Business credit cards are similar to regular credit cards but have one key difference: They are designed for business use only.

A regular credit card is typically considered for personal use, whereas a business credit card is specifically for activities related to business.

How can you use a business credit card?

The key is to have a plan on how you will use the credit card for your business expenses. According to the U.S. Small Business Administration, some acceptable uses of a business credit card include paying for gas in a company car, taking clients out to lunch and buying office supplies, to name a few.

If you’re a business owner, you can apply for a business credit card. Even if you’re working as a sole proprietor or as a business owner with an LLC, you can likely apply for a card.

Why should you get a business card?

You might think that getting a business credit card is just another thing to add to your already-substantial to-do list. If your current system is working, why change it, right? But getting a business credit card can actually streamline your finances and make things easier.

Here are the top reasons you should get a business credit card:

1. Separate business from personal expenses.

2. Access to a short-term loan.

3. Get perks and rewards.

4. Build your business credit.

Next steps

Before applying, carefully consider what you really want out of a business credit card and how it can help serve you and your goals. Read the terms and conditions and evaluate a few offers before deciding on one.

It’s not unusual for military families to experience financial stress.

Members of the military and their families can face unique situations that make them vulnerable to financial problems. For example, deployments and relocations can put financial strain on a military family, especially if a non-military spouse isn’t able to find work. Childcare also may be an issue.

If you’re in the armed forces and are having a hard time with bills, debt and imperfect credit, you may have seen offers for bad credit military loans and wondered about getting one. You may be able to qualify, but you should be aware of some risks that can come with getting this type of loan, which is an unsecured personal loan marketed for military members with bad credit. And, it’s worth looking at other options before you commit to any kind of “bad credit” loan.

Let’s look at some things to know about bad credit military loans and possible alternatives.

• What is a bad credit military loan?
• Where can I get a bad credit military loan?
• What is the Military Lending Act?
• What are alternatives to a bad credit military loan?

What is a bad credit military loan?

A bad credit military loan isn’t a specific type of loan like a mortgage or an auto loan. Instead, it is an unsecured personal loan that’s marketed toward military members who have bad credit. Some lenders specifically market personal loans for people in the military, promising to consider your loan application regardless of your credit history.

Each lender may have its own definition of “bad credit.” FICO, one of the major credit-scoring models, defines poor credit as scores of 579 and lower. With that kind of credit profile, it can be difficult to get approved for a loan or, if you are approved, a loan with a favorable interest rate because lenders may view you as a risky borrower.

While dinged-up credit might not prevent you from getting a military loan, it’s likely you’ll pay more for the loan than you would if you had stronger credit. Such loans often have high interest rates or may come with fees.

Where can I get a bad credit military loan?

A variety of lenders market loans to members of the military. If you have poor credit, you’re more likely to face higher interest rates if you want to borrow money. But some lenders may offer better rates and terms than others depending on your situation, so compare estimates from a number of lenders before you decide which to apply for.

Options for a bad credit military loan might include …

• Online lenders: Various online lenders market their products specifically for members of the military, both active-duty and retired. And some of them advertise that bad credit doesn’t mean you’ll automatically be denied a loan. But these loans often come with a high APR.
• Banks: Some community banks also offer loans for active-duty military with little or no established credit.
• Credit unions: Several credit unions offer membership for members of the military. Some are branch-specific, others are for veterans or active-duty military members, while still others are for anyone currently or formerly serving in any branch of the armed forces.

What is the Military Lending Act?

Unfortunately, some lenders might try to take advantage of service members’ financial vulnerability. The Military Lending Act, passed in 2006, aims to protect active military members (including those on active National Guard or National Guard reserve duty) and their families from predatory lending practices. Among other things, the Military Lending Act …

• Limits the amount a creditor can charge active-duty service members, their spouses and eligible dependents for certain types of unsecured loans. The total annual percentage rate can’t exceed a specified limit — with some exceptions — of 36%. This is called the Military Annual Percentage Rate. Just keep in mind that this Military Annual Percentage Rate includes finance charges, credit insurance premiums or fees, add-on products and other fees like participation or application fees.
• Requires lenders to provide loan term disclosures beyond what’s required by the federal Truth in Lending Act.
• Prohibits certain loan terms that may be unfavorable to the consumer.

What are alternatives to a bad credit military loan?

You may have other options than potentially high-interest military loans for bad credit.

Other personal loans

Military loans for bad credit are just personal loans marketed for military members who have bad credit. But you can find a variety of types of personal loan lenders. Banks, credit unions, consumer finance companies, online lenders and peer-to-peer lenders also offer personal loans.

The funds from a personal loan can be used for a number of different purposes. Loan amounts, rates and terms vary. But if you can offer some type of collateral to secure the loan, you may be able to get a lower interest rate. Just be sure you understand all of the terms, APR and any fees associated with the loan before applying.

Payday alternative loans

When you need cash fast, you may consider a payday loan — a very short-term, high-interest loan that’s typically required to be paid back by your next payday. But a payday alternative loan may be a better option.

Some federal credit unions offer these loans, and federal regulations cap the interest on payday alternative loans at 28% (although interest rates may change). The fee for the cost of processing the application can’t exceed $20, the loans must be repaid in one to six months, and loan amounts must be within $200 to $1,000.

Credit cards

Taking on more credit card debt might be the last thing you want to do, but in some situations a credit card might be a better option than a high-interest military loan for bad credit. Options for using a credit card can include a cash advance or an intro 0% APR credit card. But be cautious in pursuing either option.

Cash advances on a credit card typically come with fees and a higher APR than your card charges for purchases. Interest often starts accruing as soon as you take the advance, so it’s important to repay the money as quickly as possible.

