Managing Your Money, Together

To learn more about how our Minters are achieving their financial goals, we reached out to everyday Mint users, just like you, to hear their stories. Whether it’s paying off student loans, or working toward buying a home, we’re so inspired by the dedication this community has shown in working toward your goals and dreams.

One of the Minters we connected with is Jordan. He shared with us how he’s used Mint to reach a number of his financial goals. Check out his #EmpowerMint story:

My wife and I have been interested in getting out of debt ever since the day we took on student loans. With the desire to pay those loans off, we strived to learn more about budgeting and personal finance.

As we grew in our journey, there were many financial things we questioned that felt ‘normal.’ We heard so many messages that emphasized the need to have the newest toys to be happy, that having debt is normal, and that most people live paycheck to paycheck. We realized that we didn’t feel comfortable with any of that, and that we found satisfaction in being content with what we have. 

Knowing that money issues were often a problem area for couples, my wife and I started using Mint shortly after we got married in 2010 to ensure transparency and partnership from the beginning. We found Mint to be a terrific tool for us to have a complete picture of our financial situation. During this time, I was working full-time and my wife was finishing up her last year in nursing school. Mint was an immediate help in keeping track of where our money was going and in starting budget discussions that have proved to be invaluable in our marriage. It also helped initiate discussions on both near-term and long-term goals, which have been so key in helping us plan both strategically and aspirationally. 

As time went on, Mint was instrumental in helping us achieve so many of our goals including:

  • Paying off student loans
  • Paying for grad school with cash
  • Preparing for kids
  • Starting a 529
  • Saving for a down payment
  • Buying a home

Our current goal is to complete our 15-year mortgage in under 5 years. A combination of Mint, aggressive savings, overtime shifts, and side hustles have helped put us in a position to achieve this goal within the next 12 months. Once that goal is complete, we’re excited to have a little fun and celebrate this accomplishment, and then prepare for the next chapter in our financial journey. 

In addition to this goal, we also have various net worth milestones we would like to achieve in the next 1-, 5-, and 10-year periods. We are very excited about the concept of financial independence, and would like to be in a position where we have the opportunity to focus our attention on things outside of work, such as further investing in our family and causes that are important to us. With Mint, we can see how the choices we’re making are helping move us closer to achieving these goals. 

Today, we check Mint on a daily basis in order to stay on top of our expenses and monitor for any fraudulent activity. Years ago, Mint helped me identify a fraudulent charge almost immediately, enabling me to notify our bank and get the issue resolved. Reviewing our expenses enables us to stay within our budget, catch fraudulent activity, and follow the ‘every dollar’ budgeting rules that have been so helpful for us. In addition, linking our accounts has automated what would otherwise be a very manual and time-intensive process. 

I have also loved using the trends feature to have full visibility into exactly how our money is being spent and to help ensure we’re always partnering as we work towards our financial goals, rather than feeling like one person is pulling the other along. We can budget with transparency and not feel any need to hide transactions for personal expenses and rewards or small splurges. 

The trends feature has also allowed us to get a sense of what our typical spending has been in different categories. We periodically review our budget, and being able to easily see our historical spending in different categories has helped us set realistic targets, as well as track our progress when we are attempting to change habits. Lastly, being able to see changes in our net worth over the years has been inspiring, as we have been able to see in real-time how decisions to save or forego immediate gratification can have long-term benefits.

Beyond that, we have found a great deal of joy in doing things ourselves, whether it is cooking meals for the week, doing our own car maintenance, or trying to fix something ourselves before calling someone. Additionally, the satisfaction has compounded as we’ve seen that making these choices has helped us not only learn new things, but also in achieving our goals. 

Knowing what we know now, we’re really excited to pass these values on to our kids, and we’re happy to discuss them with anyone who asks. Additionally, I can see a ‘life’ after work that involves volunteering in some form in the personal finance field, whether that is teaching folks about budgeting or just encouraging them in their financial journey.

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Have a Plan for Student Loan Debt Payoff

Student loan debt payoff is a political hot button. But no matter your position, we can likely all agree that college loan debt itself is a financial burden to millions of Americans at nearly all adult age levels.

