Paying for College 11 Scholarships for Women_780x440

Paying for College: 11 Scholarships for Women

It’s not a secret that attending college can get really pricey really fast. For women students looking for a bit of help in the funding department, there are tons of great grants and scholarships for women available that can help ease the financial burden of pursuing higher education and help lower student loan debt. While there are plenty of college scholarships and grants that women can apply to, the following programs are specifically designed for women applicants.

Women’s Independence Scholarship Program

The Women’s Independence Scholarship Program provides scholarship opportunities to female survivors of intimate partner abuse in order to help them regain their independence and self-sufficiency via higher education and employment.

This organization aims to support women who have been separated from an abusive partner for at least a year. Both full-time and part-time students with financial need may be eligible.

While the average award amount is about $2,000 per school term, there is no set amount for this award.

Women In Need

The Women in Need scholarship is intended for women who are completing their sophomore year of college to earn a Bachelor’s degree in accounting and are also the primary source of support for their family. The award amount is $2,000 per year for two years if renewed.

Financial need is taken into consideration as is evidence that the applicant has a goal of pursuing a degree in accounting in order to prepare for a career as an accounting or finance professional.

Moss Adams Foundation

The Moss Adams Foundation scholarship provides $1,000 graduate scholarships for women who intend to earn a bachelor’s degree in accounting and is available to minority women, women returning to school as current or re-entry juniors or seniors, and women who are pursuing their fifth year requirement through general studies or a graduate program.


Recipients must illustrate commitment to the goal of pursuing a degree in accounting in order to prepare for a career in the field and will need to provide evidence of continued commitment to this goal after they receive the award.

Jeannette Rankin Women’s Scholarship Fund

The Jeannette Rankin Women’s Scholarship Fund has scholarship opportunities and provides support for low-income women who are thirty-five or older so they can build better lives through post-secondary education.

Women who are low-income and pursuing a technical or vocational education, an associate’s degree, or a first bachelor’s degree may qualify for this scholarship.

Society of Women Engineers Scholarship Program

Women admitted to accredited baccalaureate or graduate programs that are preparing them for a career in engineering, engineering technology, or computer science can qualify for the Society of Women Engineers Scholarship Program . In 2018, the program distributed around approximately 238 scholarships that come to more than $830,000 worth of awards.

Applicants have to attend or plan to attend a school with ABET-accredited programs to qualify. Each year, these awards are available for freshmen through graduate students and award amounts from $1,000 to $16,000, some of which are renewable.

Go Girl! Grants

Education grants for women are also an option for some students looking for help paying for higher education. The Go Girl! Grants is one such example. The Girlfriend Factor has supported more than 147 local women in Coachella Valley, CA with over $500,000 in grants to help them pursue four year degrees or occupational certifications.

Applicants must be currently enrolled in school in at least two classes, 25 years of age or older, and live and go to school in Coachella Valley.

P.E.O. International Peace Scholarship Fund

If someone is looking for college scholarships for women that are international students, The Philanthropic Education Organization (P.E.O) hosts the International Peace Scholarship Fund which has been providing scholarships for women from other countries, who are pursuing graduate study in either the United States or Canada, since 1949. This scholarship is based on financial need and the maximum award amount is $12,500.

P.E.O. STAR Scholarship

The Philanthropic Education Organization also offers the P.E.O. STAR Scholarship , which was established in 2009, in order to provide scholarship opportunities to high school senior women who plan to attend an accredited postsecondary educational institution in the United States or Canada in the upcoming academic year.

This scholarship is non-renewable and offers awards of $2,500 that must be used in the academic year that directly follows high school graduation. These funds can be used for expenses like textbooks, tuition, fees, and room and board.

P.E.O. Program for Continuing Education

College grants for women are also available through P.E.O. who offers one-time need based grants to women completing a degree or certification needed to improve or gain skills that lead to employment. Recipients of the P.E.O. Program for Continuing Education must be citizens or legal permanent residents of the United States or Canada and the maximum grant is $3,000.

Soroptimist Live Your Dreams Award

Annually, Soroptimist distributes over $2.8 million in education awards to around 1,700 women from around the world, more than half of which are survivors of domestic violence, trafficking, or sexual assault. Recipients of the Soroptimist Live Your Dreams Award have overcome obstacles such as poverty, teen pregnancy, and drug or alcohol addiction.

