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Most people who live and work in the U.S. need to file an annual tax return. Depending on your financial situation, your tax return may be simple or complex. If your tax return or financial situation is complicated, with many forms of income, deductions, or credits, you may end up making mistakes on your tax return. Even with a simple return, it’s possible that you might make a mistake that could cause the Internal Revenue Service (IRS) to impose fees, interest, or additional payments.

What follows are 15 of the most common tax filing mistakes — and how to avoid making them.

How Common Are Mistakes on Tax Returns?

The IRS does not release detailed statistics about how common mistakes on tax returns are, but they do say that mistakes are much more common when filing paper returns. The agency suggests that taxpayers use software to prepare their returns or work with a reputable tax preparer. This can help eliminate some of the common mistakes that occur with tax returns.

Does the IRS Care About Small Mistakes?

Yes, the IRS definitely cares about small mistakes on tax returns, though the penalties may not be as large as they are for substantial mistakes. The IRS potentially levies two different kinds of accuracy-related penalties:

•   Negligence or disregard of the rules or regulations penalty

•   Substantial understatement of income tax penalty

In cases of negligence or disregard of the rules or regulations, the penalty is 20% of the amount that was underpaid due to negligence or disregard. For a substantial understatement, the penalty is 20% of the amount that was underpaid due to the understatement on the return.

These potential penalties are on top of still having to pay the tax that you owe.

Recommended: How to File Taxes for Beginners

16 Common Tax Mistakes

Here are a few of the most common tax mistakes.

1. Not Filing Your Taxes on Time

Each year, the IRS sets the deadline for filing your federal income tax return. This date is usually April 15, though it can be extended sometimes if April 15 falls on a weekend or holiday. Not postmarking or e-filing your return by the tax filing deadline can lead to a penalty.

2. Not Putting in the Right Social Security Number

The IRS uses Social Security numbers to match up information it receives from you with information it receives about you from your employer, bank, and other entities. Messing up even a single digit in your Social Security number will disrupt this process and could cause the IRS to reject your return.

Be sure to enter your Social Security number exactly as it is shown on your Social Security card. Do the same with your spouse and anyone else listed on your tax return.

Recommended: Guide to Understanding Your Taxes

3. Not Filing Your Taxes at All

Generally, most people who work in the U.S. and have income over the filing threshold are required to file an annual income tax return. The penalty for not filing is 5% of the unpaid taxes for each month that a tax return is late, not to exceed 25% of your unpaid taxes.

4. Filing Too Early

While you don’t want to file your taxes too late (after the deadline), you also don’t want to file them too early. You want to make sure that you have received all the W-2, 1099, and other tax forms that are due to you. If you get additional forms after you’ve already filed your taxes, you may need to file an amended return.

5. Inputting the Wrong Bank Information

The IRS encourages people to e-file and choose to have their refund sent via direct deposit. But if you put in the wrong bank routing and account information when filing your tax return, you may delay your refund.

6. Incorrect Information

It’s not only your bank account and routing information that needs to be correct — you need to make sure that all of your other numbers and details are correct. This includes any information from your W-2 or 1099 forms you manually input into your tax return. Using software or a reputable tax preparer can help to minimize the chances you enter incorrect information.

7. Missing Information

If you have more than one bank account and/or a number of investment accounts, you may forget to report income (or losses) from one, or more, of these financial accounts. This is an immediate red flag to the IRS. Keeping track of all your financial paperwork throughout the year can help avoid this problem.

8. Forgetting to Sign the Forms

The IRS says that your return is not valid unless it is signed. If you file a paper return, you (and your spouse, if you’re filing a joint return) must sign the return. E-filed returns can be signed electronically by selecting an electronic PIN.

Recommended: The Fastest Ways to Get Your Tax Refund

9. Forgetting Important Paperwork

If you are working with a tax preparer, make sure to bring, or electronically send, all of your tax-related paperwork. This includes all income statements (such as W-2s and 1099s) and all tax deduction documents (such as Form 1098 for mortgage interest and Form 1098-T for college tuition paid). This will help prevent errors stemming from missing information.