You may have put off buying a home or starting a family if you are among the 45 million Americans paying off college loan debt. If you’re heading toward 60 and still paying on a second degree or loans you took out for your children’s education, you may have not saved much for retirement.

And among recent grads, 92 percent of college graduates from the class of 2016 who took out student loans still owe an average of just over $30,000, according to the National Center For Education Statistics. The Federal Reserve estimates that at the end of 2020, the student loan debt was $1.7 trillion.

No matter how much you owe, you’re likely hoping that there will be some permanent federal relief after Sept. 30, 2021, when the suspension of loan payments expires. But hoping isn’t a plan, is it? And the fact that President Joe Biden didn’t mention college loan forgiveness in his state of the union address on April 28 makes us wonder about any forgiveness proposal becoming a reality.

Reduce Student Loan Debt, All or $50,000?

Reducing individual student loans by $50,000 would obviously make a good-sized dent in what’s owed and that plan is still on the table. Eliminating all such debt would release those millions of citizens from that financial burden and, purportedly, open them to new opportunities of financial growth and stability.

And while loan payments have been suspended through September, it’s important to remember that they still exist. And when the economy returns fully as the population receives vaccinations, the loan payments will restart.

What Can You Do Now?

If you owe money on a student loan, you should be thinking about what you will do if loan forgiveness becomes a reality or if come Oct. 1, you will be back to paying the same monthly payment. Some suggestions:

  1. It’s been nice to have that extra money in your bank account each month because you haven’t had to make a loan payment. If you haven’t been putting that money aside in anticipation of payments starting up again in the fall, starting doing it now. In fact, if you can double that set-aside money do so. You will have a good piece of change to pay down the loan if the loans return to pre-COVID terms. Obviously, this would be difficult if you have lost a job because of the pandemic.
  2. If the $50,000 payoff scenario passes, you might have your  loans wiped out. The money that you put away intended for reinstated payments could be invested in a retirement plan, used toward the down payment on a house or to pay down a credit card. If you owe much more than $50,000 you still will have had a big chunk paid off and can add to that with the money you’ve been setting aside.
  3. In the unlikely event the feds wiped out all student loan debt, you’ll be in the position to use all of the money you’ve set aside for student loan payments as a kind of windfall. To avoid letting those savings disappear, keep budgeting the same amount you were paying for student loans and  make larger payments toward other debts, build your emergency fund, save for down payment on a house or contribute it to your retirement account.

What’s The Problem?

There are numerous arguments against any proposal regarding student loan forgiveness, and the arguments come from both sides of the issue.

There are those who point out that a forgiveness of $50,000 would not be enough for the many Americans who have outstanding student loans in the six-digit range.

At the same time, there are those who say it is inappropriate to discuss any student loan forgiveness because it penalizes all of those people who managed to pay off their loans without the benefit of a federal bailout.

The cost of the $50,000 debt forgiveness for all applicable cases is estimated at $1 trillion. If Biden attempted to issue an executive order on such a scale, it would be the most expensive executive order ever issued, and it would likely face legal challenges, and not only from the for-profit companies which issued the loans in the first place.

How the Plans Evolved

During his presidential campaign, Biden suggested he would push for $10,000 in student loan forgiveness for all borrowers and some members of Congress still support this. But Sen. Elizabeth Warren (D-Mass.) has spearheaded a campaign to issue a $50,000 forgiveness for all student loan holders, while Sen. Bernie Sanders (D-Vermont) has firmly supported forgiving all student loan debt.

With the Democratic Party holding the majority in the U.S. House of Representatives and a tiny majority in the U.S. Senate, the atmosphere for accomplishing one of those three goals is at its best. However, not all Democrats are in agreement. Biden has asked his education secretary to determine the legality of a presidential executive order reducing all student loan debt, but there is a possibility that Congress could pass a bill for debt forgiveness.