If you qualify for one, a 0% intro APR card can allow you to finance an expense interest-free for a period of time. Be sure to make your payments on time and pay off the balance before the promotional period ends, or you’ll be hit with interest charges on the unpaid balance. And it may be difficult to qualify for this type of credit card if you don’t have solid credit.

Nonprofit programs

If you’re a veteran and need financial assistance, you may be able to qualify for help from a nonprofit program. For example, Coalition to Salute America’s Heroes works to provide financial assistance to veterans for things like rent, food and day-to-day items.

Additionally, the Veterans of Foreign Wars Unmet Needs program can grant up to $1,500 in financial assistance. You’ll want to take advantage of any grants or assistance programs that you may be eligible for as a veteran before taking out a high-cost loan.

Bottom line 

If you’re a military member with a tough credit history, you’re not without options if you need a loan. Various funding choices may be available, but it’s important to apply the one that best fits your needs. Check out all grants and assistance programs that might be available first, and if you’re still considering a loan after that, then explore what options could be available.

And if you’re able to improve your credit before seeking a loan, you may boost your chances of getting approved for a loan at more favorable rates and terms. Making consistent on-time payments and keeping balances low on your credit cards can help improve your credit over time.

Veterans can face financial hardships, and the transition from active-duty military to civilian life can be tough. If you’re struggling financially, there are personal loans for veterans that could help ease the burden.

Whether you need financial assistance to pay bills or want to consolidate debt, there are veteran-focused loan options available that could fit your circumstances.

But before you sign on the dotted line, make sure you understand the loan terms and try to explore grants and other affordable options first.

• What is a personal loan?
• Personal loans for veterans
• Other types of loans and financial assistance for veterans

What is a personal loan?

A personal loan is a type of installment loan that’s paid out to the borrower in a lump sum and repaid with interest in monthly installments over the life of the loan. This type of loan can be used in a variety of situations, such as …

• Consolidating your debt
• Moving expenses or home improvements
• Covering emergencies

Unlike federal student loans, which must be used for education expenses, personal loans have more flexibility in how funds can be used. This can be good for veterans looking for financial assistance.

Personal loan options include secured and unsecured loans. A secured loan requires collateral, such as a savings account or a home, to secure the loan. If the secured loan is not paid back, the lender typically has the right to claim your asset as payment for the loan. An unsecured personal loan doesn’t require any collateral.

Personal loans for veterans

If you want a loan, make sure you’re getting it from a trustworthy source. The good news is there are a number of reputable lenders that work with veterans.

USAA

USAA is a large financial institution that works exclusively with current military members, veterans, eligible family members and cadets and midshipman. USAA ranked as the most reputable bank in the 2018 Bank RepTrack study. Becoming a USAA member is free and gives you access to a variety of financial products and services, such as banking, investment and insurance services and personal loans.

You can apply online to get a USAA personal loan. USAA offers personal loans from $2,500 to more than $20,000, and there are no loan application fees. If approved, you can get funds as soon as the next business day in some cases.

Navy Federal Credit Union

Navy Federal Credit Union, which was founded in 1933, has a long history of serving current and former military members. The credit union offers various financial products, including checking and savings accounts, credit cards and personal loans.

At Navy Federal Credit Union, you can apply for a personal loan of up to $50,000. Interest rates are tiered based on the loan terms.

Your creditworthiness will determine the interest rate on your loan. If you are approved for a loan, you may be able to get it deposited directly into your checking or savings account. As with USAA, you will need to become a member of Navy Federal Credit Union to use its services.

Other lenders

Although USAA and Navy Federal Credit Union cater specifically to military members, you will also want to survey the rates of other personal loan lenders including banks and online lenders. It’s also worth looking at other credit unions, which generally offer potentially lower rates and benefits for members.

Other types of loans and financial assistance for veterans

If you need flexibility in how you can use loan funds — and if you can get approved — a personal loan may be what you need. But if you need help with something specific, like getting housing or finding a job, there could be other options for you.

Veterans Affairs loans

The U.S. Department of Veteran Affairs offers several loan programs for eligible veterans if you own, or are hoping to purchase, a home.

• Purchase loan: This could be a good option if you want help with buying a home. These VA home loans often don’t require down payments and may come with better terms and interest rates than traditional lenders offer. Plus, you won’t need private mortgage insurance.
• Native American Direct Loan Program: This loan option is for veterans who are Native Americans or have a spouse who is Native American and are looking to build, buy or improve a home on Federal Trust Land.
• Interest Rate Reduction Refinance Loan: If you have an existing VA-backed home loan, you may be eligible for this type of product, which can help lower your monthly mortgage payments by getting you a lower interest rate or by moving you from a variable-rate loan to a fixed-rate loan.
• Cash-out Refinance Loan: If you’re looking to use home equity to pay for schooling, pay off debt or refinance a non-VA-backed loan to a VA loan, this could be a good option for you.

Nonprofit programs

Another option is the National Veterans Foundation, which serves U.S. veterans and their families by providing various services. It can help you …

• Request assistance
• Learn about veteran benefits and resources
• Apply for a job

The Veterans of Foreign Wars has an Unmet Needs program that offers up to $1,500 in grants for families facing financial difficulties. Because it is a grant and not a loan, you don’t have to pay anything back.

If you’re dealing with an emergency or having trouble paying a bill and need some financial assistance, you may be able to get help by applying for a Homecoming Heroes grant with Modest Needs. Modest Needs is a nonprofit organization that works with newly returned veterans who may be facing financial difficulty.

Balance transfer cards

If you’re not sold on a loan, you might consider applying for a balance transfer credit card that has a low APR or a 0% intro APR for new purchases and balance transfers. While not designed for veterans, a balance transfer card could help you consolidate credit card debt or make a big purchase. With this option, you can transfer your existing credit card balances to potentially save money on interest.

