Author: AskMyFinance Editorial Team

When you are buying a home, you will likely choose between an FHA loan and a conventional loan. Both can help you finance a home, but they work differently. Understanding the key differences can save you money and help you avoid problems at closing.

FHA Loan vs. Conventional Loan: Quick Comparison

What Is an FHA Loan?

An FHA loan is a mortgage backed by the Federal Housing Administration. Because the government insures the loan, lenders face less risk and can offer the loan to borrowers with lower credit scores or smaller down payments. FHA loans are a popular choice for first-time homebuyers.

The main trade-off is mortgage insurance. FHA loans require an upfront mortgage insurance premium (MIP) of 1.75% of the loan amount and a monthly MIP that typically ranges from 0.45% to 1.05% of the loan. If you put less than 10% down, you pay MIP for the full life of the loan.

What Is a Conventional Loan?

A conventional loan is not backed by any government agency. It follows guidelines set by Fannie Mae and Freddie Mac. Because there is no government guarantee, lenders require stronger credit and larger down payments compared to FHA loans.

If you put less than 20% down, you will pay private mortgage insurance (PMI). However, PMI on a conventional loan automatically cancels when your loan balance reaches 80% of the home’s original value — something that does not automatically happen with FHA loans.

When an FHA Loan Makes More Sense

An FHA loan is likely the better choice if:

• Your credit score is below 620 — conventional lenders typically will not approve you
• Your debt-to-income ratio is above 45%
• You can only put 3.5% down and do not have much in reserves
• You had a bankruptcy or foreclosure in the past few years

When a Conventional Loan Makes More Sense

A conventional loan is likely better if:

• Your credit score is 620 or higher, especially 720+
• You can put 10-20% down, which reduces or eliminates mortgage insurance
• You want the option to remove mortgage insurance later
• You are buying a home that would not pass FHA’s property standards (older homes, investment properties)
• You want to buy a more expensive home above FHA loan limits

The True Cost Difference

Borrowers sometimes assume FHA is always cheaper because of the lower credit requirements. That is not always true. The ongoing MIP on an FHA loan can add hundreds of dollars per month compared to PMI on a conventional loan — and that cost does not go away automatically.

Example: On a $350,000 FHA loan with 3.5% down, monthly MIP might run $175 to $250 per month on top of principal and interest. On a conventional loan with 5% down, PMI might run $100 to $180 per month — and it cancels once you reach 20% equity.

If your credit score is 740 or above, a conventional loan will almost always cost less over time.

FHA Loan Property Requirements

FHA has strict property standards. The home must be safe, sound, and secure to qualify. An FHA appraiser will flag issues like:

• Peeling lead paint (homes built before 1978)
• Missing handrails on stairs
• Roof with less than two years of useful life remaining
• No working HVAC in cold climates

These requirements can kill deals on fixer-uppers. Conventional loans have no such strict property standards, which makes them better for homes that need work.

Bottom Line

If your credit is below 620 or your down payment is limited, an FHA loan may be your only realistic option. If you have good credit and can put down 10% or more, a conventional loan will likely cost less over time due to the ability to cancel mortgage insurance.

Get quotes from lenders for both loan types before deciding. The best loan for you depends on your credit, down payment, and the specific property you are buying.

Life insurance is one of the most important financial products you can buy. The right policy protects your family if you die unexpectedly. The best life insurance companies in 2026 offer financial strength, competitive rates, and a smooth application process.

Best Life Insurance Companies 2026 at a Glance

Haven Life: Best for Online Term Life

Haven Life is backed by MassMutual, one of the oldest and most financially stable insurers in the country. Haven Life sells term life insurance entirely online, with coverage available up to $3 million. Many applicants receive instant approval without a medical exam if they are under 45 and in good health.

Rates are competitive and the application takes about 20 minutes. Haven Life also offers a unique feature: a free membership to wellness and financial planning tools for policyholders.

Best for: Healthy adults under 55 who want a fast, digital-first application experience.

Northwestern Mutual: Best for Overall Financial Strength

Northwestern Mutual is consistently ranked as one of the strongest life insurance companies in the country. It holds an A++ rating from AM Best and is the largest direct provider of life insurance in the United States. The company is known for its whole life policies, which earn dividends each year — Northwestern has paid dividends to policyholders every year since 1872.