The award is intended to help recipients offset costs associated with attaining a higher education. This includes costs like textbooks, childcare, tuition, and transportation.

Patsy Takemoto Mink Education Scholarship for Moms

Moms are in luck! There are specific scholarships for moms available. Mothers can apply for the Patsy Takemoto Mink Education Scholarship for Moms . Scholarship award availability and amounts can vary, but for reference, in 2020 the Patsy Mink Foundation offered five Education Support Awards at amounts of up to $5,000 per recipient in order to assist low-income women with children in pursuing higher education or training.

Managing Student Loan Debt that Scholarships Didn’t Cover

Hopefully there are some appealing gift aid options on this list that can help pay for higher education expenses! But even with the help of scholarships and grants, paying for college in full before graduation day can be challenging. Women with a lot of student loan debt may want to consider their student loan refinancing options to help lighten their load.

When a borrower refinances their student loans, they are taking out a new loan with a new interest rate and/or a new term. Ideally the new interest rate will be lower, making it easier and more affordable to pay off student loan debt.

It’s possible to refinance both federal and private student loans through SoFi student loan refinancing. Refinancing can be a good option for graduates who are struggling to pay down high-interest unsubsidized Direct Loans, Graduate PLUS loans, and/or private loans.

While there are some great benefits associated with refinancing student loans, it is worth noting that when a student refinances a federal loan into a private one, they lose access to certain federal protections such as public service forgiveness and economic hardship programs.

The Takeaway

Scholarships can be supremely helpful for students trying to pay for college. There are a variety of scholarships available specifically for women. In addition to the scholarships listed above, there may be opportunities available for women at a local level or, or at the college or university the student attends. Check the school’s financial aid website.

There are also online databases that can help students find scholarships to apply for.

Sometimes, paying for school entirely with scholarships isn’t possible. Students who borrowed student loans may be interested in refinancing them if they’re able to qualify for a lower interest rate or more competitive terms.

Learn more about potential refinancing rates today.



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.

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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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3 Ways to Use Your Stimulus Check

Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

Since the onset of the COVID-19 pandemic, millions of Americans received stimulus checks from the federal government. As of March 2021, a year into the pandemic, the third round of stimulus checks have been approved with the American Rescue Plan Act.

This package includes one time payments of $1,400 for individuals making $75,000 or less and per person for couples earning $150,000 or less. Additionally, those with dependents would qualify for another $1,400 per child. The IRS sent out “Economic Impact Payments” as checks in the mail or electronically via direct deposit.

The stimulus checks are a measure to provide financial relief to millions of Americans. Many people used the proceeds of the checks to pay for food, utilities, credit card bills and other expenses while others saved the money for future emergencies.

The federal government also provided stimulus checks in 2008. The amount was much lower—individuals received $600 and couples filing jointly received up to $1,200.

These economic impact payments could be used by consumers in several ways, including paying off debt such as credit cards or private student loans, starting an emergency fund, or by investing the money for retirement.

Paying Off Debt

The additional $1,400 can come in handy for people who want to pay off their debt, especially higher interest debt such as credit cards. Consumers could use all or a portion of the stimulus payment to make extra payments on a credit card, loan, or other debt. Additional payments could go towards the principal portion of what is owed, or what the consumer originally borrowed, helping pay down the interest faster; if you want to do this, it’s smart to contact the lender to let them know and ensure those extra payments are applied to the principal balance.

People who still have other credit card debt could look into obtaining a personal loan. Generally, personal loans have lower interest rates than credit card debts. Securing a lower interest rate could potentially help expedite debt repayment, so long as the repayment term is not extended.

For some, student loan debt may be a focus. In March 2020, the CARES Act temporarily paused federal student loan payments, reduced interest rates to 0% on all federal student loans, and temporarily halted collections on federal student loans in default. These protections have now been extended through Aug. 31, 2022. This does not apply to private student loans. The stimulus payment could help a borrower pay down their federal student loans or make extra payments.

Some may consider refinancing their student loans, should they be able to qualify for a lower fixed or variable interest rate, or preferable lending terms. This can make sense for some borrowers, especially those who already hold private student loans, but won’t be right for everyone. Federal loans offer borrower protections that private loans do not, so borrowers with federal student loans may want to consider all of their options carefully. Refinancing federal student loans eliminates them from all federal benefits, including the temporary relief offered by the CARES Act.

