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As nice as a spa day or yoga class is, sometimes the best form of self-care doesn’t cost anything at all. It’s financial self care, and practicing it may help you manage your money.

Financial self-care involves taking steps to avoid financial stress and meet financial goals. Given that 73% of Americans say money is their number-one stressor in life, practicing financial self-care can be a very good thing.

But what exactly does financial self-care mean and how do you do it? Read on to find out.

What Is Financial Self-Care?

Financial self-care is a form of self-care that focuses on financial wellness. Essentially, instead of more traditional self-care activities (like getting massages or enjoying dinners out), you learn the best way to manage your finances and improve your financial situation. This may not sound fun, but worrying about debt, paying the bills, and falling short of savings goals can all lead to a lot of stress that can be draining both physically and mentally. Self-care and money can go hand in hand.

Here’s another perk: Once you get your financial life under control, you’ll have more money to put towards the more exciting areas of self-care. Whether that means finally splurging on that cleaning service or a new puppy is up to you.

Tips for Practicing Financial Self-Care

Self-care and money can combine in the pursuit of financial self-care. Here are some strategies to help incorporate this form of self-care into daily life.

Creating Realistic Financial Goals

To make strides in the area of financial self-care, it’s important to set reasonable goals. That way, you can make progress and feel a positive boost when you finally do reach a goal. Here’s an example: Paying off your student debt in a single year would likely be hard even on a high salary. Instead, having a goal of paying off your highest-interest debt (perhaps a credit card balance) in a year may be more obtainable. Look at your income versus your monthly necessary expenses (the “musts” in your life), and see if you can begin funneling some of the funds left over after bill-paying towards your debt.

Tracking Your Expenses Daily

Impulse spending can feel good in the moment, but it can do a lot of harm. You can be more mindful about your spending by reviewing your personal finances daily, focusing on where your cash was spent. You may not realize just how much money flows away from you on a typical day. Expense tracking will reveal that. On days that you don’t spend much or anything at all, give yourself a big pat on the back. You’ve just taken care of yourself financially.

Checking Your Banking Accounts Frequently

Good cash management is an important part of hitting your financial goals. Alongside tracking your daily spending, it can be helpful to check bank account balances daily or at least a couple of times a week. You’ll see where you stand financially and won’t be caught unaware by a low balance. This process will also give you a deeper look at how any automatic bill payments are impacting your cash flow.

After all, most of us don’t see the money we earn or spend in cold hard cash, so it can feel less tangible. Your paycheck may be directly deposited into your checking account, for example. When you know exactly where you stand financially, it can empower you and help better inform your purchasing decisions.

Making Any Needed Changes to Budgets

After keeping an eye on spending habits and account balances, it’s a good idea to review your monthly budget goals and see how you’re doing. Perhaps you put a reminder in your calendar to do a quick check-in on the last day of every month and see how things look. Maybe eating lunch out on weekdays has made it hard to stick to your food budget for the month. Perhaps having too many subscription services left no wiggle room in the entertainment section of the budget.

The end of the month is the perfect time to reevaluate spending habits, to see where you can cut back on spending, and to figure out how to increase savings.

Focusing On Getting Rid of Debt

Debt is likely part of your life, but it can also cause a lot of worry. Thanks to interest charges, debt can mount and be hard to pay off. So when you have some extra money, sure, you might spend it on a new outfit or a weekend getaway and lift your spirits that way. Or you could pay down your debt instead.

By prioritizing debt, you’d be a step closer to eliminating some money stress from your life. Getting rid of debt can be a key aspect of financial self-care and can boost your peace of mind.

Improving Your Mindset on Money

Self-care has just as much to do with our mental health as our physical health. Feeling negative about money can really drag a person down. That’s why it can be helpful to focus on what you have instead of what you don’t have.

If you are feeling as if you can’t compete with other people’s lifestyles, it may be that your comparison framework is skewed. It may be beneficial to take a break from social media (or unfollow certain luxury accounts), stop watching reality TV, or skip hanging out with that friend who earns and spends big.

Recognizing what your money can do for you rather than feeling deprived is an important step. It can be a very empowering mindset to adopt.

Improving Financial Literacy

Money can be intimidating in part because most of us lack a basic financial education. While you may not have learned about money management in school, you can teach yourself the financial basics and beyond. Knowledge is power, after all.