10. Not Taking Advantage of Tax Breaks

You are legally allowed but not required to take any tax deductions or tax credits that you are eligible for. The IRS generally does not care if you pay more tax than necessary. But not taking advantage of tax breaks you’re eligible for can cost you money.

11. Writing the Check to the Wrong Entity

If you owe money to Uncle Sam, be sure to make the check out to the U.S. Treasury. If the check isn’t filled out correctly, the IRS likely won’t cash it. This can result in a late payment — and a penalty. Keep in mind that you can also pay any owed taxes online via IRS Direct Pay or use the electronic payment options in your tax software.

12. Math Errors

The IRS says that math errors are among the most common tax filing mistakes. This is especially true when filling out your tax return on paper, since tax software will generally do all the math for you.

13. Not Claiming All Streams of Your Income

Even if you are paid in cash or don’t receive a W-2 or 1099 form, you are legally required to report all income received in a tax year. Not claiming an income stream, even if it was part-time or “gig work,” may open you up to additional taxes, interest, and/or penalties.

14. Filing Your Taxes Under the Wrong Status

There are requirements that come with the different filing statuses that are available to you, and filing under the wrong status is a common tax filing mistake. For example, you can’t use the “head of household” status just because you make the most money in your family — this tax filing status is only for unmarried people who have to support others. If you’re married, you have a choice of two different types of filing status, and one will likely be more advantageous to you than the other.

15. Not Getting Help When You Need It

If you have a relatively simple tax return, you may feel comfortable filing your tax return on your own. But as your taxes get more complicated, it may make sense to work with a reputable tax professional. Not getting help when you need it may end up costing you a significant amount of money.

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16. Name/Misspelling Errors

Our final tax filing mistake that is common is, yes, name spelling errors. Make sure that you are checking and double checking all of the names entered into your tax return. Misspelling a name may cause the processing of your return to be delayed.

Tips on Avoiding Tax Mistakes

If you’re looking to avoid tax mistakes, here are a few things to keep in mind:

•   Consider using tax software that can do the math for you and automatically select the right forms for your situation.

•   If your financial situation becomes even more complicated, consider working with a tax professional.

•   Include all the information and tax documents you’ve received from all sources.

•   Make sure to wait to file until you’ve received all your documents, but early enough that you don’t go past the April filing deadline.

The Takeaway

In life, mistakes happen. However, you generally want to avoid them when you’re filling your tax return. Even a small misstep could hold up your return, delay any refund, and lead to interest and penalties. It’s wise to take time to understand your taxes or rely on a tax professional for help. Getting it right the first time around can help you save time — and money.

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

FAQ

Does the IRS penalize you for tax filing mistakes?

The Internal Revenue Service (IRS) charges penalties for certain — though not all — tax filing mistakes. Mistakes that can lead to penalties include:

•   Not filing your return and paying your tax by the due date

•   Failure to pay proper estimated tax

•   Substantially understating your tax liability

•   Understating a reportable transaction

•   Filing an erroneous claim for a refund or credit

Even if you don’t get hit with a penalty, you may still get an unexpected (and unwelcome) tax bill, either right away or possible years later.

How often does the IRS make mistakes with tax returns?

The IRS does not release statistics about how often they make mistakes, but it is almost certainly less often than taxpayers make mistakes. If you think that the IRS has made a mistake when processing your return, you can either contact the IRS directly or work with a reputable tax professional to rectify the situation.

How do I know if I filed my taxes right?

The IRS generally will accept your tax return within a few days. This means they’ve received it and scanned it for basic errors, like missing information or major red flags.

Once your return is accepted, the agency will begin a more detailed process of examining your return — they’ll check your income reports, verify the deductions and credits you’ve claimed, and ensure everything aligns with the tax laws.

If you’re due a refund, the IRS will approve it once they are satisfied your return is accurate. Typically, you can expect a refund within 21 days after you’ve e-filed.

Keep in mind, though, that the IRS has three years from the date you filed your return (or April 15, whichever is later) to perform an audit and potentially charge you additional taxes. That’s why it’s a good idea to keep your tax records around for at least three years.

