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If you’re wondering, “do monthly subscriptions build credit?,” the answer is that it depends. You’re most likely going to build credit if your payment activity is reported to the three major credit bureaus — Experian, Equifax, and TransUnion — or if you use certain payment methods like a credit card.

If you’re hoping to build credit with subscriptions, however, there are certain steps that you can take to help ensure that happens.

What Are Monthly Digital Service Subscriptions?

Monthly digital service subscriptions are a cost that you pay each month to access a service, such as online streaming for TV shows, movies, and music. It can also include subscriptions to software, including for photo editing, audiobooks, online classes, and ebooks.

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How Monthly Subscription Services Can Help Build Your Credit

Subscription services can help you build your credit if your payment activity is reported to the credit bureaus. You can ensure this happens by using your credit card to pay your bills or signing up for a service that reports your payment activity to the credit bureaus.

When your payment activity is reported to the credit bureaus, your monthly payments for subscription services will appear on your credit report. This can lead to either a positive or negative effect on your credit. If you miss a payment, your score could be negatively impacted, whereas on-time payments could have a positive effect.

As such, here’s a trick for ensuring that on-time payment consistently happens: setting up automatic payments.

Strategically Using Automatic Payments

Setting up automated bill payments is how you’ll most likely pay for subscription services. To make strides toward building credit, however, there are some ways you can set up your automatic payments more effectively:

•   Automatically pay with your credit card: When signing up for a subscription service, you’ll be asked for a method of payment. The simplest option is to pay using your credit card, and authorize recurring charges. Of course, you can do so using your debit card (depending on the company) or by providing your banking details. But unless you sign up for a credit reporting service, your payment history most likely won’t be reported to the credit bureaus without selecting your credit card as the payment method

•   Automatically pay your credit card from your bank account: To ensure you’re paying your credit card bill on time, consider setting up automatic payments from your bank account. That way, you’ll decrease the likelihood of missing a payment deadline. If the charge is paid on time, you’ll also get the benefit of avoiding interest charges, which is one way to save on streaming services.

If you follow these tips, it’s smart to periodically check the subscription rates to ensure your automatic payment amount matches up with what you’re currently being charged. Also check your bank account to make sure you have enough funds for the payment to go through on time.

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Other Ways to Build Credit

There are other methods to establish credit other than through subscription services. Here are some additional or alternative methods to consider:

•   Secured credit cards: A secured credit card is generally more accessible to those who have no or limited credit history. You’ll need to make a refundable deposit that acts as your credit line — so if you put $500 down, you’d get a $500 credit line. Otherwise, you can use a secured credit card as you would a traditional credit card by making purchases and paying down the balance each month. Depending on the credit card issuer, you may be able to be eligible to upgrade to an unsecured credit card or request one after making consistent on-time payments for a set number of months.

•   Credit builder loans: These types of loans are designed to help consumers build credit. Once you’re approved for a loan, you’ll start to pay it back in installments. But instead of receiving the loan proceeds right away, the funds will be housed in a savings account until you pay back the loan in full.

•   Personal loans: If you need funding right away, such as for a home improvement project, you can consider taking out a more traditional loan, as there are lenders who are willing to work with those who have a limited credit history. Keep in mind that interest rates could be higher compared to someone with more established credit, so make sure you can afford the loan and make on-time payments before taking one out.

•   Secured loans: Like secured credit cards, secured loans require you to put down some sort of collateral. These can include physical assets, such as a car (like auto loans) or cash (some banks offer loans that you secure with your savings account). Interest rates may be more favorable than unsecured loans.

•   Paying rent: Your landlord — especially if it’s a larger property management company — may report your payment activity to the credit bureaus, even if you don’t use your credit card to pay. Otherwise, there are reporting services (much like the ones mentioned above) that will report your payments to the credit bureaus to help you build your credit.

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The Takeaway

Your monthly subscription services could serve as a path toward building credit, as long as your payment activity gets reported to the credit bureaus. You can ensure this happens by either paying your subscription with a credit card or signing up for a service that reports your payments to the credit bureaus. In either case, you’ll need to make sure you’re handling your subscription service payments responsibly in order to help establish your credit.

