One former employee recounted being kept at the office until 5 a.m. and asked to underreport their hours. Another described being instructed to report fewer hours despite working through multiple all-nighters each week. High compensation an equal trade-off? The demanding nature of banking, known for long hours and high salaries, is often viewed as a … [Read more…]
If you have military experience, a loan from the U.S. Department of Veterans Affairs could help you take a giant step toward becoming a homeowner. VA loans come with a number of benefits — notably, they require no down payment. But first, you need to understand the VA loan pros and cons to make sure it’s the right choice.
A VA loan is a federally guaranteed loan administered by the U.S. Department of Veterans Affairs. Even though the VA sets the basic eligibility requirements and guarantees the loan, borrowers actually apply to private lenders for these loans, after first obtaining a certificate of eligibility from the VA.
What is a VA loan? It’s a type of mortgage designed to help improve access to home ownership for veterans, service members, reserve members, National Guard members, and surviving spouses. It comes with several noteworthy characteristics that make it attractive for homebuyers, like having no down payment requirement and limited closing costs.
In order to get preapproved for a VA loan, you must get a Certificate of Eligibility that ensures you meet the service qualifications. Here are the basic requirements for each type of borrower:
• Veteran: Served at least 90 continuous days of active-duty service.
• National Guard: Served at least 90 days of active duty (there are additional eligibility options if you served before August 2, 1990).
• Reserve members: Served at least 90 days of active duty (there are additional eligibility options if you served before August 2, 1990).
• Spouses: You’re the surviving spouse of a veteran or the spouse of a veteran who is missing in action or being held as a prisoner of war.
Lenders also evaluate your VA loan approval and mortgage amount based on your credit score, income, debt, and assets. The VA does not impose a minimum credit score requirement, although many lenders require a credit score of at least 620.
Are VA home loans good? They do come with a number of benefits. A big one is that there’s no down payment required. As long as your debt-to-income ratio can handle the mortgage payments, you can borrow up to the full sales price of the home with a minimal amount of cash at closing.
Here is what to think about as you weigh VA home loan pros and cons:
• No down payment requirement: You don’t have to put down any cash on your home purchase. Conventional loans typically require at least 3% down for first-time homebuyers and FHA loans require 3.5% down for all borrowers.
• No mortgage insurance: Other mortgages require that you pay private mortgage insurance when your down payment is less than 20%. There is no comparable fee with a VA loan.
• Lower interest rate: Not only are VA loan interest rates usually lower than conventional loan rates, you can apply for a VA Interest Rate Reduction if rates drop after closing.
• Flexible credit requirements: Lenders usually require a minimum credit score of 620. But technically, there is no minimum set by the government.
• No use limits: You can get a VA loan multiple times throughout your life; in fact, there are no limits on how many times you can use one to buy a home.
In addition to these advantages, there are also some potential drawbacks of choosing a VA loan for your mortgage.
• Funding fee: This is a one-time fee that is paid either at closing or rolled into your mortgage balance. The fee varies depending on how many times you’ve used the VA loan and the size of your down payment. For instance, a first-time VA loan borrower with a 0% down payment would pay a 2.15% funding fee.
• Strict appraisal process: All mortgage lenders require an appraisal, but your appraiser must be VA-approved with this type of loan.
• Property eligibility requirements: The home inspection must also meet VA-specific requirements, which means you can’t finance a major fixer-upper. For instance, it needs a working HVAC system, no lead paint, and adequate roofing, among other criteria.
When comparing a VA loan vs. a conventional loan, there are some significant differences to consider.
A VA loan has no minimum down payment requirement, while a conventional loan requires at least 3% down for first-time homebuyers. In the first quarter of 2024, the median home sales price was about $420,000. With a conventional loan on that amount, a first-time homebuyer would need a down payment of at least $12,600.
Although there’s no agency-mandated minimum credit score for VA loans, most lenders set a minimum of 620 — the same you’ll typically find with a conventional mortgage.
Although you may be required to pay a one-time funding fee with a VA loan, there’s no ongoing mortgage insurance like you may have to pay with a conventional mortgage.
Private mortgage insurance (PMI) is required with a conventional loan if your down payment is less than 20%. You may have a one-time, upfront payment at closing, or your PMI may be split up between up-front and monthly premiums that are rolled into your mortgage payment.
VA loans pros and cons may matter more or less depending on your personal situation. Some examples of when a VA loan may be the best choice include:
• Buyers who don’t have cash for a down payment or want to preserve cash for other goals may want to go with a VA loan after they weigh VA home loan pros and cons.
• Buyers who can’t make a 20% down payment (who would have to pay for private mortgage insurance if they obtained a conventional mortgage loan) might find a VA loan especially appealing.
Questions? Call (844)-763-4466.
Even if you’re eligible for a VA loan, it still makes sense to look at other options. Three other common types of mortgages include FHA loans (backed by the Federal Housing Administration), conventional loans, and U.S. Department of Agriculture loans.
An FHA loan is another federally guaranteed mortgage with flexible credit requirements. To qualify for a minimum down payment of just 3.5%, you need at least a 580. But you can still qualify with a 500 credit score, as long as you pay at least 10% down.
With a lower down payment, you must pay a mortgage insurance premium. There is an upfront fee at closing, as well as a monthly fee. If your down payment is less than 10%, the fee stays on for the life of the loan unless you refinance to a new mortgage.
Some conventional mortgages allow for a down payment as low as 3% for first-time homebuyers, though others may require 5%. You must pay private mortgage insurance for down payments under 20%, but that fee usually drops off once you have 20% equity in your home. The credit requirements are usually a little higher with conventional loans.
A USDA loan is designed for individuals looking to buy a home in a rural area. You can explore eligible properties on the USDA website. However, you also need to meet certain income limits based on your county and family size in order to qualify for this 0% down payment mortgage.
Weigh VA loan pros and cons to make sure you choose the best mortgage for your personal financial situation. Among the things you’ll want to consider are your credit score and how much, if anything, you have saved for a down payment on a new home.
SoFi offers VA loans with competitive interest rates, no private mortgage insurance, and down payments as low as 0%. Eligible service members, veterans, and survivors may use the benefit multiple times.
Our Mortgage Loan Officers are ready to guide you through the process step by step.
VA loans have more flexibility with application requirements compared to other types of loans, as long as you meet the military service requirements. There may also be additional restrictions on the type of home you buy, especially if you’re eying a fixer upper.
No, you may get a VA loan with no down payment, as long as your debt-to-income ratio suggests that you can make the monthly mortgage payments.
The VA itself does not require a minimum credit score but most lenders look for a minimum credit score of 620 for VA loans.
Photo credit: iStock/sommart
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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
SOHL-Q324-005
Source: sofi.com
As the leaves begin to change and the air turns crisp, our homes naturally become a refuge from the cooler temperatures outside. Fall is a season that invites us to embrace warmth, comfort, and a connection to nature. The 2024 fall decor trends are poised to blend timeless seasonal elements with fresh ideas, offering a perfect blend of tradition and innovation. In this Rent. guide, we’ll take an in-depth look at what to expect this season and how to incorporate these trends into your home, whether you’re buying a home in Annapolis, MD, or renting an idyllic San Diego apartment.
At the tail end of the summer heat, it can be tricky to think far ahead of other seasons. Before tackling your next season’s decor, get into the right state of mind. “I love fall,” interior designer Laura Medicus with The Colorado Nest begins, “first order of business to get your home and mind ready – put on Taylor Swift’s Folklore album and bake some pumpkin bread so the house smells great. Then, work in some velvet. Velvet pillows in mustard yellow, deep charcoal, forest green, or burgundy work magic. Pair those with a plaid throw in cozy colors, add some candles, and find some thrillers to read as the nights grow longer,” Medicus concludes. By setting the scene, and starting small, you’re ensured to embrace the fall vibes earnestly.
The color palette for fall 2024 is all about earthy tones and warm neutrals. “Embrace the fall 2024 decorating trends with the trending colors of the season; deep forest green, cream, and tan, or go with vintage glamour with rich burgundy, gold accents, and dark walnut softened with blush pink and ivory,” recommends Libier Reynolds, lifestyle expert and Christian speaker. ” Incorporate natural textures and warm earth tones into your beautiful living space; opt for terracotta pots, wooden accents, and cozy textiles like linen and velvet. Most of all, be grateful for and enjoy your space. Remember a little love makes any space a home.
These colors are known for their ability to create a cozy, inviting atmosphere that makes any space feel like a warm hug on a chilly day. And how you combine them is equally as important as the hues themselves. “This year’s color schemes are making a clear diversion from years’ past popular trends of rust, camels, and taupe,” explains Anna Markow with Buy Wholesale Clothing.