Just keep in mind that if you go with a card with the 0% intro APR, it will expire after a time. If you don’t pay off the balance in full and by the time the promotion expires, you’ll have to pay interest.

Bottom line

If you’re a military service member in need of money, you may want to consider loans for veterans. Make sure to look at loan options specifically for veterans and also from other lenders to compare rates.

If there are grants or other types of financial assistance available, you may want to take advantage of those first before applying for a loan. Beware of scams that target veterans as you compare your options. The key to avoiding scams is to do your research and find a competitive rate with a reputable lender.

Hear from our editors: 4 best emergency loans of 2024

Updated January 2, 2024

This date may not reflect recent changes in individual terms.

Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

Written by: Melanie Lockert

If you don’t have enough in savings to cover an emergency expense, an emergency loan that gives you the money you need quickly may help.

You may have a number of options, depending on your credit health and the loan amount you need. But keep in mind that some emergency loans can have high interest rates, so you’ll want to calculate the costs and do your research before you commit.

We’ll discuss the different types of emergency loans that could be available to you, as well as some lenders to consider. We’ll also give you tips on how to navigate the borrowing process — and any other options you may have.

• Our picks for the best emergency loan lenders
• What should I know about emergency loans?
• 5 types of emergency loans
• Other options for dealing with a cash shortage
• Alternatives to emergency loans for bad credit
• Next steps: Start planning for your next emergency
• Hear from an expert

Our picks for the best emergency loan lenders

The lenders below all have a few things in common — they offer “traditional” personal loans rather than payday loans, which typically come with dangerously high costs. Our picks also provide potentially fast funding time and a range of options for how much you can borrow.

LightStream

Good for: People with strong credit

Pros

• Competitive interest rates and “rate-beat” program
• Straightforward application and fast response
• No loan origination or prepayment fees

Cons

• No prequalification option
• May not consider those with little credit history

OneMain Financial

Good for: Secured loan option

Pros

• On average, loans funded quickly
• Considers more than just your credit scores

Cons

• May need to complete loan process in branch
• Maximum APR is on the higher side

Earnin

Good for: Paycheck advance

Pros

• No interest or fees, and tips are optional
• “Balance Shield” feature can help prevent overdrafts from your bank account
• App available for Apple and Android users

Cons

• Eligibility based on how you’re paid or what work you do
• Sacrifice some privacy by using app
• Low withdrawal limits

Possible Finance

Good for: Small loan amounts

Pros

• Only small loan amounts available — may help prevent overborrowing
• Can help you build credit

Cons

• High APRs
• Not available in all states
• Short repayment terms

What should I know about emergency loans?

Emergency loans can come in the form of unsecured personal loans, credit card cash advances, payday loans or even pawn shop loans.

Emergency loan funds can be deposited directly into your bank account — often within a business day or two of approval, depending on the lender and the details of the loan application.

To fully understand your options, make sure to do your research beforehand and read any fine print throughout the process.

5 types of emergency loans

If you need a loan in an emergency, there are several options to consider. But what type of loan you qualify for can largely depend on your credit.

Personal loans

With good credit, you may qualify for an unsecured personal loan. Personal loans often have flexible uses for emergency situations. Personal loans are typically installment loans given out in a lump sum with a fixed interest rate. They could have better interest rates than credit cards and can be paid back over a set period of time.

You don’t need to borrow a huge amount, either. If you need a small amount of money, a small personal loan can help. For example, you could get a small personal loan of $1,000 to help you in a time of need. Just remember that you should take out only what you absolutely need and can comfortably afford to pay back. Of course, when times are especially difficult, “comfortably” may be a stretch. The idea is to borrow as little as necessary.

Credit card cash advance

A cash advance is essentially using the available balance on your credit card to take out a loan. The credit card company will typically charge a higher interest rate for cash advances than it does for normal purchases, plus a processing fee. Also, interest will start accruing on the advance when you take the money out, so be careful of how much money you request.

Payday loans

A payday loan is a short-term loan that typically must be repaid by your next payday. Unlike a personal loan, which is typically paid back in installments, payday loans are paid back all at once.

But be aware: Payday loans can have costs that amount to APRs as high as 400%, according to the Consumer Financial Protection Bureau.

The problem with payday loans is that they can lead to a debt trap. Many borrowers might not be able to pay back the loan — and are then stuck in a cycle where they continue to borrow in order to pay off debt. The CFPB reports that four out of five payday loans are “re-borrowed” within a month — often around the time when the loan is due — so you should only turn to this option as a last resort.

Pawn shop loans

For a pawn shop loan, you typically have to use an item of value to secure the loan. A pawn shop will assess the value of the item and keep it on hand as collateral to back the loan.

If you’re unable to pay back the loan, the pawn shop can sell your item. Because a pawn loan doesn’t involve a credit check or application process, it could be good for those with few traditional credit options.

Title loans

Another option is a title loan. If you’re a car owner, you can use your car’s title as leverage to access a short-term loan. This might seem like an attractive option since there typically isn’t a credit check involved. But there’s a chance your car can be seized if you aren’t able to repay the loan, so this option should be carefully considered.

Other options for dealing with a cash shortage

Before rushing to take out an emergency loan, you may want to consider some alternative options.

Low-interest credit cards

If you have good credit, you may want to consider a low-interest credit card with a 0% intro APR on purchases for a period of time. You could use this new credit card as a short-term loan and pay it back within the promotional period. Just remember that applying for a new credit card will initiate a hard inquiry, which can affect your credit scores. And you should only charge what you know you can pay off within the intro APR period — any leftover balance will begin to accrue interest if it’s not paid off in time.

Medical bill repayment plans

If you have an unexpected medical bill, you can talk to the hospital about repayment options. In many cases, a provider may work with you on a payment plan.