Photo credit: iStock/kynesher

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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.
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We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

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A career as a psychiatrist can be highly rewarding, both professionally and financially, with the average annual salary in the U.S. coming in at $259,497, according to ZipRecruiter.

Becoming a psychiatrist requires a lot of dedication and time — 12 years on average. But as the need for mental health services outstrips demand in the U.S., the outlook for a career in psychiatry is strong. Indeed, the U.S. Health Resources & Services Administration predicts a shortage of 39,550 psychiatrists by 2030 if current supply and utilization patterns continue.

Read on to learn more about how much a psychiatrist makes, as well as the job’s requirements, duties, and benefits.

What Are Psychiatrists?

Psychiatrists are medical doctors who specialize in mental health. They are qualified to assess mental health disorders, including depression, anxiety, and substance abuse, and prescribe medication.

The duties of a psychiatrist generally include:

•   Assessing patients’ mental health through interviews, reviewing medical history, and testing

•   Delivering an accurate diagnosis and developing a treatment plan

•   Consulting with other mental health professionals

•   Prescribing medication if needed

•   Following up with patients and making treatment adjustments if necessary

•   Documenting each patient’s diagnosis and progress

•   Offering emotional support and coping mechanisms

•   Staying current on new developments and psychiatric treatment methods

An effective psychiatrist should be able to:

•   Be compassionate and empathetic. These qualities allow a psychiatrist to understand what’s going on with their patients.

•   Establish trust. Patients need to feel safe opening up to their doctors.

•   Be patient. The road to mental wellness can be a long one.

•   Possess strong communication skills. Psychiatry is not a job for introverts. A successful psychiatrist needs to be able to actively listen, provide guidance, and communicate solutions.

•   Maintain flexibility. The job requires flexibility in both your schedule and treatment approaches in order to provide customized help for each patient.

💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

How Much Do Starting Psychiatrists Make a Year?

Professional psychiatrists can make over $100,000, even as a starting salary. Both the bottom 10% of earners and beginning psychiatrists make, on average, $133,000 a year.

What is the Average Salary for a Psychiatrist?

Being a psychiatrist is one of the highest paying jobs in the U.S. The typical salary ranges from $68,500 to $399,000 a year, with the average psychiatrist salary in the U.S. landing at $259,497. However, location makes a significant impact on how much a psychiatrist gets paid, with the average salary in New York City coming in at $283,899.

A psychiatrist can command a yearly salary or an hourly wage in a private practice. As for how much a psychiatrist makes in an hour, the national average is $125.

What is the Average Psychiatrist Salary by State?

Psychiatrists can earn competitive pay no matter where they live and work. However, geographic location does have an influence on how much a psychiatrist makes. Here’s a look at the average psychiatrist annual salary by state.

Recommended: What Is a Good Entry-Level Salary?

Psychiatrist Job Considerations for Pay & Benefits

A professional psychiatrist can earn a high salary while helping to improve the lives of others. But there are a lot of steps you need to take in order to become a licensed psychiatrist. These include:

1.    Earning a bachelor’s degree, preferably in psychology, biology or biochemistry.

2.    Taking the Medical College Admission Test (MCAT). The MCAT is a challenging standardized test used as an admissions requirement when applying for a medical degree program.

3.    Applying to and attending medical school. Medical school typically takes about four years to complete as a full-time student.

4.    Completing a four-year medical residency. This is required to obtain your medical license and involves treating patients in real-world scenarios. It’s generally a good idea to obtain your license in the same state you intend to practice in.

In addition to a strong job prospects and a high salary, psychiatrists who work for a public, private, or government institution may be eligible for the following job benefits:

•   Health insurance — medical, vision, and dental

•   Life and disability insurance

•   Vacation and holiday pay

•   Paid sick leave

•   Retirement plans

•   Malpractice coverage

Of course, if you open your own practice, you’ll have to cover those benefits yourself. But you’ll have the flexibility to set your own schedule and session rates.


💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

Pros and Cons of Being a Psychiatrist

As with any profession, there are positive and negative sides to being a psychiatrist. Here’s a closer look at the jobs pros and cons.