So what’s replacing those fall staple colors? “In this early autumn preview I’m seeing a wide spectrum of hues being entertained from magenta to forest green and what can be said with certainty is yellows, mustards, and rusts have fallen greatly in popularity. My early pick for the winning color combination for the upcoming fall and winter would be a mix of greens and darker hues like charcoal with a pop of color sprinkled in including the aforementioned magenta,” Markow predicts.
Sustainability continues to play a crucial role in shaping decor trends, and this fall is no exception. In 2024, there’s a growing emphasis on using natural, eco-friendly materials that not only enhance the aesthetic appeal of our homes but also contribute to a more sustainable lifestyle.
“Embrace sustainable decor to enhance your living space this fall 2024,” recommends Interior designer, Kelly Moorcroft with Spaces by Kelly. “This can be easily achieved by incorporating the beauty of nature and being mindful of our impact on the environment. Shop sustainably by sourcing a reclaimed wooden table, repurposing vintage furniture, or selecting natural materials in warm, earthy tones. Choose quality, timeless pieces instead of fast decor trends to reduce waste and create a warm space filled with your own personality and memories – perfect for relaxing during long fall evenings,” Moorcroft explains.
Natural materials add texture and depth to a space while creating a connection to the natural world. “This fall, I am embracing the season by incorporating nature-inspired elements into my décor (surprise, surprise),” shares Dorothy Huntsman with Dayhouse Studio. “Warm, earthy tones like deep greens, burnt oranges, and rich browns as well as pops of blues can create a cozy and inviting atmosphere.
I’m also adding layers of texture with natural materials such as plants and flowers, wood, soft wool, textured wallpapers, and stone to enhance the sensory experience. As a bonus, these elements are known to improve your health. Plants purify indoor air by removing toxins and increasing oxygen levels and natural materials lower cortisol levels, reducing stress and promoting relaxation as well as improving mood and decreasing feelings of anxiety and depression,” Huntsman shares. “So it’s pretty much a no-brainer for me and my clients to incorporate these elements into the home environment. Right?”
Though plants are often recommended decor items, no one specified that they have to be living. “Dried flowers are making a beautiful comeback this fall, offering a timeless and elegant way to decorate,” artist Lisa Audit shares. “I simply love using them to add a touch of nature indoors. Their neutral palette of soft beige, with hints of orange, yellow, and deep red, creates a warm and inviting atmosphere. Perfect for any arrangement, dried flowers bring a cozy yet sophisticated charm that’s ideal for the 2024 fall season,” Audit concludes.
Nostalgia will be a key influence in fall decor trends for 2024, with a resurgence of vintage and retro styles. This trend is all about bringing the past into the present in a way that feels fresh and contemporary. Decor from the ’70s and ’80s, characterized by bold patterns, retro color schemes, unique textures, and classic furniture shapes, is making a comeback, adding a touch of character and history to modern homes.
This revival isn’t just about replicating past styles but rather blending them with modern elements to create a unique, eclectic look. “The trends this fall are about embracing rich textures and elegant details. Velvet is making a huge comeback, especially on golden hues,” shares lifestyle blogger, Sonya Burgess. “Scalloped edges bring in a playful element, while marble accents continue to be a classic staple. Add these to traditional fall favorites such as layering textures, natural elements, and the warm glow of seasonal candles to create the beloved cozy fall feel to your home.”
To avoid overwhelming your space with too much retro influence, mix these vintage elements with contemporary pieces. For example, pair a bold, retro-patterned wallpaper with sleek, modern furniture or add a vintage armchair to a room with minimalist decor. This blend of old and new creates a dynamic contrast that feels both nostalgic and fresh.
For several years, minimalism has been the go-to trend in home decor, but 2024 is seeing a shift towards maximalism, particularly in the fall. This trend is about embracing abundance — filling your space with colors, patterns, textures, and objects that reflect your personality and interests. It’s about creating a space that feels lived-in, cozy, and welcoming.
‘For fall 2024, dive into maximalism by embracing bold, sophisticated decor that truly expresses your personality,” Ana Medeiros, creative director of Maeve recommends. “Mix rich colors, intricate patterns, and a variety of luxurious textures to create a vibrant and inviting space. Layer rugs, throws, and cushions, and don’t shy away from combining different finishes and styles. This trend is all about creating a visually stimulating, cozy environment that’s uniquely you,” Medeiros shares.
In a world where mass production often dominates, there’s a growing appreciation for artisanal and handmade items. In the upcoming fall season, you will see a continued focus on unique, handcrafted decor that adds a personal touch to your home. These pieces, whether they’re pottery, textiles, or furniture, bring a sense of craftsmanship and authenticity that mass-produced items often lack.
Artisanal and handmade pieces are fantastic ways to add texture to your space as well, which quickly elevates any room. “One of the delightful things about the change in weather in the fall is the opportunity to add comforting textures to your spaces,” notes Karen Highland with Frederick Real Estate Online. “You can easily elevate your autumn decor by adding textured elements such as cozy throws, plush pillows, and knit blankets. Woven baskets, faux fur, and velvet cushions also bring a comforting touch to any room. These pieces not only provide warmth but also infuse your room with a seasonal charm that embodies fall. By incorporating these textural accents, you can create a welcoming and inviting atmosphere perfect for the cooler months.”
For those who want to refresh their decor without overwhelming their space or budget, this upcoming fall is all about small, thoughtful changes that make a big impact. This approach is perfect for anyone who wants to embrace the season’s vibes without committing to a full redesign.
“My biggest tip for decorating for a season like fall is to make simple changes to your everyday lifestyle,” recommends interior designer Rashmi Patel with Rushme Home. “For example, I love changing out pillows, it’s such a subtle way to change up the colors and go for more burgundy and greens. I also love updating my faux stems on the kitchen island or a console table to liven up the space for fall. The last tip is to add a nice deeper-toned throw blanket on the couch or an accent chair for a pop of color for the season. Decorating for fall shouldn’t be stressful, it should be fun, easy, and a quick way to feel the season,” Patel shares.
By making these small updates, you can infuse your home with the warmth and charm of the season, creating a space that feels fresh and inviting without the need for major renovations.
“Get ready for fall 2024 with the hottest interior design trends. Embrace the cozy elegance of neutral tones paired with organic textures, setting a serene and inviting mood. This season, expect to see geometric patterns making a bold statement in pillows and decor, adding a dynamic touch to your space,” shares interior design experts at Marbella Studio. “Modern lighting, such as globe pendants, will illuminate your home with a warm, contemporary glow. Decor tips: incorporate natural elements like stone or ceramic vases, and layer your seating with plush throws and textured cushions for added comfort. Transform your living space with these trends and make your home the epitome of autumnal sophistication.”
Depending on your geographic location, your fall season may look unique and tailored. Camille Duvall, real estate expert, shares her take on the upcoming fall season in Lake Tahoe. “As you prepare your Lake Tahoe home for fall, embrace cozy warmth and style by incorporating Tibetan lamb throws and pillows. Swap out summer linens for those in earthy jewel tones and organic neutral shades to complement the soon-to-be snowy backdrop,” Duvall shares.
“Instead of traditional bear motifs and kitschy ski posters, opt for local organic handmade pieces, such as live-edge furniture and woven baskets crafted by local artists. Tribal art and unique textures will add depth and a contemporary flair to your space, creating a fresh look that embodies the essence of Tahoe’s natural beauty and artistic spirit.”
This fall season is shaping up to be a season of warmth, comfort, and personality in home decor. By embracing both earthy and unexpected jewel tones, sustainable materials, vintage pieces, cozy maximalism, and artisanal decor, you can create a home that feels inviting and reflective of the season.
Whether you’re looking to make big changes or simply update a few pieces, these fall decor trends offer endless inspiration for a stylish and cozy fall home. So, as the leaves begin to fall and the days grow shorter, take the opportunity to refresh your space and create a haven that celebrates the beauty of the season.
Source: rent.com
Sacramento often flies under the radar compared to its flashier neighbors, but those who live here know it’s a gem worth discovering. Known for its abundant sunshine, farm-to-fork dining, and rich tree canopy, Sacramento offers a unique blend of urban amenities and natural beauty. As a city that has grown rapidly in recent years, it attracts new residents with its relatively affordable cost of living, thriving job market, and laid-back vibe. Not sure if Sactown is for you? Read on to find out what to expect if you’re considering a move to the Sacramento area in 2024.