Some hospitals provide financial-assistance options specifically for under-insured or low-income families. Each hospital may have different financial assistance programs, so get in touch to see if you qualify.

Student loan payment restructuring

Federal student loan borrowers may be able to free up some money by opting for an income-driven repayment plan, which may make your monthly payments more affordable. This is a repayment plan that caps your monthly payment at a certain percentage of your discretionary income, which could lower your monthly payment amount. In some cases, you might qualify to pay $0 per month based on your income.

You can also consider deferment or forbearance to free up some money by stopping payments temporarily. Just be aware that depending on the types of student loans you have, your loans may continue to accrue interest while they’re in deferment or forbearance. So while you’re freed from making payments for now, your overall balance that you’ll need to pay back could continue to increase.

Home equity line of credit

You may also consider getting a home equity line of credit — often referred to as a HELOC. If you’re a homeowner, this is an option in which you use your home as collateral when applying for a loan. You’ll want to know the ins and outs of your repayment term, because you might be required to pay back the loan immediately after the draw period or have a set amount of time to pay it back.

Alternatives to emergency loans for bad credit

If you have less-than-perfect credit, you may think getting an emergency loan for bad credit — a loan with looser qualifying restrictions — is your only choice. But before you turn to a potentially high-cost solution, consider these other options.

Ask for a repayment plan

If you don’t want to take out a loan, you can try to negotiate a payment plan or a longer payment period for another bill. Creditors may offer you a low-interest loan or be willing to reduce the amount that you owe. It’s a good idea to talk with your current creditors before exploring other loan options.

Explore charitable financial assistance grants

Depending on your situation, you may qualify for an emergency assistance grant or loan. Some states and cities offer hardship grants to residents. For example, residents of Dane County, Wisconsin, can apply for emergency assistance grants if their family is facing eviction or foreclosure. Check with your state or local area to see what hardship grants may be available.

Ask your employer for a loan or advance

If you’re employed, your employer may be able to help you to bridge a short-term financial difficulty. Before you pursue an emergency loan, check with your employer to see if it can offer a loan or an advance on your next paycheck.

And if you’re a full-time or part-time federal employee, you may be eligible to receive a no-interest hardship loan of up to $1,200 through the Federal Employee Education and Assistance fund.

Use a credit card in your wallet

While credit cards can come with high interest rates, those rates are still usually less costly than other kinds of financing like payday and title loans. You also may be able to apply for a new credit card with a low or no-interest introductory APR offer.

Using a credit card might provide the short-term relief that you need. But if you do use one, make sure you have a plan to pay off your balance quickly, so you don’t accumulate too much interest.

Next steps: Start planning for your next emergency

If you need an emergency loan, you’re not alone.

But you can break the paycheck-to-paycheck cycle, and the way to get started toward that goal is to begin setting aside small amounts of money for emergencies.

Even setting aside $10 each paycheck can help. You can adopt a “pay-yourself-first” model, where you make sure some of your earnings go into a savings account each payday so you’re not tempted to spend more money on discretionary purchases.

Keeping your savings in a separate, high-yield savings account can help make it easier to keep these funds reserved for emergencies. The key is to save what you can consistently, so you have an emergency cushion for the future.

Hear from an expert

Q: What would you recommend for someone who needs a loan but has no credit?

A: In that case, they will need to provide sources of their income and the amount and other assets that can be used as collateral. Home title, car title can be used in lieu of no credit. 

Q: How can people in need of emergency loans find better alternatives?

A: In some cases, family members can help as well. Payday loans are OK, but since the interest rate they charge is rather large, those loans should be taken with that knowledge and repaid as fast as possible.

— Dr. Miren Ivankovic, Adjunct Professor of Economics, Clemson University

That’s where microloans can come in. Microloans are small-scale loans that can help small-business owners get the funds they need.

In this article, we’ll look at what a microloan is, how it works, where you can apply for one, and the pros and cons of this loan option.

What is a microloan?

A microloan is a type of loan, typically for smaller amounts, for small-business owners who are starting a new business or building upon an existing one.

The average microloan is about $13,000, according to the Small Business Administration, and can go up to $50,000 or more. Many microloans are secured loans, meaning the lender requires some type of collateral, such as property or an asset, to back them.

Microloans can be used for different expenses, although some lenders may have their own requirements on how you can use the funds. For example, loans offered through the Small Business Administration microloan program can be used for inventory, furniture, working capital or equipment, but can’t be used to pay down existing debt or buy real estate.

Where can you get a microloan?

Microloans are often offered by nonprofit lenders and some peer-to-peer lenders. Here are a few organizations where you can start looking.

• Small Business Administration (through third-party lenders)
• The Business Center for New Americans (BCNA)
• Accion
• Grameen America
• Opportunity Fund
• LiftFund

Some lenders that offer microloans may limit loans to businesses in certain states or regions. Others may focus on serving specific demographics, such as women or low-income communities. So keep that in mind as you’re shopping around for a microloan lender.

How does a microloan work?

As with other types of loans, you’ll generally make monthly payments toward the principal and interest over a set loan term. The interest rate and terms of a microloan vary by lender (and your creditworthiness), so it’s important to do your research beforehand.

Microloans through the Small Business Administration are capped at $50,000, can be repaid over a term of up to six years and generally offer interest rates between 8% and 13%.

Separately, Grameen America offers smaller microloans, typically between $1,500 and $15,000, with an interest rate that starts at 15%. Opportunity Fund will lend up to $30,000, with an annual percentage rate of 15% to 22.2% and loan terms of up to three years.

If you’re interested in applying for a microloan, be sure you understand the APR, repayment terms, monthly payment, and any requirements or restrictions involved. Some microloan lenders allow you to apply for prequalification before submitting a formal application, similar to the way you might prequalify for a personal loan. This can help you determine if you might be approved for a loan and what the interest rate and loan terms could be.

