MoneyGen Archives | Page 26 of 95

Aug

2024

What Is a Premium Checking Account?

By Sarah Li Cain | Budgeting & Goals, Financial Independence, money | Comments Off

Checking accounts are one of the hubs of most people’s financial lives, and there are many options available. If you’re curious about premium checking accounts, which typically offer many extra perks, you’re in the right place.

In this guide, you’ll learn about some of the pros of premium checking accounts, such as higher interest rates and ATM-fee reimbursements. You’ll also find out about the potential downsides, like the need to maintain a high balance. Read on for details, so you can decide if a premium checking account is right for you.

Key Points

• Premium checking accounts offer benefits such as higher interest rates, waived fees, and dedicated customer service, appealing to those who maintain high balances.

• These accounts usually require account holders to meet minimum balance requirements, often ranging from $10,000 to $15,000, to avoid fees or earn interest.

• Potential downsides include lower interest rates compared to savings accounts and tiered benefits that necessitate maintaining even higher balances for maximum rewards.

• Many financial institutions allow customers to meet balance requirements across multiple accounts, facilitating easier qualification for premium checking accounts.

• Evaluating whether a premium checking account aligns with individual financial goals is crucial, as alternatives like high-yield savings accounts may provide similar benefits without high balance demands.

What Does Premium Checking Mean?

What is a premium checking account? It’s a type of checking account in which account holders are rewarded for meeting high balance requirements or paying higher monthly fees. These rewards may include higher interest rates, fee-free ATMs, free checks, and more.

In some cases, a bank may offer you these perks if you open multiple types of accounts at the same institution — an example would be having both premium checking and savings accounts at a bank. Another common model for premium checking accounts is that the more you keep on deposit, the more incentives you may receive.

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What Are the Benefits of a Premium Checking Account?

Those who qualify for a premium checking account may be rewarded with the following benefits:

• Lower fees for other financial products within the same financial institution

• Dedicated customer service

• Higher APYs, or annual percentage yields

• Free or low-cost wire transfers

• ATM fee reimbursements

• Free checks.

These can be attractive ways to encourage customer loyalty, as many financial institutions work to find new ways to enhance their clients’ experience.

Pros and Cons of a Premium Bank Account

Opening a premium bank account might be valuable if you can take advantage of all the benefits offered. That being said, there are some downsides, too. Meeting certain requirements can make this type of account inaccessible to some. Let’s take a closer look at the benefits and the downsides.

Pros

Here are the potential upsides of premium checking accounts:

• Higher APYs: Premium checking accounts typically come with higher APYs compared to basic checking accounts (which may not accrue any interest at all). That enhanced interest rate means your money earns more money.

• Waived or lowered fees: In most cases, premium checking accounts will waive fees such as those for out-of-network ATMs, money orders, cashier’s checks, and wire transfers. Depending on the bank and what other accounts you have with them, you may even get lowered or waived fees on exchange rates for ATM withdrawals outside the U.S.

• Discounted rates on other financial products: It’ll depend on your relationship with the bank (and what other accounts you have in addition to a premium checking account), you could receive lower rates for personal loans or mortgages compared to other customers.

• Higher transaction limits: You may be able to make larger daily ATM withdrawals, transfers, or debit card purchases.

Cons

Next, consider the possible downsides of a premium checking account:

• Rates may not be as high as you think: Although you could receive a higher interest rate compared to other types of checking accounts, it may not be as high as what you could get with savings or money market accounts.

• More stringent requirements: You’ll typically need to maintain a higher minimum balance in your account in order to avoid monthly maintenance fees or to earn interest. For instance, many banks require anywhere from $10,000 to $15,000 or more in your premium checking account. The good news is that the balance requirements may be the total across all your accounts with the same financial institution.

• Benefits may be tiered: While it varies from bank to bank, you may have to “level up” to an even higher minimum balance to access the best interest rates and other perks.

How Can I Qualify for a Premium Checking Account?

In most cases, all you need to do is to have a minimum amount on deposit in order to open a premium checking account. Some may even require you to open other financial products or allow you to meet the minimum deposit requirements across a number of qualifying accounts.

Some major banks, like Chase and Bank of America, will allow you to meet minimum deposit requirements across different accounts as long as they’re linked.

Recommended: How to Automate Your Personal Finances

Additional Features of a Premium Checking Account

You may want to consider whether having that much money in a checking account is a worthwhile move for you. Consider the following points:

• Is earning interest a priority for you? If you’re after a checking account that earns a higher amount in interest, a premium checking account may be for you. Keep in mind though that if you may not earn as much as you think you will. For instance, if a bank currently offers a 0.04% APY, on a $50,000 balance, you’re only earning $20 per year or so (how often interest compounds will make somewhat of a difference).

• How often do you use ATMs? Many premium checking accounts offer more ATM transactions and even waive fees for third-party ATM fees. For those who use ATMs frequently, especially out-of-network ATMs, this perk may not be worth it.

• Do these perks sync up with your financial goals? Premium checking can be part of a deeper relationship with your bank (often called relationship banking) that offers holistic support for your finances. This includes benefits like discounted rates on other financial products — say, a home loan. If you’re willing to keep all your finances at one bank, a premium checking account might be a good fit and open other doors for you.

Are Premium Checking Accounts Worth It?