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Starting an Emergency Fund

An emergency fund comes in handy to pay rent or a mortgage, auto loan, student loans, or credit cards if you lose your job or your hours are slashed. Finding another full-time or part-time job could take several weeks or months and the additional money could be useful.

Saving for an emergency fund can be difficult after paying your bills each month. The money from the stimulus check could provide a boost to help start a rainy day fund. Having the extra savings can help prevent someone from having to rely on their credit cards and rack up more debt in case there is an emergency, say something like a last minute car repair or a sudden illness.

Having the extra money can also be a relief in the event of a job-loss since it can take several weeks for unemployment funds to arrive.

General recommendations suggest that people save three to six months of expenses in their emergency fund. In some situations, it may make sense to save more than three to six months worth of expenses. For example, freelancers with a fluctuating income may want to have more saved up. If you are not sure how much money you need, look at your monthly bills and determine which ones you can’t ignore if you lost your job for an extended period.

Another way to gauge how much to save in an emergency fund is to factor in things like the deductibles for your car and health insurance in case there is an accident and you need to make repairs to the auto or you get injured.

Starting an emergency fund with the money from your stimulus check is one way to get started. From there, more money can be added to your savings account whenever you get the opportunity. There are many ways to stash more money into your rainy day fund. Clean out your closet and see if there are any items you can sell online such as electronics, clothing, a bike, or musical instrument.

Save the money earned from a part-time job, freelance work, or your annual tax refund. Or review your budget and see if there is anything you can cut such as a streaming service you rarely use.

Those in a comfortable financial position, could transfer some money automatically from your weekly or bi-weekly paycheck into a new savings account. The amount could be small, but even $25 a week adds up over a year.

Investing the Stimulus Check

The extra money from the stimulus check could also be an investment. Depending on individual financial circumstances, the stimulus check could be used to make a contribution to a retirement account like an IRA. Others may be focusing on other goals like a downpayment for a house, a vacation, a wedding, or a home remodel.

Once you open an account and start putting money towards it weekly or even monthly, you may see the balance grow, especially as the investments appreciate in value and interest compounds

The Takeaway

The stimulus checks are intended to provide temporary relief to those struggling due to the unprecedented challenges caused by the coronavirus pandemic. How you use the money will depend on your individual circumstances. Some options include paying down debt, establishing an emergency fund, or investing.

A SoFi checking and savings account could be one place to stash your stimulus check. Getting started is as easy as depositing the stimulus check. From there, SoFi Checking and Savings makes it easy to earn interest and receive cash back on purchases. A SoFi Checking and Savings account allows you to spend, save, and earn money from one place. There are no account fees and your cash balance earns interest. The interest rate and fee structure is subject to change at any time, but SoFi aims to offer competitive interest rates and not charge any account fees.

With SoFi, account holders can create financial vaults within a SoFi Checking and Savings account for different reasons such as an emergency fund or investing account.

Building an emergency fund is a huge accomplishment. Get started with SoFi Checking and Savings.



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Understanding Student Loan Debt and 1099-C_780x440: It isn’t unusual for college students and graduates to be in debt due to education-related borrowing.

Understanding Student Loan Debt and 1099-C

It isn’t unusual for college students and graduates to be in debt due to education-related borrowing. Nearly half of adults under the age of 30 took on some student loan debt in 2019, according to a Federal Reserve report , with the typical amount being between $20,000 and $24,999. As for the overall amount of student loan debt in the United States, the dollar figure is now more than a staggering $1.7 trillion.

Because of this student loan crisis, the idea of having part or all of this student loan debt forgiven would naturally sound attractive to many of these borrowers, allowing them to spend their hard-earned dollars in other ways. This post will share facts and myths about student loan forgiveness, along with information about how forgiven student loan debt can affect a person’s income tax bill and, finally, the role that the 1099-C student loan forgiveness form plays.

Here’s a high-level look at the 1099-C student loan forgiveness form. This income tax document lists how much debt, dollar-wise, was forgiven in that tax year—and the IRS will also receive a copy. Why? Some student loan debt that’s forgiven is also considered to be taxable income.