Benefits of microloans

Microloans can come with several benefits for small-business owners and entrepreneurs.

Potentially higher chance of approval

Microloans are designed for small-business owners who may not qualify for traditional business loans. If you’re struggling to qualify for a traditional business loan, your business might be too new; the amount of money you need may be too small; you may have poor credit health; or you might not have established business credit yet.

In considering your application, microloan lenders can look at factors beyond your credit, including your ability to repay the loan and a solid business plan.

Help in building credit

Microloan lenders might report your loan payments to the business credit bureaus, which could help build your business credit. They may also report to the three main consumer credit bureaus, which could help build your personal credit if you make on-time payments as outlined in your loan contract. In fact, on-time payments are one of the biggest factors in calculating your personal credit scores.

Financial education and resources

Some microloan lenders offer financial support that extends beyond a loan. For example, Grameen America provides financial training, and Accion has a business resource library and helps connect borrowers with other businesses in the community. LiftFund offers business education for both new and established businesses.

Drawbacks of microloans

While a microloan can offer important benefits, there are some other things to consider, too.

Your lender options might be limited

Many microloan lenders are limited to specific regions. Depending on where you live, you may find there are few local options for microloans.

Interest rates can be high

Interest rates for a microloan may be higher than what you could get at a traditional bank. While interest rates for business loans from a bank might start around 6%, interest rates for some microloans can start at around 8%.

Bottom line

If you don’t qualify for a business loan from a traditional lender, a microloan could provide the cash you need to get your business off the ground or to take it to the next level.

But as with any loan, be sure to do your homework and understand the loan details and restrictions across potential lenders before committing. If you decide a microloan isn’t the right fit for you, you might want to look into how business credit cards work and consider using one to help manage everyday expenses.

If you’re ready to get your first credit card or if you’re a parent looking to get one for your child, you may be wondering how old someone needs to be to qualify. Not just anyone can get a credit card, and there are age requirements for taking on the responsibility.

In order to get a credit card account in your name alone, you must be at least 18 years of age. But there are additional financial requirements from ages 18 to 21, including the ability to prove independent income. The process gets a little easier after you turn 21 years old, but there are still important things to know to set yourself up for the application and qualification process.

This article shows you how to navigate the process at every age along the way.

• Getting a credit card before 18
• Getting a credit card from 18 to 21
• Getting a credit card after 21

Getting a credit card before 18

Typically, you can’t open a credit card in your own name until you turn 18 years old.

But there are still options for getting access to a credit card account. What you can do if you’re under 18 is become an authorized user on someone else’s account.

What is an authorized user?

An authorized user is someone who is added (by a primary cardholder) to a credit card account with authorization to use that card. Typically, the authorized user will get their own credit card with their name on it. Their payment and card activity then posts to the primary cardholder’s account.

The authorized user can make payments as they would with any other credit card, but only the primary cardholder is held responsible for payments. For that reason, it’s important that the primary cardholder and authorized user set expectations together about how much can be spent and who will pay.

As an authorized user, you may be able to benefit from the primary cardholder’s good credit. Typically, the primary cardholder’s account history and activity are reported on your credit reports, which can help you to build up your own credit profile. Not all credit card issuers do this, though, so consider asking if your card issuer reports activity on authorized user accounts.

Getting a credit card from 18 to 21

You can get a credit card at age 18, but getting approved may be challenging as you typically need to have a credit history and credit scores. If you have no credit history, it’s unlikely you have any credit scores.

Even if you have built credit as an authorized user, getting a credit card from ages 18 to 21 involves meeting some tough requirements.

If you apply for a credit card while under 21, you need to prove that you’re capable of handling payments on your own — which usually means proving you have independent income from a job or other sources — by supplying a pay stub or bank statement.

If you’re an applicant under 21, you might be a student without established independent income. In that case, you will likely need a co-signer when you apply for credit cards.

Getting a co-signer

If you’re unable to get approved for a credit card based on your own credit history and profile, some credit card issuers may require you to apply with a co-signer. Whether you get approved with a co-signer depends on that person’s credit history. The co-signer takes responsibility for payments if you fail to make them, so the credit card issuer typically wants to make sure that person has good credit and the ability to repay debts.

For applicants under 21, a co-signer is typically a parent or guardian. Before going through with the process, it’s a good idea to discuss expectations regarding who will make payments, the potential consequences for each person’s credit and various other responsibilities.

Credit card options for young adults without a co-signer

While it can be tough to get your own credit card without a full credit history or a co-signer, there are options.

You can look into student credit cards, which are designed for (and advertised to) students specifically. To learn more, you can compare student credit card offers on Credit Karma.

Additionally, there are secured credit cards, which require you to “secure” the account with a cash deposit. The downside is that the secured credit card limits are often tied to the deposit amount. But the good news is that the card could help build your credit history.

Getting a credit card after 21

If you’ve already turned 21 years old, then your ability to get a credit card depends on your credit history and profile. But if you just turned 21 and don’t have steady income, you probably have a limited credit history.

However, length of credit history is just one of the factors considered when credit card issuers look at your application. Two of the most important factors to your credit scores are your payment history and the amounts you currently owe to lenders. If there are missed payments and outstanding balances on your reports, your credit might not be strong enough to qualify for the card you want.

Regardless of your credit history, there may be a credit card out there that fits your needs. Many credit cards are aimed specifically at borrowers with limited credit profiles, so the key is to do the proper research to find the right one for you.

If you’re applying for a loan, you may be referred to as a debtor. In many cases, this is just a fancy term for “borrower.”