To decide if a premium checking account is right for you, consider these points:

• It can be a smart idea to compare premium accounts to standard checking accounts. You may be able to get many of the same benefits, such as free checks or equivalent interest rates, without stashing as much cash as premium accounts require.

• Getting a high-yield savings account could be a good option if you want to earn a higher interest rate but can’t meet the large minimum balance criteria required of premium checking accounts.

• If you want to keep all your banking (including investments and loans, for instance) with the same financial institution and can maintain a high balance across your qualifying accounts, premium checking could be well worth it. This is especially true if you’ll use all the perks like free checks and ATM reimbursements.

By thinking about your financial goals and how you like to bank, you may decide that premium checking is the right move for you.

The Takeaway

Premium checking accounts can be a valuable option for some bank customers. If you can maintain the high balance and can use the rewards offered, it may be a good fit.

For others, a high-yield checking without the high minimum requirements might be a better option. It’s up to you to decide what fits your financial style best.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

Is a premium checking account worth it?

A premium checking account may be worth it depending on whether you can afford to meet the higher than usual minimum balance amount and whether you’ll be able to take advantage of all the perks. If you can, it may be a good fit.

What are the benefits of a premium bank account?

Some of the key benefits of a premium bank account is a higher interest rate, waived out-of-network ATM fees, discounted rates on loan products, and overdraft protection. Some may even offer free financial and investing advice.

What does a premium bank account mean?

A premium bank account is a type of account offering extra perks once you meet a minimum balance requirement.

Photo credit: iStock/Charday Penn

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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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Aug

2024

What Are Liquid Assets and How Do They Work?

By Austin Kilham | Budgeting & Goals, invest, Terminology | No Comments

Liquid assets are any assets that can be easily and quickly converted into cash. In fact, people often refer to liquid assets as cash or cash equivalents, because they know that the asset can be exchanged for actual cash without losing value.

Here’s a closer look at the topic and how liquid assets can contribute to your financial wellbeing.

Key Points

• Liquid assets are easily convertible to cash, allowing quick access to funds without significant loss in value, essential for financial flexibility during emergencies.

• Common examples of liquid assets include cash in bank accounts, stocks, bonds, mutual funds, and money market funds, which can be readily sold for cash.

• Non-liquid assets, such as real estate and collectibles, require more time and effort to convert into cash, often leading to potential value loss during the process.

• Maintaining liquid assets is important for calculating net worth, applying for loans, and ensuring a business can handle emergencies or market fluctuations effectively.

• Building liquid assets involves creating an emergency fund with three to six months’ worth of expenses, allowing for better financial security and investment opportunities.

What Makes an Asset Liquid?

Liquidity means that you can readily access an asset as cash. While you might own any number of valuable assets (e.g., your home, retirement accounts, collectibles) and these can be considered part of your overall net worth, only liquid assets can generate cash quickly, when circumstances demand it. If you needed cash quickly, you likely would not be able to sell your home overnight to get money.

For an asset to be considered liquid, it must be traded on a well-established market with a large number of buyers and sellers. It also must be relatively easy to transfer ownership. Think: stocks, bonds, mutual funds and other marketable securities.

Generally, you can sell stocks and obtain cash readily. By contrast, you probably couldn’t sell your vintage watch collection that fast, and even if you could, there are a number of factors that might influence how much cash value you might obtain from the sale.

Worth noting: Although liquid assets (aka cash and cash equivalents) pose very little risk of loss, they also have little or no capacity for growth.

What Investments Are Considered Liquid Assets?

As you can see, the primary advantage of liquid assets is that they can be converted to cash in a short period of time. For example, stock trades must be settled within two days, according to Securities and Exchange Commission rules. Here, you’ll learn more about what are considered liquid assets.

Examples of Liquid Assets

Here are some specifics about what a liquid asset is.

• Money in the bank. Cash in a checking and savings account is a liquid asset.

• Stocks. Stocks are often considered liquid assets because they can be converted into cash when you sell them. Keep in mind, though, that the most liquid stocks might be the ones that many people want to buy and sell. You may have a more difficult time liquidating stocks that are in lower demand.

• U.S. Treasuries and bonds. These instruments are relatively easy to buy and sell, and these processes are usually done in high volume. They have a wide range of maturity dates, which helps you to figure out when you want to liquidate them. Because U.S. Treasuries are often considered relatively safe and dependable, the interest rates are somewhat lower and could be a good fit for investors who are looking to mitigate risk.

• Mutual funds. Mutual funds are pooled investment vehicles that hold a diversified basket of stocks, bonds, or other investments.

◦ Open-end mutual funds are considered more liquid than closed-end funds because they have no limit on the number of shares they can generate. Also, investors can sell their shares back to the fund at any time.

◦ Closed-end mutual funds, on the other hand, are less common. These funds raise capital from investors via an IPO; after that, the number of shares are fixed, and no new shares are created. Instead, closed-end funds shares can only be bought and sold on an exchange, and thus are considered less liquid than open-end fund shares because they’re more subject to market demand.

• Exchange-traded funds and index funds. Like mutual funds, exchange-traded funds (ETFs) and index funds allow individuals to invest in a diversified basket of investments. ETFs are traded like stocks, throughout the day on the open market, which makes them somewhat more liquid than index funds, which only trade at the end of the day.