You know it from: Lady Bird, Sacramento, Step Brothers
Average 1 bedroom rent: $2,022 | Sacramento apartments for rent, Sacramento houses for rent
Average home price: $520,000 | Sacramento homes for sale
Average cost of full-service moving services: $182/hr for 2 movers
Average cost to rent a moving truck: $19 – $39/day
Top industries: Agriculture, Health Care, Education
Move here for: Farmer’s markets and fresh food, tree-lined streets, great biking and outdoor opportunities
Be sure to bring: Your bike and your sunscreen
Sacramento enjoys over 260 days of sunshine each year, making it a haven for anyone who craves warmth. Summers can get scorching, with temperatures often exceeding 90°F, but the low humidity makes it bearable. Winters are mild, with occasional rain but rarely dipping below freezing. If you love basking in the sun or enjoy outdoor activities year-round, Sacramento’s climate won’t disappoint. Just be prepared with sunscreen and stay hydrated during those hot summer days.
Sacramento takes pride in being the “Farm-to-Fork Capital” of the U.S., and it’s not just a catchy slogan. With its proximity to fertile farmland, the city boasts an impressive array of fresh, local produce. Farmers markets abound, and restaurants highlight seasonal ingredients, making it a food lover’s paradise. Dining out in Sacramento means enjoying meals that are fresh, flavorful, and locally sourced. Whether it’s a casual café in Midtown or a high-end restaurant Downtown, you’ll taste the difference.
Compared to other California cities like San Francisco or Los Angeles, Sacramento’s cost of living remains relatively affordable, but that gap is closing. Housing prices have been climbing steadily, with the average home costing around $520,000. Renters will find that decent apartments are still available, but they go fast. While Sacramento’s cost of living is 20% higher than the national average, it’s still more manageable than in other major California cities.
Moving Tip: Be prepared to act quickly if you find a house or apartment you like. Competition is fierce, whether you’re looking to rent or buy a home. The average single family home only stays on the market for 11 days. If you are looking for buy, working with a local real estate agent can help ensure you find the perfect home.
Sacramento’s traffic isn’t as notorious as L.A.’s, but it can still be a headache. I-5 and Highway 50 see regular congestion, especially during rush hour. The city’s rapid growth has outpaced its infrastructure, leading to bottlenecks and delays. On the bright side, Sacramento is investing in its public transportation system, which could ease some of the traffic woes in the future.
Moving Tip: If you’re commuting from suburbs like Elk Grove or Roseville, expect to spend a fair amount of time in your car. If you’re hoping to rely on pubic transit, you’ll want to live closer to the city center.
With its flat terrain and bike-friendly streets, Sacramento is a cyclist’s paradise. The American River Parkway offers 32 miles of scenic bike trails, perfect for weekend rides. Midtown and Downtown are particularly bike-friendly, with ample bike lanes and easy access to local shops and restaurants. If you’re looking to ditch your car, Sacramento makes it easy to get around on two wheels.
Moving Tip: Sacramento’s commitment to cycling extends to its community, with frequent bike events and a growing network of cycling clubs.
Beer enthusiasts will feel right at home in Sacramento, which boasts a vibrant craft beer scene. With over 50 breweries in the region, there’s always something new to try. Midtown, in particular, is a hotspot for craft beer, with popular spots like Device Brewing and Urban Roots offering diverse selections. Sacramento’s beer culture is laid-back and welcoming, making it easy to strike up a conversation with fellow beer lovers. Whether you’re into IPAs, stouts, or sours, you’ll find plenty to satisfy your palate.
Sacramento is often called the “City of Trees,” and for good reason. The city’s tree canopy is one of the densest in the nation, with over 100,000 trees lining its streets. Walking through neighborhoods like Land Park or East Sacramento, you’ll be greeted by towering oaks, elms, and sycamores that provide shade and beauty. The trees not only enhance the city’s aesthetics but also help keep temperatures cooler during the hot summer months. If you appreciate nature, Sacramento’s lush greenery will be a daily delight.
Sacramento’s job market has been expanding, particularly in government, healthcare, and tech sectors. Major employers include the State of California, Sutter Health, and Intel, offering a variety of career opportunities. However, the job market can be competitive, especially for those seeking positions in specialized fields. Networking is key, and connecting with local professionals through events or LinkedIn can make a difference. If you’re relocating for work, it’s wise to have a job lined up or at least a solid plan for your job search.
While Sacramento’s public transportation is better than it used to be, it still has room for improvement. The Sacramento Regional Transit (SacRT) system offers light rail and bus services, but coverage can be spotty outside of the city center. If you live in Downtown or Midtown, you can get by without a car, but suburban areas might find it less convenient. On the plus side, SacRT has been expanding its services and improving reliability, making it a viable option for some commuters.
Sacramento’s art scene is experiencing a renaissance, with murals, galleries, and performance spaces popping up across the city. The Wide Open Walls mural festival has transformed the city into an open-air gallery, with stunning street art around every corner. Midtown and Downtown are hubs for creativity, featuring galleries and institutions like the Crocker Art Museum and monthly art walks. Whether you’re into traditional art, modern installations, or street performances, Sacramento offers a thriving cultural experience that’s worth exploring.
Living in Sacramento means being just a short drive away from some of California’s most stunning natural landscapes. Lake Tahoe, Yosemite National Park, and the Napa Valley are all within a few hours’ reach. Whether you’re into skiing, hiking, or wine tasting, weekend getaways are a breeze. Even within the city, parks like William Land Park and the Sacramento River provide plenty of opportunities for outdoor activities. If you love nature and adventure, Sacramento’s location is a major perk.
Sacramento’s culinary landscape is as diverse as its population, offering everything from authentic Mexican tacos in South Sacramento to upscale dining in Midtown. The city’s food scene reflects its agricultural roots, with farm-to-table dining being the norm rather than the exception. Food trucks are also a big deal, especially at events like SactoMoFo, where you can sample a variety of cuisines in one place. Whether you’re a foodie or just love a good meal, Sacramento’s dining options won’t disappoint.
Sacramento might not have as many professional sports teams as larger cities, but it’s home to some passionate fans. The Sacramento Kings have a loyal following, and game nights at the Golden 1 Center are electric. Soccer enthusiasts can catch Sacramento Republic FC in action, with plans for the team to join Major League Soccer in the works. If you’re a sports fan, Sacramento offers plenty of opportunities to get in on the action.
Moving Tip: Local sports bars like The Zebra Club are always buzzing with excitement, whether it’s for NBA, NFL, or college games.
Methodology: Average rent prices sourced from Rent.com August 2024. Home prices sourced from Redfin August 2024. Average moving costs sourced from MoveBuddha. Employment data sourced from Executech.
When a cash-back rewards credit card features a 2% cash back feature, that means you receive a flat 2% back on all purchases. This can be a solid way to reap rewards.
Read on to learn the ins and outs of what 2% cash back actually means, as well as the pros and cons of a 2% cash-back credit card, to help you determine whether it’s worth your while.
Cash back is a form of reward that cash-back credit cards offer that allows you to earn money back on purchases you make. Other examples of credit card rewards include points or travel miles.
With a flat-rate cash-back card, all of your purchases earn the same amount in cash back. Other credit card issuers might offer higher cash-back rates on certain spending categories, such as on gas or groceries.
Meanwhile, some may feature rotating bonus categories to give your rewards-earning abilities a boost. For example, you might earn 5% cash back in the fall months on purchases made at restaurants and on gas.
You can redeem the cash-back rewards you earn in the form of a check, bank transfer, or gift card, or as a statement credit. Other options might include making a charitable donation or making a purchase through the issuer’s online portal. Depending on the credit card, there might be a spending threshold you need to meet before you can redeem your cash-back rewards.
Earning 2% cash back simply means that for every $100 you spend on your credit card, you’ll get $2 back. So if you were to spend $1,000, that’s $20 back in your pocket — though you’ll then have to redeem that cash back in order to make the rewards usable.
As mentioned previously, having a 2% cash-back credit card means you’ll earn two cents back for every $1 you spend using the card, or $2 for every $100, and so forth.
There might not be a limit to how much you can earn in cash back. However, in other cases, the card may cap the amount of cash-back rewards you can earn for either regular spending or spending in bonus categories.
While a 2% cash back card does come with some advantages, there are some drawbacks as well. Take a look at both:
| Pros and Cons of a 2% Cash Back Card | |
|---|---|
| Pros | Cons |
| Easy to use | Higher APRs compared to non-rewards credit cards |
| Can rack up rewards quickly | Earning caps may apply |
| Often no annual fee | Don’t often offer travel rewards or perks |
• Easy to use: A major benefit of a 2% cash-back credit card is that the rules are simple: You spend money, and get a certain amount back. Plus, redeeming rewards is usually pretty straightforward, and you have a choice of how to do so.
