In 2019, Amazon overtook Apple and became the world’s most valuable brand. Since then, the retail giant has continued to maintain its status as a top global brand, and happy customers aren’t the only ones who’ve noticed.
As Amazon’s revenue climbed, scammers watched from the shadows. In the past few months alone, AARP’s Fraud Watch Network helpline (877-908-3360 toll-free) has witnessed a dramatic spike in Amazon scams targeting U.S. consumers, jumping from 10-30 million robocalls each month to a whopping 150 million!
As scammers claw for our personal and financial information, it’s more important than ever to be prepared. Take a look at the list below for five common Amazon scams and tips for how to spot them before it’s too late.
What’s Ahead:
1. “Suspicious activity on your online account”
Ironically, some scammers trick unsuspecting victims into giving their personal information by pretending the consumer has already been scammed.
The tactic here is fear-based, scaring consumers to act fast. You might receive a spontaneous robocall reporting “suspicious activity” on your account (a missing package, an unusual order, etc.). The caller may ask you to “press one” or call another number to speak to a customer support representative that can address the issue. Don’t fall for it!
The next caller will likely solicit your account information and may even try and prompt you to install remote access software, giving them full access to your device.
2. Fake order confirmations
It’s perfectly normal to receive an order confirmation email from Amazon, so some scammers fool users by sending fake confirmation emails with items the user did not purchase.
Once again, scammers are relying on the user’s panic. You may think your card’s been (or will be) charged for an item (or even an Amazon Prime subscription) that you did not order. These messages have a phone number you can call or internal links you can click on to log in to your account and cancel the order. The reality, however, is those links lead to a fake login page, designed to capture a user’s login credentials.
Instead, leave your inbox and log in to your Amazon account via your web browser. Check “Your Orders” to see if there’s anything that matches the email. If you can’t find a match, odds are you’ve been targeted by a scammer and should report the message to Amazon.
3. “Congratulations! You’ve won a prize!”
Another trick of the trade scammers may use to steal your information is the fake prize message. Perhaps you’ve won a raffle or are eligible for an attractive discount. Whatever you do, don’t bite.
This classic phishing scam uses a victim’s joy and excitement against them, but the strategy is quite similar to the “order confirmation” scam. The text or email often includes a link consumers can click to redeem their prize and arrange for its delivery. Once again, scammers use the link to capture and steal your information, so avoid clicking on any suspicious links. Instead, log in to your account and/or call Amazon’s customer service center for assistance.
4. “Please send Amazon gift cards”
This scam may sound unusual, but unfortunately, it’s both common and complex.
In fact, scammers use Amazon gift cards for a variety of scams. Instead of posing as an Amazon representative, the scammer may pretend to be someone you know, such as a co-worker or boss, or perhaps even a relative. The scammer may request Amazon gift cards for a family member who’s facing an emergency or a contribution to a co-worker’s birthday gift. You may be encouraged to purchase Amazon gift cards as payment for an online product or as payback for an alleged fine or bill.
While there are a number of ways scammers use gift cards to steal your money, you should always be wary if a caller (even a caller you “know”) requests Amazon gift cards.
5. Fake Amazon listings
If you ever spot an Amazon deal that’s too good to be true, don’t be so quick to “Add to Cart.”
These supposedly stellar bargains can be difficult to catch. Some scammers even hire accomplices, who purchase the product and ship it to a random consumer so they can write a fake review. As a result, these products have not only attractive price tags but also great reviews as well. (This helps to convince shoppers that the seller is legitimate).
My husband Steve received a handful of Amazon packages addressed to “Sev” last year, all of which were likely purchased and shipped indirectly by the seller.
The good news is Amazon can often catch these devious sellers before shoppers have a chance to “Buy Now.” The bad news is the scam still happens, so make sure you know how to spot these phony listings.
How to spot an Amazon scam before it’s too late
Scammers are good at what they do, but there are still plenty of red flags you can watch out for to protect yourself from falling for their tricks. Here are some common signs of scammers and tips to help you catch them in the act:
Poor grammar, spelling, and punctuation (in texts and emails).
The message requests that you log in to your account via email.
The message requests payments to be made outside of the Amazon website.
The caller requests remote access to your electronic device.
The message asks you to verify sensitive personal information.
The message offers a refund you were not expecting.
You receive an order confirmation for an item you did not purchase.
The message asks you to update payment information (not linked to an order you placed or service you subscribed to).
The email address does not end in “@amazon.com.”
What to do if you suspect you’re being scammed
If you’re suspicious of a call, email, or text that claims to be from an Amazon representative, do not respond. Instead, visit your account online to see if the message or call you’ve received is accurate, and contact Amazon customer service to verify (only use the contact information listed on Amazon’s site).
If you’re concerned a scammer may already have your account information, change your password immediately. Additionally, if the scammer may have your bank information, contact your bank for help figuring out the next steps in order to protect your account. To prevent future scams, consider downloading a call blocker. Amazon also suggests their users set up two-step verification to protect their accounts.
Finally, report any suspicious calls, emails, or texts to Amazon, as well as the Federal Trade Commission (FTC) to help inform and protect other Amazon customers.
Summary
“You’ve won a prize!” “This call is to inform you of suspicious activity on your Amazon account.”
Messages like these are truthful at times, but they’ve also become common introductions used by thousands of scammers to steal your information.
To protect yourself from a scammer’s traps, make sure you’re aware of common scammer tactics and strategies. Be skeptical of suspicious messages, and if you’re worried a scammer may be targeting you, report them to Amazon, as well as the Federal Trade Commission (FTC).
Last Updated: May 26, 2023 BY Michelle Schroeder-Gardner – 13 Comments
Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.
Mystery shopping. Many of you have emailed me and asked me the question “what is mystery shopping” and have been wondering how I am making money through mystery shopping.
I usually make around $150 to $200 a month from mystery shopping.
Side note: If you are interested in the many other ways I earn extra money, check out my Extra Income page on my blog.
I use mainly Bestmark for my mystery secret shops. I’m not sure what other companies are good and reputable mystery shopping websites, but I know for a FACT that Bestmark is a legitimate mystery shopping website, so you can trust me when I say that.
Last month I didn’t make too much because not a lot of “good” shops were offered in my area. Lately, I’ve been a little more picky with the shops that I sign up for also.
What I consider a worthwhile shop for ME:
Either an online shop or phone call shop
If I have to drive, it’s close to somewhere I’ll be
Something I’ll use. I love doing Estee Lauder shops because I always love free makeup.
Restaurant shops, because I have to eat, of course.
Of course, what’s worthwhile to you and me might be different. When I first signed up for mystery shopping (sometime last summer I think), I literally signed up for everything. I made decent money, but it wore me out. The amount of surveys that you have to do is so repetitive that it makes you want to throw your computer at the wall.
Sometimes surveys take just a minute, but sometimes they literally take an hour. Restaurant shops usually take a little longer than others because usually you are grading every little detail.
Some examples of mystery shops I’ve done include:
Restaurants. This ranges from cheaper restaurants where I’m reimbursed for around $30 worth of food, all the way up to nice steakhouses where I get $100.
Dealerships. Bestmark has a ton of dealership shops available, but I only have done the phone call and scheduling services online secret shops.
I usually do about 4-5 of these a week and these are the easiest shops. You don’t have to drive anywhere and the surveys literally take one minute. And you get paid around $5 for them. Although recently they’ve lowered the payment to only $3, and there’s a ton more work involved. I had to cancel around 3 or 4 shops because they didn’t make it clear enough about the amount of work that I signed up for. And for $3, I’m not really willing to do too much.
They also have dealership secret shops where you go in and pretend you want a car. These usually pay around $20. This is something I’ve never done, and they have plenty of these available for everyone to do. I’ve never done this because car salesmen scare me. I’m not ready for thousands of annoying phone calls and I’m afraid that I’d be stuck in a dealership for an hour while trying to run away from the salesperson.
Retail. I mainly do Estee Lauder. I’ve done a lot of these. I’ve gotten foundation, lotion, toner, face wash, concealer, lip gloss and so on, all for FREE! And these aren’t sample sizes, I’ve probably gotten over $200 in stuff, plus gotten paid around $10 on top for each shop as well.
I’ve also done a couple of Best Buy shops. These are easy too. You just survey a certain department (takes like a minute), and then you can just buy something small like a candy bar so that they have your receipt for proof that you were actually there and performed it. Best Buy shops usually pay around $13. Not a ton, but the Best Buy is along the way home from my work so I just pop in.
This is a mystery shopping check from one week’s of mystery shopping.
The highest paid shops I do are usually for restaurants. I’ve done a couple of nice restaurants where I had to eat over $100 worth of food. Crazy! I’ve also seen Hotel mystery shops, but they’ve never been on a good day for me, so I’ve never been able to sign up.
Also, if you find that you cannot do a shop that you sign up for, all you do usually is contact your scheduler and say you need to reschedule or cancel. Try not to do this too often though. These schedulers will remember you, and if you’re good to them, they will give you good shops, so remember that!
Mystery shopping money will NOT make you rich. I want to make that clear. It’s just a nice form of side income, where I can get things I want for free! What I make from mystery shopping, I add to my vacation fund. So it’s a nice little addition every month.
If I want to eat at a nice restaurant that I would usually go to, then YES I would love to do a secret shop there. Those are always the greatest shops because you are paid to have fun.
Do you secret shop such as through Bestmark? Any tips?
Also, if you join Bestmark, please say I referred you! My ID is MO4999. You can join Bestmark by clicking here.
If you are new to my blog, I am all about finding ways to make and save more money. Here are some of my favorite sites and products that may help you out:
Cut your TV bill. Cut your cable, satellite, etc. Even go as far to go without Netflix or Hulu as well. Buy a digital antenna (this is the one we have) and enjoy free TV for life.
Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. I earn over $30,000 a month online through my blog and you can read more about this in my monthly online income reports. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
Lower your cell phone bill. Instead of paying the $150 or more that you spend on your cell phone bill, there are companies out there like Republic Wireless that offer cell phone service starting at $5. YES, I SAID $5! If you use my Republic Wireless affiliate link, you can change your life and start saving thousands of dollars a year on your cell phone service. I created a full review on Republic Wireless as well if you are interested in hearing more. I’ve been using them for over a year and they are great.
Sign up for a website like Ebates where you can earn CASH BACK for just spending like how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10 gift card bonus to Macys, Walmart, Target, or Kohls!
Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month (the first two weeks are free too) and you get meal plans sent straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 per person or less. This allows you to save time because you won’t have to meal plan anymore, and it will save you money as well!
Answer surveys. Survey companies I recommend include American Consumer Opinion, ProOpinion, Pinecone Research, Opinion Outpost, Survey Spot, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
Use Swagbucks for your online searches. Swagbucks is something I don’t use as much, but I do occasionally earn Amazon gift cards with very little work. Swagbucks is just like using Google to do your online searches, except you get rewarded “points called SB” for the things you do through their website. Then, when you have enough Swagbucks, you can redeem them for cash, gift cards, and more. You’ll receive a free $5 bonus just for signing up today!
Try Digital Voice. Another one you may be interested in related to Swagbucks is Nielsen Digital Voice. Digital Voice is a part of Nielsen, which I’m sure you’ve heard of. All you have to do is surf the web and you may be able to start earning money.
Try InboxDollars. InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming grocery coupons, and more. Also, by signing up through my link, you will receive $5.00 for free just for signing up!
Find a part-time job. There are many part-time jobs that you may be able to find. You can find a job on sites such as Snagajob, Craigslist (yes, I’ve found a legitimate job through there before), Monster, and so on.
The gig economy was just beginning to blossom pre-pandemic. Between 2010 and 2020, the number of gig workers or side hustlers increased by 15%. Unlike many aspects of life, which stagnated during the pandemic, freelancing only grew. Statista reported that 73.3 million people work as freelancers in the U.S. right now, an increase from 57.3 million pre-pandemic.