You will need to work with a Northwestern Mutual financial advisor to get a quote. The process is more involved than online competitors, but the financial stability is unmatched.

Best for: Buyers who want permanent life insurance from an extremely financially stable company.

Protective Life: Best for Affordable Term Rates

Protective Life consistently offers some of the lowest term life rates available, particularly for healthy non-smokers in the 30 to 50 age range. Protective offers term coverage up to 40 years — one of the longest available. The company also has a simplified conversion option if you want to switch to permanent coverage later.

Best for: Budget-conscious buyers who want the lowest possible premium for term coverage.

Guardian Life: Best for Whole Life

Guardian Life is one of the few remaining mutual insurance companies, meaning it is owned by its policyholders rather than shareholders. Guardian has paid dividends on its whole life policies every year for over 160 consecutive years. It offers flexible whole life plans and strong disability income coverage as well.

Best for: Buyers who want whole life insurance from a financially stable, dividend-paying company.

Ethos Life: Best for Seniors and No-Exam Policies

Ethos specializes in making life insurance accessible for older adults and people with health conditions who struggle to qualify for traditional coverage. It offers guaranteed issue whole life policies with no medical exam required. Coverage amounts are lower (typically up to $30,000), but the policies are available to applicants up to age 85.

Ethos also sells term life with a simplified underwriting process that does not require a medical exam in many cases.

Best for: Seniors, people with health conditions, or anyone who has been declined elsewhere.

How Much Life Insurance Do You Need?

A common rule of thumb is to buy 10 to 12 times your annual income in coverage. But your actual needs depend on:

• How many dependents you have
• Your mortgage balance and other debts
• How many years until your dependents are financially independent
• Whether your spouse works and could cover expenses alone

A 35-year-old with two young children and a $400,000 mortgage may need $1 million or more in coverage. A single person with no dependents may need only enough to cover final expenses.

Term vs. Whole Life: A Quick Guide

Term life insurance covers you for a set period — usually 10, 20, or 30 years. It is the most affordable option and works well for most families who want income replacement during working years.

Whole life insurance covers you for life and builds cash value you can borrow against. It costs 5 to 15 times more than term for the same death benefit. It makes sense for high-income earners who have maxed out other tax-advantaged accounts or for estate planning purposes.

Bottom Line

For most families, a term life policy from Haven Life or Protective Life will provide the most coverage for the lowest premium. If you want permanent coverage or whole life, Guardian and Northwestern Mutual are the strongest options. Start with a quote from two or three companies and compare both the rate and the company’s AM Best financial strength rating before buying.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

Investing apps have made it possible to start investing with any amount of money — including $1. The challenge is choosing the right app for your goals. Here are the best investing apps for 2026.

Best Investing Apps at a Glance

Fidelity — Best Overall Investing App

Fidelity is the best all-around investing app for most people. It has no account minimums, no trading commissions on stocks and ETFs, fractional shares starting at $1, and some of the lowest-cost index funds available (the Fidelity ZERO funds have 0% expense ratios). Fidelity also offers strong research tools and educational content for beginners. It is the top recommendation for long-term investors building wealth.

Charles Schwab — Best for Full-Service Investors

Schwab offers everything Fidelity does with slightly different account types and research tools. It has an excellent thinkorswim trading platform (acquired from TD Ameritrade) for active traders, plus a clean mobile app for casual investors. Schwab’s customer service is also consistently rated highly. It is a strong alternative to Fidelity with no meaningful disadvantages.

Robinhood — Best Simple Interface

Robinhood made investing accessible by stripping away complexity. The app is clean and fast. It supports stocks, ETFs, options, crypto, and retirement accounts (Roth IRA, traditional IRA). Robinhood Gold ($5/month) adds 4.9% interest on uninvested cash and margin access. The main trade-off is fewer research tools than Fidelity or Schwab.

Acorns — Best for Micro-Investing

Acorns rounds up your card purchases to the nearest dollar and invests the spare change. It charges $3/month for individual accounts. The round-up feature is useful for people who struggle to invest consistently. Once you have enough saved to invest a lump sum regularly, switching to Fidelity or Schwab will reduce your fee percentage significantly.

