrative for the stated period of time.

That said, there may be a way to remove a closed account from your credit report, which you might want to do if it is having a negative effect. Here are some options.

1. File a Dispute if There Is an Error on Your Credit Report

It might be that you notice a fraudulent account when you check your credit report. If that is the case, you can remove the record by submitting a dispute in writing with each of the three credit bureaus (Equifax®, Experian®, and TransUnion®). You must include supporting documents. The bureaus will investigate your complaint and update your credit score if there is fraudulent data.

2. Contact the Creditor and Pursue a Goodwill Deletion

Another way to remove a closed account from your credit report is to directly contact the creditor that’s involved and ask them to remove the account from your credit report. (This is sometimes known as a goodwill letter or goodwill request.) The creditor will have to contact the credit bureau(s) directly to do so. You will be more successful if you have a positive credit history and relationship with the creditor.

3. Wait It Out

In time, a closed account will no longer be reflected on your credit report, but it might take seven to 10 years. The good news is that the accounts that stay the longest are usually ones that you closed in good standing, and these will positively influence your credit score.

Recommended: Why Did My Credit Score Drop After a Dispute?

What Does “Account Closed” Mean on a Credit Report?

“Account closed” on your credit report indicates an account that is no longer active. There can be several reasons for an account being closed.

•   Perhaps it was an installment loan that you paid off.

•   You might have opened a credit card account and then decided to close it (maybe you weren’t using it much).

•   The creditor closed it, which could be positive (you paid off a loan) or negative (you weren’t paying your bills in a timely manner).

These are typical scenarios that lead to seeing “account closed” on your credit report.

How Long Will a Paid-off Account Take to Show up on Your Report?

Lenders usually update the credit report agencies with closed account information at the end of a billing cycle. Thus, it could take one or two months before a paid-off account is reflected on your credit report.

How Long Does a Closed Account Stay on My Credit Report?

As noted above, how long closed accounts stay on your credit report can vary.

•  Accounts closed in good standing (paid on time and in full) can remain on your credit report for up to 10 years.

•  Accounts closed due to nonpayment (these include collection accounts, some bankruptcies, and debt settlement) remain on your credit reports for seven years from the first missed payment or from being turned over to collections. The exception is Chapter 7 bankruptcy, which usually stays on your credit report for 10 years.

Practice Good Credit Habits Going Forward

Here’s advice that can help you manage existing credit card and loan accounts well.

•  First, it’s always wise to take control of your budget. Whether you do that with the 50/30/20 budget rule or a financial tracking app, keeping on top of your income, your spending, and your saving can be a money-smart move.

•  Check your credit score regularly to make sure there is no fraudulent activity. You might aim for an annual review.

•  Extend your credit history as much as you can with accounts that are and have been in good standing. This means it’s probably in your best interest to occasionally use a credit card account and keep it in good shape vs. closing it because you don’t use it often. This can reduce your available credit and possibly lower your debt utilization ratio.

  One good idea can be to use a credit card for predictable expenses, such as streaming services, and set up automatic payments. That way, you will be paying a set amount each month and building a positive credit history.

These moves can help you keep your financial profile in good shape.

The Takeaway

Closed credit accounts will stay with you for a long time, seven to 10 years usually. Keep accounts that you have owned for a long time open and in good standing whenever possible. If you have fraudulent accounts on your credit history or ones that were not managed well, you might take steps to have them removed and possibly build your credit profile.
Keeping tabs on your credit score and your budget can be easy with the right tools, like those SoFi offers.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

Can I get closed accounts removed from my credit report?

You can remove a closed account from your credit report if you suspect it is fraudulent by filing a dispute with the three credit bureaus. You can also contact a creditor directly and ask them to remove a closed account. However, they are under no obligation to comply with this kind of request for a “goodwill” deletion. Alternatively, you can wait for seven to 10 years, after which closed accounts will fall off your credit history.

What is the 609 loophole?