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

Is it good to put subscriptions on your credit card?

You can put charges for subscriptions on your credit card if you’re looking to build credit. Just make sure you’re exhibiting positive credit behavior by consistently making on-time payments.

What credit card is best for subscriptions?

There is no one credit card that is best for subscriptions. Whether it’s a secured or unsecured credit card, what matters is whether you make consistent, on-time payments. The credit card you choose will also depend on what you find important. For example, if you’re interested in earning travel rewards, then consider picking a credit that allows you to do so.

Does paying multiple times a month increase your credit score?

Making multiple monthly payments toward your credit card bill will reduce the amount of credit you’re using. In other words, you’ll lower your credit utilization — a comparison between your total credit limit and how much credit you’re using — which could be a positive contributing factor in your credit.

Photo credit: iStock/simpson33

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.

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 .

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.

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Many of us struggle to keep up with the demands of our daily lives, which can create stress and anxiety. That’s why some choose a minimalist lifestyle: Fewer possessions make for easier management. Minimalists strive to eliminate anything in their life that does not serve their purpose. This leads to more physical, emotional, and mental space.

There are gradations of minimalism because the mindset change from consumerism to minimalism is a drastic one best done gradually. If that change appeals to you, read on to better understand what a minimalist lifestyle is, its benefits, and how to start on the path to a simpler, more manageable lifestyle.

What Is a Minimalist Lifestyle?

Minimalist living is uncluttered by superfluous items like luxury cars, excessive clothing, and purely decorative furnishings. There can be many reasons someone chooses a minimalist lifestyle; they might want to simplify their life to reduce stress, improve their health, or reduce harm to the environment. They may also want to cut back on expenses and improve their budgeting and finances.

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Surprising Benefits of a Minimalist Lifestyle

When you have less stuff, it follows that you have less to worry about. A minimalist lifestyle allows you to carry less literal and metaphorical baggage around.

Another benefit is that minimalists buy fewer things, which saves money. From a holistic perspective, minimalism reduces consumerism, and that benefits the planet.

How to Live a Minimalist Lifestyle

Living a minimalist lifestyle can seem daunting for some, requiring a mindset shift. Here’s a window into a more minimalist mindset and lifestyle to give you a taste of what it involves.

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Invest in Experiences

Rather than collecting things and possessions, a minimalist lifestyle emphasizes experiences. Minimalists spend, just in a more deliberate way. For example, minimalists may spend on vacations and concerts rather than on cars and jewelry.

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Audit Your Life

Auditing your life involves deciding what is most important and eliminating anything superfluous. Deciding what is most important can be difficult, but some questions to ask yourself are: How am I doing mentally and physically? What’s important to me now that perhaps wasn’t before? The answer to these and similar questions can help you pinpoint your core values and priorities.

A free budget app can help you audit your spending and evaluate how much of it is really necessary.

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Eliminate Needless Expenses

A meaningless expense to one person may be valuable to another. That’s why conducting a life audit is important to help you decide which expenses are not serving your purpose. For example, a person might discover that buying gas is often unnecessary if they can manage without a car most of the time. Or that mid-price brands and gently used items can be just as nice as luxury goods.

Set Limits and Delegate

A minimalist lifestyle is easier to control. Setting limits and delegating is one way to live a minimalist lifestyle because you have less to manage. For example, you might use an accountant to do your taxes, or hire someone to manage your website. You might have fewer screens or electronics or downsize to a smaller home.

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Honor Your Priorities

The goal of auditing your life is to establish priorities to eliminate what doesn’t align with them. Part of the journey to minimalism is learning to appreciate what you have and not constantly desire new things. Perhaps you and your partner decide to live on a single income while one of you cares for the family. You may also earn less and have to economize.

Minimalist Lifestyle Tips

How do you implement a minimalist lifestyle? Because the changes can be profound, try making small changes at first as you gradually adjust to a new mindset.

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1. Declutter Your Environment and Your Mind

A great place to start is to declutter your environment. Start with your home, your workspace, your car. Get rid of things you haven’t used in a while or that you are just hanging onto in case you need them. As the space around you becomes less messy, you might find your thinking becomes more clear.