Pros of Being a Psychiatrist

•   Opportunity to help others: One of the reasons people enter the field of psychiatry is to help change people for the better and, in some cases, save their lives.

•   Mix of patients: You’ll be challenged with helping people of all different ages and backgrounds to achieve mental wellness.

•   Work in a variety of places: Psychiatrists can work in private offices, hospitals, schools, mental health clinics, and other institutions.

•   Form relationships: In addition to establishing relationships with their patients, many psychiatrists have the opportunity to work with other professionals, including psychologists and occupational therapists, as part of a holistic treatment plan.

•   Be your own boss: If you decide to form your own practice, you’ll be able to set your own schedule and session rates.

•   Job security: As noted above, psychiatry is one of the types of jobs that are currently in demand.

Cons of Being a Psychiatrist

•   Emotionally draining: Caring for patients, especially those who have dealt with traumatic experiences, can be emotionally exhausting. The stress of responsibility coupled with intense sessions can potentially lead to professional burnout.

•   Substantial educational debt: The 12 years or more of school plus residency required to become a psychiatrist can be costly and leave you a lot of student loans to repay.

•   Irregular hours: Many psychiatrists have to be flexible in order to accommodate working patients and don’t work the traditional nine-to-five hours.

•   Fluctuating income: The goal of any psychiatrist is to help people manage their lives on their own, which means patients (hopefully) come and go. If you have a private practice, you could experience fluctuations in income from year to year.

•   Physical danger: Unfortunately, some more severely mentally ill patients can potentially become physically violent with their doctors.

•   Risk of lawsuits: Patients can sue their psychiatrist for prescription errors, a misdiagnosis, or session misconduct. Your place of work or private practice will have to have malpractice insurance.

Recommended: Best Entry-Level Jobs for Antisocial People

The Takeaway

You can earn a lot of money working as a psychiatrist if you are willing to spend years on your education, with the average psychiatrist salary coming in at $259,497. But helping others is also calling. When you make a difference in a person’s life, the rewards can be more than financial.

Whatever type of job you pursue, you’ll want to make sure your earnings can cover your everyday expenses. To help ensure your monthly inflows always exceed your monthly outflows, try creating a budget and check out financial tools that can help track your income and spending.

FAQ

Can you make $100k a year as a psychiatrist?

Yes. The average salary range for a psychiatrist is $68,500 and $399,000 a year.

Do people like being a psychiatrist?

While the job can be emotionally draining at times, many psychiatrists find tremendous satisfaction in helping others.

Is it hard to get hired as a psychiatrist?

No. There is currently a great demand for psychiatrists, and there will likely always be a need to help patients with mental health issues.

Photo credit: iStock/SDI Productions

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

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

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.

SORL0124032

Ever since the first credit card debuted in 1958, people have been using them as a convenient form of payment, whether for big-ticket items or small daily purchases. As credit cards have become increasingly popular, options have multiplied. If you are looking to open a new credit card, you may be wondering, “Which credit card is right for me?”

While there is no single perfect credit card that is the best one for everyone, you can follow a few steps to see if you can find the right card for you. There are several variables to consider, from rewards to interest rates. Depending on your answers to some of the questions below, you may be able to narrow down your options and decide on the right card to apply for and use.

Check Your Credit

One of the first things that you will want to do is check your credit score. There are a number of places where you can check your credit score for free once a year. Credit scores typically range from 300 to 850, from poor to excellent.

Understanding your credit score can help you determine which credit cards you might be able to get. The way credit cards work is that typically, the cards with the highest rewards and most benefits also require the best credit scores. If your credit is fair or poor, you are not likely to be approved for those credit cards, so it may not make sense to even fill out an application.

Recommended: Guide to Credit Score Ranges

Identify Which Type of Credit Card You Need

There are many different types of credit cards out there, so the next step can be identifying which type of credit card you are looking for.

•   If you are looking for a rewards credit card that offers airline miles or other travel rewards, that can help narrow down your choices.

•   Another option might be a credit card that earns cash back with every purchase.

•   You might also compare interest rates and see which offer is most attractive to you.