From learning about how credit scores work to the investing basics, take some time to read up on the financial topics that seem confusing. Also look into apps that help you with budgeting, saving, and tracking your spending. These tools can be part of financial self-care, helping to boost your financial literacy and wellness.

Visualizing Retirement and Investing in It

Financial self-care means taking care of today’s and tomorrow’s needs. Retirement can seem like a distant concept, so try picturing your future self at retirement age and how you’d want to live then. That way, you may feel more motivated to save even though retirement is far away. Look at your budget again to see if there is room to improve your retirement savings. Even saving an extra 1% a month can make a major impact.

Respecting Money

Money is a tool and a very valuable one at that. Embracing financial self-care means recognizing that money isn’t just about buying things. That may be the easy and fun part, but saving and investing it is what really makes the most of your cash. Educating yourself on saving and investing or seeking professional advice may help you harness the full power of the money you make. Money is a force to be reckoned with; respecting its importance could help you achieve your financial and lifestyle goals.

Why Financial Self-Care Is Important

Financial self-care is equally important, if not more so, than more traditional forms of self-care like heading to the spa or taking a personal day off of work. When you prioritize financial self-care, you can work to reduce money stress and move closer to your short- and long-term goals.

Banking With SoFi

Financial self-care can be a way to help reduce money stress and make the most of what you earn. Being smart about your cash and building your savings can unlock the good things in life today and in the future. Try practicing some financial self-care ideas, and see if you don’t feel more in control of your money and less stressed about it.

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

Why is financial self-care important?

Financial self-care can help reduce the financial stress in your life. Specifically, prioritizing financial self-care may make it easier to reach financial goals like paying down debt or saving for retirement.

How do you take care of yourself and your money?

Budgeting, focusing on debt repayment, and setting clear savings goals are all good ways to take care of yourself and your money. Not having to worry about too much debt or overdue bills are other potential benefits of financial self-care.

How do I respect my money?

Respecting money involves not wasting it and instead looking for ways to make the most of it. Being mindful about purchases, sticking to savings goals, and not taking on high-interest debt are all ways someone can respect their money.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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.

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.

3.30% APY
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.

SOBK-Q224-1939955-V1

Gap years are less popular in the U.S. than in many other countries, but still, data shows that 3% of students take a gap year between high school and college. The idea of taking a break before, during, or after college is likely one that many students can relate to.

Obtaining an education involves a lot of hard work. From long days in the classroom to late-night study sessions, the rigors of academia can take their toll. And college can carry a hefty price tag. It’s understandable that someone might want to take a gap year before they start college or after they finish college to regroup before they begin working.

There are a lot of benefits associated with taking a gap year, but getting ready for a year off requires quite a lot of financial planning to make this choice sustainable.

What Is a Gap Year?

Before diving into how much to save in your bank account for a gap year, it’s helpful to understand exactly what a gap year is. Essentially, a gap year involves taking a year off from school or work to travel, do an internship, take on a temporary job, volunteer, develop a skill, or do a combination of those activities. Some students design their own program; others sign up with an organization that, say, leads them on travel or volunteer projects.

More often than not, people take a gap year between when they graduate high school and start college, but it is possible to take a gap year during college or after graduation but before starting a job or going to graduate school.

A gap year can give someone the time they need to discover what they want their next move to be, to rest, to learn about an area of interest, or to simply get out of their comfort zone.

What Are the Benefits of Taking a Gap Year?

Some parents may look down on the idea of a gap year, fearing that their child won’t get “back on track” with their studies or post-grad life. But there are many benefits associated with taking a gap year.

•   Time to rest and recharge. After many years of academic pressure, some students need a year off to recover from burnout before they start their next big endeavor.

•   Room for discovery. Students who aren’t sure what path they want to take next may find that taking a gap year gives them the opportunity to discover or deepen their interests and formulate next steps.

•   Can explore passions. If a person knows they’re interested in a certain industry or job role, they can spend some time interning, pursuing a fellowship, or researching that career path before they pursue a degree toward that job.

•   Develops independence. A gap year can provide the opportunities young adults need to become more self-sufficient. That could mean traveling solo or taking on a job in a new town, not to mention getting better with money.

Is a Gap Year Beneficial Financially?