• Money market assets. There are two main types of money market assets:

◦ A money market fund is a type of mutual fund that invests in high-quality short-term debt, cash, and cash equivalents. It’s considered low-risk and offers low yields. It is therefore thought of as a relatively safe vs. risky investment. You can cash in your chips at any time, making money-market funds a liquid investment.

◦ Money market funds are different from money market accounts, which are a type of savings account that’s insured by the Federal Deposit Insurance Corporation (FDIC).

• Certificates of deposit. If you have money in a certificate of deposit or CD, this might be considered semi-liquid because your money isn’t available until the official withdrawal date. You can withdraw money if you need it, but if you’re doing so before the maturity date, you’ll likely pay a penalty.

What Assets Are Considered Non-Liquid?

There are, of course, many assets that are not easy to liquidate quickly. These assets typically take a relatively long time to sell or for the deal to close. You’ll get your money, but most likely not right away, and there may be time or costs associated with the conversion to cash that could impact the final amount. That’s why assets like these are considered illiquid or non-liquid assets.

Examples of Non-Liquid Assets

• Collectibles. Items like jewelry and artwork, as well as hobby collections like stamps and baseball cards, may be hard to value and difficult to sell.

• Employee stock options. While employee stock options can be a valuable form of compensation, they may also be highly non-liquid. That’s because employees must typically remain with a company for years before their options vest, they exercise them, and they finally own the stock.

• Land and real estate. These investments often require negotiation and contracts that can tie up real estate transactions for weeks, if not months.

• Private equity. There are often strict restrictions about when you can sell shares if you’ve invested in private equity assets such as venture capital funds.

Liquid Assets in Business

If you’re running a business, accounts receivable — the money you’re owed from clients — are often considered to be a liquid asset, because you can typically expect to be paid within one or two months of billing.

Any inventory you have on hand, such as office furniture or a product you’re selling, can also be considered liquid, because you could sell them for cash if need be. The liquid assets on your company balance sheet usually list cash first, followed by other assets that are considered liquid, in order of liquidity.

Having more liquid assets is desirable because it indicates that a company can pay off debt more easily. When businesses need to determine how cash liquid they are, they often look at the amount of their net liquid assets. When all current debts and liabilities are paid off, whatever remains is considered their liquid assets.

Are Retirement Accounts like IRAs and 401(k)s Liquid Assets?

Retirement accounts, such as individual retirement accounts (IRAs) and 401(k)s are not really liquid until you’ve reached age 59 ½. Withdraw funds from your account before then, and you may face taxes and a 10% early withdrawal penalty.

What’s more, you can hold a variety of assets inside retirement accounts. For example, if you hold a money market fund inside your IRA, that is a liquid asset. But you could also hold real estate, which very much isn’t.

Reasons Why Liquid Assets Matter

Other than the most obvious reason, which is that cash gives you a great deal of flexibility and can be essential in a crisis, liquid assets serve a number of purposes.

• Calculating net worth: To calculate your net worth, subtract your liabilities (your debt) from your assets (what you own, which can include your liquid assets).

• Applying for loans: Lenders might look at your liquid assets when you apply for a mortgage, car loan, or home equity loan. If your liquid assets are high, you may get better terms or lower interest rates on your loans. Lenders want to know that if you were to lose your job and/or your income, you would be able to continue to pay back the loan using your liquid assets.

• Business interests: Having liquid assets on your balance sheet is a signal that your business is prepared for an emergency or a market shift that could require a cash infusion.

Are All Liquid Assets Taxable?

While income is money you earn or receive, an asset is something of value you possess that can be converted to cash at some point in the future. While owning an asset doesn’t make it taxable, converting it to actual cash would, in most cases.

The IRS, or Internal Revenue Service, has many rules around how the proceeds from the sale of assets can be taxed.

The IRS considers taxable income to include gains from stocks, interest from bonds, dividends, alimony, and more. Gains on the sale of a home might be taxed, depending on the amount of the gain and marital status. If you aren’t sure whether income from the sale of an asset is taxable, it might be wise to consult a tax professional.

Is It Smart to Keep Cashing In Liquid Assets?

The point of maintaining a portion of your assets in liquid investments is partly for flexibility and also for diversification. The more access to cash you have, the more prepared you are to navigate a sudden change in circumstances, whether an emergency expense or an investment opportunity.

Having a portion of your portfolio in cash or cash equivalents can also be a hedge against volatility.

Thus, it may be worth keeping a mix of both liquid and non-liquid assets to help you reach your short-term financial goals as well as longer-term ones. And while cashing in liquid assets might be necessary, it’s also prudent to keep some cash on hand in case you need it. You may want to focus on gathering at least three to six months’ worth of expenses in the form of liquid assets as an emergency fund.

How Liquid Are You?

To figure out how liquid you are, make a list of all your monthly expenses, from rent/mortgage on down, including even your streaming service subscription. Then, make a list of all your liquid assets and investments (being careful to pay attention to the definition of liquid assets vs. illiquid assets, as it can be confusing).

Then, total all your monthly expenses, and compare that sum to the liquid assets in your possession.

Does your total savings cover six months’ worth of monthly expenses? If so, congrats! If not, you’re not very liquid. Don’t despair, though. There are ways to build up more liquidity by growing your emergency fund.

Where to Start Building Liquid Assets

As you start to build your liquid assets, first consider saving a cash cushion in the form of an emergency fund, which should be enough to cover any unexpected expenses that might come along.