When it comes to financial language, there are all kinds of terms that might seem complicated or intimidating. One term you may have come across — maybe in a loan contract or other legal document — is “debtor.”

So what is a debtor? Read on to learn more.

• A definition of ‘debtor’
• When you might you see the term ‘debtor’
• What happens to debtors if they can’t pay?

A definition of ‘debtor’

A debtor is someone in debt from borrowing money from a person or entity such as a financial institution. Depending on the situation, “debtor” can be used a shorter term for a borrower who owes money.

You may have seen this term when considering a loan or applying for a mortgage. That’s because when you take on a loan and borrow money from someone else, you are going into debt. So, you can be referred to as a debtor.

When you might you see the term ‘debtor’

The term “debtor” can be used in a variety of financial documents, such as formal agreements like contracts. As a general rule, though, the word “debtor” may refer to anyone who has borrowed money and taken on debt.

It can also be used in more serious events, like bankruptcy. In that case, you’ll be referred to as a “debtor” in the bankruptcy proceeding. It may also come up in collection actions related to various debts, like unpaid credit card bills.

As a debtor, you borrow money from a “creditor.” Don’t be surprised if you see these two words together in financial documents.

What happens to debtors if they can’t pay?

A debtor is someone who owes money to someone or something else — often a financial institution. But simply owing money in a loan or credit card agreement isn’t a problem.

The question is what happens when the debtor can’t pay?

If a debtor cannot pay back the creditor, the debt may go to collections. In collections, a debt collector will work to get the debt repaid. Debt collectors can contact you in a number of ways but there are protections for the consumer, many of which are outlined in the Fair Debt Collection Practices Act. For example, debt collectors cannot engage in abusive or unfair practices like contacting you late at night or showing up at places they know are inconvenient for you.

As a debtor you also have the right to contact the debt collector in writing and tell them to stop communication with the collector and deal with the creditor on your own.

Can you go to jail over an unpaid debt?

You may have heard the term “debtor’s prison” — where debtors used to go if they failed to pay their debt. Debtor’s prisons no longer exist in the traditional sense (they were banned close to two centuries ago). But some companies still use the court system to seek repayment of debts — and a 2018 report from the American Civil Liberties Union says thousands of debtors are arrested and jailed each year because they owe money.

If you’re worried about debts piling up, you may want to consider contacting a credit counseling organization. The Consumer Financial Protection Bureau recommends reaching out to the National Foundation for Credit Counseling.

If you let your friend borrow some money, you’d want to know they’re good for it, right? You’d want to find a way to limit the risk and ensure you get your money back. The same thing goes with lenders. But they have a more sophisticated way of going about it — through collateral.

In this article, we’ll explain how collateral works, where you may encounter it, and how it could help you get the kind of loan you want.

• A definition of collateral
• Which types of loans require collateral?
• How collateral can help you

A definition of collateral

Collateral is something — some sort of property or asset — that you may need to provide to a lender to get a loan. In many cases, collateral is required for certain types of loans, like mortgages and auto loans.

Essentially, the collateral serves as a security measure for the lender. If you fail to make payments, your lender typically can take possession of the collateral as payment for the loan.

This offers the lender more assurance and security — in fact, collateral is described as “securing” the loan. Loans without collateral are known as unsecured loans.

Collateral can be a win-win for lenders and borrowers. It gives lenders more confidence, and it may score borrowers a lower interest rate.

Which types of loans require collateral?

There are various types of loans that typically require collateral. Below is a list of the types of loans as well as the types of collateral that can be used to secure the loan.

• Mortgages — The home or real estate you purchase is often used as collateral when you take out a mortgage.
• Car loans — The vehicle you purchase is typically used as collateral when you take out a car loan.
• Secured credit cards — A cash deposit is used as collateral for secured credit cards. In other words, your cash that is used as a deposit to get a secured credit card can be kept if you miss multiple payments.
• Secured personal loans — A valuable item that the lender agrees to use as collateral, such as your home or your savings account, can be used for secured personal loans. If you fail to make payments on the loan, the lender can typically claim that asset.

As you can see, for each different type of loan there is something of financial value that is used to secure the loan.

For example, property such as a house or car can serve as a form of collateral when you take out a mortgage or car loan. While these items are given to you under a repayment term, they can go back to the lender if you don’t hold up your end of the bargain.

How collateral can help you

Although it might seem scary to have something of yours that has financial value used as collateral for a loan, it can actually be a benefit if you make your monthly payments on time and in full.

When you offer collateral for a loan, in some cases lenders will give you a lower annual percentage rate, or APR, than they otherwise would (this might not be the case for a mortgage or an auto loan).

That’s because they view a secured loan as a less risky investment. If you don’t end up paying, they still have a way to recoup costs through the collateral. Getting a lower interest rate could also cut down on the total cost of the loan and save you money.

A sole proprietorship is a way to start a business where you are the sole owner.

Whether you’re making money on the side or starting a business on your own, any time you are working to make a profit, you are engaging in business activity in the eyes of the IRS. How you classify that business with the IRS matters: The business structure you choose will affect your taxes and legal liability for any debts or other issues your business runs into.

There are several different types of business structures, but if you’re on your own, you may consider being a sole proprietor. A sole proprietorship is a type of business where there is one sole owner of an unincorporated business who acts and operates as the business. Think of freelancers, artists, contract workers and other small-business owners.

• Who should consider a sole proprietorship?
• How does a sole proprietorship work?
• How to become a sole proprietor
• Managing finances as a sole proprietor

Who should consider a sole proprietorship?

If you’re just starting a business — and there are no other owners or partners — a sole proprietorship could be your best bet.

A sole proprietorship can be a good fit for independent workers who offer a service or sell a product. Be aware that as a sole proprietor, you are personally liable for any of your business debts and losses. That means that if you can’t pay a business debt, your personal assets could be on the hook.