Other options

There are other suggestions regarding student loan forgiveness, centered around specific segments of the population:

Considering Age

Twenty years ago, the Government Accountability Office determined that 3 percent of households headed by a person 65 years of age or older maintain a student loan balance, and that percentage has risen in the 20 years since. In some cases, these loans are likely from people returning to school for second degrees or from loans taken out for their children’s education.

There is a suggestion that the government could cancel all student debt for anyone 65 years of age or older. That would impact approximately 2 million Americans.

Considering Occupation

A new push to cancel student debt for doctors and nurses or others in the health profession has come about as a result of the coronavirus pandemic. Estimates are that there are 1 million health care workers who would benefit from having their student debt wiped out.

Considering Income

Setting a maximum income level for student loan forgiveness has been suggested. In some cases, the conversation is about those who earn less than $100,000 to $125,000 per year depending on what you are reading, while others have suggested forgiving loans for those who make less than $50,000 per year.

There are other ways to obtain student loan forgiveness, depending on one’s occupation or other factors. The U.S. Department of Education offers information on those opportunities, and also about debt relief for borrowers with permanent disabilities.

Going Forward

The question about student debt loan solutions is in suspension until Oct. 1 and there may or may not be a lot of discussion about the college debt between now and then. That’s part of the reason that if you have student debt you need to be thinking about what that amount will be when that date rolls around. But if you’ve been able to set aside those loan payment amounts, you’ll be in much better financial shape.

Kent McDill is a veteran journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder.

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Best Places to Get Out of Credit Card Debt – 2021 Edition

Best Places to Get Out of Credit Card Debt – 2021 Edition – SmartAsset

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The Federal Reserve says that revolving consumer credit debt (for credit that is automatically renewed as debts are paid off) went up to $974.4 billion in February 2021 -and that this marked an increase at an annual rate of 10.1%. This is almost one-third of all consumer debt – which also includes student and car loans – and adds up to a grand total of $4.2 trillion. With so many people trying to pay off credit card debt, SmartAsset crunched the numbers to identify and rank the best cities where it’s easiest to do so.

To do so, we considered unemployment rate, median post-tax income, lower-quartile rents and disposable income to find where debt could be paid off the fastest, assuming average interest rates and a total debt of $7,935. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.

This is SmartAsset’s 2021 study of the best cities to get out of credit card debt. Read the 2019 version of the study here.

Key Findings

  • Timelines can vary widely. Debt in the top 10 cities of our study can be paid off in just over 10 months, while the average for the bottom 10 is almost 18 months. Frisco, Texas is the city where debt can be paid fastest – under nine months. And Arlington, Virginia takes more than four times longer – a little over 36 months.
  • Residents in smaller cities can pay debt faster. Small and mid-sized cities in this study can pay debt off quickly. All of the top five cities have fewer than 250,000 residents. Affordable rent and a sizable disposable income (which is the money you take home after taxes) are key factors for residents in these cities to pay off debt.

1. Frisco, TX

Frisco, Texas residents can pay off a credit card debt of $7,935 in 8.59 months. The post-tax income for high-school graduates in this city is just over $37,000. And with a lower-quartile rent (the most affordable unit one could reasonably acquire) of $1,126 per month, residents can afford to make monthly debt payments of $979.

2. Reno, NV

Reno, Nevada residents can get out of $7,935 debt in 9.43 months. The post-tax income for high school graduates is around $31,000 and the lower-quartile rent is $787 per month. This means that if they apply 50% of their disposable income after rent to paying down credit card debt, they can afford a monthly payment of $896.

3. Gilbert, AZ

The median post-tax income for high school graduates in Gilbert, Arizona is $35,463. Residents in this city can pay off a credit card debt of $7,935 in 9.60 months. And with a lower-quartile rent (the lowest number under which 25% of renters pay for rent) of $1,192 per month, monthly debt payments of $882 are possible.

4. Anchorage, AK

Anchorage, Alaska residents can pay off a credit card debt of $7,935 in 10.04 months. The median post-tax income for a high school graduate is $30,650 and the lower-quartile rent is $863 per month. If a resident applies half of their disposable income to paying down debt, they could make monthly payments of $846.