• Can rack up rewards quickly: If you use your credit card for everyday purchases, you’ll accrue rewards fairly fast. Of course, only put everyday purchases on your card if you can afford to pay them off, and always use your card responsibly, considering what a credit card is and the implications overspending can have for your credit score.
• Often no annual fee: Many cash-back cards don’t have an annual fee. That means you won’t need to worry about spending enough to offset the fee.
• Higher APRs compared to non-rewards credit cards: While your annual percentage rate (APR) on a card partly depends on your credit and other financial factors, rewards credit cards like cash-back cards tend to carry higher interest rates. If you keep a balance on your account, you can expect to pay a pretty penny in interest, given how credit cards work.
• Earning caps may apply: While some credit cards allow you to earn unlimited cash-back rewards, others place a limit on how much you can earn. If you’re looking to max out your rewards potential, a cap could make that harder to do.
• Don’t often offer travel rewards or perks: If you’re hoping to earn rewards that apply to travel, such as airline trips or hotel stays, a cash-back credit card likely isn’t the form of rewards credit card for you. While some cards may offer travel redemption options, most don’t, and many also charge foreign transaction fees.
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Whether a 2% cash-back credit card is worth it really depends on how you’ll use the credit card. This includes what types of purchases you’d like to make, and if you plan on using your card for bills and everyday expenses, such as gas and groceries. If you use the credit card regularly, you’ll be able to earn a greater amount of cash-back rewards.
However, you’ll also want to balance that spending with sticking to important credit card rules, like not spending more than you can afford to pay off. Because rewards credit cards tend to have higher interest rates, it’s important to avoid carrying a balance so you don’t cancel out the cash back you earn.
A cash-back rewards card might not be worth it if you prefer to use your credit card rewards for travel. In that case, a travel rewards credit card typically will offer more lucrative ways to earn points or miles to use on trips.
Recommended: How to Avoid Interest On a Credit Card
If you get a 2% cash-back card, here are some tips to keep in mind to use it effectively:
• Read the redemption rules. Familiarize yourself with credit card requirements, and see if there are any limits on how much cash back you can earn. Similarly, check if you need to hit a minimum amount in cash-back earnings before you can redeem those rewards.
• Be intentional with your purchases. Devise a plan for how you intend to use your cash-back credit card. Perhaps you would prefer to use it on big-ticket items, or maybe on seasonal purchases, such as during the holidays or back-to-school season. This will help you make the most of your card.
• Choose how you’ll receive your rewards. YYou’ll also want to decide whether you plan on receiving the cash-back in the form of an ACH transfer to your account, as a statement credit, or as a check dropped in the mail. You also might be able to use your rewards by making online purchases through the credit card’s shopping portal, or by purchasing gift cards or donating to charity.
Recommended: Does Applying For a Credit Card Hurt Your Credit Score?
If you have a cash-back credit card, it’s worth your while to take the time to determine how to maximize your earnings. Here are several ways to do so.
Consider using your cash-back card on major spending categories to earn the most on rewards. For example, if you spend $4,500 a year on food for you and your family and put all of your groceries and dining expenses on your card, you’ll get $90 in cash-back on just that spending alone.
You might also consider putting your recurring bills and subscription services on your credit cards. This will allow you to scoop up points in areas you already spend.
Just make sure you aren’t spending beyond your means. Keep an eye on your expenditures, and commit to paying off your balance in full each month.
If you’ve been saving up for a sleek new laptop or coveted designer shoes, consider putting that cost on your 2% cash-back card. That way, you can get the item and earn a bit of cash back on the purchase.
Your card may even come with added perks, such as purchase protection or an extended manufacturer’s warranty.
A card without an annual fee means you won’t need to spend as much to make the cash-back rewards worthwhile. Case in point: If you get a card with a $40 annual fee, you’ll need to put $2,000 in purchases to break even at a 2% cash-back rewards rate.
As cash-back credit cards tend to have higher APRs, make it a point to pay off your card in full. This will help you avoid racking up interest charges, which can cut into the cash-back rewards you earn.
To maximize your 2% cash-back rewards card, it helps to be intentional with how you choose to redeem your cash-back rewards as well as when you do so. For instance, if you tend to dig a debt hole during the holidays, use your rewards to pay for gifts and other related expenses. Or, you can put the rewards you’ve accumulated toward a statement credit, or redeem it for a gift card for your loved one.
Whether a 2% cash-back credit card is right for you may depend on a few considerations, such as how often you plan to use the card, whether you may purchase higher-priced items with it, and if you plan to pay off the balance in full each month. It’s also important to understand all of the rules that apply to the credit card. Some cards have limits on how much you can earn in cash back or have annual fees that could cut into the value of your rewards.
A 2% cash-back credit card that’s used regularly, however, can provide you with a steady stream of extra cash that could benefit your budget, and you can also be strategic about how you redeem the rewards depending on your needs at a given time.
Whether you’re looking to build credit, apply for a new credit card, or save money with the cards you have, it’s important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
A 2% flat-rate, cash-back credit card can be a strong choice as a go-to credit card if you intend to use your card for everyday spending. Earning rewards at a flat rate and in this manner is simple and straightforward, as you don’t have to worry about keeping track of rotating categories or figuring out point conversion values.
A 2% cash back credit card is a no-hassle, straightforward way to earn rewards. While you might earn more points on a travel card, redemption values and ways to redeem points on a travel rewards card can be more complicated. A flat-rate cash-back card can be a good choice to use as a foundation. Then, you can also open a travel card if it makes sense for your needs.
Photo credit: iStock/LaylaBird
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com
Nevada, a state known for its diverse landscapes, offers everything from the bustling nightlife of Las Vegas to the tranquil beauty of Lake Tahoe. Beyond its famous entertainment scene, Nevada boasts a rich history, stunning desert vistas, and a growing tech industry, particularly in cities like Reno. Whether you’re browsing homes for sale in Las Vegas, considering renting in Henderson, or exploring houses for rent in Reno, here’s what you need to know before moving to Nevada.
Nevada is a state of contrasts, with vibrant urban centers and serene natural landscapes. The three largest cities—Las Vegas, Henderson, and North Las Vegas—each have their own unique appeal. Las Vegas is known for its entertainment industry and is home to major employers like MGM Resorts and Caesars Entertainment, while Henderson offers a more laid-back, suburban lifestyle while still being close to the action. Nevada’s cultural scene is diverse, ranging from world-famous shows and museums to a growing arts community. The state experiences a desert climate, with hot summers and mild winters, though northern Nevada sees more seasonal variation. For those seeking affordability, areas like Sunrise Manor and Paradise, provide more budget-friendly housing options without sacrificing access to amenities.
Discover the best places to live in Nevada and find the perfect city that matches your lifestyle.
Nevada’s desert climate means summers are scorching, with temperatures often exceeding 100°F, particularly in southern regions like Las Vegas. The air is extremely dry, which can lead to dehydration if you’re not careful, so it’s crucial to drink plenty of water and use moisturizers to protect your skin. The lack of humidity can make the heat feel less intense than in more humid areas, but it can also be deceiving, leading to potential heat-related illnesses.
Insider scoop: When exploring the outdoors, try to schedule your activities for early morning or late evening when temperatures are cooler. This can help you avoid the peak heat of the day and enjoy more comfortable conditions.
One of the most attractive financial benefits of living in Nevada is the absence of state income tax, which can significantly boost your disposable income. This tax-friendly environment makes the state particularly appealing. However, the state compensates for this by relying more heavily on sales taxes, which can be higher than in other states, particularly on goods like alcohol and entertainment.
Nevada is known for its iconic Las Vegas, where a 24/7 lifestyle reigns, with casinos, restaurants, and even grocery stores open around the clock. This round-the-clock availability provides unparalleled convenience, especially for those who work non-traditional hours or enjoy late-night activities. Whether you need to run errands after midnight or crave a meal in the early hours of the morning, you’ll find plenty of options available. However, this constant activity can also lead to a fast-paced lifestyle that might be overwhelming for newcomers who are used to more traditional business hours.
Nevada is a paradise for outdoor adventure, offering a range of landscapes from the stunning Red Rock Canyon near Las Vegas to the serene shores of Lake Tahoe in the north. Hiking, rock climbing, and mountain biking are popular activities in the state’s numerous parks and natural areas, while the vast desert offers unique experiences like sandboarding and off-roading. The state’s high desert and mountainous regions also provide excellent opportunities for camping and stargazing, with some of the darkest skies in the country.