Recommended: 7 Facts You Didn’t Know About Student Loan Debt

Student Loan Forgiveness

This is a subject where plenty of facts, myths, and half-truths exist. Part of the confusion may have arisen when the Student Loan Forgiveness Act (SLFA) was introduced in Congress in 2012 to help borrowers pay down their debt.

This Act proposed an interest rate cap on student loans, along with a repayment plan that would allow borrowers to have their loan balance forgiven after ten years if the payments they made equaled 10% of their adjusted gross income.

Students who found employment in public service jobs could have their balances forgiven after five years, rather than ten. This Act, though, never made it out of committee.

In May 2020, the House of Representatives passed the HEROES Act (although it wasn’t addressed by the Senate). The Act debated in the House would allow for $10,000 in forgiveness in federal student loans and $10,000 in private student loans per student, reduced from the initial proposal that called for $30,000 in forgiveness—but then the Act was further watered down to only provide this option to students who were struggling financially.

On October 1, 2020, the House passed a modified version of this bill, but it has not yet been addressed by the Senate.

The American Rescue Plan, which passed in March 2021, did include some provisions regarding student loan forgiveness. These provisions state that all forgiven student loans will be forgiven tax-free through December 2025.

Existing Options for Federal Student Loan Forgiveness

There are some options for borrowers to receive forgiveness on federal student loans. These forgiveness options include:

•   Income-Driven Repayment Plans: The U.S. government offers four types of income-driven repayment plans where the remaining balance could be forgiven after 20 to 25 years if requirements are met. Requirements include paying designated amounts on time.
•   Public Service Loan Forgiveness: Under this program, borrowers who work for a qualifying non-profit agency, governmental organization, or public interest employers can get their loans forgiven after ten years. They must make 120 payments based on their income to qualify. The amount forgiven under this plan is not considered taxable income by the IRS.
•   Teacher Loan Forgiveness Program: Qualifying teachers, after five years of teaching full-time, can get up to $17,500 of their federal loans forgiven. To qualify for the full amount, they need to teach math or science at the secondary level, or special education at the elementary or secondary level. Otherwise, they may still qualify for $5,000 in forgiveness.
•   NURSE Corps Loan Repayment Plan: This program can pay up to 85% of eligible borrowers’ unpaid nursing school debt. To qualify, they must work for two years in a critical shortage facility or as a nursing faculty member at an accredited school. After two years, 60% of student loan debt can be forgiven. If qualifying for another year, then an additional 25% of the debt can be forgiven.
•   Indian Health Services’ Loan Repayment Program: This program will repay up to $40,000 for qualifying doctors, nurses, dentists, psychologists, and other healthcare professionals working for two years in facilities that serve American Indian or Alaskan Native communities. Contracts can continue to be renewed beyond the initial two years until the loan debt is fully paid off, and other professionals—such as environmental engineers and social workers—may qualify.
•   The National Health Service Corps: Medical, dental, and mental health professionals who work for two years in underserved areas can qualify for up to $50,000 in loan repayment forgiveness. Typically, it’s the federal loans that qualify.

There is plenty of discussions right now about forgiving student loans in additional ways, so it’s possible that forgiveness programs may be expanded under the new administration. It’s hard to predict right now.

There certainly is support for the idea of forgiving all student loans, with more than half of Americans (54%) agreeing that this debt is a “major problem” in the United States. When looking at registered voters, 58% of them say they’d support a plan that got rid of existing student loan debt—and to also make public colleges and universities, along with trade schools, tuition-free.

When it comes to private student loans, these loans can seldom be forgiven except under the direst of circumstances, such as when the borrower becomes completely disabled or dies.

Recommended: Understanding Private Student Loan Forgiveness Options

1099-C: Cancellation of Debt (Student Loans!)

When a borrower gets student loan debt forgiven, tax consequences should be investigated and, as with any tax-related question, it’s best to consult with an accountant or tax attorney.

Programs that require borrowers to serve in high-need areas or in public service can provide forgiveness of debt that’s tax-free. Current examples of tax-free forgiveness include Public Service Loan Forgiveness, Teacher Loan Forgiveness, and the National Health Service Corps Loan Repayment Program. Forgiveness under income-driven repayment plans is generally taxable.