How does a sole proprietorship work?

Anyone who is building out their side gig or running a business on their own can be considered a sole proprietor. You may not even think of yourself as a business owner if you offer tutoring on the side — but when you’re making money, the government will likely consider it a business activity, whatever it is.

As a sole proprietor, you are responsible for saving for your own taxes and making any estimated tax payments that may be required. Your tax return is filed with your personal taxes, because in the eyes of the IRS, you are the business.

While being a sole proprietor comes with a lot of perks, there are some important things you should know. Namely, since there is no distinction between you and the business, you are personally liable for any financial losses, debt and damages in case of a lawsuit.

How to become a sole proprietor

If you’ve decided sole proprietorship is the right business structure for you, you might wonder how to make it official.

As a sole proprietor, you can typically use your own Social Security number because there is no legal separation between you and your business. But if you’d like a bit of separation from your personal info or you’re looking to build your business credit, you can apply for an employer identification number.

An EIN is similar to a Social Security number but used in business for tax reporting.

Managing finances as a sole proprietor

As a sole proprietor, it’s best practice to create a business bank account so you can separate your business income and expenses from your personal income and expenses. Separating your finances can make it easier to track.

If you want to get a business credit card, it’s likely that your personal assets will be on the line. That means if your business suffers, your personal finances could suffer too. Your personal finances can affect your business finances — and vice versa — as there is no separation.

Bottom line

A sole proprietorship can be an entrance into the world of business. Just be mindful of the risks and personal liability you’re taking on. As you grow your business, you may consider a different business classification, but you may be able to get started today as a sole proprietor.

The prime rate is a base interest rate that plays an important role in determining lending rates that many banks and other lenders charge consumers.

As of January 2024, the current prime rate is 8.5%, according to The Wall Street Journal. Learn more about the prime rate and how it can affect your personal finances.

• What is the prime rate, and why is it important?
• Who sets the prime rate?
• When can the prime rate change?

What is the prime rate, and why is it important?

The prime rate acts as a starting point for interest rates to be set on financial products like credit cards, auto loans, personal loans and mortgages. Lenders look to the prime rate to decide what interest rates to set for consumers.

The prime rate also can have a big impact on your existing loans that have variable interest rates, like adjustable-rate mortgages and many credit cards. For example, if your credit card has a variable APR, or you have an adjustable-rate mortgage, it’s likely your rate will fluctuate along with the prime rate.

So if the prime rate goes up, it’s more than likely that variable APR on your credit card will, too. And in the case of a mortgage, when the prime rate goes down, it could be time to consider refinancing your mortgage to get a better rate.

Who sets the prime rate?

The Federal Open Market Committee is one part of the Federal Reserve System (also known as “the Fed”), which is the central bank for the United States. The FOMC meets eight times a year to set monetary policy, including setting what’s called the federal funds rate. This is the rate that the Fed thinks is a healthy target rate for U.S. banks to lend money to one another.

Banks routinely borrow from each other to keep up required cash reserves, and they take their cues from the federal funds rate in deciding what interest to charge.

The Wall Street Journal then surveys the largest of those banks for the rate that most of them charge one another — typically it’s the federal funds target rate plus about 3% — and publishes this consensus rate as the prime rate.

When can the prime rate change?

Because the prime rate is tied to the federal funds rate, the prime rate can change when the federal funds rate changes. Typically, this would happen during one of the FOMC’s regular meetings — but the FOMC can also call for change outside of that meeting schedule in times of economic crisis.

The chart below shows the history of the prime rate and how it has changed in sync with changes to the federal funds rate.

Image: federal-funds-rate-vs-prime-rate

Events like the recession in 2008 led to a lower federal funds rate — and a lower prime rate, too. And as the economy recovered and the federal funds rate rose, the prime rate also rose.

Right now, the prime rate is 8.5%.

What’s next?

When the prime rate shifts, it affects the lending environment — and it has an impact on how much consumers pay in interest for the money they borrow.

Keeping an eye on the prime rate and understanding how it can affect the interest rates you pay can empower you as a consumer, helping you figure out where things may be headed.

You’re in so much credit card debt that you feel stuck — it’s tough to get ahead with such a high interest rate. So what can you do? One thing to consider is a balance transfer.

A balance transfer is the process of transferring debt from one credit card to another credit card, usually to one with a lower interest rate. This can be a great option, but if you’re not careful or aware of the potential drawbacks, you could wind up with even more debt.

If you’re considering a balance transfer as part of your get-out-of-debt strategy, read on to learn the pros and cons.

• Balance transfer pros
• Balance transfer cons
• Bottom line

Balance transfer pros

It can consolidate your payments

You may be able to combine multiple credit card balances by transferring them to a balance transfer card. Once you consolidate your credit card debt onto one card, you can focus on one payment with one due date, instead of making several payments each month and having to keep track of various due dates. This can make it easier to manage your payments.

You can save money on interest

A major benefit of doing a balance transfer is the potential to save money on interest. It’s common to see credit cards with APRs of up to 28% or higher.

Some balance transfer cards come with an introductory 0% APR for a set amount of time. That way the money you do put toward your debt is not just getting eaten up by interest, but instead paying down the principal balance.

Move your debt to a different credit card

You may feel stuck with your current credit cards, dealing with high interest rates and terms that don’t offer you much as a cardholder. Depending on the card you get approved for, you may be able to move your debt to a credit card that has a lower interest rate and more favorable terms. You may even be able to find a balance transfer card that offers perks that can earn you rewards. But you might want to wait until your transferred balance is paid off before you take on new credit card debt.

Balance transfer cons

You may have to pay a balance transfer fee

Most good things aren’t free, and that includes balance transfers. Many balance transfer credit cards will charge a balance transfer fee of 3% to 5% of the amount you transfer, usually with a minimum of $5 to $10.