M1 Finance — Best for Automated Portfolio Investing

M1 Finance lets you build a custom portfolio (called a “pie”) from stocks and ETFs, then automates all future contributions to maintain your target allocation. There are no trading commissions. The minimum account is $100. M1 is ideal for investors who want a set-and-forget approach with more control than a robo-advisor but less manual management than a standard brokerage.

How to Choose an Investing App

• If you are a beginner: Start with Fidelity or Schwab. Both have strong education resources and no minimums.
• If you want simplicity: Robinhood’s interface is the cleanest — it removes friction to get started.
• If you struggle to save: Acorns automates micro-investments. The $3/month fee is a high percentage on small balances, but the habit it builds is valuable.
• If you want automation: M1 Finance gives you custom portfolio automation with no fees.

Bottom Line

Fidelity is the best investing app for most people — no minimums, lowest-cost index funds, and strong research. For complete beginners who want the simplest start, Robinhood removes all barriers. Acorns is useful for building the savings habit. Whatever you choose, the most important thing is to start investing, even with a small amount.

Frequently Asked Questions

What is the best investing app for beginners?

Fidelity and Charles Schwab are the best all-around apps for beginners — no account minimums, no trading commissions, and strong educational resources. Robinhood is simpler but has fewer research tools.

Is Robinhood safe for beginners?

Robinhood is SIPC-insured up to $500,000 and regulated by FINRA. Your investments are protected. However, it offers fewer research tools than Fidelity or Schwab, and its options interface is designed to encourage trading — which is not ideal for long-term investors.

What app is best for long-term investing?

Fidelity is best for long-term, buy-and-hold investors. It has no minimums, offers fractional shares, provides strong research, and its index fund costs are among the lowest available.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

Index funds are the most reliable way most people can build wealth over time. They are low-cost, diversified, and require very little management. Here is how to start investing in index funds in 2026, even if you have never invested before.

What Is an Index Fund?

An index fund is a type of investment fund that tracks a market index — like the S&P 500, the total U.S. stock market, or the bond market. Instead of a manager picking individual stocks, the fund simply buys all (or most) of the stocks in the index.

The result is broad diversification at a very low cost. Because there is no active management, fees are minimal.

Why Index Funds Are So Powerful

• Low cost: The average actively managed fund charges 0.5–1% per year in fees. Index funds often charge 0.03–0.1%. On a $100,000 portfolio, that difference is $500–$970 per year — compounded over decades, it is enormous.
• Diversification: A single S&P 500 index fund owns shares in 500 companies across every major sector. One bad company does not sink your portfolio.
• Better returns: Over 15-year periods, more than 90% of actively managed funds underperform their benchmark index after fees. Index funds consistently beat most active managers over the long term.

Step 1: Choose Where to Open an Account

To buy index funds, you need a brokerage account. The best brokers for beginners are:

• Fidelity: No minimums, fractional shares, offers ZERO-fee index funds
• Charles Schwab: No minimums, excellent customer service
• Vanguard: The original home of index investing — best for long-term buy-and-hold investors

Step 2: Decide Which Account Type

• Roth IRA: Best for most people under 50 who expect to be in a higher tax bracket later. Contributions are after-tax; withdrawals in retirement are tax-free.
• Traditional IRA: Best if you want a tax deduction now. You pay taxes on withdrawals in retirement.
• 401(k): If your employer offers one with a match, contribute at least enough to capture the full match first.
• Taxable brokerage account: No contribution limits. Use this after maxing retirement accounts.

Step 3: Pick Your Index Funds

You do not need more than two or three funds to build a well-diversified portfolio. Here are the most recommended starting points:

• Fidelity ZERO Total Market Index (FZROX): Total U.S. stock market, 0% expense ratio
• Vanguard Total Stock Market ETF (VTI): Total U.S. market, 0.03% expense ratio
• Vanguard S&P 500 ETF (VOO): 500 largest U.S. companies, 0.03% expense ratio
• Vanguard Total International Stock ETF (VXUS): International diversification, 0.07% expense ratio
• Vanguard Total Bond Market ETF (BND): U.S. bond market, 0.03% expense ratio

Step 4: Set a Contribution Schedule

The most powerful thing you can do is invest consistently. Set up automatic monthly contributions — even $50 or $100 per month — and let compound interest work. This approach is called dollar-cost averaging: you buy more shares when prices are low and fewer when prices are high, smoothing out market volatility over time.