Envision what you might need in the event of a crisis (e.g., a job loss, divorce, health event, and so on). In terms of how much to save in an emergency fund, aim to accumulate three to six months’ worth of expenses to cover basic bills, repairs, insurance premiums and copays, as well as any other personal or medical expenses.

One good way to build liquidity is to set money aside every week or month. Or you might have a set savings amount auto-deducted from each paycheck. You could keep the funds in a high-yield savings account to help them grow.

From there, you may consider opening a retirement account or a taxable brokerage account where you can invest in potentially more lucrative (but risky) liquid investments, such as stocks, bonds, mutual funds, and ETFs.

The Takeaway

Liquid assets are assets that can be converted into cash relatively easily — typically with little or no loss in value. Liquid assets can include cash in a checking or savings account, money market accounts, or marketable securities like stocks, bonds, mutual funds, and ETFs.

Liquid investments can play a surprisingly important role in your financial wellbeing. Having ready access to cash can help you pay off debt, cover a crisis, or be able to invest in new opportunities.

Having the right banking partner can help you keep your cash secure and earning interest.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

What’s the definition of a liquid asset?

A liquid asset is an asset that is readily converted into cash, such as money in the bank, stocks, or a certificate of deposit (although you might owe a penalty when you liquidate it).

What does non-liquid asset mean?

Non-liquid assets are resources that can’t be quickly converted to cash, such as real estate, employee stock options, or collectibles (such as artwork or jewelry) that would have to be sold, which can take time and the price may fluctuate.

Is a 401(k) considered a liquid asset?

Retirement accounts, such as a 401(k) are not really considered liquid until you are over the age of 59 ½. Before that age, you would face a 10% early withdrawal penalty, as well as taxes, meaning you would take a loss on the value.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

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.

SOBNK-Q324-023

Aug

2024

Instant-Use Credit Cards, Explained

By Kelly Boyer Sagert | Credit, credit card | Comments Off

After you’re approved for a new credit card, you usually have to wait for it to arrive in the mail before you can start using it. But with an instant-use credit card, as the name implies, you can start shopping immediately.

While not all credit card issuers offer this feature, some issuers share account information with cardholders as soon as they’re approved. Getting a credit card you can use instantly can come in handy if you’re eager to start racking up rewards or spending to secure a sign-up bonus.

What Is an Instant-Use Credit Card?

Instant-use is a feature that some credit cards offer, allowing account holders to use the credit card before they receive a physical card. This is a perk given how long it takes to get a credit card otherwise — usually, cardholders can expect to wait between seven and 10 business days for their card to arrive in the mail.

Each credit card issuer can have unique policies and requirements about using an instant-access credit card. For example, you may not have access to your full credit limit until your physical credit card arrives.

How Instant-Use Credit Cards Work

There are a few different ways that credit cards offering instant use may work. After applying and being approved, you may receive a credit card account number before you get the actual card, which allows you to use the account online. Or, the credit card issuer may provide a temporary instant credit card number or barcode that you can use to make purchases before the official card and number arrives. Note that this differs from virtual credit cards, where the credit card numbers you receive are always temporary and disposable.

In other cases, it’s possible to add the instant-use credit card you’re approved for to a digital wallet, such as PayPal, Google Pay, or Apple Pay. You could then use the card as you’d use other cards in your digital wallet.

Benefits of Instant-Use Credit Cards

The exact benefits of an instant-use credit card depend upon the specific policies of the issuer. Besides providing access to the credit card account more quickly, these cards can offer the following perks.

Faster Rewards Accrual

A key benefit of instant-use credit cards is how quickly you can use them. If a credit card for immediate use features a rewards program, you could start accrue these rewards more quickly, thanks to prompt access to your credit card account. Similarly, if your card offers a lucrative sign-up bonus, you can start spending to earn it that much sooner.

Discounts

Many brands offer discounts to those who get their instant-use credit card. For instance, some retailers may provide a 25% discount on the first purchase you make with the instant-use card. You could use that discount strategically on the largest purchase you’d planned to make in order to maximize this benefit.

Financing Offers

An instant credit card number may offer special financing offers, such as a promotional rate of 0% annual percentage rate (APR) for a designated amount of time. Taking advantage of such an offer can save you a significant amount of money if you pay off your full balance before the promotion ends. Otherwise, the regular interest rate will kick in.

Recommended: How to Avoid Interest on a Credit Card

Drawbacks of Instant-Use Credit Cards

When choosing a credit card, it can understandably seem tempting to get a credit card you can use today. Watch out, though, for the following drawbacks of instant-use credit cards.

Limited Availability

There aren’t that many instant-use credit cards available to choose from. Only a select number of issuers offer them, with some only offering instant access on certain cards. Further, even if you do apply for one of the instant-use credit cards offered, there’s the chance you won’t get immediate access if the issuer encounters any challenges confirming your information.

Initial Usage Restrictions

With some instant-use credit cards, you don’t get immediate access to your full credit limit until you activate your physical card. Instead, when you receive your instant credit card number, you’ll only be able to use a limited portion of your approved credit limit. Especially if you were planning to make a large purchase immediately, this could cap your spending power.

Recommended: What is the Average Credit Card Limit

Potential for Overspending

This can be a downside of any credit card. But with a credit card for immediate use, it can be tempting to run up the balance as soon as you have the account number in hand.