•   If you are working on building your credit, there may be a student or secured credit card to suit your needs.

Understanding the different types of cards that are available can help you choose the right credit card for your specific situation.

Narrow Your Choices by Asking the Right Questions

As you make your decision about which credit card is right for you, consider these points:

•   Some credit cards offer higher rewards in specific bonus categories, while others may offer a flat rate on all purchases. If you make a lot of purchases at grocery stores, gas stations, or home improvement stores, you may want to get a credit card that offers higher rewards rates in those categories.

•   If you have more balanced spending, it might make more sense to get a credit card that offers a high rewards rate on all purchases, no matter where you spend. Many people like using cash back rewards, among the various redemption options.

•   You’ll also want to look at any annual or other fees associated with a card to make sure you are getting enough in value to offset the cost of any fees you have to pay. It can sometimes make sense to have a credit card with an annual fee if the benefits are worth it to you (say, you travel a lot, and the card offers access to a network of posh airport lounges). That said, there are many excellent credit cards that do not charge an annual fee.

•   If you are focused on building your credit, see which secured credit cards are available. These cards involve a cash deposit that serves as collateral in case you can’t make a payment.

Recommended: Understanding Purchase Interest Charges on Credit Cards

Apply for the Credit Card That Offers You the Highest Value

Once you’ve figured out what kind of rewards you want to earn and what card you are likely to be approved for given your credit history, you can look at a few cards that fit those criteria. Compare interest rates, and consider the three main reasons you might consider applying for any particular card:

•   The value of the rewards you will earn with everyday purchases.

•   How much you might get from any one-time initial credit card bonus offers.

•   Any perks or benefits you receive just from having the card.

Carefully review each of these benefits for any cards you are considering and then apply for the card that gives you the best value.

Credit Card Tips

Once you’ve received your new credit card, these tips may help as you use it:

•   Set up a plan to pay it off in full each and every month if possible. Interest rates on your balance tend to be steep, so avoid paying those costs as best as you can.

•   While you may be able to pay your credit card with a debit card in some instances, it will likely be easier to set up your credit card account to automatically be paid from your bank account.

•   If you’re using this new card to replace a previous card, you may want to update any automatic bill payments to use your new card information.

•   If your bill is due right before payday, call the issuer and see if you can shift the date by which payment is needed. Some card issuers can accommodate this request.

The Takeaway

There are hundreds of different credit cards out there, and each one comes with their own terms and perks. If you’re curious about “Which credit card is right for me?” know that there isn’t a single credit card that is the best credit card for everyone — instead, you’ll have to analyze the options and pick the best one for you.

Carefully review which cards you’re likely to be approved for, the rewards and benefits of each one, and any annual fees associated with the card to find the one that’s right for you.

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 do I know what credit card is right for me?

There are a couple of different questions you’ll want to ask yourself to help decide which credit card is right for you. First, check your credit score, and look for a card that targets users within that credit score range. Then look for a card that offers rewards or benefits that you will find useful; also review whether an annual fee is charged.

How do I choose which card to use?

When you go to use your credit card, check to see which of your cards offers the most rewards for that type of purchase. If you have a card that offers a bonus rewards rate for those types of purchases, that could be a good one to use. Otherwise, use a credit card that offers a high rewards rate on all purchases.

Which credit card do most millionaires use?

It’s hard to say which credit card is most popular with millionaires, since that information is not generally considered public. However, it’s probably a safe bet that many millionaires might look for cards that offer a high level of benefits though they charge high annual fees. This might include The Platinum Card from American Express, the Chase Sapphire Reserve, or the Capital One Venture X card.

Photo credit: iStock/AscentXmedia

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

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

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

SOCC1023011

The credit card security code is generally found on the back of the credit card, close to or within the signature field. (There are a few exceptions, however; some American Express cards present the security code on the front of the card, separate from the main credit card number.)

In this article, you’ll learn the details you need about credit card security codes: not just where to find them, but also what they are, why they’re important, and tips for increasing your overall credit card security.

What Is a Credit Card Security Code?