If you’re contemplating taking a gap year, it’s natural to wonder how much to save to make it a reality. You may also be curious if a gap year could be a boost or a bust for your finances. In truth, a gap year can be beneficial financially and in other cases it can be financially damaging — it just depends on how the person chooses to spend that year. For instance, if you are working at a local business while living at home, you might open a high-yield savings account and really plump it up with your earnings. If, on the other hand, you go on a gap-year guided tour of another continent, that could cost $10,000, $20,000, or more.

There is some concern that gap years can hurt someone’s overall lifetime earnings. By pushing off entering the working world with a college degree in hand by a year, they can lose a year’s earnings as well as a year’s progress towards a higher paying job.

That being said, someone may spend their gap year interning, working as a fellow, or finding other ways to earn income or boost their resume. They may find their efforts propel them forward financially or at least help them break even. On the other hand, if a person spends the year traveling and relaxing, their finances might take a major hit if they don’t plan and budget appropriately.

Typical Expenses to Prepare for During a Gap Year

Parents may not be able to (or eager to) fund a child’s gap year, so a student can benefit from preparing to pay some or all of their expenses. Saving in advance or working part-time during the gap year can help make it a reality. (Planning for a gap year can actually be a great way to get your finances in order and learn how to budget.)

Here are some of the expenses to consider:

•   Rent and utilities or other housing (say, youth hostels if you are traveling)

•   Transportation

•   Travel costs

•   Food

•   Entertainment (movies, concerts)

•   Clothing

•   Personal-care products

•   Health insurance

•   Medical costs

•   Car insurance

•   Cell phone/data plan; internet access

•   Student loan payments, if applicable

•   Credit card debt payments

•   Gym membership/fitness costs

Financial Tips to Save for a Gap Year

The very act of planning and saving for a gap year can be a great exercise in money management for college students; it will definitely give you a new perspective on saving and spending.

Budgeting While Planning a Gap Year

Budgeting for a gap year takes quite a bit of forethought and planning regarding your personal finances. It’s a good idea to plan for a gap year a full 365 days in advance to make it easier to build up a savings fund. It can be helpful to put your cash into either a savings account, money market account, or CD to gain interest and help build your funds.

You might want to determine how much you need to save over the next year, divide that amount by 12, and then add that amount into your budget so you can set the money aside each month. This can be a great time to familiarize yourself with different budgeting techniques (like the envelope system or the 50/30/20 budget rule) and see which one suits you best.

Getting a Job or Internship

Getting a part-time job or a paid internship while in school can make it easier to save for a gap year. Your school may have an online board where you can scan for opportunities. You might also consider a side-hustle, whether that means selling photographs you took while hiking or doing a weekend shift at a local coffee shop.

Cutting Unnecessary Expenses

As mentioned, it’s a good idea to budget for a gap year. Now it’s time to up the ante. You can take a cold, hard look at your budget to see where you can cut your spending (hello, subscription services and those pricey daily smoothies). The money you save can be put towards your gap year fund.

Selling Items You No Longer Use

From clothes to workout equipment to electronics, most of us have things we simply no longer use. If you’re trying to fund a gap year, you can cut the clutter and make some extra cash by selling this stuff. You might offer items up online (eBay and the like) or organize a yard or stoop sale.

Reduce Credit Card Spending

Credit card debt has a way of snowballing and getting very expensive. With credit card interest rates at 24.62% as of mid June 2024, owing money on your plastic can be an expensive thing. Aim to only use your credit card for purchases you can afford to pay off right away. That way, you can use any cash-back and travel-point bonuses to help fund your gap year without carrying a balance. It’s wise to focus on managing your money in a way that doesn’t require relying on a credit card.

Consolidate Credit Card Debt

The above strategy may not be possible if you’ve already racked up a good deal of credit card debt and are feeling as if you are in financial trouble. (Yes, this can happen quickly, even if you’re a student who’s only had a card for a short time.) You may find that consolidating multiple sources of credit card debt can help you get a lower interest rate (which could save money) and streamline your debt, making it easier to pay off.

For instance, you might find a balance-transfer card that offers breathing room thanks to an introductory, interest-free period. Or perhaps you would do better with a credit card consolidation loan that lets you pay off the debt and then pay back the funds at a lower interest rate. If you need guidance, consider talking with a debt counselor at the non-profit National Foundation for Credit Counseling (NFCC).