Step 5: Do Not Panic When the Market Drops

The stock market drops 10% or more in about one out of every three years. This is normal. Index fund investors who stay invested through downturns consistently outperform those who sell and try to time the market. The key is to invest in amounts you can afford to leave alone for at least five years.

Bottom Line

Open a Roth IRA at Fidelity or Vanguard, buy a total market index fund, and set up automatic monthly contributions. That is the entire strategy. Simple, low-cost, and historically effective over any 20-year period in U.S. stock market history.

Frequently Asked Questions

How much money do you need to start investing in index funds?

You can start with as little as $1 with brokers that offer fractional shares, like Fidelity and Schwab. Many index funds have no minimum investment. The Fidelity ZERO funds, for example, require $0 to start.

Are index funds safe?

Index funds carry the same market risk as the stocks they hold. Their value goes up and down with the market. But because they are diversified across hundreds or thousands of companies, a single company’s failure does not significantly impact your investment.

What is the best index fund for beginners?

The Fidelity ZERO Total Market Index Fund (FZROX) and Vanguard Total Stock Market ETF (VTI) are the top starting points. Both offer total market exposure at near-zero cost.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

The Roth IRA and the 401(k) are two of the most powerful retirement accounts available. Most people should use both — but the order matters. Here is how to decide which to fund first.

Key Differences: Roth IRA vs. 401(k)

The Recommended Order: Where to Save First

Follow this priority order for most situations:

Step 1: Contribute to Your 401(k) Up to the Employer Match

If your employer matches contributions, this is a 50%–100% instant return on your money. It is the best guaranteed return available anywhere. Contribute at least enough to capture the full match before doing anything else.

Example: Your employer matches 50% of contributions up to 6% of your salary. You earn $60,000. Contributing $3,600 (6%) triggers a $1,800 match — that is $1,800 of free money. Never leave this on the table.

Step 2: Max Out a Roth IRA

After capturing the full 401(k) match, put money into a Roth IRA up to the annual limit ($7,000 in 2026). The Roth IRA’s advantages are powerful:

• Tax-free growth and withdrawals in retirement
• No required minimum distributions — you never have to take money out
• Contributions (not earnings) can be withdrawn at any time without penalty — it doubles as an emergency fund backup
• More investment choices than most 401(k) plans

Step 3: Go Back and Max Out the 401(k)

After maxing the Roth IRA, return to your 401(k) and contribute up to the $23,500 limit. Even if the investment options are limited, the tax-deferred growth is valuable over decades.

Step 4: Taxable Brokerage Account

After maxing both retirement accounts, invest additional savings in a taxable brokerage account. There are no contribution limits, and you can access funds without penalty at any time.

When a Traditional 401(k) Beats a Roth IRA

The Roth IRA is the better choice for most workers in their 20s and 30s who expect to be in a higher tax bracket in retirement. But the traditional 401(k) wins if:

• You are in a high tax bracket now and expect to be in a lower one in retirement
• You earn too much to contribute to a Roth IRA directly (above $165,000 single / $246,000 married)
• You need the tax deduction now to reduce your current-year tax bill

Bottom Line

The smart order is: capture the full 401(k) employer match, then max a Roth IRA, then go back and max the 401(k). This approach captures free money, maximizes tax-free growth, and builds long-term flexibility. Most people can and should use both accounts every year.

Frequently Asked Questions

Can you contribute to both a Roth IRA and a 401(k) in the same year?

Yes. You can contribute to both in the same year as long as you meet the income limits for the Roth IRA. Contributing to a 401(k) does not affect your Roth IRA eligibility.

What is the income limit for a Roth IRA in 2026?

For 2026, single filers can contribute the full amount if their income is under $150,000. The contribution phases out between $150,000 and $165,000. Married filing jointly: full contribution under $236,000, phases out up to $246,000.