Freelancing has tremendous benefits for many people. Freelancing or gig work can provide:
Flexibility
A better work-life balance
Increased income potential
But it can come with some financial complications, too.
As a freelancer, you’ll need to manage cash flow so that you’ll have money in your account to pay your bills. You’ll be responsible for paying your own taxes. And, with that in mind, you’ll want to track expenses carefully so that you can deduct the costs of running your freelance business from your bottom line.
That’s where having a business bank account can come in handy.
Why You Need a Bank Account If You Have a Side Hustle
According to tax laws, you don’t have to have a business bank account to run a side hustle or a freelance business. You can file your taxes using your Social Security number and receive a 1099 form as a sole proprietor.
But as your business grows, you may want to incorporate under a tax ID number. You may choose to register as a corporation like an S-Corp or, more commonly, a limited liability corporation or LLC. This can get confusing, so it’s important to speak to a tax account before you take this step.
If you incorporate your business, you’ll need a business checking account to keep your personal finances separate from your business expenses. You would pay yourself a salary out of your business account and use your personal bank account to pay for your daily living expenses, entertainment, and anything that isn’t considered a business expense.
Benefits of Business Accounts
Most small business owners, freelancers and side hustlers prefer to open a business account even if they aren’t incorporated. Having a dedicated business checking account makes it easier to track your business income and expenses, which makes filing taxes – and making quarterly estimated tax payments – easier. If you ever get audited, you’ll have a clear record of your personal and business finances.
Plus, if you do any sales and marketing for your freelance business, your business debit card can often pique people’s interest. You’d be surprised how having a debit card with your business name on it can help you generate leads in odd places, whether you’re at your favorite bar or paying for groceries.
If you’re ready to open a separate business account, it’s important to find one that will meet your needs.
Freelancer vs. Side Hustler vs. Entrepreneur
Before you choose a business account, you may be wondering about the differences between entrepreneurs, freelancers, and side hustlers. Which category do you fit in?
These are all loose terms to describe anyone who owns their own business or is self-employed. Self-employed is a tax designation, which means you are a 1099 contractor for other companies. This term would apply to most freelancers and side hustlers.
On the other hand, if you start your own business, you might consider yourself an entrepreneur. The dictionary defines an entrepreneur as someone who starts a business and is willing to take a financial risk in hopes of great success.
A freelancer may also take financial risks, including leaving a steady paying job. In a lot of cases, whether you describe yourself as an entrepreneur, small business owner, freelancer or side hustler is up to you.
Compare the Best Freelancer Checking Accounts
In most cases, business owners, freelancers and side hustlers can all benefit from a good business bank account. Read on as we compare the best business checking accounts for freelancers, gig workers, and entrepreneurs.
1. Lili Bank: Overall Best Bank for Freelancers
Lili calls itself “the one-stop shop for all your small business financial needs.” An online financial services company that provides business banking, accounting for freelancers, invoicing, and tax support, Lili is backed by Choice Financial Group Inc.
As a US-based bank, Choice is a member FDIC, which means your funds deposited in Lili are protected by the federal government up to $250,000 per account.
What sets Lili apart as one of the best bank accounts for freelancers?
In addition to all the other services it offers to business owners, Lili has no minimum balance requirements, no monthly fees for basic checking, and a network of 38,000+ fee-free ATMs nationwide. You can also open a business savings account and earn 1.50% APY at Lili.
Lili’s basic business checking account has no monthly fee, expense categorization for your purchases, and the ability to generate quarterly expense reports.
Alternatively, for $9 per month, you can earn 1.5% on savings, get a Visa business debit card with cashback rewards, overdraft protection up to $200 and tax, invoicing software, and accounting support.
Lili integrates with third-party services that gig workers may use, including Etsy, Shopify, Venmo, QuickBooks, and your PayPal business account.
When you compare the prices of other invoicing and online accounting services, you may find that Lili offers tremendous value for the money as one of the overall best banks for gig workers you can find.
Bluevine: Best for Business Interest Checking Account
Like Lili, Bluevine is a financial technology company. It is backed by Coastal Community Bank, Member FDIC to protect your deposits. The Bluevine business checking account offers 2.0% interest, which sets it apart from competitors.
To take advantage of the interest, you’ll need to either spend $500 per month with your Bluevine Business Debit Mastercard or receive $2,500 per month in customer payments to your Bluevine business checking account.
There are no monthly fees or minimum balance requirements and you can make unlimited transactions with no fees. Like Lili, Bluevine also offers other services for business owners.
If you are looking for a business interest checking account with value-added services, consider Bluevine. Your account integrates easily with QuickBooks, with no fees involved. Plus, you can set up sub-accounts to easily manage your money, add authorized users, and pay bills via ACH or wire transfer from your Bluevine account.
While many credit providers offer business credit cards, Bluevine is one of only a few business checking accounts that offers a business line of credit. You may qualify for a credit line of up to $250,000, with a rate as low as 6.2% interest. This interest rate is much lower than the national average of 20.46% for business credit cards right now, as reported by The Balance. Plus, you could get approved in as fast as five minutes, according to the Bluevine website.
For entrepreneurs seeking to purchase tools or resources, or freelancers in need of business equipment, Bluevine’s line of credit could provide you with the financial security you need to grow. Take note that you’ll need a credit score of 625 or more to qualify and $40,000 in monthly revenue. This is probably not a service for a gig worker, but for a seasoned entrepreneur.
Even so, it’s never too early to get started with a business checking account, especially one with no monthly fees.
Amex: Best for Debit Card Rewards and Bonus Offer
American Express is a renowned name in business and consumer rewards credit cards. But you might not be aware that the company also offers a business checking account with 1.30% APY on balances up to $500,000.
American Express also has no monthly maintenance fees, no fees on domestic ACH payments, and no fees at MoneyPass ATMs. The American Express Business Blueprint app makes it easy to manage your account.
Amex stays true to its credit card rewards roots with a rewards business debit card. Earn 1 Membership Reward point for every $2 on eligible purchases. You can combine points earned with Membership Rewards points accrued with other Amex cards, and use those points for travel, gift cards, or cash back. You can also convert those points into cash deposits directly into your new business checking account.
Amex’s bonus offer stands out to us. Earn 30,000 Membership Rewards points after you deposit $5,000 or more within the first 30 days of account opening, maintain that balance for the next 60 days, and make five or more qualifying transactions within those first 60 days.
NBKC Business Checking: Best for No Fees
If finding a business bank account with no fees is most important to you, a nbkc Business Checking account might fit the bill. The bank offers unlimited transactions with no fee, no minimum balance requirements, no monthly fees, and no opening deposit requirements either. You can also have out-of-network atm fees reimbursed for up to $12 per month.
If you are a freelancer just getting started or just looking to supplement your full-time income with a side hustle, you’ll find nbkc bank a low-cost and convenient option among free business checking accounts.
NBKC lacks some of the bells and whistles of the top choices on our list. You won’t get integrations with common business software or invoicing and accounting support. But a nbkc business checking account is free with your personal account and provides an easy way to keep your business and personal funds separate.
Novo: Best for Payment and P2P Money Transfer App Integration
Novo is another choice with no monthly maintenance fee, no monthly fee, free ACH transfers, and no minimum balance needed. Like many of the business bank accounts on this list, Novo is a financial technology company. It’s backed by Middlesex Savings bank, a Member FDIC, which means your money is protected up to $250,000 per account.
Novo is the best for business owners looking for an easy way to process payments or transfer funds. You’ll get free ACH transfers from another checking or savings account and refunds on all out-of-network ATM fees.
Novo integrates with many P2P payment apps, including Square, Shopify, and Stripe, as well as Etsy, eBay, Amazon and more.
When you use Novo Boost, you can get paid 95% faster through Stripe, or two business days before the funds would ordinarily appear in your account.
Plus, it’s quick and easy to open an account online, with approval as fast as 10 minutes – rather than days with some other online bank accounts.
Axos Bank: Best for New or Scaling Businesses
Many freelancers don’t think about opening a business account until they have incorporated their company to make that transition from self-employed to entrepreneur. If this sounds like you, Axos Bank could have the best bank accounts for you. The online bank is offering business owners who incorporated after June 2020 an extra $200 in their new business bank account.
If you aren’t newly incorporated, you can earn a $100 bonus.
Like many of the best business accounts on this list, Axos has no monthly fee, no minimum monthly average balance to hold, ATM fee reimbursements for all domestic transactions, and no minimum opening deposit. The bank accepts cash deposits or you can transfer money from other checking accounts via ACH.
Unlike many online banks, Axos offers business owners a dedicated relationship manager to help point you to the products and services that are best for your growing business.
Chase Business Complete Banking: Best for Credit Card Processing
As the largest U.S. bank, with assets of $3.31 trillion, Chase is a traditional bank that offers all the convenience of online banks. This includes personalized service, stellar fraud protection, and a host of other features and benefits we’ve come to expect from any financial institution.
The Chase Business Complete Banking account is ideal for entrepreneurs, offering unlimited transactions and no monthly fee (if you meet certain requirements). These requirements are relatively easy to meet with a $2,000 minimum balance, $2,000 in purchases on your Chase Ink Business credit card, a link to a Chase Private Client Checking account, or $2,000 in deposits from QuickAccept or Chase eligible merchant services.
The best aspect of Chase Business Complete Banking is the ability to process credit card transactions and receive funds the same day through Chase QuickAccept. (Additional fees apply.)
You can open an account with no minimum deposit to get started.
Wave Money Business Banking: Best for Free Business Banking
Wave Money integrates a free checking account with easy bookkeeping for freelancers and solopreneurs. Wave is best for those who want to improve cash flow with instant pay and want bookkeeping tools to make tax prep easier.
Wave has no monthly fee or transaction fees, so you keep more of what you earn. You can use the mobile check deposit feature for convenience, and make ACH transfers easily. There are no transaction limits with Wave, and you can also connect third party payment processors.
Wave is another fintech company, with banking provided by Community Federal Savings Bank, Member FDIC. That means your funds are insured for up to $250,000 per account.
TIAA Bank: Best for Business Investments
Besides checking accounts, TIAA Bank offers a variety of banking products for entrepreneurs and gig workers that sets it apart.
If you’re considering business savings accounts, TIAA offers CDs and money market accounts to earn interest at a rate higher than you may get with another account. Currently, TIAA’s one-year business CD offers an APY of 3.75%.
TIAA’s checking accounts offer easy online banking and mobile check deposit, along with personalized service from a business solutions specialist.
LendingClub Bank Tailored Checking: Best for Earning Checking Account Rewards
The LendingClub Bank tailored checking account for freelancers is one of the few banks on our list where you can earn interest on your checking balance, plus 1% cash back rewards when you use your debit card.
Account holders earn 1.5% APY on balances up to $100,000 and 0.10% APY on the portion of your balance that exceeds $100,000.
LendingClub Bank reimburses fees if you use an out-of-network ATM. The bank also supports QuickBooks, Quicken and Mint for budgeting and bookkeeping. You can also send digital invoices and get paid directly to your LendingClub account, making LendingClub Bank Tailored Checking one of the more robust and affordable online banks for freelancers.
Just make sure to maintain an average daily balance of at least $500 to have the monthly fee waived.
How to Choose the Best Bank Account for Your Business
When you’re evaluating business bank accounts, you’ll want to consider your needs and the features that are most important to you.
It should go without saying that you want an account with no monthly fees or no monthly fees. Unless you’re an established business owner, you may also want no minimum balance requirements. You don’t want to get saddled with fees if your business runs into cash flow problems or you have a down month.
If you run a high-volume business, look for a bank account with no transaction limits, no in-network ATM fees, and unlimited ATM fee rebates.
Need a way to manage contracts, collect invoices, and help with taxes?
Your business bank can represent much more than just a place to deposit cash and a means to pay your bills. Many of the best bank accounts on this list also offer freelancer invoicing, tax assistance, and ways to manage contracts.