Cook at Home

Eating out will almost always cost more than eating at home. To save extra cash, get comfortable in the kitchen and build your meal-prep repertoire. In addition, you might start making your own lunch; those popular salad bars can be a budget-breaker if you go often.

Recycle, Reuse, Rewear

One way to save big is to be planet-friendly. Did you know the average American spends about $100 per year on bottled water? Buy yourself an insulated reusable water bottle in a color or design you love, and use it.

Also consider that each of us typically spends almost $2,000 on clothes per year. Commit to wearing what you own or perhaps shopping second-hand (there are plenty of cool things to be found at thrift and vintage stores) to whittle that expense way down.

Think Carefully About Big Purchases

If you’re planning for a gap year, you may want to slow your roll when it comes to making big purchases. Upgrading to the latest mobile phone or buying a premium mattress as you enter adult life may seem enticing right now. However, if you delay gratification, you may be closer to making your gap year dreams a reality. Better money management can sometimes mean knowing how to say “no” to things you think you have to have.

The Takeaway

A gap year can be a great way to intern, explore, volunteer, destress, and more. But it typically isn’t free. If you want to enjoy this kind of experience, you likely need to save more in your bank account and spend less. Yes, this can help your gap year become a reality, but it has another bonus: It teaches you money management skills that can last a lifetime.

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 much money is needed for a gap year?

How much money you need for a gap year depends on your goals. For instance, if you want to travel the world during that year, you will require a lot more money than if you plan to live at home and intern in an industry you’re interested in.

Can taking a gap year help you save money?

Usually a gap year doesn’t help students save money, other than the fact that no tuition will be due that year. The exception would be if you live with your parents during your gap year and work during that time.

How can a gap year hurt?

A gap year can potentially hurt someone’s lifetime earning potential. By delaying entering the working world for a year, the individual misses out on a year’s salary and career growth that can lead to a higher salary down the road. However, a gap year could also be a positive: It could involve an internship or connections that eventually lead to a dream job.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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.

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.

3.30% APY
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.

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.

SOBK-Q224-1939933-V1

The annual percentage rate (APR) of a credit card represents how much someone pays in interest on an annual basis if they carry a balance on their credit card. The lower someone’s APR is, the less they would pay in interest. Because of this, it makes sense to try to secure the lowest APR possible.

Keep reading to learn how to lower the APR on a credit card.

What Is Credit Card APR?

A credit card’s APR represents the total cost of borrowing money using a credit card. The APR on a credit card is the interest rate charged to carry a balance, plus any fees. A credit card can have a fixed or variable interest rate, meaning the rate can either stay the same or change over time based on index rates.

Understanding what APR is can help credit card users know how much they’d need to pay in interest if they don’t pay off their credit card balance in full each month. If they don’t carry a balance, they can avoid paying credit card interest.

Recommended: What Is a Charge Card?

Ways a Lower Interest Rate Can Help

Having a good APR for credit cards is important for a number of reasons. A lower interest rate can save you money. In turn, this can make it easier and faster to pay off debt. Doing so is one way you can help build your credit score.

The higher your interest rate is, the harder it can be to chip away at your credit card balance, as the bulk of credit card payments will go toward interest. This is why achieving a lower credit card APR can make escaping high-interest credit card debt easier.

Recommended: How to Avoid Interest On a Credit Card

How to Lower APR on a Credit Card

If you are interested in lowering your credit card APR, there are steps you can take to try to do so.

Apply for a Balance Transfer Card

If your card has a high APR, one option for how to get a better rate can be a balance transfer card with a lower interest rate. You can then transfer your balance from the high-interest credit card to the balance transfer card.

Usually, this new balance transfer credit card can’t be issued by the same company or any affiliates of the original card. Balance transfer cards may offer a 0% APR promotional period. During that period, you won’t pay any interest, which means all of your payments will go toward paying down the principal.

However, once the promotional period ends, a higher APR will kick in (this is one example of what can increase your credit card’s APR). Additionally, a balance transfer fee may apply to move over the existing credit card balance to the new card. It might make sense to calculate your credit card interest rate on your old card to ensure you’ll save money.