What happens to my 401(k) if I leave my job?

You can leave it with your former employer, roll it into your new employer’s 401(k), roll it into a traditional IRA, or cash it out (cashing out triggers taxes and a 10% penalty if under 59.5). Rolling into an IRA gives you the most flexibility.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

State Farm and Geico are the two largest car insurance companies in the United States. Both offer solid coverage, but they serve different types of drivers well. This comparison breaks down pricing, coverage, discounts, and service so you can choose the right one.

Quick Comparison: State Farm vs. Geico

Pricing: Who Is Cheaper?

Geico is usually the cheaper option for drivers with a clean record. Its average full-coverage premium runs about $110 per month, compared to about $123 for State Farm. But pricing depends heavily on your ZIP code, age, driving history, and vehicle.

State Farm is often more competitive when:

• You have a teen driver on the policy
• You have a recent accident or ticket
• You bundle home and auto

Coverage Options

Both companies offer all standard coverage types:

• Liability (bodily injury and property damage)
• Collision and comprehensive
• Uninsured and underinsured motorist
• Medical payments (MedPay) and personal injury protection (PIP)
• Rental car reimbursement
• Roadside assistance

State Farm also offers rideshare coverage for Uber and Lyft drivers, which Geico offers in fewer states.

Discounts

State Farm discounts include:

• Multi-policy (bundle home + auto)
• Drive Safe and Save (telematics program)
• Good student (under 25, 3.0 GPA or higher)
• Accident-free discount
• Defensive driving course

Geico discounts include:

• Multi-policy and multi-vehicle
• Good driver (5 years accident-free)
• Federal employee and military
• Good student
• Membership and employee discounts (partner with 500+ groups)

Customer Service and Claims

State Farm scores higher in J.D. Power’s overall satisfaction study. Its large network of local agents means you can often meet your agent in person, which many customers prefer when filing a claim.

Geico is almost entirely digital. It handles claims well through its app and online portal, and has a strong reputation for quick claims processing. If you prefer to handle everything online without talking to an agent, Geico may suit you better.

Which Should You Choose?

• Choose Geico if you want the lowest base premium and prefer a digital-first experience.
• Choose State Farm if you want a local agent, have a teen on your policy, or want the highest customer satisfaction scores.

Bottom Line

Both State Farm and Geico are excellent insurers with top financial strength ratings. The best way to choose is to get quotes from both — prices vary significantly by location and driver profile. Spend 10 minutes getting quotes from each before you decide.

Frequently Asked Questions

Is State Farm or Geico cheaper?

Geico is often cheaper for drivers with clean records. State Farm can be more competitive for drivers with accidents or teens on the policy.

Which company has better customer service?

State Farm has higher J.D. Power satisfaction scores and a large local agent network. Geico is rated well for its digital tools and claims app.

Can I get a quote from both on the same day?

Yes. Both State Farm and Geico offer instant online quotes. Getting both on the same day is the fastest way to compare real prices for your ZIP code.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

Car insurance for seniors does not have to be expensive. Many insurers offer strong discounts for older drivers, especially those with clean records and low annual mileage. Here are the best car insurance companies for seniors in 2026.

Best Car Insurance Companies for Seniors

1. The Hartford (AARP Program) — Best Overall for Seniors

The Hartford partners with AARP to offer auto insurance designed specifically for drivers 50 and older. Key benefits include:

• Accident forgiveness — your rate does not increase after your first accident
• Lifetime renewability — they cannot drop you for old age alone
• New car replacement for vehicles less than 15 months old
• RecoverCare benefit for household expenses if you are injured in an accident

AARP members get exclusive pricing. If you are 50 or older, this is the first quote to get.

2. USAA — Best for Military Seniors

USAA consistently earns top customer satisfaction scores and offers very competitive rates for veterans and military families. If you or a spouse served in the military, USAA should be your first call. It is available to active duty, veterans, and their families.

3. Geico — Best Rates for Seniors with Clean Records

Geico offers low base rates and a mature driver discount of up to 10% for drivers who complete an approved defensive driving course. Its digital claims process is straightforward for seniors who prefer to handle things online.