Insider scoop: For a truly memorable experience, visit the Great Basin National Park. Its remote location ensures minimal light pollution, making it a prime spot for astrophotography.
Water is a precious resource in Nevada, particularly in the southern part of the state where drought conditions are common. Local governments often impose water restrictions to conserve this vital resource, limiting activities like lawn watering and car washing during certain times of the year. These restrictions can vary by region and are typically more stringent in urban areas like Las Vegas, where the population puts a significant demand on the water supply.
Nevada’s diverse ecosystems are home to a wide range of wildlife, from desert dwellers like coyotes and rattlesnakes to mountain inhabitants like mule deer and black bears. In more rural or suburban areas, it’s not uncommon to encounter these animals, so it’s important to be aware of your surroundings and take precautions to avoid unwanted encounters. Additionally, Nevada is one of the few places where you can see wild mustangs roaming freely, particularly in the northern parts of the state.
Southern Nevada, including Las Vegas, experiences a monsoon season from July to September, characterized by sudden and intense thunderstorms. These storms can bring heavy rain, lightning, and strong winds, often leading to flash flooding in low-lying areas and roads. It’s important for residents to stay informed about weather conditions during this period, as flash floods can occur with little warning and pose serious risks. Driving during a monsoon storm can be particularly hazardous, so it’s advised to avoid flooded roads and heed any warnings issued by local authorities.
Insider scoop: Keep an eye on local weather apps and social media for real-time updates, as cell service can be spotty during storms. If you’re caught in a storm while driving, pull over to a safe location and wait until conditions improve.
Casinos are an integral part of Nevada’s culture and economy, and they’re not just confined to the Las Vegas Strip. You’ll find them in nearly every town and city across the state, from Reno’s historic gambling halls to smaller, more local establishments in rural areas. These casinos offer a wide range of entertainment options beyond gambling, including dining, live shows, and events, making them central hubs of social activity in many communities. For those who enjoy gaming, living in Nevada provides easy access to a variety of options, but it’s also important to be mindful of responsible gambling practices.
While gambling is legal and widespread in Nevada, there are specific regulations that residents should be aware of. Understanding these regulations is crucial for anyone planning to engage in gambling activities, whether for fun or professionally, to ensure compliance with state laws.
Nevada offers a generally low cost of living compared to many other states, making it an attractive option for residents. The median home sale price in Nevada is around $461,700, though this can vary significantly between cities, with Carson City being more expensive with an average rental price of $1,720. There are more affordable options to live, as in Las Vegas, where the average rental price for a one-bedroom apartment is $1,347.If you’re considering moving to Nevada, you’ll want to weigh the pros and cons to know if this state is right for you.
If you’re moving to northern Nevada, particularly around Reno and Lake Tahoe, be prepared to live at higher altitudes, often exceeding 4,000 feet above sea level. The thinner air at these elevations can take some getting used to, especially for newcomers, and may cause altitude sickness in those who are not acclimated. Winters in northern Nevada are also more severe, with significant snowfall and colder temperatures compared to the southern part of the state. However, these high-altitude areas offer stunning mountain scenery, excellent skiing opportunities, and a cooler climate during the hot summer months.
Population data sourced from the United States Census Bureau, while median home sale prices, average monthly rent, and data on affordable and largest cities are sourced from Redfin.
Source: rent.com
You’ve probably heard about the big NAR settlement that could completely change how real estate works going forward.
But if you haven’t, or are unsure of what’s changing, there are two new rules set to go into effect August 17th, 2024.
The first is that offers of compensation will be prohibited on Multiple Listing Services (MLSs).
In other words, listing agents won’t be able to say they’re offering 2% or 3% to the buyer’s agent on the MLS.
The logic is that this type of co-op commission leaves the buyer out of the conversation, which isn’t fair if the buyer ultimately pays for it.
While they may not pay it directly, a pre-determined commission might result in a higher sales price.
In addition, there’s also not much transparency about the fee, nor do consumers know such fees are negotiable.
Simply put, this move is intended to boost transparency and ideally lower fees for consumers by letting buyers negotiate with their agents separately.
But there might be some unintended consequences as a result, which I’ll get to in a moment.
The other major change is that buyers must sign a written agreement before they can tour a property. At that time, compensation will also be discussed.
Now about those unintended consequences I alluded to. While the standard commission might go down thanks to these new rules, from say 2.5% to 1.5% or even 1% on the buy-side, there’s still the question of who pays it.
As noted, the seller can continue to offer buyer agent compensation, it just can’t be included on the MLS.
So hypothetically this could be conveyed in other ways, such as on their own brokerage website listing, via phone call, text, etc. At least that is what some think for now.
That too could change if this evolves into a situation where co-op commission is completely banned and decoupled.
But as of now, many real estate agents assume they can still make offers of compensation via channels other than the MLS.
In theory, this means nothing might change in some transactions. For example, a seller could tell their listing agent to offer 2.5% to a buyer’s agent. And a buyer’s agent may ask for 2.5% from their buyer.
The logic here is that they want to move the property quickly, and being stingy could backfire.
If they only offer 1%, or offer nothing at all, a buyer’s agent may need to make up the shortfall with the home buyer.
At that point, the buyer may balk or simply be unable to come up with the out-of-pocket funds to pay it.
When all is said and done, the seller might lose a buyer and kick themselves for not just offering compensation and getting a decent sales price.
On the other side of the coin, a buyer might be OK with getting nothing from the seller and paying their agent themselves to sweeten their offer (assuming multiple bidders).
So there are a lot of scenarios here and still a lot of uncertainty about how this could evolve.
But some things I’ve seen thus far are a real estate sign that makes clear the seller will offer buyer agent compensation, buyers forgoing an agent and contacting the listing agent directly, and some even signing a form that says they won’t tour homes that don’t offer compensation to the buyer’s agent.
It’s going to be very interesting. And like I said, it’s still very fluid and there’s a lot we still don’t know.
Beginning August 17th, 2024, home buyers will have a few options to pay the buyer agent compensation.
They can maintain the status quo and hope the seller offers it, with the buyer’s agent fee coming out of the sales proceeds.
They can go direct to the listing agent and request a dual agency, where the listing agent represents both buyer and seller.
They can hire a real estate lawyer and have them guide them through the process for a flat fee, assuming such a setup is permitted.
Or they can foot the bill themselves by simply paying it out of pocket.
Some folks seem to think buyers are going to increasingly pay the buyer’s agent commission themselves.
While I don’t fully agree, given the fact that most Americans can barely scrape together their down payment and closing costs funds, it’ll likely happen more frequently.
And if and when it does, it could burden some home buyers, especially the aforementioned who don’t have deep pockets.
That brings us to the original question in this post. If they’re unable to pay cash, can real estate commissions be financed instead?
At the moment, real estate commissions can’t be rolled into the loan amount, aka financed.
This goes for all major loan types, including conforming loans backed by Fannie Mae and Freddie Mac, along with FHA loans and VA loans.
The same is true of USDA loans for that matter as well, as seen in the screenshot above.
However, it’s important to note that real estate commissions aren’t considered in the maximum interested party contribution (IPC) calculations.
So you can get the seller to pay your buyer’s agent and still get the full amount of seller concessions for other stuff like lender fees and third-party costs, including title insurance and home appraisal.
Both Fannie Mae and Freddie Mac issued letters to confirm that real estate agent commissions won’t count towards the IPC limits if they continue to be customarily paid by sellers.
And the VA released a circular because their regulations specify that a veteran cannot pay for real estate brokerage charges.
In light of the settlement, veterans will be permitted to pay it, assuming buyer-broker charges are not included in the loan amount. In addition, it won’t be considered a concession.
As for why real estate agent commissions can’t be financed, for one it never really came up since the seller would typically pay the buyer’s agent via sales proceeds.
This was essentially a non-issue prior to the landmark NAR settlement.
The other wrinkle is loan-to-value ratio (LTV) restrictions. If the borrower had to add an additional 2-3% of the purchase price in real estate agent commissions to their loan amount, they might no longer qualify.
This is especially true when putting down 0% to 3.5%, which is quite common these days. The homes simply won’t appraise and the max LTVs will be exceeded.
Could this change in the future? It’s possible but not necessarily probable for the issues mentioned above.
Now let’s talk about a potential solution if the seller won’t offer buyer agent compensation and you don’t have cash to pay it out of pocket.
One viable option could be the use of a lender credit, which technically can’t be used for real estate agent commissions.
However, if the lender credit were used for other costs, such as lender fees and third-party fees, it would free up cash to be used elsewhere.