Budgeting and Savings Features to Look For
When you’re a freelancer, it’s convenient to have an easy way to track your expenses and budget for not just expected costs, but surprise opportunities or financial emergencies.
Just as you should have a personal bank account established with emergency savings, you want a business savings account. In fact, you may want multiple business savings accounts or the ability to divide money into various buckets for known costs – like taxes – and unexpected expenses, such as car repairs or a new phone.
Some budgeting and savings features are nice to have, such as an interest-earning checking account and cash back on debit card purchases.
Why We Chose Lili as the Best Business Bank Account
Lili graces the top of our list because the fintech company offers so many value-added services for entrepreneurs that it’s virtually a one-stop shop for freelancers. However, the other banks on our list for best business accounts have their own benefits you might want to consider.
Should You Use Different Banks for Personal and Business Finance?
If you already have a separate bank account for your personal finance, there is something to be said for opening a business account through the same bank. You may get extra perks and benefits or waived fees. Best of all, it’s easier to use one app to manage all your personal and business banking.
But if you opt for an online financial services company, instead, it is typically easy to transfer funds between accounts. Also, companies like Lili and Bluevine specialize exclusive in business accounts, which means they have services tailored specifically to your needs.
Bottom Line
A lot of factors go into choosing the best bank account for your business checking needs. Knowing your must-haves, nice-t0-haves, and those features that don’t really matter to you can help make the decision easier.
FAQs
What is a business bank account?
A business bank account is a dedicated account separate from your personal accounts that you use to deposit cash, checks, or other customer payments earned through your business. You should also use your business checking account to pay for business expenses.
Do You Need a Business Bank Account if You’re a Freelancer?
Freelancers are not required by law to have a separate business banking account. But if your business is incorporated as an S-corp, C-corp, or LLC, you are required to keep your business and personal accounts separate.
Should You Have a Separate Bank Account If You’re a Freelancer?
Even though it’s not required by law, it’s a good idea to have an account separate from your personal checking account to help you keep track of business income and expenses.
What Makes a Business Bank Account Ideal for Freelancers?
Business bank accounts often have many of the same features as some of the best personal bank accounts. That would include low or no minimum balance requirements, no monthly maintenance fee, no transaction fees, and no hidden fees.
You may also look for features like mobile check deposit, unlimited electronic deposits, and low wire transfer fees if you have a lot of customers, clients, or vendors outside the U.S.
Methodology: How We Select the Best Bank Accounts for Freelancers and Side Hustlers
We evaluated the best bank accounts for freelancers based on the ability to earn interest, monthly maintenance fees, minimum balance requirements, the ease of making cash deposits, customer service, and more.
Some banks are better for freelancers who don’t maintain a high balance or only have a few transactions per month. Entrepreneurs with fast-growing businesses looking to scale may prefer a business checking account with unlimited transactions and the ability to accept credit card payments through the same bank.
Some business owners may want to be able to integrate their Quickbooks accounting system through their bank.
We have banks on this list designed for small business owners, freelancers and side hustlers at every stage of business growth.
Now that I’m no longer semi-anonymous with my finance blogging, I tend to have a lot of friends and random people asking me finance questions.
I have people pouring what seems like their heart and soul to me because they really want to change and improve their situation.
This is something that I love about being a personal finance blogger – the fact that I can (hopefully) help someone change their life and teach them how to manage their money better.
Many of the questions I receive involve debt and what they can do to change their situation.
Someone told me they had over $200,000 in student loan debt, another person recently told me they had over $100,000 in credit card debt, some are hiding their finance problems from their families, some have told me that they are beyond house poor and they don’t know what to do.
The list goes on and on about the stories that I have heard.
I think the first thing a person needs to do when it comes to eliminating their debt is to realize WHY they are in debt in the first place (the next step is to actively reduce your debt – read How To Eliminate Your Debt). If you don’t know what your problem is, then it would be hard to make a positive change.
Yes, it is great to just start attacking your debt, but you also don’t want to fall into a vicious cycle of going into debt over and over again.
Here are some of the many reasons for why you may be in debt.
You think you have plenty of time to pay off your debt.
When I was in the middle of paying off my $40,000 worth of student loan debt, I remember being asked why I wanted to get rid of my student loan debt so quickly.
You know the saying about how there is no such thing as a stupid question?
Well, I thought that question was extremely stupid. I thought (and still think) it was probably the most stupid question I have ever been asked or heard.
I can’t remember the conversation exactly, but I remember them saying something about how I’m young and I should enjoy my money more and that I can worry about my student loans later.
UMM WHAT?!
Why not just pay off your debt more? Would you really rather have than 100th pair of jeans instead of putting more towards your debt? I know for a fact that I will probably completely forget about an article of clothing (even though I love clothes!) and I will appreciate my debt being paid off more.
I still enjoyed my life while I was paying off my debt, and I definitely do not think I was suffering at all.
It’s been around seven months since I completely paid off my student loans, and I couldn’t be happier!
You also never know what may happen. If you wait to pay off your debt and instead spend your money on things that you don’t need, you may fall into a bad situation. What would happen if you lost your job, came across high medical bills, or something else?
Wouldn’t you have wanted your debt to be gone?
You treat your credit card as income.
Your credit card is not a new income source. If you treat your credit card this way, then you should cancel your credit card.
Oh well if closing your account means that you will be lowering your credit score, you are probably doing worse damage anyways by racking up large credit card bills that you can’t pay.
If you are using a credit card, then you should be working to pay off your balance completely each month.
So-and-so has debt, so it’s fine if you do too.
Many people compare their debt amounts to others in hopes that they will feel more “normal” about their debt and not feel as bad. An example would be if you are 30 and the average 30-year-old has $10,000 worth of credit card debt (I completely just made that number up). You then use this number as a “guide” to yourself so that you can feel more comfortable about your debt.
However, WHO CARES about how much debt another person has? How exactly does knowing what the average amount of debt a random 30-year-old has affect you?
Is that person you?
NO!
So, why would another person’s amount of debt even matter to you? That makes no sense!
Just because someone else has $10,000 worth of credit card debt from buying too much clothing does not mean that you should too. You never know, this amount may be breaking them on the inside even if they aren’t showing it.
You believe you deserve the items you buy.
Yes, you may be awesome and think you deserve it, but should you really be buying it? Just because someone else just bought a 100 inch 3D TV (or a mansion, nice car, gadgets, a crazy-expensive wedding, etc.) doesn’t mean that you should as well.
You might think “oh well they have a comparable job to mine, so, if they can afford, then I can too.”
However, you have no idea how this person is paying for it. Maybe they saved for years, or maybe they are just putting everything on their credit card.
I recently talked to someone who has over $100,000 in credit card debt and I could tell they were in panic mode. They bought way too much house, way too much car, way too much everything. They thought they deserved it all since others were buying something similar.
You don’t need to keep up with the Joneses!
There are many ways to cut down your spending. Below is a quick list:
Lower your cell phone bill. Instead of paying the $150 or more that you spend on your cell phone bill, there are companies out there like Republic Wireless that offer cell phone service starting at $10. YES, I SAID $10! If you use my Republic Wireless affiliate link, you can change your life and start saving thousands of dollars a year on your cell phone service. I created a full review on Republic Wireless as well if you are interested in hearing more. I’ve been using them for over a year and they are great.
ATM fees. Why do people do this to themselves?
TV. Cut your cable, satellite, etc. Even go as far to go without Netflix or Hulu. Buy a digital antenna (this is the one we have) and enjoy free TV.
Sign up for a website like Ebates where you can earn CASH BACK for just spending like how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10 gift card bonus to Macys, Walmart, Target, or Kohls!
Pay bills on time. This way you can avoid late fees.
Shop around for insurance. This includes health insurance, car insurance, life insurance, home insurance and so on. Insurance pricing can vary significantly from one company to the next. When we were shopping for car insurance last, we found that our old company wanted something like $205 to insure one car for one month, whereas the new company we have now charges $50 a month for the same exact coverage. INSANE!
Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month (the first four weeks are free too) and you get meal plans sent straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 per person or less. This allows you to save time because you won’t have to meal plan anymore, and it will save you money as well!
Fuel savings. Combine your car trips, drive more efficiently, get a fuel efficient car, etc.
Trade in your car for a cheaper one. For us, we are car people. Cars are one of our splurges. However, if you only have a nice car to keep up with the Joneses, then you might want to get rid of it and get something that makes more sense.
Live in a cheaper home. I’m not saying you need to go live in a box, but if you live in a McMansion then you may want to think about a smaller home. This way you can save money on utility bills and your mortgage payment.
Use a programmable thermostat so that you can heat and cool your home efficiently and more affordably.
Learn to have more frugal fun. We don’t spend anywhere near the same amount of money on entertainment as we used to. There are plenty of ways to have frugal fun.
Check out my recommendations page for a full list on money-saving websites.
Some ways to make extra money are below, but check out the related articles below to see many, many more:
Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. I made over $320,000 last year by blogging and I’m hoping to double that in 2016. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
Sell your stuff. There are many things you can do to make money by selling items. We all have extra things laying around that can be sold, or you can even search for items that can be bought and resold for a profit.
Rent an extra room in your home. If you have extra space in your home, then you may want to rent it out. Read A Complete Guide To Renting A Room For Extra Money.
Answer surveys. Survey companies I recommend include VIP Voice, Earning Station, American Consumer Opinion, ProOpinion, YouGov, Pinecone Research, Opinion Outpost, Survey Spot, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
Use Swagbucks for your online searches. Swagbucks is something I don’t use as much, but I do occasionally earn Amazon gift cards with very little work. Swagbucks is just like using Google to do your online searches, except you get rewarded “Swagbucks” for the things you do through their website. Then, when you have enough Swagbucks, you can redeem them for cash, gift cards, and more. You’ll receive a free $5 bonus just for signing up today!
Try InboxDollars. InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming grocery coupons, and more. Also, by signing up through my link, you will receive $5.00 for free just for signing up!
Find a part-time job. There are many part-time jobs that you may be able to find. You can find a job on sites such as Snagajob, Craigslist (yes, I’ve found a legitimate job through there before), Monster, and so on.
Related articles:
Why are you in debt? What reasons have you caught yourself using?
If you’re feeling extra brave, please share how much debt you have (house, car, student loans, credit cards, etc.).
Mortgage Q&A: “How to pay the mortgage with a credit card.”
First things first; banks and mortgage lenders don’t accept credit cards as a form of payment when attempting to repay your home loan. Options for paying are typically limited to ACH or check.
However, back during the housing boom aka meltdown there were various third-party services that allowed homeowners to make their mortgage payments with a credit card.
Paying the mortgage with a credit card topics:
– Why pay the mortgage with a credit card? – Using Plastiq to pay the mortgage – Using Tio to pay the mortgage (no longer an option) – Using American Express Serve to pay the mortgage – Warnings and drawbacks to paying the mortgage with a credit card
These services charged fees for the convenience, and looking back, they were probably only offered because people couldn’t keep up with their mortgage payments, and eventually their credit card payments either.
Chances are these same people had to execute a balance transfer shortly after…
Unsurprisingly, these services seemed to disappear as quickly as they surfaced, but there are still options to pay the mortgage with a credit card each month free of charge, even if mortgage lenders won’t let you do it directly.
Reasons to Pay the Mortgage with a Credit Card
To meet a minimum spending requirement and earn bonus credit card points
To increase everyday spending and earn cash back, points, etc.
To defer payments for a period of time to give yourself some breathing room
This last one isn’t a good idea!
The difference today is that this method/idea is more about earning credit card points (or cash back) for paying your mortgage, and not so much about simply paying it.
Let me preface this by saying it makes no sense to pay your mortgage with a credit card if you can’t afford to pay it otherwise.
The only purpose of this method is to earn bonus points and/or cash back as you would on other purchases made with a rewards credit card.