Negotiate With Your Credit Card Issuer

When it comes to figuring out how to get lower APR on a credit card, it’s possible to simply ask for an APR reduction with a credit card issuer. This strategy may be particularly effective if the cardholder has used their credit card responsibly and consistently paid their credit card bill on time — one of the cardinal credit card rules.

You can also provide a reason why you’re requesting a reduction. You may have experienced a job loss or have unexpected medical bills to pay. Maybe you got a raise and are really motivated to pay off your debt, and having a lower interest rate would help you do that. It’s also possible to leverage new credit card offers with lower interest rates to try to negotiate a current APR down.

Consumers can also ask for a temporary reprieve if the credit card issuer won’t offer a lower rate indefinitely. For example, it may be possible to request a one-year rate reduction of one to three percentage points.

Low-Interest Credit Cards

If you can’t quite figure out how to get a lower interest rate on a credit card with your current issuer, you could also step away from using that specific credit card. Instead, you might apply for a low-interest credit card to use in lieu of the card with the higher APR.

Cardholders who have consistently made on-time payments and taken other steps to build their credit score may be able to secure a new card with a lower interest rate. As an added bonus, doing so can make it easier to negotiate a lower APR with a current credit card.

Some different types of credit cards even reward cardholders for their good behavior by lowering their APR.

The Takeaway

If you pay off your credit card balance in full each month, you won’t have to worry about your APR too much. That being said, it’s always smart to try to secure the lowest APR possible in case it’s necessary to carry a balance from time to time.

Having a lower APR on a credit card means the cost of borrowing money is lower. More of your monthly payments can go toward paying down the principal balance instead of interest. In turn, this can help you pay off your debt faster, save money, and even build your credit score.

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

How can I reduce my credit card interest rate?

You have a few options for lowering the interest rate on a credit card. You can try to negotiate a lower interest rate on any current credit cards by calling your issuer and trying to come to an agreement. If that doesn’t work, you can apply for a new credit card or a balance transfer card. If you can secure a lower interest rate on a new credit card, you can choose to use that credit card or take that offer back to your current lender to try to negotiate a lower APR.

Why do credit card issuers charge varying APRs?

Credit card issuers use a consumer’s credit score to help determine what the APR on a credit card should be for a specific consumer. The reason that APRs vary is because credit card issuers give a custom APR to each applicant based on their financial history. Generally, the lower someone’s credit score is, the higher their APR will be.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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 .

SOCC-Q224-1910584-V1

Getting a credit card for the first time comes with a unique set of challenges. A lack of a credit history can make it harder to qualify, and you’ll have a learning curve when it comes to how to choose and use your first credit card responsibly.

However, the actual process of applying for a credit card for the first time isn’t all that complex if you are armed with a bit of information. Read on to learn how to get your first credit card.

Qualifying for a Credit Card

When someone applies for a credit card, the credit card issuer will take a number of factors into consideration, including their credit score and income, when deciding whether to approve their application. It’s also necessary to make sure you’re old enough to get a credit card — you usually must be at least 18 years old.

Someone’s credit score can indicate how likely they are to pay back their credit card on time. The higher someone’s score is, the more creditworthy they appear. Income is also a major factor that’s considered, especially when figuring out someone’s credit card limit. Applicants under the age of 21 who can’t show independent income generally must get a cosigner.

Additionally, those applying for a certain type of credit card, such as a student credit card, will have to make sure they meet that card’s particular requirements. While a student credit card may be available to those with no or limited credit, the cardholder generally must be enrolled in a qualifying educational program.

Recommended: Charge Cards Advantages and Disadvantages

How to Apply for a Credit Card With No Credit History

It can be difficult to qualify for a credit card before you’ve built a credit history, given what a credit card is. The catch? It takes credit to build credit. Thankfully, there are a few credit card options that consumers can consider if they don’t yet have a credit history at all or only have a limited one.

Starter Credit Card

Starter credit cards are a type of credit card designed for consumers who have no credit history or a very limited credit history. Starter credit cards help cardholders build a credit history when they use the card responsibly. If they make on-time payments each month, they’ll see their credit score rise over time and will start to build a solid credit history.

Generally, starter credit cards don’t come with the best rates and terms, but when used to make purchases someone can afford to pay off each month, they can be a very helpful financial tool. Student credit cards are an example of starter cards that can help someone establish a credit history.