For example, say you’ve got a $500,000 loan amount and the buyer’s agent wants you to pay them 1%.
A 1% lender credit frees up $5,000 in cash to pay those other costs, allowing a buyer to compensate their agent with the freed up cash.
It’s still very early goings and unclear if such an arrangement will be permitted. After all, co-op commission might be on the chopping block next. But it’s something to consider.
Ultimately, it will likely be best for most home sellers to continue to pay the buyer’s agent via the sales proceeds.
This should maximize the number of eligible buyers/bidders and not shut out first-time home buyers, who are most at risk due to limited funds.
The good news is these real estate agent fees could come down as a result, saving both buyers and sellers some money along the way.
Source: thetruthaboutmortgage.com
When electioneering, the best pledges are catchy enough to get stuck in a voter’s head. During this election, “no tax on tips” seems to be the phrase fitting that bill.
Both presidential candidates are embracing the promise to exempt workers from paying taxes on their tips. But the problem with no-tax-on-tips proposals, experts say, is that they’re clearly a bid for votes rather than a substantive solution to address the fundamental needs of tipped workers.
“This wouldn’t help very many workers, and it could actually be very harmful to millions more, with the real benefits of this policy change going to employers and the wealthy at the expense of working people,” says David Cooper, researcher from EPI Action, a nonpartisan research and advocacy organization.
On June 9, former President Donald Trump made a promise to end taxes on tips in front of service workers in Las Vegas. Last weekend, in Las Vegas, Vice President Kamala Harris made a similar pledge. It’s no coincidence that both candidates made the announcement in Las Vegas — leisure and hospitality is the dominant industry in the metro area, Bureau of Labor Statistics data shows.
On Monday, White House press secretary Karine Jean-Pierre said that President Joe Biden also supports eliminating taxes on tips for service and hospital workers, as well as raising the minimum wage.
The policy is undeniably appealing for tipped workers and the unions that represent them. After all, who doesn’t want a tax break when they can get it? Experts say the message to voters may be effective, but the policy is less likely to be.
“I’d say, thumbs down to the policy proposal; it’s bad tax policy,” says Kyle Pomerleau, a senior fellow studying federal tax policy and reform at American Enterprise Institute, a right-leaning think tank.
Tipped workers are some of the most visible workers: They’re taking your coffee order, cutting your hair, serving your meals in restaurants, delivering your groceries and ridesharing you around town. And yet, the Budget Lab at Yale University estimates there are only about 4 million workers in tipped positions in 2023 — about 2.5% of the entire U.S. workforce.
The most typical tipped work is in the service and hospitality industry. Tipped workers also tend to be younger than the rest of the working population — 20 to 34 years old, according to Yale Budget Lab.
In order to qualify as a tipped worker, you must earn more than $20 per month in tips. In tipped positions, workers must receive a subminimum wage, also known as a cash wage, of $2.13 per hour. A subminimum wage is combined with tips in order for workers to earn at least the federal minimum wage of $7.25 per hour. If an employee earns a subminimum wage plus tips less than $7.25 per hour, an employer must make up the difference.
There’s also something called tip pooling that’s often done in restaurants; it’s where the front of the house (servers and bartenders) share their tips with each other, as well as with the back of the house (such as cooks and dishwashers). In this scenario, all employees who receive pooled tips — including the workers who earn the tips — must make at least the federal minimum wage, according to the Department of Labor.
It’s unclear how often restaurants properly adhere to wage rules because tipping is notoriously underreported. Although, that’s less of an issue now since most people pay electronically and don’t leave cash tips as often anymore, says Howard Gleckman, senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute.
Median weekly wages, including tips, are $538 among tipped workers, compared to a median of $1,000 among non-tipped workers, according to 2023 estimates by Yale Budget Lab. Many tipped workers earn so little they already aren’t required to pay federal income taxes; Yale Budget Lab estimates this is the case for about 37% of tipped workers.
It’s likely only a small sliver of the tipped worker population would get the tax advantage that Trump and Harris propose — and that’s without knowing what specific income limits would be set by either candidate’s plan.
“Think about somebody who is a server at ‘Bob’s Diner’ — it has a $9.95 special and [the server] is going to get two bucks,” says Gleckman. “If you’re a server at some fancy downtown steakhouse where dinner is $200, you’re going to get 40 bucks, right? So for those higher income servers, this [policy] can make some difference. But for most people, it won’t really matter at all.”
There’s another important distinction about tips and taxes: Even when workers don’t have a federal income tax obligation, workers and their employers must pay federal payroll taxes, which fund Social Security and Medicare programs. That also means they must continue to report tips, even if federal taxes on tips are eliminated; also, the proposals would not affect state income tax requirements.
Neither Trump or Harris has specified whether their proposals would apply only to the federal income tax. But if the No Tax on Tips Act, introduced by Sen. Ted Cruz (R-Texas), is any indication, the exemption would likely only apply to federal income taxes.
Tip earnings are hard to characterize since the amount varies drastically based on the type of service that workers provide, as well as local minimum wage laws. But the Tax Foundation offers an example: Say a server earns $19,000 per year in wages plus $15,000 in tipped income. Their adjusted gross income is $34,000. They take a standard deduction of $14,600, which leaves them with $19,400 in taxable income. Under this example they owe $2,096 in federal income taxes.
With a no-tax-on-tips policy in effect, their adjusted gross income is $19,000 since the $15,000 income in tips isn’t considered taxable. They take a standard deduction of $14,600, which leaves them with $4,400 in taxable income. Under this example, their tax liability is $440. It’s the difference of $1,656 from the previous example.
As the Tax Foundation points out, a cashier who makes the same $34,000 — without tips — would have the same $2,096 federal tax liability in either scenario, and so would be paying vastly more in taxes than the server under a no-tax-on-tips policy.
Suffice to say, tax and wage experts are unimpressed with the no-tax-on-tips proposal.
“This wouldn’t help very many workers, and it could actually be very harmful to millions more, with the real benefits of this policy change going to employers and the wealthy at the expense of working people,” says Cooper.
Here are some reasons why experts say exempting tips from taxes could have negative repercussions, depending on how the policy is structured.
Social programs and other tax benefits could be impacted
If a no-tax-on-tips proposal includes an exemption for the payroll tax in addition to the income tax, it could impact both worker eligibility for Social Security and Medicaid, as well as the solvency of the program itself, says Cooper.
This scenario isn’t necessarily likely. Even though Trump has not specified if his proposal would apply to both the federal income tax and the payroll tax, Cruz’s No Tax on Tips Act applies the exemption only to the federal income tax. It’s difficult to see Harris applying the exemption to the payroll tax.
But depending on how the law is written, no-tax-on-tips could make it more difficult for workers to get other tax benefits like the earned income tax credit or the child tax credit, experts say.
“If you’re a household with children, those credits phase-in with earned income, meaning that they are larger the more income you earn, up to a certain point,” says Pomerleau. “But if you were to structure this tax exemption as an exemption from adjusted gross income, it would directly interact with the earned income tax credit in the child tax credit and reduce those benefits for households.”
No matter what, says Pomerleau, no-tax-on-tips would add tax complexity for a population of tax filers that, generally, do not have access to accountants to help them through the process. That could result in more workers not filing taxes or not being able to access the benefits they are eligible for.
High earners could find a loophole
A tax exemption on tips leaves open the possibility of exploiting the system. Some in high-income positions like lawyers, for example, could restructure how their earnings are reported to avoid paying taxes on a portion of their income.
“You could envision a lot of scenarios where this would be really grossly abused by highly paid individuals,” says Cooper.
The Harris campaign told The Washington Post that, under her plan, the tax exemption would only apply to workers who earn below a certain threshold in select industries. This would prevent high earners in nontraditional tipping positions from gaming the system. There is currently no bill from Democrats in Congress that matches Harris’ plan.
Trump’s proposal and the No Tax on Tips Act from congressional Republicans doesn’t narrow industry eligibility or impose income limitations.
It could reduce employers’ need to raise wages
The tax benefit presents a double whammy benefit to owners: a tax benefit that appeals to workers and an opportunity to save money by shifting the pay burden from owners to consumers.
“It’s a win-win for restaurant owners, hotel owners, like, for example, Donald Trump,” says Gleckman. “But it’s much more ambiguous and much riskier for tip workers, particularly low-income workers.”
Cooper says this policy won’t incentivize employers to raise raises for workers because there’s a tax benefit inherent to the job. But it could incentivize businesses to reclassify certain positions as tipped occupations.