Using Plastiq to Pay the Mortgage with a Credit Card
Plastiq allows mortgage payments via credit card
But only with a MasterCard or Discover card
They no longer accept Visa or American Express cards
You must also pay a transaction fee of 2.5% or less
There are some companies that allow you to pay rent or the mortgage with a credit card in exchange for a small transaction fee.
By small fee, I mean something in the range of 2-3%. Recently, a company called Plastiq had a special where they charged just 1.75% ($17.50 per $1,000 in payment). They normally charge 2.5%.
Unfortunately, most credit cards don’t earn cash back or points at levels this high unless it’s in a bonus category. And these companies often aren’t in any bonus category whatsoever.
The one exception is the old AT&T Access More credit card, which earns 3X per dollar on all online purchases. That seems to include services like Plastiq. This allows you to come out ahead.
Even if you can’t come out ahead dollar for dollar, it might be worth it for some people looking to meet a minimum spending requirement to earn an opening bonus, or just to buy some time on that monthly payment (not recommended).
For example, if you need to spend $5,000 in the first three months to earn a signup bonus, paying the mortgage can probably put a big dent in that requirement. And it’s only $125 in fees if you use Plastiq for the entire amount. If the reward points eclipse the cost, you win.
Some other cash back credit cards do earn 2%+ on all spending, either initially as a bonus or all the time, so it’s possible to come out slightly ahead or just slightly behind. Aside from making money doing this, some folks are happy just to earn lots of credit card points and miles by charging the pricey mortgage.
Important note: Plastiq currently only accepts MasterCard and Discover. They recently stopped allowing mortgage payments to be paid with a Visa card and American Express cards. That means you’re limited to the other two major issuers, which still isn’t bad.
Apparently Visa told Plastiq they had to comply with a new directive that banned mortgage payments via Visa credit cards. They’re basically closing a loophole because otherwise Visa would just allow it themselves and you wouldn’t need to use a third-party payment service.
It’s unclear if the others will follow, but it’s always a risk. For some reason, the ability to pay the mortgage with a credit card never seems to stick long-term, and perhaps for good reason.
If you do use Plastiq to pay the mortgage, you’ll need to enter the business name as it appears on your mortgage statement, along with the mailing address they list for mailed payments.
Assuming they have an electronic option (ACH) available in their system, payment will be sent electronically. If not, they’ll send a paper check on your behalf. If that’s the case, be sure to give it a week or two to arrive.
In terms of limits, the only payment limits are those associated with the credit card you use for payment. So if your card has a $5,000 credit limit, you won’t be able to send a mortgage payment for any more than that. This means even those with a jumbo mortgage will likely be able to use this service, assuming they have decent credit limits.
I’ve yet to use Plastiq, but I may in the future if I need to meet a spending requirement quickly to earn a signup bonus. I’ve heard of people successfully paying a Wells Fargo mortgage and a Chase mortgage with this service.
Use Tio to Pay the Mortgage with Discover, MasterCard, or Visa
Tio used to allow homeowners to make mortgage payments with any credit card
Other than American Express
With virtually every bank, lender, or loan servicer for a variable fee
But then they got bought out by PayPal and were promptly shut down
There’s a similar service called Tio (formerly ChargeSmart) now owned by PayPal that lets you pay a mortgage with a credit card in a matter of seconds. You don’t even need to sign up.
All you have to do is select a mortgage company from the handy list on their website (pictured above), then enter your loan number and payment amount.
From there, simply click on the credit card icons and enter your credit card information. It will then display the fee, which tends to range between 2.5% and 3%.
Interestingly, they seem to charge varying fees based on payment amount and based on the mortgage company you select. It appears to be more expensive for smaller payments, such as 3% for $1,000 payments, and a bit cheaper as your payments rise.
If you’re okay with everything, you simply hit “pay this bill” and Tio will deliver your payment within 2-3 business days they say.
The upside is that Tio is super fast, the downside is it can be more expensive than Plastiq, and they don’t accept American Express for mortgage payments. However, they seem to still accept Visa cards.
At first glance, I like Tio more than Plastiq, at least when it comes to paying the mortgage, because they have tons of mortgage companies already listed and ready to go. I don’t like the idea of manually entering the wrong company or address when sending a very important payment.
Plus, they list tons of major mortgage companies like Chase, Citi, Ditech, Nationstar, Ocwen, PNC, Quicken, Wells Fargo, and many more.
Update: Tio has also suspended service while its parent company PayPal investigates some so-called security vulnerabilities. So this method may or may not be available in the future once they sort it out.
You Might Be Able to Pay Your Mortgage with American Express Serve
American Express Serve used to work like a charm
Homeowners could load the prepaid card account with a rewards credit card
Then use the bill pay service to make monthly mortgage payments
But most customers’ accounts were shut down
Perhaps the easiest method that used to work involved American Express Serve, which is referred to as a reloadable prepaid account.
In reality, it basically works like an online bank account in that you can transfer/load money to it and then pay everyday bills or make purchases with the associated prepaid card.
Let’s focus on that paying bills part. Your mortgage is a bill and it must be paid each month until maturity, just like other recurring bills.
But loan servicers don’t give homeowners the option to pay with a credit card (for good reason!) unlike most other bills.
The Serve method entails loading the account with a credit card or gift cards (like pin-enabled gift cards), and then using the funds to pay your mortgage via their bill pay service. I suppose you can use a debit card as well if it earns rewards.
The purpose of this is to get credit card rewards on that large amount of money spent, so if the credit/debit card doesn’t earn rewards, there’s no point in doing this.
Of course, most folks would buy Visa gift cards using a different travel rewards card, hotel credit card, or airline credit cards to hit the minimum spending requirement and earn lots of miles.
Then they would turn around pay off their credit card in full each month to avoid any interest or fees to offset the benefit of doing it to begin with.
A couple warnings/issues with this method:
– You need to make sure your credit card issuer doesn’t charge fees to load Serve (American Express warns of this possibility on the website – They can be treated as cash advances – The max you can load with a credit or debit card each month is $1,000 ($200 per day) – The limit increases to $1,500 a month ($500 daily) if you get Serve with Softcard – You actually need to pay off the credit card charges to avoid interest/fees – Your credit score can go down if you keep racking up large balances, even if they’re paid off – You could get on the bad side of credit card companies and miss out on future rewards – If you have bad credit none of these methods will probably work very well
As noted above, you can load your Serve account with a credit card, but even American Express warns that you could be charged fees by your card issuer for doing so.
I’ve used a Chase credit card and there was no fee or issue. It just showed up as a standard purchase.
But to avoid any mishaps, testing with a small amount or asking your credit card issuer to lower your cash advance limit to zero (or as low as possible) might be a good idea before giving it a whirl.
Once the necessary funds are in the Serve account, you’ll be able to see your available balance. Assuming it’s sufficient to cover your full mortgage payment, you simply select “Pay Bills” from the dropdown menu then add a payee.
While certain payees are already in Serve’s system, you’ll likely need to add your loan servicer manually, including their address and your loan number.
It should be the address where you would send a paper check because Serve is basically cutting a physical check on your behalf. It’s essentially a bill pay service. This is exactly why it works.
You’re not actually paying your mortgage with a credit card – rather, you’re funding an account with a credit card then sending those funds to your servicer via check, a much more accepted form of payment.
Once you save the payee information, you can make your mortgage payment via Serve each month. There’s even a memo section where you can write your loan number and any other details to ensure the payment is processed properly.
Note that payments can take several business days to process, so it’s not as quick as making a payment online. Fortunately, mortgage due dates are fairly flexible. But you’ll want to give yourself a cushion to avoid paying late if anything goes wrong.
Update: Serve doesn’t work for many people anymore, so take note that the above method properly won’t be an option going forward. In fact, they went as far as to just close a lot of people’s accounts.
The Downside to These (or Any) Methods
The first thing you have to look at it is the associated fee for using a credit card
You also have to make sure you aren’t charged cash advance fees for doing it
Also consider the work involved if employing a creative method
And the potential to accidentally miss a mortgage payment along the way
It may also complicate a future refinance if payment history is shown via credit card
In the end it might not be worth it
While it’s kind of cool to pay your mortgage with a credit card, it does require some work, as noted above. And if you have a jumbo mortgage payment, these methods may not work very well if your credit limits are low.
You certainly won’t want to send partial payments and find out that your loan servicer paid down your principal or simply returned your check.
It can also get murky if you use different methods to pay the mortgage, and then decide to apply for a refinance because mortgage rates went down. If the new lender asks for mortgage payment history and sees some of the payments made via credit card, they may question your solvency. Even if you do explain yourself, they probably won’t be thrilled about it.
At the end of the day, you’ll have to ask yourself how much you’ll really “earn” by using a credit card once factoring in your time (opportunity cost) going to the store to buy gift cards, not to mention the transaction fees and credit card annual fees.
If your monthly mortgage payment is $1,000 a month, it equates to just 12,000 points or miles annually, which is worth maybe $120 or slightly more if redeemed for travel or something more lucrative.
Those earnings could be used to pay down your mortgage a little bit faster if you put it toward the principal balance. In that sense, it could be worth it as the points would go a lot further via saved interest and faster home equity accrual over time.
Just be careful not to miss a payment or make life harder in the process. Plenty can go wrong here, and at the end of the day, you might be better off just using your bank account to pay the mortgage. Or simply keeping an eye on mortgage rates and refinancing to a lower rate to save potentially hundreds a month.
Mortgage Q&A: “How to pay the mortgage with a credit card.”
First things first; banks and mortgage lenders don’t accept credit cards as a form of payment when attempting to repay your home loan. Options for paying are typically limited to ACH or check.
However, back during the housing boom aka meltdown there were various third-party services that allowed homeowners to make their mortgage payments with a credit card.
Paying the mortgage with a credit card topics:
– Why pay the mortgage with a credit card? – Using Plastiq to pay the mortgage – Using Tio to pay the mortgage (no longer an option) – Using American Express Serve to pay the mortgage – Warnings and drawbacks to paying the mortgage with a credit card
These services charged fees for the convenience, and looking back, they were probably only offered because people couldn’t keep up with their mortgage payments, and eventually their credit card payments either.
Chances are these same people had to execute a balance transfer shortly after…
Unsurprisingly, these services seemed to disappear as quickly as they surfaced, but there are still options to pay the mortgage with a credit card each month free of charge, even if mortgage lenders won’t let you do it directly.
Reasons to Pay the Mortgage with a Credit Card
To meet a minimum spending requirement and earn bonus credit card points
To increase everyday spending and earn cash back, points, etc.
To defer payments for a period of time to give yourself some breathing room
This last one isn’t a good idea!
The difference today is that this method/idea is more about earning credit card points (or cash back) for paying your mortgage, and not so much about simply paying it.
Let me preface this by saying it makes no sense to pay your mortgage with a credit card if you can’t afford to pay it otherwise.
The only purpose of this method is to earn bonus points and/or cash back as you would on other purchases made with a rewards credit card.
Using Plastiq to Pay the Mortgage with a Credit Card
Plastiq allows mortgage payments via credit card
But only with a MasterCard or Discover card
They no longer accept Visa or American Express cards
You must also pay a transaction fee of 2.5% or less
There are some companies that allow you to pay rent or the mortgage with a credit card in exchange for a small transaction fee.
By small fee, I mean something in the range of 2-3%. Recently, a company called Plastiq had a special where they charged just 1.75% ($17.50 per $1,000 in payment). They normally charge 2.5%.
Unfortunately, most credit cards don’t earn cash back or points at levels this high unless it’s in a bonus category. And these companies often aren’t in any bonus category whatsoever.
The one exception is the old AT&T Access More credit card, which earns 3X per dollar on all online purchases. That seems to include services like Plastiq. This allows you to come out ahead.