A credit card security code is a numerical code, usually three or four digits long, that helps prevent fraudulent charges.

When you make a purchase that doesn’t involve physically presenting the credit card — for example, online — the point-of-sale system will usually prompt you to enter this security code.

Because the security code is not allowed to be stored by merchants, which helps protect against credit card hackers getting the information. Thus, the security code helps ensure fraudsters can’t use stolen credit card numbers to make digital purchases.

Other Common Names for Credit Card Security Codes

You may also hear the credit card code referred to as:

•   CVV, or Card Verification Value

•   CSC, or Card Security Code

•   CVC2, or Card Verification Code

•   CID, or Card Identification number

All of these terms signify that same three- or four-digit code on the back (or occasionally front) of your card.

When Do You Need Your Credit Card Security Code?

Your credit card security code is usually requested by the merchant whenever you’re making a credit card transaction without being physically present with the card.

The most common instance of this by far these days? That’s probably when you make an online purchase, but you may also make a credit card purchase over the phone and be asked to provide the security code.

Recommended: Understanding Purchase Interest Charges on Credit Cards

Why Credit Card Security Codes Are Important

Again, credit card security codes work to make your credit card information more secure — at least during purchases where you’re not physically present with the card. (When you are physically inserting, swiping, or tapping a credit card, other security features, such as the EMV chip, offer security measures.)

Where to Find Your Credit Card Security Code Number

Your credit card security code number is almost always on the back of your credit card, usually toward the right-hand side of the card beside or within the signature box. Some credit cards may list the credit card number on the back of the card, as well, but the security code is separate.

American Express cards list the security code on the front of the credit card, usually to the left of the card and always above the main credit card or account number.

Recommended: Guide to Checking Your Credit Card Approval Odds

How to Find Card Security Code Without the Card

The whole point of your credit card’s security code is to make the card impossible to use without being physically present. So, unfortunately, if you’ve lost your credit card, there’s no way to recover the code separately.

You may be able to ask the credit card issuer for a virtual version of the card, which will allow you to see the security code, or you may need to report the card lost or stolen and wait for a new card — with a new account number and security code — to arrive by mail.

Example of Credit Card Issuers That Use a Credit Card Security Code

These days, just about every major credit card issuer uses credit card security codes to help ensure the safety of their cardholders.

Discover, Visa, MasterCard, and American Express all use security codes — though as noted above, American Express cards are the only ones that list the code on the front of the card instead of the back.

Tips on Credit Card Security

Keeping your credit card information safe is the first step in preventing identity theft and fraudulent purchases. Fortunately, security measures like CVCs help make it easier, but here are some tips to help double your defenses.

•   Use secure passwords. These days, most people manage their credit cards (and many other types of financial accounts) online. Using secure passwords helps ensure fraudsters can’t hack into your online profiles to steal your information. Using a long password with a mix of numerical, alphabetical and special characters can help increase your level of security. If your credit card utilizes a PIN, change it often.

•   Be careful how you share credit card information. Though it may be safe to make a purchase through a legitimate, secure website or on an official company phone line, you should never email your credit card information or write it on a slip of paper for someone. If a merchant requests you to do so, shop elsewhere.

•   Sign up for alerts. Many credit card accounts can alert users by email, text message, or phone call when suspicious activity, like very high-priced purchases or transactions done at a different physical location than your home area, are made. Some cards may also automatically decline such transactions. (Don’t worry: if the charges are legit, you’ll be able to quickly verify them with the credit card company to get the transaction approved. It can also be helpful to let your credit card company know ahead of time if you’re planning to travel.)

The Takeaway

Want to know where the security code is on a credit card? Your credit card security code is located, in most cases, on the back of your card, close to or within the signature box. American Express cards list the security code on the front of the credit card. No matter where it is, the code helps keep your information safe when making transactions online or over the phone.

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

FAQ

Is a credit card security code 3 or 4 digits?

Credit card security codes can actually be three or four digits long. Discover, Visa, and MasterCard all use three-digit codes that are printed on the back of the credit card, while American Express employs a four-digit code printed on the front of the card.

Is the security code the same as CVV?