The 609 loophole is a tactic that some people think will remove bad debt history from their credit reports. A section of the Fair Credit Reporting Act states that you can write a letter to gain documentation on what you may believe is an incorrect entry in your credit history. The 609 letter theory is that if a credit bureau cannot produce a piece of information, such as the original signed copy of your credit application, they have to remove the disputed item because it’s unverifiable. However, these steps are not the same as a dispute. Also, if you have legitimate debt, even without this documentation, the debt may remain. In other words, this process is unlikely to provide a shortcut to building your credit.

How long before a debt is uncollectible?

At which point a debt can no longer be collectible varies based on the type of debt and the state you live in. It is often between three and six years, but it could be as long as 20 years. After the statute of limitations that applies, a debt collector can no longer sue you for repayment, though some might still try to collect.

Photo Credit: iStock/dusanpetkovic
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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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SORL-Q324-024

In international banking, transactions can involve IBAN codes, which indicate a specific foreign bank account number, and SWIFT codes, which identify a particular financial institution. Depending on the countries and banks involved, sometimes only one of these codes is needed to make an international transfer, and sometimes both. Knowing the difference between these codes — and how and when each is used — can be valuable when transferring funds globally.

What Is an IBAN?

An IBAN is an International Bank Account Number. This number, up to 34 digits, pinpoints a person’s individual bank account in participating countries.

Because countries operate with different currencies, regulations, and financial institutions, IBANs help standardize cross-border transactions. IBANs can play an important role in getting funds transferred into the correct checking account or savings account.

Each unique alphanumeric IBAN code contains:

•   A two-letter country code

•   Two “check digits” for error detection

•   Up to 30 alphanumeric characters that signify an individual’s bank account (a bank identifier and a basic bank account number)

Roughly 80 countries currently use IBAN numbers when conducting money transfers. The largest collection of these countries is in Europe, but many North African, South American, Caribbean, and Middle Eastern countries participate as well.

IBANs are not used in America. Instead an ABA routing number and a bank account number identify checking and savings accounts. But if you’re wiring money internationally to a country that uses IBANs, you’ll need to know that number.

(Worth noting: Canada, Australia, and New Zealand also don’t use IBANs but instead use their own systems for identifying accounts.)

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Understanding SWIFT Codes

SWIFT stands for Society of Worldwide Interbank Financial Telecommunication, a messaging network through which financial institutions can communicate securely across borders. This is a popular payment network for international wire transfers, but it’s not the only network.

A SWIFT code is a globally accepted standard BIC (Bank Identifier Number) for SWIFT transfers. Essentially, a SWIFT code refers to a specific bank or financial institution during international transfers. In that way, SWIFT codes serve a similar purpose internationally as routing numbers do domestically in the United States.

SWIFT codes are much shorter than IBANs, with between eight and 11 characters. Each contains:

•   The first four digits are a bank code

•   The next two are a country code

•   The next two signify the bank’s main office location

•   If applicable, the final three digits refer to a specific branch code (these are used by large banks with multiple branches in various countries and regions)

Unlike the case with IBANs, U.S. bank customers do typically have SWIFT codes affiliated with their accounts. (Some smaller banks and credit unions may not use SWIFT codes, however.) Your bank’s code will play a role if you are sending money overseas or if you are receiving funds from abroad.

It’s also important to know that there are several countries that are currently not permitted to participate in the SWIFT payment system, such as North Korea, Belarus, and Russia.

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Key Differences Between IBAN and SWIFT

The major differences between IBAN vs. SWIFT codes come down to where each is used, what information each contains, and what kinds of transactions each is used in. Here are important points to know:

Geographic Coverage

IBANs are most popular for identifying bank account numbers in the European Union and nearby countries (such as Israel and Turkey), but other countries in South America and the Caribbean have adopted these codes as well. The United States, again, does not use IBANs; instead, bank account numbers and routing numbers are used domestically.