To apply for a starter credit card, you generally must provide the following:

•   Social Security number

•   Sources of income

•   Monthly housing or rent costs

Those under the age of 21 who do not have your own source of income will need to get an adult cosigner who’s over the age of 21. For those who are applying for a student credit card as their choice of starter credit card, the credit card issuer may request information such as the name of your school or program, your major, and your expected year of graduation.

Secured Credit Card

Another credit card option for those who are new to credit is a secured credit card. With a secured credit card, the cardholder must deposit money to use the card.

The amount they deposit will act as their credit limit, and they’ll then borrow against that deposit. For example, if they deposit $500, they can make up to $500 worth of purchases anywhere that accepts credit card payments. Once they pay off their card balance, they can spend up to $500 again.

When at least the credit card minimum payments are made on time, the cardholder will build a credit history. Functionally, a secured credit card works more similarly to a debit card but helps to build credit.

Applying for a secured credit card requires much of the same information as applying for an unsecured credit card. This includes your name, address, Social Security number, and income information. Additionally, it’s necessary to have the cash on hand to make the security deposit. Depending on the card, there may or may not be a credit check required.

Often, after using a secured credit card responsibly, the cardholder can graduate to a standard unsecured credit card.

How to Choose Your First Credit Card

When shopping around for a credit card, it’s a good idea to compare the fees, interest rates, and cardholder benefits of multiple credit cards. Here’s why these factors matter when choosing a first credit card:

•   Credit card fees. From annual fees to foreign transaction fees to late fees, all credit cards have some fees that cardholders need to be aware of. Certain transactions, such as buying a money order with a credit card, can also involve fees as well. Being aware of the fees a card may charge and finding a credit card with low fees can help save money.

•   Interest rates. If a cardholder carries a balance, they’ll need to make interest payments. Credit cards interest rates are displayed as annual percentage rates (APRs) and the higher someone’s APR is, the more they’ll pay in interest. What’s considered a good APR for a credit card will vary depending on someone’s credit profile as well as the type of card they’re applying for, but it’s generally below the average rate, which is around 24%.

Also pay attention to the different rates that may be charged. For example, if you take a cash advance on a credit card, the rate is typically higher than the standard rate.

•   Rewards. From cash back to travel points to discounts at major retailers, credit cards can come with some pretty cool rewards. It’s worth comparing the rewards offerings of multiple credit cards to see where it’s possible to benefit more from good credit habits. Keep in mind, however, that the top rewards cards are usually reserved for those with solid credit histories.

How to Apply for a Credit Card

The process of figuring out how to apply for a credit card online for the first time is usually pretty straightforward. When it’s time to apply for a credit card, the applicant generally needs to supply the following information as a part of the credit card issuer’s application process:

•   Identification (such as a Social Security number)

•   Source of income (such as pay stubs or W-2s)

•   Credit score (generally a score starting in the mid 600s is required, though you may find a number of options if your score is between 580 and 669, which is considered a fair score)

Further information may also be requested, as the process can vary somewhat from issuer to issuer.

Once you’ve submitted your credit card application, you’ll wait to get an approval or a denial. It may take just minutes to get a response, or it may be a few days or even a few weeks. The creditor must send a decision within 30 days at the most.

If you’re approved, you’ll then receive your new card in the mail. You won’t have to worry about replacing it until your credit card expiration date, at which point the issuer will send you a new card.

How to Use Your First Credit Card

Here are some pointers for using your credit card:

•   The key to using your first credit card is to limit charges to those that you can afford to pay off — and then making sure you do so in a timely manner. Doing so will ensure you never miss a payment, which will boost your credit score, and avoid late payment fees and interest payments.

•   Paying off your balance at the end of each month (or more often) will help keep credit utilization rate low. Credit utilization measures how much credit someone is using in comparison to how much they have available. The lower someone’s credit utilization, the more their credit score will benefit.

For instance, a potentially good way a student could use their first credit card is to limit their purchases to their textbooks for a semester. This will rein in their spending as they learn to budget and stay on top of their credit card statements.

•   Educate yourself on credit card safety best practices. For instance, be on the lookout for credit card skimmers, which are devices attached to credit card readers designed to steal your information.

Also be wary of sharing your credit card information, such as the CVV number on a credit card, with anyone.

What Should You Do if Your Application Is Denied?