Yes, the credit card security code is the same as the CVV, which stands for Card Verification Value. The code can also be known as a CSC (Card Security Code), CVC2 (Card Verification Code), or CID (Card Identification number).

Are all credit card security codes 3 digits?

Not necessarily. Credit card security codes can be three or four digits long, depending on what kind of card you have. The four- or three-digit code on a credit card is typically found on the back, but occasionally on the front.

Photo credit: iStock/Kantamard Lamasai

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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Are you a little obsessed with planning your next big trip? We hear you! The excitement of seeing new places — whether that means a faraway tropical island or a neighboring state — is a powerful lure. But there’s one thing that may get in the way: Money.

Let’s be real, travel can be expensive. Even if you’re hopping in the car for a short weekend road trip, the cost of gas, food, entertainment, accommodations, and more can get a bit overwhelming. Fortunately, with a little bit of planning, you can make your travel dreams a reality. And it can all begin by creating a travel fund.

What Is a Travel Fund?

A travel fund is exactly what it sounds like — a fund exclusively used for gallivanting around the world. It’s a place to stash some cash that you don’t use for rent, bills, repaying student loans, or any other monthly financial obligations. This fund is just for your passion in life. And your passion is clearly traveling.

How to Fund Traveling

Unfortunately, a travel savings account will not grow by magic. If only! You’ll need to find ways to funnel some cash towards your travel plans. There are a variety of ways to do this. Perhaps you got a raise recently (nice!) and can put that amount directly towards travel. Or, maybe you can automatically whisk $25 or $50 per paycheck into your savings. Or, you might give up concert tickets or takeout food for a while to allow some wiggle room in your budget that goes towards paying for your next getaway. There are many options — some of which we’ll explore below.

Recommended: 15 Easy Ways to Save Money

Setting Up a Dedicated Travel Savings Account

There are a few options for where to keep your travel fund. Yes, you could keep your vacation fund in the same account as your day-to-day savings, but separating the fund could provide even more clarity.

Keeping your travel fund in a separate account can make it easy to see how close you are to reaching your travel goal. It allows you to see exactly how much money you’ve saved for the cause with ease. Having the money in a separate account also allows you to set up automatic contributions, just as you might already be doing with your other accounts.

Automating your savings towards travel means you can eliminate another task from your to-do list. You’ll be making progress toward your dream of cruising down the Nile without even having to think about it. And since it’s stashed separately, you don’t need to worry that you’ll use it on, say, entertainment or new shoes without realizing it.

Tips on Selecting an Account to Use

When it comes to setting up a dedicated travel fund, the first order of business is usually to pick an account type. There are a variety of options to choose from. Part of what will likely influence your decision is how long you plan on saving. If you want to take a trip in just a few months, a savings account may be a good vehicle. You can easily contribute to it, and you’ll earn some interest.

To help your travel fund grow faster, you may want to go with a high yield savings account. These accounts typically pay a much higher annual percentage yield (APY) than traditional savings accounts, giving you the ability to earn more on your money while still enjoying the security of a federally insured account. These days, many high-yield savings accounts offer APYs of up to 5% or more — many times more than the average national rate of 0.46%.

Some of these accounts may come with certain restrictions, like a limited number of withdrawals a month or maintaining a minimum balance, so be sure to read the fine print on each account you might be considering.

Another is a certificate of deposit (CD), which locks up your money for a particular term, typically from six months to a few years. This type of account can sometimes offer a more competitive interest rate than a traditional savings account but comes with withdrawal restrictions. If you choose to withdraw the money before the term ends, you’ll likely have to pay a penalty or fee.

Yet another option is to use a cash management account with a brokerage firm. These accounts are meant as an option for your uninvested money. They can also be great for putting away some extra money to save, but again — do read the fine print. Fees may be involved, plus commissions if a broker steps in to help you with your investments. Make sure that these won’t cut into your savings.

All of these options will allow you to keep your vacation fund separate from your checking account, emergency savings, or regular savings account. You may even be able to give it a unique name like “travel fund” or even more specific like “Tahiti fund.” It’s much more exciting to watch “dream trip to Bali fund” grow than just “account: 3283052.”