4. Nationwide — Best for Low-Mileage Seniors

Nationwide’s SmartMiles program is a pay-per-mile option ideal for seniors who drive fewer than 7,500 miles per year. You pay a base rate plus a per-mile charge. If you drive significantly less than the average American (about 14,000 miles per year), this can cut your premium in half.

5. State Farm — Best for Seniors Who Want a Local Agent

State Farm has 19,000+ local agents nationwide. For seniors who prefer face-to-face service, State Farm’s agent network is unmatched. Its Drive Safe and Save program also rewards low-mileage driving with discounts of up to 30%.

Senior Car Insurance Discounts to Ask About

• Mature driver discount: Most major insurers offer 5–15% off after you complete a defensive driving course (AARP, AAA, and online courses qualify).
• Low-mileage discount: If you drive under 7,500 miles per year, ask about pay-per-mile or low-mileage discounts.
• Multi-policy discount: Bundling home and auto with the same insurer typically saves 5–15%.
• Loyalty discount: Many insurers reward long-term customers who have been with them for multiple years.

What Coverage Do Seniors Need?

As a senior, your coverage needs depend on a few factors:

• If you own your vehicle outright, you may not need collision and comprehensive coverage if the car’s value is low.
• If you drive infrequently, a pay-per-mile policy can reduce costs significantly.
• Make sure you have adequate liability coverage — minimum state limits are often not enough if you cause a serious accident.
• MedPay or PIP coverage is valuable if your health insurance has high deductibles.

Bottom Line

The best car insurance for seniors depends on your driving habits, military status, and preference for digital vs. local service. Get quotes from at least three companies — The Hartford (AARP), Geico, and State Farm — to find the best rate for your profile.

Frequently Asked Questions

Does car insurance go up after age 65?

Rates start to rise gradually around age 70 for most drivers. The increase depends on your driving record and the insurer. Maintaining a clean record and taking a defensive driving course can offset higher rates.

What discounts are available for senior drivers?

The most common are the mature driver discount (after taking a certified course), low-mileage discount, and bundling discount. AARP members can also access special rates through The Hartford.

Is AARP car insurance worth it?

The Hartford’s AARP Auto Insurance program offers competitive rates and benefits designed for drivers 50+, including a lifetime renewability guarantee and accident forgiveness. It is worth comparing against standard quotes.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

Having bad credit can raise your car insurance premium significantly — but some insurers penalize poor credit less than others. Here are the best options if your credit score is below 580.

How Credit Affects Car Insurance Rates

In most states, car insurance companies use a credit-based insurance score to help set your premium. Studies show that drivers with lower credit scores file more claims on average. As a result, insurers charge more to offset that risk.

The impact is significant. Drivers with poor credit pay an average of 61% more than drivers with good credit. That is roughly $700 more per year on a $1,150 average premium.

States that ban credit scoring: California, Hawaii, Massachusetts, and Michigan do not allow insurers to use credit scores. If you live in one of these states, your credit will not affect your premium.

Best Car Insurance Companies for Bad Credit

1. Geico — Lowest Average Rates for Poor Credit

Geico charges less than most competitors for drivers with poor credit. While rates still go up with bad credit, the baseline is lower than average. Geico’s large scale allows it to spread risk across a wide pool of drivers.

2. State Farm — Smallest Credit Penalty

State Farm applies one of the smallest credit-based surcharges in the industry. The difference in premium between a driver with excellent credit and poor credit is smaller at State Farm than at most other major insurers.

3. Progressive — Best for High-Risk Drivers Overall

Progressive specializes in nonstandard and high-risk drivers. It accepts drivers with poor credit, recent accidents, and DUIs that other companies reject. Its Snapshot telematics program also lets safe drivers earn discounts that can partially offset the credit penalty.

4. USAA — Best for Military Families with Bad Credit

USAA also applies a relatively small credit surcharge and offers some of the lowest base rates available. If you are eligible, it is the best option regardless of credit.