“The tipping system, as it currently exists, is rife with wage theft and discrimination,” says Cooper. “It opens up workers to abuse from customers and colleagues because they feel like they have to tolerate bad behavior, lest they put their kids at risk. So this [policy] would grow a system that is problematic in a lot of ways and spread it to more occupations. That’s not something that we should be incentivizing.”
The deficit would increase, although not substantially
Tax cuts lead to a decline in revenue, which could, over time, exacerbate the federal deficit; it’s currently about $1.52 trillion, according to the U.S. Treasury. The Committee for a Responsible Federal Budget estimates the cost of exempting tips from federal income tax would be $100 to $200 billion over a decade. If tips are also exempted from payroll taxes, the total could run to $250 billion.
If the policy makes tips exempt from the payroll tax, it would have broader repercussions for Social Security and Medicaid programs, experts say.
“These programs are already facing a fiscal shortfall and will need to be dealt with, in as little as ten years,” says Pomerleau. “If they were to remove $38 billion, potentially from the face of Social Security and Medicare, I would accelerate this problem.”
It could exacerbate tipping backlash
As the CRFB notes, what’s not included in its calculations are changes in tipping behavior, which could result in consumers giving less than they do now if they perceive tipped workers as getting an unfair tax advantage.
A backlash to tipping culture has already resulted in 7% lower tipping among service-sector workers from November 2022 to November 2023, according to a payroll analysis by Gusto, a payroll provider.
It could fuel worker resentment
On the flip side, excluding certain tipped jobs by field or income could stir the pot among workers and the unions that represent them.
Cooper says, “Why would we be giving preferential income tax treatment to this very small subset of workers when there are lots of other hard working, low-paid workers — people providing daycare, childcare, eldercare — that this would do nothing for?”
Gleckman says the policy violates a “cardinal rule of good tax policy,” which is to tax people making the same income at the same level. “I’m not sure I quite understand why a low wage worker somehow should enjoy more benefits than a low wage worker of another kind who’s getting the same income,” says Gleckman. “If you really care for a bunch of low wage workers, there are plenty of other things you could do.”
Despite criticism of the no-tax-on-tips proposal, it would benefit workers who are eligible. Adding limitations by industry and income could prevent the exemption from being a regressive one.
Shortly after Harris’ announcement, Culinary Union Local 226 in Nevada endorsed Harris for president and lauded the proposal without acknowledging Trump’s. The union, along with the Bartenders Union Local 165, represents 60,000 workers in Las Vegas and Reno. The Culinary Union argues that the tax exemption could help millions of workers that earn a subminimum wage.
“The fact that many companies pay tipped workers across the country $2.13 an hour is outrageous and ending taxes on tips for service and hospitality workers would significantly help millions of workers provide for their families, including in Nevada,” the union wrote in its press release endorsing Harris.
Businesses that employ tipped workers also support the plan. At least, Cruz’s plan, which would not limit the exemption by industry and income. Two of the biggest associations for the top tipped industries — the National Restaurant Association and the Professional Beauty Association — both endorsed Cruz’s proposal.
“Tipped employees are a critical part of the restaurant industry, and anything that strengthens their economic condition is a positive for them,” said Sean Kennedy, executive vice president of public affairs for the National Restaurant Association in a press release announcing Cruz’s bill. “The ‘No Tax on Tips Act’ would provide immediate tax relief for more than 2.2 million restaurant employees and their families, putting more money in their pockets at a time when we’re all feeling the squeeze of higher prices.”
During the campaign rally in Las Vegas last weekend, when Harris made her promise to end tax on tips, she also said she would raise the minimum wage. What she didn’t promise to do is eliminate the subminimum wage, which would have a bigger impact on tipped workers.
“Why not do something like raise the minimum wage if you really want to improve outcomes for tipped workers in the United States?” says Cooper.
The federal minimum wage for all workers has been $7.25 per hour since 2009. However, 30 states plus the District of Columbia have set minimum wages above that amount. Again, the federal subminimum wage is $2.13 per hour. Right now, 36 states have set minimum wages for tipped workers below the federal minimum wage of $7.25 per hour.
The tipped workers who earn the most, nationwide, are in Los Angeles ($16.78 per hour); Seattle ($17.25 per hour); and New York City, where tipped workers earn $15 per hour with the exception of delivery workers, who earn a minimum of $17.96 per hour.
Other places have eliminated the subminimum wage practice altogether. So far six states have banned subminimum wages for tipped workers, including Alaska, California, Minnesota, Montana, Oregon and Washington.
“It is outrageous that over a million workers in this country are not guaranteed a fair minimum wage in 2024,” the Culinary Union 226 wrote in a release endorsing Harris’ proposal. “Employers across the nation need to take responsibility for paying a real minimum wage and Congress must ensure it.”
Beyond raising the minimum wage, there are other levers that could be pulled to help low wage workers, experts say. That includes expanding income supports like the child tax credit, the earned income tax credit or Medicaid.
Source: nerdwallet.com
Private label credit cards are a particular kind of credit card that’s typically only good at one specific store. Some stores or other merchants offer private label credit cards to give better terms to certain customers than they might otherwise be able to offer. Many merchants also provide these cards as an incentive for customers to spend more, since they can potentially defer payment and/or earn loyalty rewards.
These perks are among the reasons why private label credit cards are popular. But before you start thinking about how to get a private label credit card, it’s important to consider their pros and cons.
Also called a store credit card or a closed loop credit card, a private label credit card is a credit card that can only be used at one particular store or merchant.
Generally, a merchant’s private label credit card is partnered with and issued by a third-party financial institution, such as a bank. These institutions act as private label credit card issuers, and they’re responsible for funding the credit line and collecting all payments.
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If you understand how credit cards work, you’ll know they usually can be used anywhere the processor (often Visa or Mastercard) is accepted. In contrast, private label cards are intended for use only at the store or merchant where they are issued.
In other respects, private label cards work in much the same way as traditional credit cards. These cards offer a revolving line of credit that cardholders can borrow against, up to their predetermined credit limit. It’s necessary to make at least a minimum credit card payment to avoid a late payment fee. Balances that carry over from month to month will accrue interest.
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In most cases, the easiest way to get a private label credit card is to apply at the store that’s issuing or sponsoring the private label credit card. Many stores offer incentives for applying for their private label card while you’re shopping in the store. You also may be able to sign up for a private label card on the store’s website.
But even if you can get one, should you get a private label credit card? Choosing a credit card depends on your specific financial situation. However, if you have sufficient income and strong credit, you may be able to get a traditional credit card that may offer rewards and more flexibility than a private label card that’s only good at one store may provide.
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Because banks or other financial services companies serve as the credit card issuers for most private label credit cards, you’ll likely be familiar with the setup process if you’ve ever had any other credit card.
Once you’ve applied for and been approved for a private label credit card — assuming you met the credit card requirements — you’ll typically go through the process of setting up your card. You’ll want to make sure to log in to your online account, review your statements, and set up payments.
Next, you’ll want to make sure to log in to your online account, review your statements, and understand when your credit card payments are due.
Wondering why are private label credit cards popular? Here are some of the upsides of these types of credit cards:
• Easier to qualify for: Private label credit cards are often thought of as being easier to get approved for than general purpose credit cards. So if you don’t have an excellent credit history, you may consider a private label credit card as a way to help build your credit.
• Earn rewards and other benefits: Another benefit of private label credit cards is that stores often use them to build loyalty with their best customers. This might include offering rewards, loyalty points, or even nixing the credit card annual fee some cards have.
Even if the pros of private label credit cards may seem enticing, it’s also important to account for the downsides. These include:
• Lack of flexibility in use: The biggest drawback of a private label credit card is that it typically can only be used at one specific store or merchant. The lack of flexibility means that it is difficult for a private label credit card to be your only or main credit card.
• Potentially higher APRs: Another potential drawback is that many private label cards have annual percentage rates, or APRs. Make sure you read the terms and conditions before signing up for a private label credit card to ensure you know the consequences of carrying a balance. Otherwise, you could end paying exorbitant interest — which is how credit card companies make money.
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As you can see, slightly different credit card rules apply to private label credit cards. Here are the major differences to keep in mind when comparing a private label card to a general purpose credit card:
| Private Label Credit Cards | General Purpose Credit Cards |
|---|---|
| Can usually only be used at one store or merchant | Can generally be used anywhere the issuer (e.g. Visa, Mastercard, etc.) is accepted |
| Only offers store-specific rewards or perks | May offer cash back or travel rewards on every purchase |
| Generally are easier to get approved for than traditional credit cards | Often more difficult to get approved for than private label cards |
Some merchants offer a co-branded credit card that offers specific perks for their particular store but is issued by a major credit card processor (i.e., Visa or Mastercard). This means that you can also use the co-branded credit card at other merchants. As one example, Old Navy and Barclays offer the Navyist Rewards Mastercard, which offers Old Navy perks but can also be used anywhere that Mastercard is accepted.