The tax season after a borrower receives student loan forgiveness, they’ll likely receive a 1099-C form. This will list how much debt was forgiven in Box 2, so check to make sure it matches your records and then verify whether income taxes will be owed on this amount.

Some borrowers who will see tax consequences for forgiven student loan amounts may be pushed into a higher tax bracket. If this occurs, they will need to deal with a double whammy: more taxable income at a higher bracket.

In some cases, this will make it difficult for the borrower to pay the amount of income taxes owed for that year. Some may decide to put the amount on a credit card or take out a personal loan, while others negotiate with the IRS or set up a payment plan with the agency.

The Takeaway

Federal student loans come with benefits not available through private student loans, including the forgiveness programs like those offered by Public Service Loan Forgiveness or income-driven repayment plans. When federal student loans are refinanced, the borrower can’t benefit from the forgiveness programs anymore.

If you’re thinking about refinancing student loans, it may make sense to explore what’s available at SoFi. Check out this information about student loan refinancing while the ongoing relief due to COVID-19 is in effect and what can make sense (short answer: refinancing federal loans might not be the thing to do right now, but it could make sense to explore refinancing private student loans through SoFi).

SoFi offers competitive rates with no fees and, if and when the time is right, you can refinance your federal student loans with your private student loans, something that many financial institutions simply won’t do. Plus, it’s quick, easy, and convenient to apply online.

Find out if you pre-qualify and at what rate in minutes.



IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS, PLEASE BE AWARE THAT THE WHITE HOUSE HAS ANNOUNCED UP TO $20,000 OF STUDENT LOAN FORGIVENESS FOR PELL GRANT RECIPIENTS AND $10,000 FOR QUALIFYING BORROWERS WHOSE STUDENT LOANS ARE FEDERALLY HELD. ADDITIONALLY, THE FEDERAL STUDENT LOAN PAYMENT PAUSE AND INTEREST HOLIDAY HAS BEEN EXTENDED TO DEC. 31, 2022. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE THE AMOUNT OR PORTION OF YOUR FEDERAL STUDENT DEBT THAT YOU REFINANCE WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
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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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Private Student Loan Relief Options

Private student loans can help fill the gap needed for students to pay for their tuition and living expenses, but they do not have the same relief programs that federal student loans provide.

Federal student loans offer more borrower protections after students graduate, especially if they face difficult economic circumstances such as the loss of a job, being furloughed from a position or if their salary is inadequate to pay all their bills. When borrowers take out a federal student loan, they have a few different options to choose from such as forgiveness or deferment programs until their financial circumstances change.

Are There Relief Options for Private Student Loans?

The options for private student loan relief are fewer. Private student loan forgiveness does not exist and no lenders offer this option.

When graduates face hurdles in repaying their private student loans, some lenders provide their own temporary assistance programs. These programs may provide temporary assistance to borrowers and the programs will vary based on the lender.

Read the fine print on temporary relief programs offered by private lenders. Generally, interest will continue to accrue while the loan is in forbearance, which can make the loan more expensive in the long-term. However, if you’re struggling to make repayments, securing forbearance could help provide breathing room to help you get back on track without missing payments.

If you are not sure whether or not the lender offers forbearance or other temporary assistance programs, try to contact them before missing any payments. They may have an option that could help or be willing to work with borrowers who are struggling.

Missing payments can potentially impact a borrower’s credit score. And if the borrower has a co-signer, their credit score may feel an impact as well.

Private Loans and COVID-19 Student Loan Relief Plans

The federal government has extended some relief options to borrowers with federal student loans due to the COVID-19 pandemic. Most of these policies do not apply to borrowers with private student loans.

As of March 2021, some borrowers with private student loans in default qualify to have their student loan payments paused. Borrowers with a defaulted loan made through the Federal Family Education Loan (FFEL) Program, may qualify for the federal protections offered . The FFEL program loans were made by private companies but were backed by the federal government. The program ended in 2010.

Recommended: Navigating Your Student Loans During COVID-19

Repaying Private Student Loans

Since there aren’t any real loan forgiveness options available for borrowers with private student loans, repaying them may become a financial priority. The repayment period for private student loans may vary based on lenders, so review the terms and payment schedule with your lender.