Even if you can’t come out ahead dollar for dollar, it might be worth it for some people looking to meet a minimum spending requirement to earn an opening bonus, or just to buy some time on that monthly payment (not recommended).
For example, if you need to spend $5,000 in the first three months to earn a signup bonus, paying the mortgage can probably put a big dent in that requirement. And it’s only $125 in fees if you use Plastiq for the entire amount. If the reward points eclipse the cost, you win.
Some other cash back credit cards do earn 2%+ on all spending, either initially as a bonus or all the time, so it’s possible to come out slightly ahead or just slightly behind. Aside from making money doing this, some folks are happy just to earn lots of credit card points and miles by charging the pricey mortgage.
Important note: Plastiq currently only accepts MasterCard and Discover. They recently stopped allowing mortgage payments to be paid with a Visa card and American Express cards. That means you’re limited to the other two major issuers, which still isn’t bad.
Apparently Visa told Plastiq they had to comply with a new directive that banned mortgage payments via Visa credit cards. They’re basically closing a loophole because otherwise Visa would just allow it themselves and you wouldn’t need to use a third-party payment service.
It’s unclear if the others will follow, but it’s always a risk. For some reason, the ability to pay the mortgage with a credit card never seems to stick long-term, and perhaps for good reason.
If you do use Plastiq to pay the mortgage, you’ll need to enter the business name as it appears on your mortgage statement, along with the mailing address they list for mailed payments.
Assuming they have an electronic option (ACH) available in their system, payment will be sent electronically. If not, they’ll send a paper check on your behalf. If that’s the case, be sure to give it a week or two to arrive.
In terms of limits, the only payment limits are those associated with the credit card you use for payment. So if your card has a $5,000 credit limit, you won’t be able to send a mortgage payment for any more than that. This means even those with a jumbo mortgage will likely be able to use this service, assuming they have decent credit limits.
I’ve yet to use Plastiq, but I may in the future if I need to meet a spending requirement quickly to earn a signup bonus. I’ve heard of people successfully paying a Wells Fargo mortgage and a Chase mortgage with this service.
Use Tio to Pay the Mortgage with Discover, MasterCard, or Visa
Tio used to allow homeowners to make mortgage payments with any credit card
Other than American Express
With virtually every bank, lender, or loan servicer for a variable fee
But then they got bought out by PayPal and were promptly shut down
There’s a similar service called Tio (formerly ChargeSmart) now owned by PayPal that lets you pay a mortgage with a credit card in a matter of seconds. You don’t even need to sign up.
All you have to do is select a mortgage company from the handy list on their website (pictured above), then enter your loan number and payment amount.
From there, simply click on the credit card icons and enter your credit card information. It will then display the fee, which tends to range between 2.5% and 3%.
Interestingly, they seem to charge varying fees based on payment amount and based on the mortgage company you select. It appears to be more expensive for smaller payments, such as 3% for $1,000 payments, and a bit cheaper as your payments rise.
If you’re okay with everything, you simply hit “pay this bill” and Tio will deliver your payment within 2-3 business days they say.
The upside is that Tio is super fast, the downside is it can be more expensive than Plastiq, and they don’t accept American Express for mortgage payments. However, they seem to still accept Visa cards.
At first glance, I like Tio more than Plastiq, at least when it comes to paying the mortgage, because they have tons of mortgage companies already listed and ready to go. I don’t like the idea of manually entering the wrong company or address when sending a very important payment.
Plus, they list tons of major mortgage companies like Chase, Citi, Ditech, Nationstar, Ocwen, PNC, Quicken, Wells Fargo, and many more.
Update: Tio has also suspended service while its parent company PayPal investigates some so-called security vulnerabilities. So this method may or may not be available in the future once they sort it out.
You Might Be Able to Pay Your Mortgage with American Express Serve
American Express Serve used to work like a charm
Homeowners could load the prepaid card account with a rewards credit card
Then use the bill pay service to make monthly mortgage payments
But most customers’ accounts were shut down
Perhaps the easiest method that used to work involved American Express Serve, which is referred to as a reloadable prepaid account.
In reality, it basically works like an online bank account in that you can transfer/load money to it and then pay everyday bills or make purchases with the associated prepaid card.
Let’s focus on that paying bills part. Your mortgage is a bill and it must be paid each month until maturity, just like other recurring bills.
But loan servicers don’t give homeowners the option to pay with a credit card (for good reason!) unlike most other bills.
The Serve method entails loading the account with a credit card or gift cards (like pin-enabled gift cards), and then using the funds to pay your mortgage via their bill pay service. I suppose you can use a debit card as well if it earns rewards.
The purpose of this is to get credit card rewards on that large amount of money spent, so if the credit/debit card doesn’t earn rewards, there’s no point in doing this.
Of course, most folks would buy Visa gift cards using a different travel rewards card, hotel credit card, or airline credit cards to hit the minimum spending requirement and earn lots of miles.
Then they would turn around pay off their credit card in full each month to avoid any interest or fees to offset the benefit of doing it to begin with.
A couple warnings/issues with this method:
– You need to make sure your credit card issuer doesn’t charge fees to load Serve (American Express warns of this possibility on the website – They can be treated as cash advances – The max you can load with a credit or debit card each month is $1,000 ($200 per day) – The limit increases to $1,500 a month ($500 daily) if you get Serve with Softcard – You actually need to pay off the credit card charges to avoid interest/fees – Your credit score can go down if you keep racking up large balances, even if they’re paid off – You could get on the bad side of credit card companies and miss out on future rewards – If you have bad credit none of these methods will probably work very well
As noted above, you can load your Serve account with a credit card, but even American Express warns that you could be charged fees by your card issuer for doing so.
I’ve used a Chase credit card and there was no fee or issue. It just showed up as a standard purchase.
But to avoid any mishaps, testing with a small amount or asking your credit card issuer to lower your cash advance limit to zero (or as low as possible) might be a good idea before giving it a whirl.
Once the necessary funds are in the Serve account, you’ll be able to see your available balance. Assuming it’s sufficient to cover your full mortgage payment, you simply select “Pay Bills” from the dropdown menu then add a payee.
While certain payees are already in Serve’s system, you’ll likely need to add your loan servicer manually, including their address and your loan number.
It should be the address where you would send a paper check because Serve is basically cutting a physical check on your behalf. It’s essentially a bill pay service. This is exactly why it works.
You’re not actually paying your mortgage with a credit card – rather, you’re funding an account with a credit card then sending those funds to your servicer via check, a much more accepted form of payment.
Once you save the payee information, you can make your mortgage payment via Serve each month. There’s even a memo section where you can write your loan number and any other details to ensure the payment is processed properly.
Note that payments can take several business days to process, so it’s not as quick as making a payment online. Fortunately, mortgage due dates are fairly flexible. But you’ll want to give yourself a cushion to avoid paying late if anything goes wrong.
Update: Serve doesn’t work for many people anymore, so take note that the above method properly won’t be an option going forward. In fact, they went as far as to just close a lot of people’s accounts.
The Downside to These (or Any) Methods
The first thing you have to look at it is the associated fee for using a credit card
You also have to make sure you aren’t charged cash advance fees for doing it
Also consider the work involved if employing a creative method
And the potential to accidentally miss a mortgage payment along the way
It may also complicate a future refinance if payment history is shown via credit card
In the end it might not be worth it
While it’s kind of cool to pay your mortgage with a credit card, it does require some work, as noted above. And if you have a jumbo mortgage payment, these methods may not work very well if your credit limits are low.
You certainly won’t want to send partial payments and find out that your loan servicer paid down your principal or simply returned your check.
It can also get murky if you use different methods to pay the mortgage, and then decide to apply for a refinance because mortgage rates went down. If the new lender asks for mortgage payment history and sees some of the payments made via credit card, they may question your solvency. Even if you do explain yourself, they probably won’t be thrilled about it.
At the end of the day, you’ll have to ask yourself how much you’ll really “earn” by using a credit card once factoring in your time (opportunity cost) going to the store to buy gift cards, not to mention the transaction fees and credit card annual fees.
If your monthly mortgage payment is $1,000 a month, it equates to just 12,000 points or miles annually, which is worth maybe $120 or slightly more if redeemed for travel or something more lucrative.
Those earnings could be used to pay down your mortgage a little bit faster if you put it toward the principal balance. In that sense, it could be worth it as the points would go a lot further via saved interest and faster home equity accrual over time.
Just be careful not to miss a payment or make life harder in the process. Plenty can go wrong here, and at the end of the day, you might be better off just using your bank account to pay the mortgage. Or simply keeping an eye on mortgage rates and refinancing to a lower rate to save potentially hundreds a month.
“How can I travel on a budget?” is one of the top questions we receive at TPG.
There’s no question that travel is expensive right now as millions satisfy the itch to travel more. Demand has been through the roof. Inflation and correspondingly high hotel, rental car and airline ticket costs have many would-be travelers throwing up their hands in frustration.
However, there are still many ways to save. In addition to using reserves of points and miles to book hotels and airfare, TPGers have many budget travel tips to help stretch your dollars when traveling.
Here are 22 ways to travel on a budget.
Use membership codes to save on car rentals
AARP webpage showing car rental discounts. AARP
If you’re a member of AAA or AARP, have a Costco membership, are a veteran or work for a large company with a car rental discount code, pull all of these levers. You might be eligible for discount codes you didn’t even know about. A few examples from AARP include 30% off a car rental at Budget or Avis.
Related: How to never pay full price for a rental car
Look beyond traditional car rental companies and locations
TURO
Most people search for rentals at the airport with standard companies like Hertz and Avis. If you don’t find good results, consider off-airport locations or try alternatives like Kyte, Turo and Silvercar.
Related: Delta and Turo launch partnership, allowing travelers to earn 2,000 SkyMiles on 1st rental
Check credit card merchant offers
American Express offers. AMERICAN EXPRESS
Before booking your trip, review your credit cards’ special merchant offers. Multiple issuers offer this option (although American Express is a leader in the category).
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Every program works similarly: Log in to your card account online or through your banking app, review the offers available to you, add the ones you want and make a qualifying purchase using the card for which the offer is registered.
There are no promo codes to enter at online checkout or coupons to print to take to the register. There are likely offers you can activate that will provide discounts on dining, gas and entertainment.
Related: How credit card merchant offers can save you hundreds of dollars every year
Take advantage of free days at national parks
Avalanche Lake in Glacier National Park. CLINT HENDERSON/THE POINTS GUY
Every year the U.S. National Park Service sets aside several days when entry is completely free; options include Martin Luther King Jr. Day in January, the first day of National Park Week in April, National Public Lands Day in September and Veterans Day in November.
Visiting a national park on one of the NPS’ free-entry days can save you up to $35 per vehicle at some of the most popular national parks, such as Glacier National Park and the Grand Canyon.
Stay outside the national parks
The Holiday Inn West Yellowstone. CLINT HENDERSON/THE POINTS GUY
You might dream of a night in a rustic cabin inside a national park, but getting that reservation could be challenging or costly — especially if you can’t pay for it with points.
However, just beyond the park, there’s probably a hotel you can book with points. For example, you could stay at the Holiday Inn in West Yellowstone with IHG One Rewards points; the SpringHill Suites just outside of Zion National Park is a great property if you have Marriott Bonvoy points to spend.
Related: The best campgrounds, hotels and lodges near Yellowstone National Park
Download the T-Mobile Tuesdays app
If you’re a T-Mobile user, you’re in luck: This app is a major perk that will put money in your pocket just for checking your phone on Tuesdays.
To participate, download the T-Mobile Tuesdays app, check the app on Tuesday and claim your discount code. We’ve seen weekly discounts on everything from rental cars to gas, hotels and theme park tickets.
Get discounted gas at Shell through the Fuel Rewards app
At TPG, we love to stack savings. The Shell Fuel Rewards app is a good one to pile on the discounts.