Tips for Getting an Instant-Use Credit Card

If you’re hoping to secure a credit card you can use immediately, here are some tips to keep in mind throughout the process.

Check Your Credit Score Before Applying

Before you move forward with applying — and incurring a dip in your credit score due to a hard inquiry — take a look at your credit score. See if it falls within an issuer’s credit card requirements. If it doesn’t, you might be better off applying for another card you’re more likely to get approved for. Or, you could take steps to improve your credit score before you submit an application, assuming you have the time to do so.

Don’t Skip Researching

If you’re in a rush to find a credit card for immediate use, you might feel tempted to jump on the first instant-use credit card you spot. But don’t let a sense of urgency cause you to skip out on doing due diligence. It’s still important to take the time to compare your options, and to review a credit card’s terms and conditions before you’d move forward with applying.

Remember to Read the Fine Print

When you’re in a rush to get a credit card you can use today, it can seem harmless enough to skip over reading the fine print. However, especially in the case of instant-use credit cards, this can contain some important information when it comes to understanding how credit cards work.

For instance, there may be restrictions on usage of your instant credit card number, such as limited access to your credit limit. If you’d planned to make a massive purchase immediately, you’ll want to know that sooner rather than later.

Tips for Using an Instant-Use Credit Card

If you get approved for a credit card for immediate use, it’s likely you’ll want to start using it as soon as possible. Here are some important tips to keep in mind as you start spending.

Know Your Options for Access

Issuers will provide approved applicants with usage instructions for their instant-access credit cards. The issuer may give you a credit card number that you can then use to make purchases online or using your mobile wallet. If the credit card is attached to a retailer, they may set it up so you can use their app right away with the credit card number they provide.

Don’t Forget to Active Your Physical Card When It Arrives

Even if you’re already off to the races when it comes to spending with your new credit card, don’t neglect your physical card when it does arrive in the mail. Unless you have your card in your digital wallet, an instant-use credit card number limits you to online or over-the-phone purchases. Plus, some issues only offer partial access to your credit limit until your physical card is activated.

Remember That Basic Credit Card Rules Still Apply

Same-day credit cards come with the same set of credit card rules as any other card. Before you get carried away with making purchases, make sure you’re not spending more than you can afford to pay off. You’ll also want to set up a reminder — or even better, auto-pay — to ensure you make timely payments on your new credit card.

Recommended: When Are Credit Card Payments Due?

What to Do If Your Card Doesn’t Offer Instant Access

If you thought you’d applied for an instant-access credit card only to discover it actually isn’t a credit card you can use instantly, you do have options.

• For one, you can call your credit card issuer and request rush delivery. Though this likely won’t be as speedy as instant access, it can expedite the mailing process. Just keep in mind that you may owe a fee to cover the cost of faster shipping.

• You might also explore a personal loan. Many online lenders offer same-day funding, and the interest rates for personal loans tend to be lower than those of credit cards. Just keep in mind that applying for multiple loans in a short amount of time can affect your credit score. That’s because each application results in a hard inquiry, which will temporarily lower your score.

• Lastly, this could be a good time to dip into your emergency fund — especially if you really need fast access to cash. If you do, just make sure to replenish your savings so you’re covered the next time an unexpected expense comes up.

The Takeaway

Applying for instant-use credit cards can come with benefits, including immediate buying power. There are some downsides to consider, though, before making the right credit card choice for your unique needs. For one, you’ll have a more limited selection of cards to choose from, as not all credit card issuers offer instant-use credit cards.

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

Can you use a credit card the same day you get it?

With instant-use credit cards, you can use the card upon approval, which could happen almost instantly. For credit cards that don’t offer instant use, you can typically use the card as soon it arrives in the mail.

How long does it take for a credit card to arrive in the mail?

There are two factors that can impact how long it takes for a credit card to arrive. The first is how long approval takes, which can happen nearly instantly or take up to a week or so. You’ll then have to wait on mailing time, which can take anywhere from five business days up to two calendar weeks.

Can I use my credit card before it arrives?

There are credit cards that you can use instantly, although not all credit cards offer this capability. Some cards require you to wait for the physical card to arrive before you use it. If you have an instant-use credit card, you’ll receive instructions from the issuer on how to start using the account right away.

Photo credit: iStock/Cunaplus_M.Faba

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Aug

2024

What to Do When a Family Member Uses Your Credit Card Unauthorized

By Dan Miller | Credit, credit card, Family Finances | Comments Off

Dealing with unauthorized credit card charges by family members or friends can get complicated. Your credit card issuer may want you to file a police report and even take legal action against the person who made the charges. You’ll have to decide whether it’s worth potentially damaging your relationship with your family member or friend.

One of the main advantages of using a credit card for purchases is that, in most cases, you’re not liable for fraudulent charges. If your card is lost or stolen, usually all it takes is a quick chat with your credit card issuer to resolve the issue. While this likely means you won’t be liable for a relative’s charges made without permission, read on to learn more about managing this scenario.

Authorized vs Unauthorized Credit Card Charges

While you are legally responsible for paying back any authorized credit card charges, in most cases, you will not need to cover any unauthorized credit card charges.

Most credit cards come with a 0% liability guarantee, meaning that you’re not liable for any unauthorized or fraudulent charges that were made with your credit card or account information. This can help protect you against credit card scams and other fraudulent activity, as well as charges made to your card without your permission.