2. Be a Purposeful Not Prolific Consumer

Minimalists still make purchases, but the emphasis is on quality rather than quantity. An example is choosing to use one credit card that serves many purposes rather than five because each one comes with different rewards. Yes, you may benefit from free miles and cash back, but you will also have to buy more to earn those points and rewards, which is consumerism, the antithesis of financial minimalism.

3. Digitize Movies and Books

Most of us have bookcases full of books that sit and gather dust. It’s fine to keep some treasured items and classic novels, but you can also download e-books or visit your local library. Declutter your home of old DVDs, CDs, and books you don’t need.

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4. Recycle and Reuse

Reusing shopping bags, refilling a water bottle instead of buying bottled water, or taking your own cup to Starbucks are ways to cut back on trash and single-use products. You’ll save money and help the environment.

5. Get Organized

As you declutter, you’ll find ways to be more organized. Find a space for things you want to keep, and use storage bins and organizers. When everything has a place, you’ll waste less time trying to locate things, and you’ll be more motivated to put things back when you’ve used them.

The Takeaway

A minimalist lifestyle is appealing, considering how busy and cluttered our lives can be. However, changing our mindset is difficult, and getting rid of things (both real and symbolic) we’ve held onto for years can be traumatic. Thankfully, you don’t have to embrace full-on minimalism immediately. You can take small steps to simplify your life gradually as you adapt to minimalist life.

Begin by establishing goals and priorities and by envisioning a less complex life. From there, move to decluttering your environment and organizing. You can also reduce your expenses and financial obligations and delegate tasks you don’t need to do yourself. As you progress, you may find that your mind clears, your life slows down, and you learn to appreciate what you have instead of yearning always to have more.

SoFi’s money tracker app simplifies and manages all of your finances in one place and at no cost. Get credit score monitoring, spending breakdowns, financial insights, and more.

Track your money like a champion with SoFi.

FAQ

How do you live a minimalist lifestyle?

Living a minimalist lifestyle requires prioritizing and eliminating things that do not align with your values. The process of elimination will be different for everyone, but it does not have to be quick or painful. Just removing one thing or downloading a budgeting and money tracking app can help you achieve a simple minimalist lifestyle.

What is an example of a minimalist?

An example of a minimalist is someone who lives with very little furniture, or none at all, or someone who moves to a smaller home. A less extreme version of a minimalist might be someone who simplifies things by clearing items from countertops, buys few clothes, or chooses a vegan diet.

What is the 90 rule for minimalism?

The hardest part of achieving a simpler minimalist lifestyle is decluttering. How do you decide what to get rid of? The 90 rule can help. Choose a possession, and ask yourself if you’ve used that item in the past 90 days. If not, then it’s a candidate for elimination from your life because it is not currently serving a useful purpose.

Photo credit: iStock/Pramote Naksomrit

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.

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.

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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Ethereum 2.0 is the new and improved version of the original Ethereum project, while Ethereum Classic is a smaller, less well-known fork from the original Ethereum blockchain, dating back to 2016. The native coin of Ethereum 2.0 is ETH, unchanged from the original Ethereum project. The native coin of Ethereum Classic is ETC.

Ethereum 2.0 features a series of innovations and upgrades that became known as The Merge, when the project shifted from a proof-of-work system to a more efficient proof-of-stake algorithm in September 2022.

Ethereum Classic, meanwhile, still exists, but ETC has a much smaller market cap and lower price compared with ETH.

What Is Ethereum 2.0 (ETH)?

Although Ethereum is the second-largest crypto by market cap, the road to Ethereum 2.0 has been long and complicated.

History of Ethereum 2.0 and Ethereum Classic

It helps to think of Ethereum as evolving in three stages:

•   The original Ethereum project and crypto (ETH) were created by Vitalik Buterin and launched in 2015 as the first programmable blockchain.

•   In 2016, a hacking incident resulted in a hard fork of that original blockchain, which divided the Ethereum project in two. Users loyal to the original blockchain became part of Ethereum Classic — essentially the original Ethereum, untouched — creating a new coin ETC.