You can link it to other loyalty programs — including American Airlines AAdvantage, Giant Food, Stop & Shop, Advance Auto and more — to receive extra discounts. Also, if you purchase through Fuel Rewards, link to partner retailers such as Petco, Bed Bath & Beyond, Office Depot/OfficeMax and many others to save even more.
Don’t forget to use a credit card that gives bonus points or discounts at gas stations for even more savings. TPG likes the Citi Premier® Card (see rates and fees), which awards 3 ThankYou points per dollar at gas stations, and the Blue Cash Preferred® Card from American Express, which also gives 3% back at U.S. gas stations.
Related: These are the best credit cards for gas purchases
Save on theater tickets in New York and London
Check TodayTix for cheap Broadway and West End tickets if traveling to New York City or London.
The TodayTix app has discounted tickets to various shows available. Prices vary, but most of the top shows currently playing are available on the site and the app.
While not all shows are hugely discounted, TodayTix often runs no-fee promotions. Keep in mind that for some shows, you won’t be able to choose your precise ticket location. Instead, you will pick a section you’d like to sit in.
Related: On with the show! How to get a great deal on Broadway tickets
Save on entrance fees with Bank of America
JOHNNY GREIG/GETTY IMAGES
Bank of America cardholders can enjoy free general admission to more than 225 cultural institutions in dozens of U.S. cities on the first weekend of every month just by showing their cards. It’s through the Museums on Us program that’s been going on for 25 years. It’s open to Bank of America, Merrill and Bank of America Private Bank (U.S. Trust) credit or debit card holders.
Related: 5 reasons to get the Bank of America Premium Rewards credit card
Use your library card for museum entry
Another way to get free museum admission is with a library “lending ticket” — a program where libraries will lend museum passes for a set amount of time.
Also, check if your local museum’s membership comes with ROAM (a reciprocity program across North America). It’s an easy way to get maximum value from a regional (and usually less expensive) membership.
Take a free walking tour
Downtown Greenville, South Carolina. DENNISTANGNEYJR/GETTY IMAGES
Sign up for a free walking tour on your first day in a new city. It’s an inexpensive way to learn about the city and orient yourself.
Look online for options before traveling and sign up in advance if necessary. Then, all you need to do is show up with comfortable shoes and enjoy your free tour.
Although tipping is suggested, you’ll spend much less, even after generously tipping your guide, than you would with a standard tour option. You will likely also meet other like-minded travelers, which can be welcome if you’re traveling alone or looking to make new friends.
If you’re interested in seeing what’s available on your next trip, Google the city you’ll visit and the phrase “free walking tour” to see what comes up.
Dine on the cheap with Seated
A view of New York City restaurants on the Seated app. SEATED
Here’s a fun one: The Seated app allows you to dine out and get paid for it.
The app rewards diners who sign up and eat at designated restaurants with cash they can redeem through gift cards. All you have to do is let the app know you’ll be dining at a location before you take a seat. You can also get gift cards for Uber, Amazon and Starbucks.
Fly on weekdays
Flexibility on which days you fly is one of the keys to getting the best airfare prices. Leisure travelers most commonly book weekend flights, while many business travelers fly on Monday. So, the midweek days — Tuesday and Wednesday — have lower demand and are often the best days to travel for lower prices.
Related: When is the best time to book airfare?
Book vacation packages
AAVACATIONS.COM
Airlines that bundle airfare and hotels as vacation packages can offer better deals thanks to their vast buying power and inventory. These bundles can offer savings of up to 40% off. Savings on business-class plane tickets and high-end hotels can offer some of the best deals.
Also, purchasing directly from the airline gives you a one-stop shopping experience. You can even add a car and activities to your trip at the same time. Plus, you’ll often be able to take advantage of special sales and bonus points and miles offers.
Related: Everything you need to know about saving money with vacation packages
Use a price monitoring tool
A Google Flights tracking page. GOOGLE
Airline fare monitoring sites such as Hopper and Google Flights ensure you get notifications when your trip’s best and lowest prices become available. Set up as many combinations as you’re considering, including different departure and return dates, so that you can get alerts for all possible fare reductions.
Be flexible on destination
If you’re not locked into a fall or winter vacation location (like you would be for a destination wedding or family reunion that you can’t change), try an alternative to find better prices. For example, consider subbing Quebec City in for Paris if you want Old World charm. For scuba diving enthusiasts, skip the expensive long-haul flight to Australia and the Great Barrier Reef and instead head to the second-largest barrier reef in the world in easy-to-access Belize.
Related: 5 key tools and tips for cheap airfare
Hold your deal
If you see a great deal but are not yet ready to book, hold it. For example, Hopper’s Price Freeze allows you to lock in the price of a flight for up to seven days to take more time to finalize plans before you book. Some airlines will also let you hold flights for a small fee. (Remember that all U.S. airlines, by law, allow you to hold and cancel a flight booking within 24 hours without penalty as long as you book more than seven days in advance.)
Re-price your flights and hotels
CLINT HENDERSON/THE POINTS GUY
As long as you’ve booked a hotel, car or flight that can be canceled without penalty, you should make it part of your weekly routine to check for price drops. If you find a lower price, rebook. You can use these same rebooking strategies with points to make dynamic pricing work in your favor for hotel stays so you can save on award nights.
Related: How I saved 33,500 points on upcoming hotel stays
Consider alternative airports
JetBlue’s Airbus A321-LR, which flies its transatlantic routes, sits at the gate in Boston ahead of the inaugural flight to London Gatwick Airport. SEAN CUDAHY/THE POINTS GUY
With prices high, now is the time to be flexible and check all nearby airports. For example, Houston and Chicago have two airports, while the New York City area has three, including Newark Liberty International Airport (EWR) in New Jersey. In Southern Florida, you could easily fly to West Palm Beach, Fort Lauderdale or Miami. It works internationally too: Try Gatwick Airport (LGW) instead of Heathrow Airport (LHR) when flying to London.
It may even make sense to get to one city by flying to another city and then taking a short train ride for the rest of the journey. For instance, you could fly into Philadelphia and catch a train to New York. Strategies like this can help you get to your destination on a flight with better pricing or award availability.
Use positioning flights
Positioning flights are unrealistic for every situation or trip, but they can often offer better award availability or pricing than those from your home airport. Can you reach your destination for a lot less by starting in Seattle or Chicago? Would adding another flight to a different airport save you money or miles? Just ensure you leave enough time between flights to avoid unnecessary travel headaches.
Related: Use positioning flights to get amazing deals
Use points and miles when appropriate
Since you are reading TPG, you may also want to earn points or miles through your everyday spending that you can use to pay for part of your trip. Some credit cards — like the Delta SkyMiles® Gold American Express Card and the Hilton Honors American Express Surpass® Card — can help you earn airline miles or hotel points that you can redeem directly with the airline or hotel. Cards such as the American Express® Gold Card earn transferable points you can redeem for travel or transfer to various travel partners.
If you have a stash of points and cash fares are high, it makes a lot of sense to use those points instead. For example, I recently priced a trip to San Francisco and found a flight over the Fourth of July weekend; it should normally cost about $400, but for this particular weekend, it was going to cost me at least $621. I used 46,000 Delta SkyMiles instead. While it wasn’t the best redemption in the world, it was better than shelling out all that cash. Most of those SkyMiles came from credit card spending on my Delta SkyMiles® Reserve American Express Card.
Related: Why I’m keeping my Delta Reserve card even when I’m flying less
There are many strategies for getting the most out of your credit card. You’ll generally get the most value when redeeming for premium-cabin flights or luxury hotel stays. However, you may prefer to book economy award flights or lower-category hotel stays using your points to stretch your points further.
Join AARP
The AARP discount travel page. AARP
You can join AARP for discounts even if you are not retired. The advocacy group for older adults offers all kinds of cool discounts, including $60 to $200 off British Airways flights and 10% off Hilton hotels.
Related: How to use AARP discounts on travel
Bottom line
Paris in 2022. CLINT HENDERSON/THE POINTS GUY
Spending a small amount of time researching the best ways to travel on a budget could easily make a dream trip, like a Paris vacation, more attainable.
It’s possible to take an excellent vacation on a budget. You just need to put in the time to plan your trip, budget your expenses, download a virtual wallet of money-saving apps and consider using points and miles to decrease your out-of-pocket costs.
Some of our top budget travel tips include shopping around, signing up for deal alerts through websites like TPG and using points and miles. Opening a credit card or two for the sign-up bonus once or twice every few years could make your trips even cheaper. Don’t forget to sign up for our daily newsletter, where we teach you how to travel better for less. At TPG, we make traveling on a budget easy.
Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.
This week’s episode starts with a discussion about new scams, including Google Voice and AI scams.
Then we pivot to this week’s money question from Jaime, who left us a voicemail:
“Hi, Nerds. Wanted to call in and ask a question. I’m looking for just an opportunity to supplement my income, and I came across one opportunity that’s called tradelines, and I was wanting your advice, your opinion, on tradelines, if it’s something worth doing. From my understanding, tradelines is when you sell your authorized user accounts on your credit card to people who need to boost their credit, for a certain amount of money a month. So, I thought it may be a good way to supplement my income, as well as that I do have a 815 credit score, and so, I was curious as to your guys’ opinion on the matter. So, thank you for answering it. Have a great day.”
Check out this episode on either of these platforms:
Episode transcript
Sean Pyles: Your credit report can help you borrow money, but what if you could use your credit report to earn money? Would you do it even if it was a little sketchy?
Liz Weston: Welcome to NerdWallet’s Smart Money podcast, where you send us your money questions and we answer them with the help of our genius Nerds. I’m Liz Weston.
Sean Pyles: And I’m Sean Pyles. Listener, I have a question for you. What are you thinking about — money-wise, I mean? Are you wondering how to buy a house in a still expensive market, or do you want to get serious about saving for retirement but aren’t sure how?
Liz Weston: Whatever your money question, the Nerds have your back. You can leave us a voicemail or text us on the Nerd hotline at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected].
Sean Pyles: This episode, Liz, Sara and I answer a listener’s question about making money from your credit report. But first, in our This Week in Your Money segment, Liz and I are talking about the scams you need to watch out for now.
Liz Weston: Yes, because scammers work hard, but the Nerds work harder. So, we’re going to give you the scoop on how fraudsters are attempting to strip you and your loved ones of your money and your personal information.
Sean Pyles: Indeed. So, Liz, what scams should our listeners be aware of?
Liz Weston: OK. According to the Identity Theft Resource Center, the top scam in 2022 was the Google Voice scam. And how it works is typically somebody will contact you on social media in response to a post, whether you’re selling something, trying to find a lost pet, something like that. But then the person will say they’re concerned about scammers, so they want you to confirm your identity through a text. You then get a text with a Google Voice verification code. And if you give it to them, poof, you’ve been scammed.
Sean Pyles: OK. So, you have been scammed through a text code. What’s going on there?
Liz Weston: When you give the scammer that verification code, they’re able to create a Google Voice account that’s connected to your phone number. The scammer can then use that voice account to scam other people or even get more information about you to try to get into your accounts.
Sean Pyles: Yikes.
Liz Weston: So, the bottom line is, yes, yikes is right. Don’t give strangers any verification code that you get through text. If it’s dealing with your bank accounts, your financial accounts, Google Voice, whatever it is, if the text comes through and a stranger wants it, ignore them.
Sean Pyles: And maybe avoid giving internet randos your phone number in general.
Liz Weston: Yeah, that’s a good idea.
Sean Pyles: Whenever I’m communicating with folks on apps, whether I’m trying to buy or sell something, I like to keep communication within that app. When someone’s trying to get you to communicate on a different platform, that to me is a red flag that they’re up to no good.
Liz Weston: Oh, yeah, that’s a really good point. And Sean, that wasn’t the only scary scam we learned about recently. Can you talk about artificial intelligence scams?