Legal Protection Against Unauthorized Use of Credit Cards

There are two main federal laws that help to protect you against unauthorized use of your credit card or account information:

• Fair Credit Billing Act (FCBA): This law limits your liability for unauthorized credit card charges to $50, though many card issuers lower your liability to $0 for all unauthorized charges.

• Electronic Fund Transfer Act (EFTA): Sometimes referred to as Reg E, this law limits liability for ATM transactions or debit card charges, among other types of transactions, if it’s reported within 60 days.

Recommended: What is a Charge Card?

Tips for Handling Accidental Possession of Credit Cards

One of the best things you can do to help avoid unauthorized use of your credit card by a third party is to keep it in your possession. Make sure you know where your credit cards are at all times, especially if you have teens or other adults living in your home.

It’s also a great idea to regularly monitor your bank accounts and credit card accounts. That way, you can spot any unauthorized charges quickly.

Tips for Handling Unauthorized Credit Card Charges

If unauthorized charges were made to your credit card, here are some tips for how to handle the situation.

Contact Your Credit Card Issuer

The first thing you’ll want to do if you spot an unauthorized credit card charge on your account is to contact your credit card issuer. You can do this by calling the number printed on the back of your credit card or contacting your issuer through your online account.

Request a Refund

As the refund process may vary slightly by issuer, the customer service representative you talk with can help you figure out how to request one. A refund is also sometimes referred to as a credit card chargeback. In many cases, the bank will provisionally credit your account within 24-48 hours while they investigate the fraudulent charges.

File a Police Report

In some cases, your bank or credit card company may request you to fill out a police report. In other cases, the card issuer may file a police report themselves. This can make the situation complicated if it’s a friend or family member who made the unauthorized charges.

Disputing Credit Card Charges

Disputing credit card charges is another term for reporting unauthorized or fraudulent activity on your account. When you dispute a credit card charge, you’re letting the card issuer know that you believe you should not be responsible for paying that particular charge. It’s important to dispute any fraudulent charges as soon as possible.

Reporting Unauthorized Credit Card Use

It’s good financial practice to regularly review your bank and credit card accounts for a number of reasons. One reason is to report any unauthorized credit card use as soon as you see it. The best way of handling fraudulent charges is to report them immediately and then let your bank or credit card company investigate them.

Recommended: How to Avoid Interest On a Credit Card

Tips for Avoiding Credit Card Fraud and Unauthorized Use

There are two things that you’ll want to do to avoid unauthorized use on your credit card:

• First, make sure that you keep track of your cards and don’t leave them where someone else might use them.

• Second, regularly monitor your bank and credit card accounts. That way, you can report any unauthorized use to avoid being liable for any credit card purchase interest charges that may accrue otherwise.

The Takeaway

Federal law limits consumer’s liability for fraudulent or unauthorized charges, and most credit cards have a $0 fraud liability policy. So if you do have any unauthorized or fraudulent charges, make sure to report them to your credit card issuer right away.

Where this situation can get complicated is if it’s a friend or family member who made the unauthorized charge. In the case of unauthorized use of a credit card by a family member or friend, you’ll need to decide whether to try and get the money back directly from that individual or report the charge to your card issuer, which may mean filing a police report.

FAQ

Who is liable for unauthorized credit card charges?

Federal law limits a consumer’s liability for unauthorized credit card charges and credit card fees stemming from unauthorized use. If you see a charge on your credit card account that you don’t recognize, make sure to report it to your card issuer as soon as possible.

How do credit cards investigate unauthorized charges?

Credit card companies have a variety of different ways that they investigate unauthorized charges. They may contact the merchant, review video from the purchase, or check online activity. In some cases, they may work with local law enforcement and/or pursue criminal charges.

Should you report a family member for unauthorized credit card use?

Whether or not you report a family member for unauthorized credit card use depends on the situation. Keep in mind that reporting a family member for unauthorized credit card use may lead to the card issuer pressing charges against them for fraud. So, depending on your relationship, you may not want to report your family member to the card issuer and instead try to get the money back directly from them.

Photo credit: iStock/Erdark

Aug

2024

What Is Credit Card Arbitrage and Is It Worth It?

By Kim Franke-Folstad | Credit, credit card, Growing Wealth | Comments Off

Credit card arbitrage is a strategy in which you borrow money with a 0% or low-interest credit card and then put that money into an investment that earns a higher rate of return. It can sound like a way to make easy money, but it does carry some risks. And it isn’t necessarily a good fit for average investors.

If you’ve heard of credit card arbitrage and wondered if it’s something you should try, read on for a rundown of the risks and rewards.

What Is Credit Card Arbitrage?

With credit card arbitrage, or balance transfer arbitrage, you sign up for a credit card with a low or 0% annual percentage rate (APR). Then, you use that credit card account to put money into an investment that will earn more than the interest rate you’re paying on the credit card balance you’re carrying.

You follow one of the basic credit card rules of making at least the minimum credit card payment on time each month. When the card’s introductory rate expires, you take the money you need out of the investment, pay off the remaining balance on the card, and keep the difference as your profit.

Credit Card Arbitrage Strategies

What you decide to invest in using a credit card may depend on a few different factors. This includes how much you can borrow, the length of your introductory rate (which is often between 12 and 21 months), and your tolerance for risk.