The SWIFT system has a greater global reach. It is the most popular network for identifying banks when managing international transfers in many countries in North America, the European Union, Africa, Central and South America, as well as China and India, and more. That said, not every nation uses SWIFT codes, either because they choose not to participate or are prohibited (as noted above) from doing so.

Information Contained

SWIFT vs. IBAN codes indicate two separate pieces of banking information, as mentioned above:

•   SWIFT codes, eight to 11 characters in length, can identify a specific bank or financial institution during international money transfers.

•   IBAN codes, up to 34 characters, can identify specific bank accounts during cross-border money transfers.

Usage in Transactions

Which codes you’ll need to make an international transfer will be determined by the code systems used by the countries and financial institutions sending and receiving the money. Sometimes, you’ll only need one of these codes, but often you’ll need a SWIFT and an IBAN code for an international bank wire. (They are separate identifiers, so it’s not a matter of, say, converting IBAN to SWIFT. Each conveys important financial information.)

That said, here are some scenarios you might encounter:

•   If you’re sending money to someone in a country that doesn’t use IBAN, you’ll have to use another way to identify the bank and their checking account.

•   If someone in a foreign country wants to transfer funds to you, they will not have an IBAN code associated with your account and will need to use your bank account and routing number and your bank’s SWIFT code, if available.

•   If you are trying to move money internationally to a country where you can’t use a SWIFT code, you’ll need to use another network to send money electronically. You might explore whether fintech options are available.

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Combining IBAN and SWIFT

As mentioned, for many international transfers, you’ll need to know both the IBAN and SWIFT code involved. It really depends on which country you’re wiring money to. In some instances, you may only need one of the numbers. However, in this case, you may need to satisfy other requirements a country has established for transferring funds, as they might use other identifiers.

The Takeaway

SWIFT vs. IBAN codes are used to standardize international transfers and help ensure secure payments. SWIFT information identifies a particular bank in a country, such as in the U.S. or elsewhere, while IBAN characters point to a specific bank account in countries using the IBAN system. When sending funds from the U.S. to someone in a foreign country, you will likely need both of these codes to complete the transfer. U.S. banks typically have SWIFT codes that are used when they are receiving cross-border funds to be directed to a client’s account.

While SoFi doesn’t currently do international transfers, we do provide competitive interest rates and a host of tools to help you manage your money better.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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

Can a bank have multiple SWIFT codes?

It’s possible for a bank to have multiple SWIFT codes. Bigger banks with multiple branches across the globe may use three extra digits at the end of their code to identify a specific branch.

Is IBAN used in the United States?

The United States does not use IBAN codes. Instead, the U.S. uses a bank account number and routing number to identify financial institutions and the specific accounts within them. However, if you live in the U.S. and are wiring money internationally, you may need to know the recipient’s IBAN code, depending on what country they live in.

How do I find my IBAN or SWIFT code?

If you have a bank account in the U.S., you will not have an IBAN code affiliated with it. If you have a bank account outside the U.S. in a country that uses IBANs, you can typically find an IBAN code on your bank statement or on the bank’s website. If you are wiring money to someone who lives in a country using the IBAN system, you can ask for their IBAN code when discussing the details of the wire transfer.

You should also be able to find a bank’s SWIFT code on its website or on a bank statement (if you are a client). If you’re unable to locate it, you might do a quick online search or call the bank’s customer service number.

What happens if I use the wrong code for a transfer?

If you use the wrong code for a wire transfer and it cannot be completed, the money may be returned to your account. In some cases, you may be charged a fee for this. However, there is the slight possibility that the transfer could be completed and the money sent to the wrong account. That is why, if you know you used the wrong code, it’s important to contact your financial ASAP and see if you can request a cancellation or reversal of the transfer.

Photo credit: iStock/Lyndon Stratford

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Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible 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 (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, 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 Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBNK-Q324-075

Wire transfers can be a convenient and safe way to send and receive money electronically, both domestically and internationally. While wire transfers serve a number of purposes, they can be especially good if you need a secure way to send cash to someone overseas or if you need to transfer a large sum, such as the down payment on a house.