Sean Pyles: Yes. Artificial intelligence is being used by scammers now in a terrifying way. There is a growing number of AI voice spoofing scams, and here’s how it works. You might get a call from a sibling, a parent, friend, and they’re absolutely hysterical. They’ll be sobbing and saying that they’ve been kidnapped and they need you to wire money to them ASAP to free them. And of course, you want to do that because you want to free your loved one, but the truth is that they were never in danger. That wasn’t even your loved one calling you. It was a scammer using an AI-generated version of their voice and potentially a call spoofer to make it look like they were calling you directly.
Liz Weston: Oh, my God, that’s horrifying.
Sean Pyles: Yes. And what’s really scary is that in general, across the board, AI is developing faster than we can keep track of, and scammers are taking advantage of that. They’re using the content that you post online, things like videos on TikTok or audio that you’re recording on a podcast, for example, and they’re able to make a model of your voice, inflection and all. So, the example that I just gave shows how AI is being used in what’s called imposter scams, but AI is also being used in other types of scams, too.
Liz Weston: I’m having a moment here, Sean, it’s like, how much of our voice is out there, yours and mine?
Sean Pyles: A tremendous amount. Actually, I hope that no scammers are listening to this because it would be very easy for them to use our voice to do exactly what I just described there.
But there are some ways that we can protect ourselves, Liz, and anyone else listening. So, for AI voice spoofing, imposter scams specifically, one suggestion that sounds awfully dystopian and it kind of is, is that you need to make a safe word or phrase for yourself and your loved ones. This is a word or phrase that in an emergency your loved one could tell you or you could tell a loved one to confirm that it’s actually them and not a scammer calling. Ideally, this would be a few words that you can use in a conversation that wouldn’t be super obvious.
You might say something along the lines of, “Oh, my wallet is on the dresser.” Instead of saying like, “Banana, banana, banana.” That might throw people off and sound a little bit awkward on a phone call. But in general, folks should know that scammers are always going to be leveraging new technologies to rip you off, so it’s important to stay up to date on the latest scams.
Liz Weston: And I just want to drop in: We actually came up with a safe phrase when my daughter was a teenager and she wanted to leave a party or leave a friend’s house without alerting them that there was a problem. So, this isn’t something that’s way out of line. I think a lot of families do this anyway, but it’s something to talk about and make sure everybody remembers what that phrase is so that you can use it in case of emergency.
Sean Pyles: Absolutely. And now I want to zoom out a little bit and discuss the underlying technique that many scammers use to take advantage of you. This is something called social engineering. And it is essentially scammers attempting to manipulate you through social interactions. This can happen many different ways. It could be someone posing as your boss sending you a text message where they urgently need you to go buy them a bunch of gift cards. Or it could be that stranger messaging you online trying to get you to give a Google Voice verification code, like Liz mentioned earlier. The goal of the scammer is to manipulate your emotions through social interactions, to earn your trust or create a sense of panic that makes you reveal your personal information or send them money.
Liz Weston: And that sense of panic or that sense of urgency is key to the scam. So, anytime somebody is pushing you, pushing your buttons, trying to make you do something quickly, that’s a good time to step back or try to step back and take a breath and go, “Hey, this might be a problem.” And of course, if gift cards are involved, you know it’s a scam.
Sean Pyles: Yes.
Liz Weston: So, Sean, what can we do?
Sean Pyles: All right. I think folks should recognize that everyone is vulnerable to this. And that even you, our smart, savvy listener, could potentially fall victim to some social engineering. But owning your susceptibility and knowing how scammers will try to dupe you, can help you spot a scam before you give someone your personal information or money or both.
Liz Weston: And if you’re looking for a resource to help educate you about scams, I recommend AARP’s Fraud Watch. You don’t actually have to be retired to take advantage of this, but they do a really good job of keeping track of scams that are on the rise and educating you about your options. Also, if you are the victim of a scam, please report it to the Federal Trade Commission and the Identity Theft Resource Center.
All right, now let’s get onto this episode’s money question.
Sean Pyles: Sounds good. This episode’s money question comes from Jaime, who left us a voicemail. Here it is.
Jaime: Hi, Nerds. Wanted to call in and ask a question. I’m looking for just an opportunity to supplement my income, and I came across one opportunity that’s called tradelines, and I was wanting your advice, your opinion, on tradelines, if it’s something worth doing. From my understanding, tradelines is when you sell your authorized user accounts on your credit card to people who need to boost their credit, for a certain amount of money a month. So, I thought it may be a good way to supplement my income, as well as that I do have a 815 credit score, and so, I was curious as to your guys’ opinion on the matter. So, thank you for answering it. Have a great day.
Liz Weston: To help us answer Jaime’s question on this episode of the podcast, we’re joined by our dear Smart Money pal and regular host of the show, Sara Rathner. Hey, Sara.
Sara Rathner: Hey, everybody. Glad to be here.
Sean Pyles: Great to chat with you, Sara. So, the practice of selling authorized user slots on your credit cards to strangers is not new, but it is sketchy for a number of reasons.
Liz Weston: Yeah. First, we should back up and explain what an authorized user slot actually is. It’s basically the place where you add an authorized user, which is typically someone who you’ve added to your credit card who’s allowed to use your account to make charges but who isn’t responsible for making payments.
Sara Rathner: Becoming an authorized user on somebody else’s account can help your credit, assuming that primary user — that’s the person who holds the account originally — is responsible in their use of the card. And it’s a fairly common practice among people who actually know each other.
You see this a lot with parents and their children. Parents will add children as authorized users on their accounts until the child is old enough to get their own credit card account. That’s usually between the ages of 18 and 21. You might also add a relative or a close friend to your credit card this way, both to give them access to the card if they need it, and you have that agreement, and also to help them build credit.
And credit card issuers and credit scoring companies are basically cool with this. This is a feature that’s built into cards. And you can always opt to not give the authorized user an actual card. So, they are added to your account, but they don’t have a physical card with which to make any purchases. So, you’re building their credit without letting them spend your money.
Sean Pyles: And what’s most relevant to our listener’s question is that some companies have decided to turn this into a business. They sign up folks who are willing to rent out their authorized user slots and charge people who are trying to build their credit.
Sara Rathner: Right. And the thing is, the companies that do this typically keep the vast majority of the “rent.” They could charge up to $1,000 for one of your authorized user slots, but you only get $50 to $300, and they pocket the rest. But you have to do the work of contacting your issuer, adding the person as an authorized user, and then removing them when the rental period is done. And you can add an authorized user online pretty easily for the most part, but you may have to call and wait on hold to remove them. So, now we’re talking about a fairly decent amount of your time and effort for $50 to $300. Not great.
Tradeline sellers promise their users don’t get access to your credit card information and won’t make purchases, but you’re going to want to keep an eye on your transactions to make sure. And credit card issuers, even though they allow for authorized users, they’re not fans of this, obviously. If your issuer figures out what you’re doing, they could close your account, and that could hurt your credit score.
Sean Pyles: And again, you have a stranger attached to your tradeline, which just feels weird and gross to me.
Sara Rathner: Yeah, honestly, I wouldn’t even want most people I know to be attached to my tradeline, let alone complete strangers. No offense to literally everyone I know, but no, don’t touch my money.
Sean Pyles: There are also some ethical concerns around selling your tradelines. First, you are perpetuating and profiting off a system that makes people who are in a vulnerable position pay for access to better credit, at least on a short-term basis. Meanwhile, the person renting your tradeline may not be getting a long-term solution to their credit woes because after they are done renting your tradeline, that account comes off their credit reports and their credit could go right back to where it was originally. And then there are also the ethics of potentially violating the terms of your agreement with your credit card issuer.
Sara Rathner: Yeah. Tradeline sellers like to tout themselves as providing more equitable access to credit, which is complete bollocks, essentially. Can I say that word on this podcast? I know we’re a clean podcast, but I was trying to think of alternatives to the word I have in my mind. So, listeners, just envision what you think I was about to say and you’re probably right. There’s nothing equitable about charging a person $1,000 to build their credit, point blank. That is absolute nonsense. Another nice way to put that.
You can improve your credit score over time without buying a tradeline from a stranger. It’s not necessarily going to be free, I will get into that, but it’ll be a significantly lower cost, and you can often get that money back.
So, let me explain how. One way is to utilize what’s called a secured credit card. That’s a credit card where there’s typically no credit check required. You don’t have to have an established credit history. You could have bad credit as well. You put down a cash deposit, oftentimes it’s around $200, but there are some cards that have lower deposits. And if you have the money and you require a higher credit limit, then you can also put down more.
That cash deposit becomes your credit limit. That’s the amount that you can charge every billing cycle on your card. And then you use your card carefully and responsibly for a couple of months. Don’t charge more than maybe 30% of that total credit limit. Put one recurring charge on there, like a streaming service or your cell phone bill or something like that. Pay it off on time in full every month. And you’ll start to see within several months, you’re beginning to establish that credit history.
And when you reach a point where you’re ready to graduate to a more traditional unsecured credit card that doesn’t require that security deposit, you’ll actually get that money back. So, you’re essentially just fronting the money for yourself, rather than paying this separate entity money that you’ll never get back to supposedly build your credit.
Another option is something called a credit builder loan — that’s essentially a really small personal loan that you do pay interest on — and then you make regular payments, and then the loan is paid off. You do have to make interest payments on this. But it is, again, a more legitimate way to build your credit. So, that’s option two.
Option three is being added as an authorized user of a card held by somebody you actually know personally, a friend or a family member that you trust. So, those are three other options for you that will not cost you this outsized amount of money.
Sean Pyles: Yeah. And the impact of using a secured credit card or a credit builder loan will remain on your credit profile for years to come, unlike simply renting the tradeline, where it is again gone after you’re done paying for it.
Well, now let’s get to another part of our listener’s question, which was really just about how to supplement your income. And there are lots of ways to do it that are not as sketchy as the tradeline option that we have just gone deep into. Sara, I’m wondering if you have any thoughts about this or if you have had any success maybe working on a side hustle and supplementing your income in the past?
Sara Rathner: Yeah. I mean, so listen, here’s the thing, it’s really hard to make money for nothing. So, oftentimes, the most sustainable side hustles that can be the most lucrative actually utilize a skill that you already have. I am a writer. I have worked as a freelancer, so that’s been my side hustle. I even got into ghostwriting. And I got into ghostwriting for financial planners, which was how I learned so much about personal finance. That’s how I got my start. And so, if you have a skill that is something you can monetize, preferably not something that’s like a fun hobby, because when you monetize a hobby, it becomes a real drag.
But if it’s just a skill that you have, maybe you are good at home repairs and you can do little home repair jobs for friends and neighbors, dog walking, cat sitting, obviously, babysitting. There are lots of things that you can do that you can charge money for. So, start doing that. I mean, even helping friends clean out their basement and then charging them by the hour for that. If you’re a really organized person, that’s a great way to make money.
Sean Pyles: Yeah. I will say I’m wary of any sort of side hustle that markets itself as first and foremost being easy, because there’s usually some kind of catch, like they’re just a straight-up scam or a little weird, like you’re selling photos of your feet or something on the internet. So, some people are totally fine with that, that’s up to them. But you have to think about the trade-off. If something is easy, you’ll be doing something else a little bit different elsewhere.
And like you said, Sara, there are a lot of videos that I see in my TikTok feed that are like, oh, if you are a painter or if you’re into photography, you can just monetize that and set up an Etsy shop.
But when you turn your creative outlet into a source of income, it can really suck all the joy from it. So, even if that is a skill and it’s something you like to spend your time on — it’s nice to have some things that aren’t about making money and to have it be distinctly your own personal hobby. So, I would caution against trying to make money off of that if you have such a creative hobby.