If someone’s credit card application is denied, the best thing they can do to move forward is to work on building their credit score. This will improve their creditworthiness, and thus their odds of getting approved in the future. Here’s some advice:

•   Making on-time payments and keeping a low balance on an existing credit card are both ways to improve a credit score.

But if someone can’t qualify for any credit cards, how can they improve their credit score? In this scenario, one option is to become an authorized user on a family member’s credit card, such as a parent’s.

•   When someone is an authorized user, their score will improve as the main account holder makes on-time payments. However, both the account holder and authorized user’s credit scores are at risk if either party makes purchases they can’t afford, so it’s important that everyone has a plan for paying off the bill at the end of the month.

Recommended: When Are Credit Card Payments Due

Things You Need to Know as a First-Time Credit Card User

When someone is a first-time credit card user, it’s important that they understand the basics of how a credit card works. Specifically, they’ll need to know what interest rates and fees they may end up paying by using their credit card (especially if they plan to carry a balance).

Using a credit card can feel like shopping with free money, but at the end of the month, the cardholder needs to be prepared to pay their balance off in full. Otherwise, they risk paying more for the purchases they already made in the form of interest and fees. Once debt starts racking up, it can become hard to get rid of.

What If You Are Not Ready to Apply for a Credit Card?

Applying for a credit card for the first time is a big responsibility. If someone isn’t ready to take on the responsibility, they do have the option of using a debit card to gain some of the convenience that comes with a credit card.

A debit card is attached to a bank account and allows the account holder to make payments without keeping cash on hand. Debit cards don’t involve borrowing money, so interest rates aren’t a concern.

However, debit card holders will still need to look out for potential fees. Additionally, debit cards don’t have quite the level of protections that credit cards offer, such as the option to request a credit card chargeback.

The Takeaway

Applying for a credit card online is a relatively straightforward process, requiring some basic information about you and proper ID. The challenging part can be getting approved for the first time since you may have a thin or non-existent credit history. If you are approved, try to use your new card wisely by only making purchases you can afford and by paying off your balance in full each month. This can help you avoid high-interest payments and late fees and also may make it easier for you to get approved for other cards in the future.

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

FAQ

What is a good credit limit for a starter credit card?

The credit limit for a starter credit card is usually low, perhaps $1,000. With a secured credit card, the limit is the amount of the security deposit that the cardholder makes.

What are the requirements to apply for a credit card?

To apply for a credit card, it’s usually required that the applicant provide proof of income and identifying information such as a Social Security number. They will also need to have an acceptable credit score to qualify.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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Sometimes life throws a few curveballs your way. When those curveballs include unexpected expenses (like an emergency car repair or medical bills) or a job loss, it can be hard to keep your budget on track. This may lead to paying some bills late, or not at all, which only puts you further in the hole, thanks to interest and late fees. Your credit can also take a hit.

While you may not be able to get back in the black overnight, there are ways to regain control of your finances and work toward financial stability. Read on for simple strategies that can help you get caught up on bills, plus tips on how to avoid getting behind in the future.

6 Tips for Getting Caught up on Bills

Falling behind on bills can feel overwhelming, but it’s a challenge that many people face at some point. The key is to face missed payments head on and come up with a plan to gradually bring all of your accounts up to date. These tips can help.

1. Make a Master List of Bills

A good place to start is by organizing your bills and making a master list of everything you owe. This includes rent/mortgage, utilities, insurance, credit card payments, personal loans, and any other debts. Consider organizing them by due date, amount owed, and interest rates. Having a clear picture of your financial obligations helps you prioritize and plan your payments more effectively. This list will serve as a roadmap to ensure you don’t overlook any bills and can systematically address each one.

2. Reach Out to Your Creditors

Communication with your creditors is crucial when you’re struggling to keep up with payments. Companies and creditors may be willing to work with you if you explain your situation honestly. They may offer solutions such as extended payment deadlines, reduced interest rates, or temporary payment plans. And you don’t have to wait until your accounts are severely delinquent — reach out as soon as you know you’re having trouble. Proactive communication can prevent additional fees and negative marks on your credit report.