Some private student loans may have a grace period—a period of time after a student graduates where payments are not due. This will depend on the lender, so review your loan terms to find out if your private loan is eligible for a grace period. Interest may accrue during the grace period.

Other Ways to Payoff Private Student Loans

Other strategies to that can help students as they repay their student loans include:

•  Budgeting with Purpose. Factor student loan payments into your budget and prioritize repayments.
•  Enrolling in automatic payments. This can help you avoid missing payments. Some lenders may even offer a rate discount to borrowers who do enroll, so it’s worth asking.
•  Funneling additional income to student loans. Influx in cash thanks to a recent birthday, tax refund, bonus at work? Make an overpayment to the student loan.
•  Consider refinancing. Student loan refinancing can help qualifying borrowers secure a more competitive interest rate or preferable terms. Lowering the interest rate on a student loan could help borrowers save money over the life of the loan.

Recommended: 9 Smart Ways to Pay Off Student Loans

Why Refinancing Could Be Helpful

Refinancing could result in a lower interest rate which could also lower the minimum monthly payment. In some cases, getting a lower monthly payment requires extending the life of the loan, which can ultimately cost more.

Student loan refinancing means a new loan is obtained at a new interest rate and possibly a new term or the number of years you have to pay off the loan. Borrowers can generally choose between fixed or variable interest rates, depending on the options available at the lender they have decided to borrow from. Private lenders will generally rely on information like a borrower’s credit score and employment history to determine how much money a person can borrow, and at what interest rate.

Borrowers who are able to secure a lower interest rate may find that refinancing can help them spend less over the life of the loan. Additionally, a borrower with multiple private student loans might appreciate the opportunity to streamline their monthly payments to a single sum with a single lender.

The Takeaway

Some borrowers may be able to get some private student loan assistance, depending on the programs offered and policies in place with their private lender. In some cases, refinancing may make sense for borrowers who can qualify for a lower interest rate.

SoFi’s private student loans do not charge application or origination fees, offer competitive rates, flexible terms, a simple online application, and human support to answer your questions.

Learn more about refinancing with SoFi.



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.


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 .

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.

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.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.


IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS, PLEASE BE AWARE THAT THE WHITE HOUSE HAS ANNOUNCED UP TO $20,000 OF STUDENT LOAN FORGIVENESS FOR PELL GRANT RECIPIENTS AND $10,000 FOR QUALIFYING BORROWERS WHOSE STUDENT LOANS ARE FEDERALLY HELD. ADDITIONALLY, THE FEDERAL STUDENT LOAN PAYMENT PAUSE AND INTEREST HOLIDAY HAS BEEN EXTENDED TO DEC. 31, 2022. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE THE AMOUNT OR PORTION OF YOUR FEDERAL STUDENT DEBT THAT YOU REFINANCE WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.

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What is a cashback credit card?

What is a Cashback Credit Card?

Some things in life sound too good to be true, and getting cash back for purchases may seem like one of those deals. But an increasing number of credit cards, called cashback cards, offer clients money back when they charge what they buy.

Many people are familiar with the concept of credit card rewards, when lenders give clients a little something back—points, airline miles—as an incentive for using their card.

In the case of cashback cards, that reward is, well, cash.

How Does a Cash Back Credit Card Program Work?

Cashback credit cards reward clients based on their spending, providing a credit that is a small percentage of the total purchase.

If a cashback card provides 1% back, for instance, the cardholder would generally earn 1 cent on every dollar spent, or $1 for every $100 they charge to their card. If, over the course of the year, a person charges $10,000 in purchases to their cashback credit card, they’d earn $100 in cash back for that time period.

Unlike sale items, when an item is discounted at the time of purchase—meaning, of course, the shopper pays a cheaper price—cashback cards work more like a rebate. The customer buys something at the posted rate and gets money back at a later date.

The average American had a credit card balance of $5,315 in 2020, according to Experian. Assuming that full balance is eligible for cash back, it would earn $53.15 with a credit card providing 1% cash back and $106.30 for one giving 2% cash back.

Do All Cashback Credit Cards Work the Same Way?

Yes and no. While all cashback cards typically use the same model—money back based on a percentage of total purchases—the differences are typically in the details.