5. Chesapeake, VA

Chesapeake, Virginia residents can pay a debt of $7,935 off in 10.11 months. The median post-tax income for a high school graduate is $29,087, Furthermore, the most affordable rental unit, at the lower-quartile mark, costs $744 per month. With just over $20,000 in disposable income after rent, residents can apply half to monthly debt payments of $840.

6. St. Louis, MO

St. Louis, Missouri’s median income for high school graduates is just under $26,000 and the lower-quartile rent total is $519 a month. If someone with that income and rent adopted a relatively aggressive repayment strategy and put half of their disposable income towards paying a credit card debt of $7,935, they would be free of credit card debt in 10.37 months.

7. Fort Wayne, IN

Fort Wayne, Indiana’s median post-tax income for high school graduates is $24,881 – the lowest in the top 10 of this study. The lower-quartile rent (the most affordable unit one could reasonably acquire) in this city is $496 a month. Someone with almost $19,000 in disposable income after rent could pay off a total credit card bill of $7,935 in 10.81 months.

8. Lincoln, NE

The median post-tax income for a high school graduate in Lincoln, Nebraska is $25,828. And the lower-quartile rent in this city is $589. If residents were able to afford to put half of their disposable income after rent towards repayment, they could pay down a credit card bill of $7,935 in 10.91 months.

9. Tulsa, OK

Residents in Tulsa, Oklahoma could pay off a credit card debt of $7,935 in 10.98 months. This is based on a median post-tax income of $25,038 and a lower-quartile rent payment of $532, which means that they could afford a monthly debt payment of $777 using a relatively aggressive repayment strategy.

10. Oklahoma City, OK

Oklahoma City, Oklahoma is the most-populous in the top 10 of this list and it has a median post-tax income of $25,125 for high school graduates. The lower-quartile rent payment is $558 a month. Using a relatively aggressive repayment strategy, a resident who puts half of all disposable income after rent towards debt could pay a credit card bill of $7,935 in 11.12 months.

Data and Methodology

In order to find the best places to pay off credit card debt, we created a credit card debt payment model for 56 cities. To determine our list of cities, we excluded cities with a population smaller than 200,000 and those with a below-average unemployment rate.

To complete the analysis, we first calculated the amount of disposable income a high school graduate could have in each city, assuming he or she earned the median salary for high school graduates with no further education. Using SmartAsset’s income tax calculator, we found the after-tax income for local high school graduates. We then subtracted the annual lower-quartile rent to get how much disposable income the average high school graduate would have. Lower-quartile rent is the lowest number under which 25% of renters pay for rent.

We then assumed that high school graduates would dedicate half of their disposable income to credit card payments. Using that figure, we calculated how long it would take to pay off $7,935 of credit card debt, determined by dividing the estimated outstanding credit card debt by the number of households in the U.S. in February 2021. We also assumed consumers would be paying interest of 15.91%, which was the estimated average credit card interest rate, according to the Federal Reserve.

Data for population, median income for high school graduates and lower-quartile rent comes from the U.S. Census Bureau’s 2019 1-year American Community Survey. February 2021 unemployment figures come from the Bureau of Labor Statistics (BLS) and are measured at the county level.

Credit Card Tips

  • Consider consulting an expert. A financial advisor can help you plan so that you don’t find yourself in debt. SmartAsset’s free tool connects you with financial advisors in five minutes. If you’re ready to be matched with advisors, get started now.
  • Budgeting can go a long way in minimizing or even preventing debt. A budget is another way to make sure you don’t end up with too much credit card debt. Use SmartAsset’s free budget calculator to plan how much to spend on various categories so you don’t end up owing more than you make.
  • Choose the right card for you. If you do use a credit card, use SmartAsset’s Best Credit Cards rankings to find one that is best for your lifestyle.

Questions about our study? Contact press@smartasset.com. 