Here’s a breakdown of the key differences to keep in mind to distinguish between private label credit cards and co-branded credit cards:
| Private Label Credit Cards | Co-Branded Credit Cards |
|---|---|
| Can usually only be used at one store or merchant | Can be used anywhere the issuer (e.g. Visa, Mastercard) is accepted |
| Only offers store-specific rewards or perks | Also offers store-specific rewards or perks but can also offer rewards on purchases at other merchants |
| Generally are easier to be approved for than traditional credit cards | Often more difficult to be approved for than private label cards |
Two alternatives to private label credit cards are general purpose credit cards and co-branded credit cards. Here’s what you need to know about each of those other options as you’re deciding which type of card is right for you:
• General purpose credit cards are what you probably think of when you think of a credit card. These cards can be used anywhere that processing network, such as Visa or Mastercard, is accepted.
• Co-branded credit cards are cards that share branding between a bank or credit card issuer and another merchant or company. Examples include airline or hotel credit cards or the credit cards of some retail stores. With a co-branded credit card, you can also use the card anywhere the processing network is accepted, and you’ll often earn brand-specific perks on every purchase.
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A private label credit card is a type of credit card that can typically only be used at one particular store or merchant. Many merchants use private label cards as a way to incentivize and reward their most loyal shoppers. It can also motivate shoppers to spend more, since they have the convenience of a credit card and can defer payments to a later date.
Whether you’re looking to build credit, apply for a new credit card, or save money with the cards you have, it’s important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
The easiest way to get a private label credit card is to apply on the website or in the store of the merchant that offers the card. If you meet the credit card requirements, you will be approved for the card. Then you can start using it while shopping at this particular merchant.
Private label credit cards make money in much the same way that any other credit card companies make money. They make money from the fees associated with the card (late fees, possible annual fees, etc.) and interest paid by cardholders who carry a balance. Additionally, they may rake in money from “swipe fees” paid by the merchant each time the card is used.
While a private label credit card often has the logo of a particular merchant or store, the day-to-day processing is handled by a bank or other financial services company. You’ll make your payments directly to the processing company, usually not to the store itself. One of the credit card rules for successfully managing your credit is to pay your bill in full, each and every month, so make sure you understand who and when you need to pay.
Photo credit: iStock/gazanfer
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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Source: sofi.com
Ohio provides diverse living experiences, from the bustling cityscapes, to the charming small-town feel. The state is also known for its beautiful natural areas, such as the Cuyahoga Valley National Park, which is perfect for adventure. Whether you’re browsing homes for sale in Cleveland, considering renting in Columbus, or exploring houses for rent in Cincinnati, here’s what you need to know before moving to Ohio.
Ohio’s weather is characterized by its four distinct seasons, with cold, snowy winters and warm, humid summers. Average winter temperatures range from 20°F to 40°F, with significant snowfall in northern areas and occasional ice storms. Summers are typically warm, with temperatures between 70°F and 90°F, and high humidity levels. Ohio is full of vibrancy and affordable living, featuring diverse cities and a rich cultural scene. Cleveland, one of Ohio’s largest cities, is known for its Rock and Roll Hall of Fame, while Columbus, the state capital, thrives with a strong tech and education sector. Affordable living is a highlight, with cities like Toledo and Springfield appealing for budget-conscious individuals.
Major employers in the state include The Ohio State University, Procter & Gamble, and General Electric, providing diverse job opportunities. The state’s cultural scene is vibrant, featuring numerous festivals such as the Columbus Arts Festival, Cleveland International Film Festival, and Cincinnati’s Oktoberfest. For outdoor enthusiasts, Ohio offers a variety of recreational activities, from hiking in Cuyahoga Valley National Park to enjoying the shores of Lake Erie.
Ohio offers a notably low cost of living compared to many other states, making it an attractive destination for those seeking affordability. The Median home price in Ohio is $263,000, which is significantly lower than the national median of $442,451. Rental prices are also reasonable, with an average monthly rent of $1,525 in major cities like Cleveland. The overall affordability extends to groceries, healthcare, and utilities, which are generally lower than the national average, allowing for a more budget-friendly lifestyle.
If you’re planning on moving to Ohio, you’ll want to consider the pros and cons before making this state home.
Sports culture is deeply ingrained in Ohio, where fans passionately support their local teams across various sports. The Cleveland Browns and Cincinnati Bengals command significant attention in the NFL, with game days drawing large crowds. The Cleveland Cavaliers, with their NBA championship win in 2016, have a dedicated fan base, and Ohio State University’s football team, the Buckeyes, is renowned for its competitive spirit and historic rivalries, particularly with the University of Michigan.
Winters in Ohio can be harsh, particularly in the northern parts of the state. Temperatures frequently drop below freezing from November to March, and the state experiences significant snowfall, averaging 25 to 30 inches annually. Northern cities like Cleveland often see heavier snow compared to southern regions such as Cincinnati. Ice storms and cold snaps are also common, necessitating winter preparedness with snow tires for vehicles, emergency kits, and precautions for potential power outages and hazardous road conditions.
Travel tip: If you’re moving to Ohio, consider downloading the Ohio Department of Transportation’s “OHGO” app. It provides real-time updates on road conditions, traffic, and weather alerts, helping you navigate safely through snow and ice.
Ohio’s diverse economy provides ample job opportunities across various sectors. Major employers include The Ohio State University, Procter & Gamble, and General Electric, which offer a range of positions in education, consumer goods, and manufacturing. The state is also a hub for healthcare, with institutions like the Cleveland Clinic and Ohio State University Wexner Medical Center leading the way. Additionally, Ohio’s growing tech industry, especially in cities like Columbus, offers career opportunities in startups and tech firms, further enhancing the state’s employment.
Ohio’s natural landscape offers a variety of outdoor recreational opportunities. The Cuyahoga Valley National Park provides scenic hiking trails, such as the Ledges Trail with its stunning rock formations and panoramic views. Lake Erie’s shores offer boating, fishing, and beach activities, while the Hocking Hills region features picturesque waterfalls and rugged terrain perfect for hiking and camping. The state is also great for winter sports, where you can enjoy skiing and snowboarding at resorts like Snow Trails and Mad River Mountain.
Insider scoop: For a unique outdoor adventure, consider visiting the “Gorge Overlook” in Cuyahoga Valley National Park during the fall. The overlook provides a breathtaking view of the park’s vibrant autumn foliage, and it’s less crowded compared to other scenic spots.
Living in Ohio, you’ll soon discover that Ohioans are known for their welcoming and friendly demeanor, contributing to a warm and inclusive community atmosphere. Whether in bustling cities like Columbus or smaller towns like Granville, residents often exhibit a strong sense of neighborliness and community spirit. Local events and festivals frequently showcase the state’s hospitality, with people coming together to celebrate and support local initiatives.
The rivalry between Ohio and Michigan is famously intense, particularly in college sports. The annual football game between Ohio State University and the University of Michigan, known as “The Game,” is one of the most storied rivalries in college football, with both fan bases passionately supporting their teams. This rivalry also extends beyond sports, influencing regional pride and interactions.
Insider scoop: While the rivalry adds a layer of fun and competition, it’s wise to be aware of this local sentiment if you find yourself in the midst of sports discussions or regional events.
Ohio’s central location in the Midwest provides easy access to several major cities outside the state. Residents of Ohio are about a two-hour drive from Pittsburgh, PA, and Detroit, MI, allowing for convenient travel to these bustling metropolitan areas. This proximity to cities like Indianapolis, IN, and Louisville, KY, also broadens business and cultural opportunities. Ohio’s central position enables its residents to enjoy the benefits of nearby major cities while still experiencing the state’s more relaxed and affordable lifestyle.
Ohio has a strong educational system with a range of high-quality schools and universities. Public schools in cities like Solon are often ranked among the top in the state, offering excellent academic programs and extracurricular activities. Higher education institutions such as Ohio State University, Case Western Reserve University, and the University of Cincinnati provide a range of academic and research opportunities. Additionally, the state’s emphasis on education is reflected in its support for public and private schools, contributing to a robust educational environment for students.
Population data sourced from the United States Census Bureau, while median home sale prices, average monthly rent, and data on affordable and largest cities are sourced from Redfin.
Source: rent.com