Wire Transfers Explained

A wire transfer, as the name suggests, is a method of transferring money from one bank account to another electronically. Wire transfers allow you to move large sums of money both within the United States and internationally. Wire transfers are convenient, but they are not instantaneous:

•   Domestic wire transfers are typically completed within one business day.

•   International wire transfers usually take a few business days; in some cases, up to five days.

Wire transfers allow funds to flow between individuals and/or businesses, and they may be facilitated by banks or a nonbank money transfer service, such as Western Union or Wise.

It’s worth noting, however, that wire transfers can be a more expensive way to move money out of or into a bank account. Depending on whether they are domestic or international and the bank or service you use, the charge could be anywhere from $0 to $50. Another point to know: Wire transfers typically can’t be canceled, so it’s vital to double-check all details carefully when making one.

How Wire Transfers Differ From Other Payment Methods

Wire transfers aren’t the only way to send money. Other options include:

•   ACH transfers, which electronically move funds from one bank to another

•   Peer-to-peer (P2P) payment services, such as PayPal, Venmo, and Cash App

•   Traditional cash or check payments

•   Money orders and cashier’s checks

Here are some considerations regarding how wire transfers compare to the alternatives above:

•   Speed: Wire transfers are generally faster than writing a check, but P2P payments may be speedier, particularly if you pay a fee for instant transfers.

•   Convenience: While many wire transfers can be done online, you may be required to visit a bank branch or retail location in person in some cases. ACH transfers and P2P payments, however, can be done from a smartphone or computer, wherever you may be.

•   Fees: Senders often pay fees for wire transfers, while recipients may or may not need to pay a fee. Money orders and cashier’s checks also typically come with fees for the sender, and P2P payment apps usually charge for instant transfers.

•   Amounts: Wire transfers typically allow you to send the largest sum of money (upwards of $100,000), which makes them popular in real estate transactions. P2P payment apps usually have daily and weekly limits, and money orders tend to max out around $5,000.

Recommended: How to Send Money to Someone Without a Bank Account

How Do Wire Transfers Work?

The process for completing a wire transfer is usually pretty straightforward:

•   The sender visits a financial institution or a wire transfer service location or initiates the transaction online.

•   They provide information about themself and the recipient.

•   To initiate or complete the transfer, the sender may also need to pay a fee.

•   The bank or service provider will communicate with the recipient’s institution to verify the transaction. The funds will then be deposited into the recipient’s account, where the recipient can access the money.

•   In some cases, the recipient may need to pay a fee as well.

Domestic vs. International Wire Transfers

Domestic wire transfers refer to electronic funds transfers between two financial institutions in the United States. These generally take a single business day to complete and are more affordable, with the sender often paying between $15 and $30 and the recipient paying between $0 and $15.

International wire transfers are more complex, given different countries’ regulations and currencies. Expect the fees to be higher for international wire transfers, often between $35 and $50 for the sender and $0 and $30 for the recipient. In addition, prepare for these to take a few days (even up to five) to process.

Information Needed for a Wire Transfer

To complete an outgoing wire transfer (that is, to send money to someone else via wire), you’ll need to supply some information, including:

•   The recipient’s full name and contact information (such as their address and phone number)

•   The recipient’s bank account and routing numbers (or, for international transfers, SWIFT/BIC and IBAN numbers).

As the sender, you’ll also need to provide:

•   Your name and contact information (often along with a government-issued ID or driver’s license)

•   The funds for the transfer (either physical money or your bank account information)

•   Your name and phone number

•   Any fees to cover the wire transfer service.

Recommended: ACH vs. Wire Transfers: Which Should You Use?

Advantages and Disadvantages of Wire Transfers

Wire transfers have both pros and cons to consider vs. other payment methods. The table below breaks down some of the benefits and drawbacks of using a wire transfer:

Recommended: Pros & Cons of Online and Mobile Banking

Types of Wire Transfer Services

There are two main types of wire transfer services: bank and nonbank.