Photo credit: ©iStock.com/Farknot_Architect

Ben Geier, CEPF® Ben Geier is an experienced financial writer currently serving as a retirement and investing expert at SmartAsset. His work has appeared on Fortune, Mic.com and CNNMoney. Ben is a graduate of Northwestern University and a part-time student at the City University of New York Graduate Center. He is a member of the Society for Advancing Business Editing and Writing and a Certified Educator in Personal Finance (CEPF®). When he isn’t helping people understand their finances, Ben likes watching hockey, listening to music and experimenting in the kitchen. Originally from Alexandria, VA, he now lives in Brooklyn with his wife.
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How is credit card interest calculated?

How is Credit Card Interest Calculated

If you’re like most people repairing their credit card debt, your credit card’s annual interest rate is a mystery to you. You might even avoid thinking about it or looking at it, because it’s such a large number. Interest rates can make it difficult to get out of debt quickly, because you’re working against a large percentage—as much as 16% or even 20% annual interest.

Credit card interest is calculated using a complicated formula that can be confusing to many people. So it often remains a puzzle to borrowers. But it’s important to understand the basics of credit card interest, because it will help you to repair your credit card debt quicker—and to be a smarter credit card user. Here’s how credit card interest works.

How Is Credit Card Interest Calculated?

credit card interest calculation

If you’ve watched your interest rate closely, you may have noticed that it has changed since you first opened your credit card. Many credit cards offer a low introductory interest rate that increases after the period is over. But even after that, your annual interest rate will often go up and down. That can be confusing, and even a bit unsettling.

Your interest rate changes

The first thing you should understand is that your credit card uses a variable interest rate. That means that the interest rate can change over time. A variable rate is tied to a base index—usually the U.S. prime rate. As the U.S. prime rate goes up or down, so will your credit card’s interest rate.

Right now, the U.S. prime rate is 4.25%. But your credit card’s interest rate is probably closer to 18.25%, or even more. That’s because credit card companies charge an additional amount above the U.S. prime rate—perhaps 14%, but it varies from card to card. So your total interest rate will be closer to 18.25%, annually. If the U.S. prime rate raises or lowers, your annual interest rate will also go up or down by the same amount.

The factors that influence the U.S. prime rate are reviewed every six weeks. The prime rate could stay the same for years, or it could change every six weeks. It all depends on current federal economic conditions and forecasts.

Your interest rate is annual

It’s also important to understand that your credit card’s interest rate is an annual rate. So if your annual rate is 18.25%, that amount is applied per year—not per month. But since you’re billed monthly, your interest is calculated each month, using an average daily balance method.

Calculating your interest rate

Here’s how the average daily balance works:

  1. Determine the daily periodic rate (DPR)—the interest rate you pay each day. DPR is your current interest rate (it varies, remember) divided by 365. So, 18.25 / 365 = 0.05%.
  2. Determine the average daily balance for the month. This is done by adding up the balance for each day of the billing period, then dividing that sum by the number of days (either 30 or 31 days—or 28 in February!). If you had a balance of $0.00 for 10 days, then $500.00 for 10 days, then $1000.00 for the last 10 days of the month, your average daily balance would be $500.00.
  3. Multiply the DPR by the number of days in the billing cycle, then multiply that total by the average daily balance. This is your interest for the month. So, a DPR of 0.05% * 30 days = 1.5%. 1.5% * $500.00 = $7.50.

That might not sound like much, but if you’re an average cardholder in the United States, you’re carrying a credit card debt of $16,000.00. That means you’re paying $2,880.00 per year in interest alone, in this scenario.

How Can I Avoid Paying So Much Interest?

When you’re working hard to repair your credit card debt, it can be frustrating to be fighting against a high interest rate. But there are ways you can reduce—or even eliminate—the amount of credit card interest you’re paying each month.

Pay more than the minimum balance due

Your credit card statement lists a minimum amount that you must pay each month. Your interest for the month is rolled into that minimum payment. But if you pay more than the minimum, every dollar above that minimum goes towards your principal balance. There’s no interest charged on it.

In other words, if your minimum payment is $500.00 and you pay $600.00, that extra $100.00 is applied to the amount you borrowed—it’s interest-free. And that benefits you in two ways:

  • You’re paying off debt without paying interest
  • You’re lowering the dollar amount of interest you’ll have to pay next month, because your average daily balance will be smaller.