Let’s say you transfer $5,000 and there’s a 3% balance transfer fee. You’ll end up paying a $150 fee just to do the transaction. Consider that added cost before you transfer your balance to make sure you’re still saving money.

The low interest rate doesn’t last forever

Balance transfer cards may offer a 0% intro APR for a specific amount of time. The promotional period can vary depending on the card, but you’ll see balance transfer cards out there with intro APR periods of anywhere from six months to 21 months.

That means if you’re using this card to pay off debt, you’ll want to be aware of when the promotional period ends and what the APR will be after that.

You could add to your debt

If you’re looking to do a balance transfer, you’re likely hoping to pay off debt and save money on interest. But if you haven’t addressed the root of the issue, having another credit card could easily lead to more debt.

If you don’t have a plan, you may end up racking up even more debt with the new credit card. Worse yet, you may not pay off your existing debt within the promotional period and end up just shuffling your debt around without actually saving money.

“Some balance transfer credit cards also offer a 0% APR on purchases for a period of time, such as 12 to 18 months. Don’t take the bait,” says Beverly Harzog, author and credit card expert for U.S. News & World Report. “One of the biggest mistakes consumers make with balance transfer cards is to use them for new purchases. You can end up in even more debt this way.”

You may need healthy credit

In order to get approved for a balance transfer credit card, you typically need good credit scores to qualify. Your credit scores will also help determine if you are approved for the best APR.

Bottom line

A balance transfer credit card can be a useful tool if you’re looking to pay off debt faster. If you get approved for a low interest rate and pay off your debt during the promotional period, you may be able to save money on interest and be debt-free sooner.

It’s also a good idea to understand how your credit card debt got where it is before you apply for a new card.

Weigh the pros and cons carefully to help decide if a balance transfer credit card is a good option for your financial situation. If taking action makes sense for you, keep reading to learn how to do a balance transfer.

You’ve likely heard of the FTC but may not know what it actually is or does. Officially known as the Federal Trade Commission, it’s a federal agency that plays an important and sometimes overlooked role in consumers’ lives.

The FTC serves to protect consumers from what it describes as “anticompetitive, deceptive and unfair business practices.” Essentially, it serves as a watchdog agency for consumers and businesses to stop unfair business practices in the market.

In addition, the FTC provides access to resources, tools and protections for consumers. Read on to learn more about the FTC and how it can help empower you as a consumer.

• What does the FTC do?
• A brief history of the FTC
• How can the FTC help you?

What does the FTC do?

The FTC works to protect consumers and businesses alike by preventing unfair, deceptive and fraudulent practices in the market. This work is split across three bureaus, each with its own focus.

• The Bureau of Competition assesses anticompetitive mergers and other potentially anticompetitive practices.
• The Bureau of Consumer Protection aims to protect consumers from unfair, fraudulent and deceptive acts or practices.
• The Bureau of Economics assesses the potential impact of the FTC’s actions on the economy.

Much of this work involves monitoring businesses by conducting investigations and fielding complaints. The FTC may also share its information with other government and law enforcement agencies and creates tools and resources to empower consumers.

But the FTC also has the power to enforce antitrust and consumer protection laws. The agency can seek relief for consumers and in some cases go after the perpetrators for civil penalties.

On top of that, the agency can create and implement trade regulations relating to unfair or deceptive acts or practices while also making relevant economic recommendations to Congress.

The FTC seeks to maintain its legitimacy and trust with the public by staying bipartisan. It’s run by five commissioners, with each serving a seven-year term after being nominated by the President of the United States and confirmed by the Senate. But the FTC cannot include more than three commissioners of the same political party at any one time.

A brief history of the FTC

Around the turn of the 20th century, megabusinesses considered “trusts” — U.S. Steel and Standard Oil, to name two — monopolized markets and controlled prices.

To combat these monopolies, Congress passed specific antitrust laws along with the Federal Trade Commission Act in 1914, creating a long-term solution for investigating and regulating unfair competition and deceptive practices that can harm consumers. While previous organizations had been tasked with investigating businesses, the FTC’s creation helped strengthen and formalize the government’s efforts to protect businesses and consumers.

Over time, the FTC has been handed increased power and authority to fight unfair competition and deceptive practices in the market. In 1938, Congress amended the FTC Act to prohibit unfair or deceptive acts or practices in addition to unfair competition. More than 35 years later, in 1975, the FTC was granted the authority to adopt industry-wide trade regulations.

How can the FTC help you?

Throughout the past 100 years, the FTC has played a crucial role in maintaining market fairness and protecting consumers. On top of the acts they enforce, they also offer a variety of tools to help consumers.

If you think you’re being taken advantage of or duped by a company, you may wonder what recourse you have. In such matters, the FTC often has the ability to act on your behalf. You can submit complaints and reports related to various issues, including identity theft and other scams, via the agency’s website. You can also add yourself to the National Do Not Call registry and sign up for email alerts about the latest scams.

The FTC also upholds many of the laws that help determine your overall credit profile. For instance, it helps enforce the Fair Credit Reporting Act, which gives consumers the right to request a free copy of their credit reports from each of the three major consumer credit bureaus — Equifax, Experian and TransUnion — once every 12 months.

If you take advantage of these resources thoughtfully, you could end up a more knowledgeable and empowered consumer.

Bottom line

The FTC works to ensure that businesses act fairly toward consumers and conduct their business in the spirit of fair competition. If you encounter a serious issue such as fraud or theft, you have the ability to submit a consumer complaint with the FTC. If you’re dealing with a different consumer issue, you can check out the agency’s consumer information page for a potential solution. The FTC is meant to help protect you, the consumer, from harm.