Bank Wire Transfers

A traditional bank wire transfer requires that both the sender and the recipient have a bank account. The sender will need to know the recipient’s bank account information to transfer money from their own bank account to the recipient. You typically either visit a local bank branch to initiate the wire transfer or use your bank’s online platform. Some banks and credit unions may even waive fees (or offer lower fees) to members.

After initiating the wire transfer, the sender’s and the recipient’s financial institutions will communicate through an electronic system, such as SWIFT, to securely complete the transfer.

Nonbank Wire Transfer Services

You don’t have to work directly with a bank to wire money. You can also use a nonbank transfer service, such as Western Union. To complete the transfer, you may visit a service location in person, fill out a form, and physically provide the money to the wire transfer service provider. Another option that’s often available is to complete the process online, drawing funds from your bank account. The funds can then be made available for pickup in person or be sent to the recipient’s checking account or to a mobile wallet on their phone.

SWIFT and IBAN in International Transfers

International wire transfers require a little more information than domestic transfers. In addition to providing your and the recipient’s basic information (such as name and account details), you’ll typically need to know the recipient’s SWIFT and IBAN codes:

•   The SWIFT (Society for Worldwide Interbank Financial Telecommunication) code identifies the recipient’s bank. In this way, it acts like a routing number, but they are not the same. You may also see this referred to as a BIC (Bank Identifier Number).

•   The IBAN (International Bank Account Number) code identifies the recipient’s account at their bank.

The U.S. and Canada do not use IBANs. For instance, someone wiring money from another country to the U.S. would instead need to know the recipient’s bank account number and routing number. Australia and New Zealand also use different codes.

Wire Transfer Fees and Costs

Wire transfer fees vary depending on the financial institution or nonbank wire transfer service you use, but they typically range anywhere between $0 and $50. Senders almost always must pay a wire transfer fee, though some banks and credit unions don’t charge fees to send, at least domestically. Recipients sometimes have to pay a fee as well, particularly for international wire transfers.

Typical wire transfer fees are as follows:

•   Outgoing domestic wire transfers: $0 to $30

•   Incoming domestic wire transfers: $0 to $15

•   Outgoing international wire transfers: $35 to $50

•   Incoming international wire transfers: $0 to $30

The Takeaway

Wire transfers can be an effective way to electronically transfer money between individuals and/or businesses, both domestically and internationally. While you’ll often pay a fee to initiate a wire transfer (and sometimes to receive one), this payment method has several advantages, such as its speed and the ability to send large sums of money.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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

How long does a wire transfer take?

Domestic wire transfers typically process within 24 hours; if you time it right, the transfer may even complete in the same day. International wire transfers take a little longer, usually between one and five business days, depending on the country to which you’re wiring money.

Are wire transfers safe?

Wire transfers are typically considered to be a safe way to send money, as long as you know the recipient and have their correct information. However, many fraudsters use wire transfers in a number of common bank scams. To avoid this risk, never wire money to a person you don’t know, and educate yourself on common fraud tactics.

Can I cancel a wire transfer?

You cannot cancel a wire transfer once you have initiated it. Thus, you should always make sure all the information is correct before initiating a wire transfer.

Photo credit: iStock/izusek

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible 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 (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, 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 Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBNK-Q324-074

A credit card statement balance reflects your transactions (and the amount owed) during a billing cycle, while your current balance reveals your real-time activity and how much you may owe at a given moment.

When you buy with credit, it’s like taking out a short-term loan to make a purchase. If you’re putting charges on your credit card throughout the month, the value of that loan — your “current balance” — fluctuates. When your billing cycle ends and the amount due is tallied, that equals your statement balance.

Learn more about how these two numbers can differ, along with a few tips for paying down your credit cards.

Statement Balance vs Current Balance

Each credit card issuer may have a slightly different method of presenting and even calculating the numbers on your monthly statement, whether you get a hard copy or check it online or in your card’s app. Still, you will likely see one number called the statement balance and another called the current balance.