   Those who favored the upgrade, which reconfigured the blockchain to address the hack and cyber theft, built a version known simply as Ethereum, which kept ETH as its native coin. Call it Ethereum 1.0.

•   Then in late 2022 the Ethereum 1.0 blockchain completed a major shift from its legacy proof-of-work system, migrating to proof-of-stake. This more efficient blockchain is sometimes called Ethereum 2.0 — but that moniker is fading now that some of the major changes are in place.

So when people talk about Ethereum 2.0, they are referring to the latest upgrade to the far more energy-efficient, proof-of-stake consensus mechanism. But Ethereum 2.0 is really the same big crypto competitor that has been #2 in size and scope to Bitcoin’s #1 for years.

What Is Ethereum Classic (ETC)?

Ethereum Classic was created from a hard fork of the original Ethereum blockchain, and ETC is its native token. The hard fork was an effort to cope with a cyber attack in which $50 million was stolen.

ETH and ETC shared the same blockchain record prior to the hard fork. Since they both stem from the same project, Ethereum Classic has many of the same features as Ethereum 2.0. But owing to the substantial technological differences between the two chains, Ethereum Classic wasn’t able to support the kinds of innovations that have built Ethereum into the DeFi powerhouse it is today.

Ethereum is best known as one of the most successful programmable blockchain platforms, with the capacity to support smart contracts, dApps (decentralized apps), non-fungible tokens (NFTs), and other DeFi projects. For these and other reasons, Ethereum remains a crypto industry leader, pointing to some of the reasons investors may consider crypto.

As of February 7, 2023, ETC was the #23 largest cryptocurrency, with a price of $22 and a market cap of just over $3.1 billion. By comparison, Ethereum (ETH) is the second-largest cryptocurrency with a price of $1,638 and a market cap of about $200 billion. Both tokens can be traded as speculative assets and both are listed on many of the most popular crypto exchanges.

Bitcoin remains the oldest and still the largest cryptocurrency, with a market cap of $442 billion, as of February 7, 2023.

What Is a Smart Contract?

A smart contract is an agreement between two parties written in code. The blockchain will execute the terms of the contract automatically, when certain conditions agreed upon by the two parties are met.

Because blockchain technology is also immutable (a blockchain’s records cannot be changed, at least in theory), smart contracts create many opportunities for businesses to do things faster, more efficiently, and in a way that doesn’t require the time and money costs of third-party oversight.

Smart contracts are a critical part of how crypto works. Many different types of cryptocurrencies can use smart contracts, but Ethereum was the first and remains the most prominent leader in the space.

How Ethereum Classic Works

Ethereum Classic is the original Ethereum, and still adheres to the rules and functions of the original Ethereum blockchain. As such, the upgrades that have been implemented over time, leading to Ethereum’s current incarnation (Ethereum 2.0), are not compatible with Ethereum Classic.

Accordingly, Ethereum Classic retains a proof-of-work consensus mechanism, in which miners can generate additional ETC through crypto mining.

Ethereum Classic also doesn’t adhere to the ERC20 token standard. The primary purpose of ERC20 tokens is to work with smart contracts and define a common list of rules that all tokens on the Ethereum blockchain abide by.

Ethereum Classic History

The history of Ethereum Classic is complicated and technical. A simplified summary of the altcoin might go something like this:

•   Developers created the DAO, or decentralized autonomous organization, on Ethereum with the goal of funding future development of decentralized applications.

•   The DAO had its own tokens that were interchangeable with ETH tokens and executed contracts using proof-of-work.

•   In 2016, after hackers took advantage of a flaw in the DAO smart contract and stole $50 million worth of ETH, the community decided that the network would create a hard fork to solve its security challenges.

•   The new blockchain, created as a result of the fork, would be called Ethereum. Ethereum began a bigger evolution in 2021 and shifted to proof-of-stake consensus algorithm in 2022. The old blockchain is called Ethereum Classic.

Difference Between Ethereum 2.0 and Ethereum Classic

If you’re looking to build a well-balanced crypto portfolio, you probably want to choose one but not both Ethereum and Ethereum Classic.