How to Lower Your Premium with Bad Credit

• Shop at least three quotes. Credit penalties vary widely by insurer — shopping around can save hundreds per year.
• Raise your deductible. A higher deductible lowers your premium. Make sure you can cover the deductible in cash if you need to file a claim.
• Drop comprehensive and collision on older vehicles. If your car is worth less than $4,000–$5,000, these coverages may not be worth the premium.
• Ask about telematics programs. Programs like Progressive Snapshot or State Farm Drive Safe and Save reward safe driving habits regardless of credit.
• Work on your credit. As your score improves, ask your insurer to re-run your credit at renewal. The savings can be significant.

Bottom Line

Bad credit raises your car insurance premium, but the penalty varies significantly by insurer. Geico and State Farm tend to offer the most competitive rates for drivers with poor credit. Always compare at least three quotes and consider telematics programs to offset the credit surcharge.

Frequently Asked Questions

Can insurers use your credit score to set rates?

In most states, yes. Insurers use a credit-based insurance score (different from your FICO score) to predict claim likelihood. California, Hawaii, and Massachusetts ban this practice.

How much more does bad credit cost for car insurance?

Drivers with poor credit pay an average of 61% more for car insurance than drivers with good credit, according to industry data. That can add $500 to $1,500 per year to your premium.

Will improving my credit lower my insurance rate?

Yes. As your credit improves, ask your insurer to re-run your credit score for a new rate. Some insurers do this automatically at renewal.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

The American Express Gold Card and the Chase Sapphire Preferred are two of the most popular mid-tier travel rewards cards. Both carry a roughly $95–$325 annual fee and earn strong points. But they reward different spending patterns. Here is how to pick the right one.

Quick Comparison

Amex Gold Card: Best for Dining and Groceries

The Amex Gold earns 4x points at restaurants worldwide and at U.S. supermarkets (up to $25,000 in grocery purchases per year). If you spend $500 or more per month on dining and groceries combined, the Gold earns more than the Sapphire Preferred in those categories.

The card also includes $120 in annual dining credits (at select partners like Grubhub and Cheesecake Factory) and $120 in Uber Cash, adding up to $240 in credits that partially offset the $325 annual fee.

Best for: People who spend heavily on dining and groceries and want to maximize everyday rewards.

Chase Sapphire Preferred: Best for Travel and Flexibility

The Chase Sapphire Preferred earns 3x on dining and travel, 5x on Chase Travel portal bookings, and 2x on all other travel. Its primary strength is the quality of its points and travel benefits:

• Points are worth 1.25 cents each when redeemed for travel through Chase Ultimate Rewards
• Trip cancellation/interruption insurance up to $10,000 per person
• Primary rental car insurance (not secondary)
• Baggage delay insurance and travel accident insurance

At only $95 per year, the Sapphire Preferred is one of the best-value cards for travelers.

Best for: Travelers who want comprehensive travel insurance and a lower annual fee.

Which Card Should You Choose?

The answer depends on where you spend most:

• Spend heavily on dining and groceries? Amex Gold earns more rewards per dollar in those categories.
• Travel frequently and want strong insurance? Chase Sapphire Preferred’s travel protections and lower fee make it the better travel companion.
• Want both? Some cardholders carry both — using the Gold for food spending and the Preferred for travel. Both programs let you transfer points to many of the same airline partners.

Bottom Line

The Amex Gold wins on dining and grocery rewards. The Chase Sapphire Preferred wins on travel benefits and overall value at a lower fee. If you eat out often and shop at U.S. supermarkets, the Gold justifies its higher fee. If you travel and want trip insurance, the Preferred is the smarter choice at $95 per year.

Frequently Asked Questions

Is the Amex Gold worth the $325 annual fee?

The Amex Gold’s $325 fee can be offset by its $120 dining credit and $120 Uber Cash credit — totaling $240 in annual value. If you use those credits, the effective fee is $85, which is easy to justify with 4x dining rewards.

Which card is better for travel?

The Chase Sapphire Preferred is better for travel. It earns 3x on travel, includes trip cancellation insurance, and its points transfer to 14 airline and hotel partners. Amex Gold earns only 3x on flights booked directly.

Can you use Chase points and Amex points on the same trip?

Not directly. Chase Ultimate Rewards and Amex Membership Rewards are separate programs. Some transfer partners overlap (like Air France/KLM Flying Blue), but you cannot pool points between the two programs.