•   The statement balance means all transactions during a designated period, called a billing cycle. If a billing cycle covers one month and starts on the 15th of each month, this statement balance will include all of the activity on an account between, say, January 15 and February 15, in addition to any previously unpaid balances. Until the close of the next billing cycle, the statement balance will remain unchanged.

•   ‘Your current balance means the running total of all transactions on your account. It changes every time you swipe your card to pick up Chinese takeout or return a T-shirt that didn’t fit right.

To understand the interplay between the statement balance vs. the current balance, consider this example:

•   ‘On February 15, the statement balance is $1,000, meaning that the total charges between January 15 and February 15 add up to $1,000.

•   ‘Two days later, you make a $50 charge to the card. Your current balance will reflect $1,050 while the statement balance remains the same.

In this case, the current balance is higher than the statement balance. The reverse can also be true, and the current balance can potentially reflect a smaller number than the statement balance.

Recommended: Personal Loan vs Credit Cards

What to Know About Paying Off Your Credit Card

As each billing cycle closes, you will be provided with a statement balance. You will also likely be provided with a due date. At the time you make a payment, you may decide to pay off the statement balance, the current balance, the minimum payment, or some other amount of your choosing.

Paying the Statement Balance

If you regularly pay your statement balance in full, by its due date, you likely won’t be subject to any interest charges. Most credit card companies charge interest only on any amount of the statement balance that is not paid off in full.

The period between your statement date and the due date is called the grace period. During this period, you may not accumulate interest on any balances. It’s worth mentioning that not every credit card has a grace period. It’s also possible to lose a grace period by missing payments or making them late. If you have any questions about whether your card has a grace period, contact your credit card company.

Paying the Current Balance

If you’re using your credit card regularly, it is possible that you will use your card during the grace period. This will increase your current balance. At the time you make your payment, you will likely have the option to pay the full current balance.

If you have a grace period, paying the current balance is not necessary in order to avoid interest payments. But paying your current balance in full by the due date can have other benefits. For example, this move could improve your credit utilization ratio, which is factored into credit scores.

Paying the Minimum Monthly Payment

Next, you can pay just the minimum monthly payment. Generally, this is the lowest possible amount that you can pay each month while remaining in good standing with your credit card company — it is also the most expensive. Typically, the minimum payment will be an amount that covers the interest accrued during the billing cycle and some of the principal balance.

Making only the minimum payments is a slow and expensive way to pay down credit card debt. To understand how much you’re paying in interest, you can use a credit card interest calculator. Although minimum monthly payments are not a fast way to get rid of credit card debt, making them is important. Otherwise, you risk being dinged with late fees.

Missing or making a payment late can also have a negative impact on your credit score.So, if the minimum payment is all you can swing right now, it’s okay. Just try to avoid additional charges on your card.

Making a Payment of Your Choice

Your last option is to make payments that are larger than the minimum monthly payment but are not equal to the statement balance or the current balance. That’s okay, too. You’ll potentially be charged interest on remaining balances, but you’re likely getting closer to paying them off. Keep working on getting those balances lowered.

Recommended: Credit Card Closing Date vs Due Date

Your Credit Utilization Ratio

The balance you currently carry on your credit card can impact your credit utilization ratio. Credit utilization measures how much of your available credit you’re using at any given time.

This figure is one of a handful of measures that are used to determine your credit score — and it has a big impact. Credit utilization can make up 30% of your overall score, according to FICO® Score.

Not every credit card reports account balances to the consumer credit bureaus in the same way or on the same day. Also, the reported number is not necessarily the statement balance. It could be the current balance on your card, pulled at any time throughout the billing cycle. Again, it may be worth checking with your credit card issuer to find out more. If your issuer reports current balances instead of statement balances, asking them which day of the month they report on could be helpful.

Sometimes, the lower your credit card utilization is, the better your credit score. While you may feel in more control to know which day of the month that your credit balance is reported to the credit bureaus, it may be an even better move for your general financial health to practice maintaining low credit utilization all or most of the time.