While the Ethereum 2.0 and Ethereum Classic networks allow software developers to use smart contracts to build applications, one advantage of Ethereum 2.0 is that it has a larger market cap and user base than Ethereum Classic. This may make ETH less volatile overall. Certainly the token has higher liquidity, and is more popular on exchanges.

ETH also has the added use case of being fuel or “gas” for decentralized applications (dApps). Many developers build decentralized finance (DeFi) protocols on top of Ethereum.

To use those kinds of apps, users need ETH tokens. Sometimes ETH is the only token that users can exchange for other tokens necessary for participating in the platform. Other times, dApps require small amounts of ETH to perform certain functions.

For example, Crypto Kitties was one of the first big decentralized applications, or dApps. The game allowed users to buy, sell, and trade virtual cats that could be “bred” with one another, creating new, unique virtual cats. To participate in the game, users needed ETH tokens.

Ethereum 2.0 also has stronger support from something called the Enterprise Ethereum Alliance, which counts many large companies among its members.

Choosing Which Ethereum to Invest in

If you want to invest in one of the two Ethereums — Ethereum 2.0 or Ethereum Classic — the decision will ultimately come down to your personal preferences and goals as an investor. As discussed, the two are similar, but there are some stark differences that may make one more attractive than the other.

For the average crypto investor, though, it may make sense to stick to the larger cryptocurrency, which is Ethereum 2.0. It has more liquidity and a larger market cap, which might make it a more attractive choice. On the other hand, if you’re interested in being able to mine crypto, Ethereum Classic may be more suited to your tastes.

Price of Ethereum Classic vs Ethereum 2.0

In terms of price or value, Ethereum 2.0 (ETH) is more valuable than Ethereum Classic (ETC). As noted above, Ethereum 2.0 tokens were trading for roughly $1,638 each as of Feb. 7, 2023. That is down significantly from its all-time high of more than $4,600 in the fall of 2021.

Ethereum Classic, conversely, trades for around $22. That, too, is far off its all-time high, which was around $120 in the spring of 2021.

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The Future of Ethereum Classic

What is the future of Ethereum Classic? It’s hard to say.

Looking at Ethereum Classic vs. Ethereum 2.0, it’s not hard to see that Ethereum appears to have better prospects for the future. For instance, there’s more trust in the ETH network, it has more backing, and it has a much larger market cap when compared to the Ethereum Classic value. There are also a lot of DeFi platforms and other dApps built on Ethereum 2.0 — more so than on any other smart contract platform.

To make matters worse, the Ethereum Classic network has suffered several 51% attacks. This can happen when attackers gain enough hashing power to control the majority of the network. Then they can alter the blockchain, leading to potential problems like double spent transactions, where users can send the same coins more than once.

The Takeaway

Ethereum Classic is the original version of Ethereum, which itself has undergone several upgrades and is now Ethereum 2.0. The two are similar, and have their roots on the same Ethereum blockchain, but now are two different cryptocurrencies entirely, operating on their own blockchains.

Ethereum Classic still adheres to the original Ethereum’s standards and protocols, including its proof-of-work consensus mechanism. Ethereum 2.0, on the other hand, has adopted new and improved standards, including a proof-of-stake model. It’s also vastly more popular and valuable.

FAQ

Is Ethereum Classic the same as Ethereum?

No, Ethereum Classic is its own project on a separate blockchain network, that adheres to the original Ethereum’s standards and protocols. It’s more accurate to say that Ethereum 2.0 is the “original” Ethereum, as it is the old Ethereum having undergone upgrades and updates.

Which is better: Ethereum 2.0 or Ethereum Classic?

It’s impossible to say which is better, as that’s a subjective call. But Ethereum 2.0 has many advantages over Ethereum Classic, since it’s bigger, more widely used, and more valuable. But prospective miners may give Ethereum Classic the edge.

Is there a future for Ethereum Classic?

Ethereum 2.0 appears to be winning over more investors and market participants. Ethereum Classic is still one of the largest crypto, however, so it’s not time to rule it out.

Photo credit: iStock/MStudioImages

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