Sara Rathner: Yeah. And sometimes creative hobbies like crafting, photography, things like that, there’s a fair amount of investment at the outset of buying equipment and materials that you need. So, it takes a long time to become a profitable professional photographer, for example. If you’re looking for a quick way to make money from a side hustle, you want to think about the initial investment. For me, side hustling as a writer meant using the laptop I already owned. So, that wasn’t too high of a lift for me. But if I decided to sell hand-knit sweaters on Etsy, then I would have to invest in the equipment, the yarn, which is expensive. And also, the time building up inventory and then selling it online. And probably, paying fees to whatever site I was using to make those sales. So, that’s what you want to think.
You want to think about that cost-benefit analysis of that side hustle, how much do you have to buy in to get started? Which brings us to another thing, multilevel marketing schemes. You know when you have to buy $10,000 worth of ugly leggings to keep in your garage, and then you try to sell them to all your neighbors, and all of your neighbors secretly hate you and talk about you behind your back? Don’t do that. We don’t like it. We’re not going to buy your ugly leggings.
Sean Pyles: And I have some other considerations for our listener or anyone else that’s really interested in supplementing their income, maybe starting a side hustle. And I think that’s important for them to determine if there’s a specific amount of money they want to earn monthly. Knowing that could help them narrow down their options in terms of what sort of side hustle they want to focus on. I’m just wondering, also, what’s driving their push for this. Is there some sort of budget shortfall that they have, too? And if so, could they maybe make up for that by cutting expenses?
But in terms of other side hustles, there are a few other parameters to think about besides how much they might want to earn monthly, like how much time do they want to spend on a side gig, how much effort do they really want to exert? These are things that come to mind for me because I’m someone who has done some side work in the past, and I kind of resented it. Because when I’m not working my 9-to-5 job, I want to have that time for myself. And having to then pick up another job after I’ve worked all day long, it just isn’t appealing for me personally. So I think it’s important for anyone who’s getting into this to just know what they do and don’t want to do around a side hustle.
Sara Rathner: That is absolutely valid. When I was doing the side hustle on top of a full-time job thing, I mean my life outside of work really took a hit. It was a substantial amount of time. And I was at a point in my life where I could dedicate the time to do it, but you get real tired. I mean, I’m not going to lie. So, that’s something to think about, how much additional working hours per week are you going to be adding on your plate? And if it’s the kind of thing where you tutor two kids for two hours a week, maybe that feels sustainable for you on top of your normal full-time job. But if you’re talking about an extra 10 to 20 hours a week of work or more, I mean that’s like taking on another full-time job, and everything else in your life is going to suffer.
Liz Weston: Well, speaking of jobs, you might have the opportunity to, if you do hourly work, you may be able to volunteer for another shift, or work more hours, or simply put more effort into getting a promotion at work so you can earn more money. Sometimes that’s a much more efficient way to go about increasing your income than picking up a side hustle.
Sara Rathner: Yeah. Or even job hunting and negotiating a higher salary in a new position, too.
Liz Weston: There you go.
Sean Pyles: I think there are some creative ways where you can get some, maybe, extra benefit from a side job that you pick up. One thing that I’ve considered in the past is actually picking up a part-time job at my local nursery, maybe working one day a week for a few hours. And as someone who’s really into gardening, if I could get a discount on their plants in addition to making a little bit more money, and getting to know more about these plants, and connect with people who are really into gardening in my community, that has a lot of benefits for me. And it would make the time I would spend working worth it if I were to do that.
Liz Weston: Oh, you’re reminding me. A friend of mine picked up a job with an airline largely for the travel benefits. So, she works I think about 20 hours a week. She has a lot of flexibility, and she can fly either for free or — get this — pay 60 bucks and go first class.
Sean Pyles: That’s pretty sweet.
Liz Weston: I would shift some luggage for that. That sounds like a pretty good deal to me.
Sean Pyles: That also raises the idea again of what are you getting besides the money from a side gig, that there are so many other things to weigh beyond just the time that you spend. How can you really make any sort of side gig worth it for you truly?
Sara Rathner: Yeah. And then you talk about supplementing your income, what are you going to do with that money? What’s your plan? Maybe you have some debts you need to pay off. Or if you’re bringing in an extra $100, $200 a month, is that money going into your debt, or is it easy to just justify spending more because you have a little extra money in your pocket? So, what has to come after all that extra work is the discipline to actually apply that money into a specific goal or a specific problem you’re trying to solve in your life with that extra money. So, definitely be really diligent about, “OK, this is how much extra money I’m earning every month. I’m putting it right into my credit card debt. I’m putting it right into my student loan. I’m putting it right into this savings goal that I have or an investing goal that I have. And I’m not just putting it into my checking account and then spending more money.”
Sean Pyles: All right. Well, Sara, thank you for talking with us.
Sara Rathner: Thanks for having me.
Sean Pyles: And with that, let’s get on to our takeaway tips, and I will start us off. Be skeptical of anyone promising “easy money.” Tradeline sellers make most of the profit and take none of the risk of adding strangers to your credit card’s authorized user slots.
Liz Weston: Next, beware of sacrificing your good credit for profit. If your credit card issuer shuts down your accounts, that could hurt your credit scores.
Sean Pyles: Finally, consider other options. There are many other side hustles that can supplement your income that are 100% aboveboard.
Liz Weston: And that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]. And visit nerdwallet.com/podcast for more information on this episode. Remember to follow, rate and review us wherever you’re getting this podcast.
Sean Pyles: And here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Liz Weston: This episode was produced by Sean Pyles and myself with the help of Tess Vigeland. Kaely Monahan mixed our audio. And a big thank-you to the thoughtful folks on the NerdWallet copy desk for all their help.
And with that said, until next time, turn to the Nerds.
When my husband and I got married nine years ago, we had an audacious dream of paying cash for our first home. At that time, it was very much a far-off dream — we were just trying to survive the rigors and expenses of law school without going in debt. That alone was a seemingly gigantic feat.
But after three years of law school, my husband did graduate without debt, passed the bar, and we started planning for the future. Since we’d been renting for almost four years, my husband had a good job, and our second baby was on the way, pretty much everyone expected that buying a house would be in our immediate future.
I mean, after all, isn’t buying a house the responsible thing for a young couple to do? Well, maybe — or maybe not. We didn’t have much money in savings, and we weren’t sure how long we would be living in the town we were in, so we chose to go against conventional wisdom and continued renting.
Setting a Goal
Within the next six months, my husband lost his job, we relocated to another city so he could find work, I had some significant health problems in my pregnancy which resulted in numerous hospital and doctor’s bills, and we had our second baby. Needless to say, we were incredibly thankful that we hadn’t taken out a mortgage and then had to deal with the headache of trying to sell a house at the last minute — especially since the housing market was poor in our area.
It was around this time that we were first introduced to Dave Ramsey. While we didn’t have any debt and had always lived on a strict budget, going through his Financial Peace University Class fired us up to set big financial goals and work hard to accomplish them.
One of the big goals we decided to aim for was paying cash for our first home. We crunched a bunch of numbers and realized that, if we continued to live simply and frugally and worked hard to bring in extra money through side jobs, we could save enough over the course of five years to pay cash for a starter home.
It felt like a mammoth goal and we weren’t sure if we could do it, but we decided to go for it anyway. We figured that, even if we didn’t make our goal in five years, we’d at least be a lot closer to it than if we didn’t try at all! Plus, from our calculations, we’d be in a lot better position to wait to buy — even if it took seven years to save up enough for a house — than if we were to go ahead and get 15-year mortgage and pay it off early.
We knew that we could buy a decent starter home in the area where we were planning to move for around $100,000 to $110,000, so we divided $100,000 by 60 (since there are sixty months in five years) and set a goal to save $1700 every month. Because we didn’t have any debt or school loans, and because we lived simply and frugally, we were able to live on significantly less than we were making, thus freeing up a good chunk of money to put towards our house savings each month.
Gazelle-Like Intensity
Once we set this goal and I blogged about it publicly, we were incredibly motivated to work as hard as we could and delay every purchase we could in order to put as much as possible into our house savings fund. We used coupons, ate a lot of meatless meals, shopped at thrift stores, cooked from scratch, brown bagged it, continued to use our old and worn-down furniture, didn’t replace anything that wasn’t an absolute necessity, limited our going out to eat, only had one car, stayed home a lot, used gift cards from Swagbucks to buy any non-necessities, bought eye glasses from Zenni optical, learned to be content with what we had, and continued to live on a strict written budget.
Meanwhile, we also looked for ways to increase our income. I blogged, wrote ebooks, and took on freelance writing jobs. My husband did contract work, started his own law firm, and helped me running the blogging business.
That first year, we didn’t always make our monthly savings goals. We had some unexpected medical bills and car problems that ate up a portion of our savings. But we kept plugging away, throwing whatever extra we could squeeze out of our income toward savings.
The few years of long hours and hard work we’d put into blogging started to really pay big dividends and by the second year, we were meeting and exceeding our monthly savings goals every single month. As our house savings fund increased, we began to get so excited that we kind of went overboard and worked long, long hours in order to meet our savings goal even faster. I wouldn’t recommend putting in such long hours, missing so many social events, or sleeping so little, but the effort paid off because, at the end of two and a half years, we paid 100% down on our first home!
Even though I wish we had given ourselves a little more breathing room and margin while saving, it was thrilling, fulfilling, and exciting to achieve this goal — in half the time we had initially planned. And we are thankful we chose to take a counter-cultural route and pay cash for our house. Not having a mortgage payment has freed us to continue to save aggressively toward other goals, increase our spending in areas that really matter to us, and give generously to needs in our community and around the world.
Maybe you’ve heard of these apps that actually pay you to play games and take surveys. And you’re thinking: What’s the catch?
Surely, there’s not just some billionaire on a boat somewhere paying Gen Zs to play Solitaire on the metro. So what’s in it for the app developers?
Moreover, do these things even pay out like they’re supposed to? Or are they total scams, designed to waste your time and steal your personal data?
Well, the answer falls somewhere in the middle.
So let’s investigate: are paid gaming apps legit?
What’s Ahead:
What are paid gaming apps?
“Paid gaming apps” is the term I and many others use to describe apps that actually pay you for playing games and taking surveys.
Take Coin Pop, for example. You download the app, generate an account, and it gives you a selection of simple games to play to make cash.
Source: Coin Pop on the Google Play Store
As you’ll start to notice, some of these games are surprisingly recognizable, like Angry Birds or Poker. But most of them are cheap knockoff flash games, such as “Family Farm Seaside.”
Anyways, you choose a game, and here’s where things get interesting.
How do paid gaming apps work?
Paid gaming apps don’t pay cash directly. Instead, you generate “coins,” which can be redeemed for gift cards, PayPal, or other cash equivalents. Some paid gaming apps let you cash out your coins in increments as small as $5, while others have pushed the goalpost farther and farther to $30+ (more on that in a bit).
Anyways, you can typically generate coins in one of five ways:
Automatically, by simply spending time playing games (i.e., 100 coins/hour)
By completing certain missions or objectives within games
By sharing the game or the app on social media
By completing surveys
By referring friends
Take Cashyy, for example. Cashyy is more mission- than time-focused, meaning each game will have specific goals or milestones to reach to receive a bundle of coins all at once.
Source: Cashyy on the Google Play Store
Before discussing how much you can reasonably earn, it’s important to understand where the money is coming from. Who the heck is paying you to play obscure flash games, and why?
Why do apps pay you to play games or take surveys?
These paid gaming apps generate revenue in a few ways.
Some, like Mistplay, charge the developers a fee to have their game featured. In effect, players like you and me are “testing” these games for the developers and Mistplay is kicking back valuable data like what demographics are playing, who’s getting stuck on what missions, etc.
Others go the more traditional route of simply pummeling you with mobile ads between surveys and gaming sessions.
Finally, and I’m just speculating here, but my experience so far would suggest that many of these apps are simply harvesting your data. Not to the benefit of any game developers, but to sell to a third party in a way you probably wouldn’t approve of.
Heck, one of these apps wanted my facial ID while another required my SSN… to play Angry Birds.
When a paid gaming app wants access to your front camera