Things like the rate of cashback earnings, interest rate, the process for redeeming cash back, and so on vary by card and lender. Some lenders may even offer several cashback credit card products with different rates and benefits.

As such, before signing up for a cashback credit card, it’s smart to spend some time researching and comparing cashback cards to find the one that best suits your needs.

What to Look for in a Cashback Card

There are a number of considerations when choosing a cashback credit card that will determine just how profitable the card will be for a specific person.

Because people have different spending habits and financial preferences, the best type of credit card will ultimately depend on the individual. Here are some things to consider.

Rate of Cash Back

Not all cashback credit cards offer the same rate of return, so it’s best to comparison-shop. Though differences in percentages may sound negligible, getting 2% instead of 1% means double the cash back—and those small amounts can add up over time.

Some credit cards also provide different rates of cash back depending on the spending category or how much money the cardholder charges in a year. For example, some credit cards may provide a higher percentage on expenditures such as gas, travel, or groceries and a different rate for other types of purchases.

Tiered cashback cards may provide a higher (or even lower) rate when annual purchases exceed various thresholds.

Some credit cards also offer higher introductory cashback rates.

How a person chooses to redeem cash back may also determine the final payout. A travel rewards card, for example, may provide a higher rate of return for cardholders who redeem the money they earn on flights, and a lesser amount for those who redeem their rewards on statement credits or other purchases.

It can be difficult to tell at a glance how much the cashback percentage rate may actually net an individual, especially when considering categorized and tiered rewards. But when comparison-shopping for a cashback credit card, it is worth crunching some numbers to get an idea.

One way to estimate how much in cashback rewards a card will actually end up earning is to apply the posted cashback rates to previous credit card statements or to the spending allocations within an individual’s annual budget.

Annual Fees

Though some cashback credit cards have no annual fee, others do. It’s a good idea to factor in any annual fee when estimating the cashback rewards based on your spending habits. Calculating the returns on fee vs. no-fee cards can help to assess whether it’s worth shelling out extra.

If a bank charges $99 for a cashback card earning 2%, the bank fees would essentially cancel out the $100 in cash back earned on the first $5,000 in annual spending.

Someone who charged $7,500 annually would net $51 with the 2% cashback card, and $75 with a no-fee 1% cashback card. But if they charged $20,000 annually, the $99/2% cashback credit card would net $301, while the no-fee card would only earn $200 in cash back.

APR

The nearly half of Americans who carry a balance on their credit cards each month will want to pay close attention to a credit card’s annual percentage rate. This is the amount of interest cardholders will have to pay if they do not pay off their credit card balance in full each month.

The average credit card APR was 14.65% in late 2020, according to the Federal Reserve—a rate that can quickly cancel out any cashback benefits.

Recommended: What is a Good APR?

Redemption Terms

A good question to ask a lender before signing up for a cashback credit card is “Where can I get cash back?” The terms of redemption can vary across credit card products.

In some cases, cardholders may see an annual one-time credit for the full amount earned. Other cards allow cardholders to redeem their cash back at any time.

Tips for Getting the Most Out of a Cashback Card

While signing up for—and using—a cashback credit card is the first step to getting money back on everyday purchases, there are some ways to optimize the returns.

Pay Off Your (Whole) Credit Card Bill on Time

With few exceptions, credit card charges are not subject to interest until after the statement payment due date. But after that payment becomes due, extra interest and fees can quickly add up—erasing any cashback benefits.

Optimize Redemptions

When it comes to redeeming cash back, it’s worth seeking the biggest bang for your buck.

If a card offers different rates of cash back depending on how rewards are redeemed, being strategic when cashing out can result in a greater windfall.

Consider Extra Fees

Though a cashback credit card can make it tempting to charge everything you buy, that’s not always the most cost-effective strategy.

Though it’s generally an exception, some merchants impose surcharges for using a credit card or may provide discounts for paying in cash. In such cases, it’s a good idea to crunch the numbers to ensure the extra fees don’t actually cost more than the cashback reward.

The Takeaway

Free money may be hard to come by—but not if you use a cashback credit card. When choosing a card, It’s best to look at the rate of cash back, any annual fee a card may charge, and the APR if you carry a balance.

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1See Rewards Details at SoFi.com/card/rewards.


*See Pricing, Terms & Conditions at SoFi.com/card/terms

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.

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