Some possible investments for your credit card arbitrage strategy include a high-yield savings account, a certificate of deposit, and short-term bond ETFs.

High-Yield Savings Account

A high-yield savings account may be a good option for risk-averse investors attempting credit card arbitrage. You can’t lose the money because it’s protected at banks by the Federal Deposit Insurance Corporation (FDIC) and at credit unions by the National Credit Union Administration (NCUA). However, you may have to keep a minimum balance to avoid a monthly service fee.

An alternative to attempting credit arbitrage using a high-yield savings account might be to save using an online-only financial institution. Online banks tend to offer more competitive rates than brick-and-mortar banks.

Certificate of Deposit

Another investment with limited risk is a short-term (six months to a year) or no-penalty certificate of deposit, or CD. A CD may offer a higher interest rate than a savings account, and it also will be insured by the FDIC.

The benefit of a no-penalty CD over a short-term CD is that if you find a higher return elsewhere, you can withdraw your money and move it without paying a fee. Otherwise, you’ll face an early withdrawal penalty if you try to take your money out of a CD before the term is over.

Recommended: How to Avoid Interest on a Credit Card

Short-Term Bond ETFs

A bond exchange-traded fund (ETF) that holds short-term bonds may be another low-risk option to consider. Bond ETFs are traded on the stock market, so they’re more liquid than other types of bonds and bond funds. And funds that have a shorter term are less exposed to changing interest rates.

Still, if you’re unfamiliar with bond ETFs, you may want to take some time to research the pros and cons of this investment — including the risk and potential for loss and how to reduce trading costs.

Pros and Cons of Credit Card Arbitrage

As mentioned, there are definite downsides to credit card arbitrage. However, there’s the potential for gains, too. Here’s a quick rundown of the pros and cons of credit arbitrage:

Pros	Cons
May be an easy way to make money if you can find the right investment	Difficult to find a safe investment that makes the strategy worth the effort and risk
A low-interest card with cash-back rewards or points could add to the strategy’s benefits	Consequences for late payment could eat into expected profit
Making timely payments could help build your credit score	Taking out a card and using up your available credit could negatively affect your credit score

The upside to using credit card arbitrage is the potential to make some extra money with very little effort. If you’ve worked hard to earn and maintain a credit score that qualifies you for a credit card with a 0% or low-interest rate, you can use that card to fund an investment and, if all goes well, quickly pocket a profit.

If you choose a credit card that offers credit card rewards, such as cash back or points, that could be an added benefit. Further, by always making at least the minimum payments on the credit card and repaying the balance on time, you might help build your credit score. (Although if you qualify for a low-interest card, you probably already have good credit.)

Unfortunately, there are also plenty of downsides to credit card arbitrage — starting with finding an investment that works well with the strategy. Though in recent months the Federal Reserve has been bumping up its benchmark interest rate, it may take a while before those increases lead to noticeably higher yields on savings accounts and CDs.

Depending on how much you decide to borrow and how long your introductory period lasts, the small amount you might earn from your investment may not be worth the effort or risk of using your credit card.

And there are risks involved with credit arbitrage. For starters, you can expect to feel some effects if you make a late payment on your card. You might have to pay a late fee or, worse, the credit card company could cancel your promotional interest rate and immediately begin charging a substantially higher interest rate on the account. That could take a significant bite from your profits.

Your credit score also could suffer — even if you make timely payments. Just opening a new line of credit may temporarily lower your score. And if you borrow all or a large portion of your available credit, it could affect your credit card utilization ratio, which also can negatively affect your credit score.

You also can expect your credit score to go down if you do end up making a late payment (or payments). Payment history is the No. 1 factor in determining your FICO Score®.

Considering Credit Card Arbitrage? What to Know

There’s an old saying in investing: Don’t risk more than you can afford to lose. Or, as your mom might put it: Just because you can doesn’t mean you should.

Credit arbitrage may look like an easy and “free” way to make some extra money, but it’s a strategy that’s probably best left to investment professionals. If you do decide to attempt it, here are a few things you can do in advance to protect yourself:

• Have a backup plan. What would happen if you suddenly lost your job or had unexpected expenses from an illness or accident? Unless you have a healthy emergency fund or your investment can be easily liquidated, you could quickly run into financial trouble.

• Make sure you understand the terms of your credit card agreement. How long does the introductory period last? (The longer the better.) What happens if you miss a payment? What’s the rate when the promotional period expires?

• Know yourself. This strategy requires using a credit card responsibly. If you aren’t clear on how credit cards work or think you’ll be tempted to use your card for a spending spree instead of investing, you may want to think twice before moving forward.

• Don’t forget about fees. Run the numbers to be sure your investment will still pay off after you cover fees and other costs.

Recommended: 10 Credit Card Rules You Should Know

Other Ways to Save and Make Money Using Your Credit Card

If the concept of credit card arbitrage is new to you, it may be because there are other popular ways to use a credit card to save and make money. Here are some other options to consider.

Earning Cash Back

With a cash-back rewards card, cardholders can get back a percentage of the money they spent on purchases during a billing cycle. That percentage varies from one card to the next — and there also may be different ways you can receive your cash rewards. You may be able to apply the cash directly to your balance, put it toward gift cards or charitable giving, or have the money deposited directly into your checking account.