Open a balance-transfer credit card

credit card interest

A balance-transfer card can be a very helpful way to repair your credit card debt. A transfer credit card has a very low introductory interest rate—often as low as 0%. The card lets you transfer your balance from other debt onto the new card. You can then make monthly payments on the transfer card to pay down your existing debt.

But the low interest rate is only valid for a limited time—usually six to 18 months—so you’ll need to pay off the debt before the introductory rate expires. You should also do your homework: some transfer cards charge a transfer fee. And some charge a penalty APR, which allows the credit company to charge you a high interest rate if you miss a payment.

Pay off Your Credit Card Debt Faster

Your credit card’s annual interest rate doesn’t have to be a confusing mystery, and you don’t need to know everything there is to know about interest rates. But when you understand the basics of variable interest rates and how they’re calculated, you can use that information to repair your credit card debt faster and easier. Paying more than the minimum balance due and using a balance-transfer card can be very helpful ways to use interest rates to your advantage.


A reputable credit repair specialist can help you find other ways to successfully get out of credit debt. If you’re tired of struggling on your own, find out how our advisors can help you repair your credit debt. Contact us today.

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Avoid these 3 Pitfalls of Debt Consolidation

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The Truth About Department Store Credit Cards

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If you’ve ever shopped in a department store, you know the story. Maybe you picked up a new set of cutlery, registered for a wedding or tried on some new dresses. Whatever the reason for your trip, the checkout process is always going to start the same way – “Have you signed up for our store credit card?”

The interest rates and perks may vary, but pushing a retail credit card is standard practice at many department, big box and outlet stores. They usually include a signing bonus or discount that can be applied to the purchase you’ve come for, making them a tempting offer for anyone looking to save a quick buck.

But what are the consequences of signing up for retail credit cards? In what ways do they differ from standard cards? Should they be approached cautiously, embraced fully or avoided entirely?

Why You Shouldn’t Use Them

Retail credit cards are tied to specific stores and often offer discounts when you sign up initially. Some also offer extra sales and coupons such as an additional 10% on top of another sale. But they can be a dangerous entry to the world of credit.

Unfortunately, the benefits and rewards of retail cards are often tied to the store directly, so you’re encouraged to spend more there to see the benefits. A sale at your favorite clothing brand might not entice you unless you have a store credit card that offers an extra 10% when you use the card.

Some store credit cards can also hurt your credit score, depending how you use them. Many offer lower credit limits than other types of credit cards, which can affect your credit utilization.

For example, if you have a credit limit of $500 on a department store’s credit card and spend $200 on a new duvet, your utilization percentage will be 40%. An ideal credit utilization percentage is 30% or less – any higher will negatively impact your credit score.

Store credit cards also often have higher interest rates than other cards, which will negate any discount you receive from using them. The cards are mostly aimed at short-sighted consumers, so those who take the time to weigh all the factors are less likely to be drawn in.

When to Sign Up

These cards aren’t completely useless. If you’re still building a credit history, a store credit card can be a good way to get your foot in the door. Their standards may be lower than other major credit cards and can prepare you for the “big leagues.”

Before applying for a store credit card, find out if they report to the three major credit bureaus – Experian, TransUnion and Equifax. These bureaus are responsible for your credit reports so if they don’t report to them, you won’t be able to build up a credit history.

Using a store credit card wisely can teach you how to be responsible, avoid temptation and build a credit history. After a few months, you may find yourself eligible for better rewards cards, including ones with large cash back or travel bonuses.

Stores that you frequent, like a superstore, can be good options in this situation. If you’re going this route to build credit, try to use a credit card from a store you’ll actually frequent.

The trick is to not spend more than you would have just because you’re receiving a small discount. That’s how these store credit cards really profit the companies they’re created by, and why they’re pushed so heavily in the checkout line. They know the money lost from the discounts they offer will pale in comparison to the extra business they’ll drum up by offering them – and now you do too.

Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Debt Free After Three.

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