If you are worried about your credit utilization rate being too high during any point throughout the month, you can make an additional payment. You don’t have to wait until your billing cycle due date to reduce the current balance on your card.

According to Experian®, one of the credit reporting agencies, keeping your current balance below 30% of your total credit limit is ideal. For example, if you have two credit cards, each with a $5,000 limit, you have a total credit limit of $10,000. To keep your utilization below 30%, you’ll want to maintain a combined balance of less than $3,000.

Some financial experts recommend that keeping one’s credit utilization closer to 10% or less is an even better move.

Recommended: Personal Loan Calculator

3 Tips for Managing Your Credit Card Balance

If you’re struggling to juggle multiple credit cards and make all of your payments, here are some tips that may help.

1. Organizing Your Debt

A great first step to getting a handle on your debt is to organize it. Try listing each source of debt, along with the monthly payments, interest rates, and due dates. It may be helpful to keep this list readily available and updated.

Another option is to use software that aggregates all of your finances, such as your credit card balances and payments, bank balances, and other monthly bills. Your bank may offer financial insights tools as well, which can be a great place to start with this endeavor.

When it comes to managing your credit card debt, keep in mind that staying on top of your due dates and making all of your minimum payments on time is one of the best ways to stay on track.

You can also ask your credit card providers to change your due dates so that they’re all due on the same day. Pick something easy to remember, such as the first or 15th of the month.

2. Making All Minimum Payments, But Picking One Card to Focus On

While you’re making at least the minimum payments on all your cards, pick one to focus on first. There are two versions of this debt repayment plan:

•   ‘With the debt avalanche method, you attack the card with the highest interest rate first.

•   ‘With the debt snowball method, you go after the card with the lowest balance.

The former strategy makes the most sense from a mathematical standpoint, but the latter may give you a better psychological boost.

If and when you can, apply extra payments to the card’s balance that you’re hoping to eliminate. Once you’ve paid off one card, you can move to the next. Ultimately, you’re trying to get to a place where you’re paying off your balance in full each month.

3. Cutting Up Your Cards

Whether you do this literally or not, a moratorium on your credit card spending can be a great strategy. If you are consistently running a balance that you cannot pay off in full, you may want to consider ways to avoid adding on more debt.

A word of warning: Don’t be tempted to cancel all your cards. This can negatively affect your credit score. However, if you feel you really have too many credit cards to manage — say, more than three or four — cancel the newest credit card first. This will ensure your credit history length is unaffected.

In addition to these steps, there are other options for dealing with credit card debt, such as debt consolidation, which can involve taking out a personal loan (typically, at a lower rate than your credit card interest rate), working with a certified credit counselor, and/or negotiating with your creditors to see if you can pay less than your full balance.

The Takeaway

Your credit card statement balance is the sum of all your charges and refunds during a billing cycle (usually a month), plus any previous remaining balance. It changes monthly with each statement. Your current balance is updated almost immediately every time you make a purchase. It is the sum of all charges to date during a billing cycle, any previous remaining balance, and any charges during the grace period. Whenever you can, pay off the full statement balance to avoid interest charges.

Trying to pay off credit card debt? Taking out a personal loan can consolidate all of your credit card balances.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Should I pay my statement balance or current balance?</h3>

It can be wise to always aim to pay off your statement balance every month by the due date to avoid pricey interest charges. While not necessary, paying off the current balance can help lower your credit utilization ratio, which can in turn help build your credit score.

Why do I have a statement balance when I already paid?

Your statement balance reflects all the charges you have made, any interest and fees, and credits that occurred during a single billing cycle. Once that statement balance has been captured, it likely won’t be updated until the next billing cycle. Your credit card’s balance may well change, however, during this period as you use your card.

What happens if you don’t pay the full statement balance?

If you don’t pay your total statement balance before the end of what’s known as your grace period (the days between the end of your billing cycle and your payment’s due date), both your current balance and any new purchases that you make will start to accrue interest right away.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q324-041