Growing Your Travel Fund

After you’ve created your unique travel fund, it’s time to put in some savings work. And that begins with your budget. If you already have a budget, that’s great. All you need to do is add in “travel fund” as a new line item and shift as much money as you feel comfortable moving to this new account each month.

But, if you’re starting from scratch, that’s OK too. Trying to save for the trip of a lifetime is just as good an excuse as any to start budgeting.

To build a budget, you’ll want to start by figuring out your average monthly take-home income (what you earn after taxes are taken out). Next, it’s good to create a list of all your monthly expenses. You’ll want to include all the basics like rent or mortgage, car payments, student loans, credit card statements, food, gas, insurance, gym memberships, streaming accounts, and any money you currently put towards saving and investing. Make sure to get as granular as possible about your spending.

Next, subtract your average monthly expenses from your average monthly income to see how much you have leftover. If it’s more than $0, that’s excellent news! You can put the excess towards your travel fund. If not, you’ll need to find some places to cut back on spending.

Recommended: How to Make a Budget in 5 Steps

Finding Extra Cash for Your Travel Account

If you’d like that leftover number in your budget to be higher, maybe it’s time to take a look at both your spending and your current income level. Perhaps you can see where changes can be made.

One of the potentially easiest ways to create more cash for your travel fund is to look deeply at your monthly spending. Are you still subscribing to that streaming service you never (or rarely) watch? Are you signed up for the premium version of that social media platform you haven’t been on in months?

What about that gym membership? How’s that going for you? Go ahead and get rid of things that aren’t bringing you joy or are dispensable. Then, refocus those funds in your travel fund.

If there’s no room for cuts, then it might be time to increase your income. Of course, you could always ask for a raise at work, but if that doesn’t come through, explore some other options — like a side hustle. A side hustle is a gig you take on outside your normal work to make some extra money. If you can, pick something you really enjoy doing so it feels less like “work.” For example, if you love dogs but aren’t ready to own one, maybe walking dogs before work would be fun for you.

If you are a handy person who likes to fix things, creating a listing on a site like Thumbtack or TaskRabbit may be a good idea. If you have other talents like photography, writing, or graphic design, you might do some networking to see if you can drum up some freelance work. That way, you can get paid for what you love to do and save for what you love too.

Recommended: How Families Can Afford to Travel on Vacation

SoFi: Your Partner in Creating a Travel Fund

By now, you’ve committed to adjusting your budget and setting aside cash in a new fund. The only thing left to do is find the best place to stash your cash.

When choosing where to put your travel fund, you’ll want to find an account that pays a competitive yield, keeps your money safe, and allows you to easily access your funds when it’s time to set off for your next adventure.

SoFi Travel has teamed up with Expedia to bring even more to your one-stop finance app, helping you book reservations — for flights, hotels, car rentals, and more — all in one place. SoFi Members also have exclusive access to premium savings, with 10% or more off on select hotels. Plus, earn unlimited 3%** cash back rewards when you book with your SoFi Unlimited 2% Credit Card through SoFi Travel.

FAQ

How much should I keep in my travel fund?

To come up with a travel savings goal, you’ll want to determine how much you’ll need for your trip and when you want to take it. From there, you can determine how much you’ll need to transfer into your travel fund each month to reach your goal. For example, if your trip will cost $2,500 and you plan to travel in six months, you’ll need to set aside around $33 a month.

How do I set up a travel fund?

Setting up a travel fund can take only a matter of minutes. It can be as easy as opening a savings account online and then directing money towards it. You can also go into a brick-and-mortar bank to set up an account.

How can I save money on a travel fund?

To save money on a travel fund, look for a savings account that doesn’t charge monthly fees and offers a competitive interest rate. These two factors will help boost your savings and get you on your dream vacation as quickly as possible.

**Terms, and conditions apply: This SoFi member benefit is provided by Expedia, not by SoFi or its affiliates. SoFi may be compensated by the benefit provider. Offers are subject to change and may have restrictions, please review the benefit provider's terms: Travel Services Terms & Conditions.
The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.