Recommended: How to Negotiate Medical Bills

3. Pay Priority Bills

All bills are not equally important, and when funds are limited, it’s essential to prioritize which bills to pay first. You might start with necessities that ensure your basic living conditions, such as housing, utilities, and food. These are critical to maintain your daily life and stability. Next, you may want to focus on any bills that have legal consequences if left unpaid, such as child support and taxes. Secured debts, like car loans, should also be a priority to avoid repossession. Once these essentials are covered, you can move on to other debts.

4. Pay Bills with the Highest Interest Rates

High-interest debt can quickly spiral out of control, making it harder to catch up. After prioritizing essential bills, consider paying down debts in order of interest rate, from highest to lowest. This repayment strategy, known as the avalanche method, can save you money in the long run by reducing the amount of interest you’ll pay over time. Consider making larger payments toward these debts while maintaining minimum payments on lower-interest obligations.

5. Cut Unnecessary Expenses

To free up more money for paying bills, take a close look at all of your monthly expenses and identify areas where you can cut back. Dining out, subscription services, gym memberships, and entertainment are examples of expenses you may be able to cut until your finances are in better shape. Creating a bare-bones budget can help you focus on what’s necessary until you’re caught up. Redirect the money saved from cutting expenses toward paying down your debts. Even small savings can add up and make a significant difference over time.

6. Boost Your Income

Increasing your income can provide a much-needed boost to catch up on bills and put more padding in your checking account. Consider taking on a part-time job, freelancing, or selling items you no longer need. If you have any special skills or hobbies, you might look into starting a side business. Or you might explore opportunities to work extra hours or seek a raise at your current job. While increasing your income may require additional effort and time, the extra money can help you get back on track faster.

How to Avoid Falling Behind After You’re Caught Up

Once you’ve managed to catch up on your bills, it’s important to implement strategies to avoid falling behind again. Here are some ways to help you stay on track.

Create a Budget

A well-structured budget is the cornerstone of good financial management. Now that things are more stable, you might want to take a closer look at what’s coming and going out each month to ensure that your spending aligns with your priorities. One simple budgeting framework to consider is the 50/30/20 rule. This suggests dividing your after-tax income into three main categories, with 50% going to “needs,” 30% going to “wants,” and 20% going to savings and debt payments beyond minimums.

Enroll in Autopay

Automating your bill payments is one of simplest ways to avoid missing payments and getting hit with late fees. Consider setting up autopay for your recurring bills, such as rent, utilities, and credit card payments. To make sure you don’t accidentally overdraft your account, put reminders on your calendar or set up alerts on your phone before each bill is due. That way you can make sure you have sufficient funds in your account to cover these automated payments.

Build an Emergency Fund

An emergency fund acts as a financial safety net, allowing you to cover unexpected expenses without disrupting your regular budget. Aim to save at least three to six months’ worth of living expenses in a separate, easily accessible account, such as a high-yield savings account. Start small if necessary and gradually build up your fund over time. Having an emergency fund can prevent you from relying on credit cards or loans if you get hit with an unexpected expense or loss of income and can help you maintain your financial stability.

The Takeaway

Catching up on bills when you’re behind can be challenging. Fortunately, by assessing your situation and coming up with a strategic pay-off plan, it’s possible to get back on track. Staying proactive and disciplined can help you avoid falling behind again and allow you to work toward long-term financial stability and growth.

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

What to do when you can’t catch up on bills?

Consider making a list of all your outstanding bills, then prioritizing the ones that are for necessities (housing, for instance) and those with the highest interest rates. To free up funds to pay off your bills, you may need to temporarily cut or reduce unnecessary expenses, like dining out, streaming services, and entertainment. It’s also a good idea to reach out to your creditors and explain your situation. They may be willing to work with you by offering a more manageable payment plan and crediting late fees.

What bills should I prioritize?

If you’re behind on bills, you’ll want to prioritize any bills relating to necessities, such as housing and utilities. Next, you might focus on obligations that, if neglected, could have legal consequences (like past-due taxes or child support), followed by secured debts (like an auto loan or mortgage) to avoid repossession. After that, you might prioritize high-interest debts (like credit cards), since the longer it takes to pay them off, the more expensive they get.

Why is it so hard to catch up on bills?

Catching up on bills can be challenging due to high-interest rates that make debts grow quickly. Having a limited income, getting hit with unexpected expenses, and poor financial habits (such as lack of budgeting or overspending) can also make it difficult to catch up once you fall behind.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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.
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.

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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