Getting cash-back rewards can be an especially effective strategy if you use your card for frequent and/or major purchases and pay down your balance every month.

Earning Rewards Points

Some card issuers offer a rewards program based on credit card points. Cardholders may be able to put their points toward multiple purposes, including travel (flights, hotels, car rentals), statement credits, cash back, and more. The value of points may vary depending on the specific credit card as well as how you opt to redeem earned points.

Investing Your Rewards

You also may be able to invest with credit card rewards. For instance, if you earned cash-back rewards from your credit card spending, you could redeem your rewards as a direct deposit or check. Then, you could use that money to invest with credit card rewards basically — either in a literal investment, such as stocks or index funds, or even in yourself, through additional job training or classes.

Shopping Online to Earn Bonus Rewards

Some credit cards offer bonus rewards for shopping online or through an app. Card issuers may have different rules for their rewards (think goods instead of services or certain brands only,) so it’s a good idea to check out a rewards program’s requirements before signing up.

Using a Balance Transfer Card to Pay Down Debt

Another possibility is to use a no-interest balance transfer credit card to pay down debt. Once you move your balance from a high-interest card to the new card, you’ll have several months to pay down your debt without accruing any additional interest.

Just as with credit card arbitrage, it’s important to be sure you make your monthly payments on time, though, or you could see a big jump in your card’s interest rate. Also keep in mind that a balance transfer fee will apply, so be sure to factor that into the equation.

Using a 0% APR Card

Planning to take a dream trip or make a major purchase? A no-interest credit card could allow you to finance your big spend without accruing interest. You’ll just want to make sure you can pay off the balance within the promotional period, and make your payments on time.

The Takeaway

You may have heard credit card arbitrage, or balance transfer arbitrage, touted as an easy way to make some extra cash. But the process, which involves using a no- or low-interest credit card to finance an investment that earns a higher rate of return, isn’t as simple as it may seem. It can require careful planning, financial savvy, and some research to find the right investment for this strategy. And even if all goes well, the payoff may not be worth the time and effort to use credit cards in this way.

FAQ

Are there risks involved in credit card arbitrage?

Yes. Even if your investment seems super safe and like it won’t lose money, if you don’t make your monthly payments on time or if you can’t pay off the balance before the promotional period is up, you could find yourself in a financial bind.

Is credit card arbitrage legal?

Yes. But just because you can do it doesn’t mean you should. There are other more proven ways to save and invest using a credit card.

How much can you make with credit card arbitrage?

The amount you can make using credit card arbitrage depends on several factors. This includes how much you choose to borrow and invest, your card’s interest rate, how much your investment pays, the length of your card’s promotional period, and the fees you might incur when investing.

Photo credit: iStock/Prostock-Studio

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.

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 .

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What Is a Premium Checking Account?

What Does Premium Checking Mean?

What Are the Benefits of a Premium Checking Account?

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Pros and Cons of a Premium Bank Account

Pros

Cons

How Can I Qualify for a Premium Checking Account?

Additional Features of a Premium Checking Account

Are Premium Checking Accounts Worth It?

The Takeaway

FAQ

Is a premium checking account worth it?

What are the benefits of a premium bank account?

What does a premium bank account mean?

What Are Liquid Assets and How Do They Work?

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Reasons Why Liquid Assets Matter

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Is It Smart to Keep Cashing In Liquid Assets?

How Liquid Are You?

Where to Start Building Liquid Assets

The Takeaway

FAQ

What’s the definition of a liquid asset?

What does non-liquid asset mean?

Is a 401(k) considered a liquid asset?

Instant-Use Credit Cards, Explained

What Is an Instant-Use Credit Card?

How Instant-Use Credit Cards Work

Benefits of Instant-Use Credit Cards

Faster Rewards Accrual

Discounts

Financing Offers

Drawbacks of Instant-Use Credit Cards

Limited Availability

Initial Usage Restrictions

Potential for Overspending

Tips for Getting an Instant-Use Credit Card

Check Your Credit Score Before Applying

Don’t Skip Researching

Remember to Read the Fine Print

Tips for Using an Instant-Use Credit Card

Know Your Options for Access

Don’t Forget to Active Your Physical Card When It Arrives

Remember That Basic Credit Card Rules Still Apply

What to Do If Your Card Doesn’t Offer Instant Access

The Takeaway

FAQ

Can you use a credit card the same day you get it?

How long does it take for a credit card to arrive in the mail?

Can I use my credit card before it arrives?

What to Do When a Family Member Uses Your Credit Card Unauthorized

Authorized vs Unauthorized Credit Card Charges

Legal Protection Against Unauthorized Use of Credit Cards

Tips for Handling Accidental Possession of Credit Cards

Tips for Handling Unauthorized Credit Card Charges

Contact Your Credit Card Issuer

Request a Refund

File a Police Report

Disputing Credit Card Charges

Reporting Unauthorized Credit Card Use

Tips for Avoiding Credit Card Fraud and Unauthorized Use

The Takeaway

FAQ

Who is liable for unauthorized credit card charges?

How do credit cards investigate unauthorized charges?

Should you report a family member for unauthorized credit card use?

What Is Credit Card Arbitrage and Is It Worth It?

What Is Credit Card Arbitrage?

Credit Card Arbitrage Strategies

High-Yield Savings Account

Certificate of Deposit

Student Loan
Refinancing

Personal
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Online
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