Egregious

Category: Finance

Articles on personal finance from Egregious, covering saving, smart spending, credit card strategies, and investing fundamentals.

  • A Guide to SoLo Funds

    Revisions

    June 3, 2026: Performance updates and changes to borrowing limits.

    April 2, 2026: Polished for better readability.

    April 1, 2026: Updated to reflect new minimum score.

    March 5, 2026: Updated to reflect changes to late fees and recovery fees.

    Temporarily short on cash and need a quick infusion for cash flow purposes? Or want to fund those in need while earning some money in the process? Learn the ins and outs of SoLo Funds, and how to use it effectively whether you’re a borrower or lender.

    Introduction to SoLo Funds.

    SoLo Funds is a peer-to-peer lending platform that connects borrowers with lenders. Users can register on the platform as a borrower or as a lender. Borrowers are able to submit loan requests, and lenders are able to choose who to fund. SoLo Funds is accessible through its mobile app or desktop website.

    Links: Referral | Non-Referral

    Signing up with the referral link gives you $5 towards your first loan and $5 when you repay as a borrower. As a lender, the referral link gives you $5 when you fund your first loan.

    Using SoLo as a borrower.

    When you sign up on the SoLo Funds platform, you’ll be prompted to perform identity verification and link your bank account. SoLo will use your personal information and bank account data to determine your creditworthiness. They do this through their own proprietary algorithms that analyze your financials for steady income, stable cash flow, and other related metrics. The system adheres to KYC and AML regulations as required by law.

    The SoLo score ranges from 1 to 99. Your score needs to be at least 53 in order for lenders to see your loan request on the marketplace. You can boost your score by attaching additional payment methods and bank accounts to your profile. If your score isn’t at least 53 even after linking all of your accounts, SoLo doesn’t believe you have the ability to repay loans. You’ll be able to post a loan request, but lenders will not be able to see it. At that point, SoLo Funds is not a good fit for you, and you should look for an alternative instead.

    If you meet all the requirements and have a score of 53 or higher, you can proceed. Before you start your first loan request, go into the settings page and toggle off the “SoLo Donation” option. Turning this setting off allows you to bypass the platform fee that they charge. When creating your loan request, set the lender tip to the maximum allowed amount (15% of the principal). The due date should be set as far out as possible, since paying your loan back early will boost your score higher. As a result, your borrowing limits will be lifted more quickly. As you build up positive repayment history on SoLo, you’ll eventually be able to borrow as much as $650.

    Using SoLo as a lender.

    The signup process as a lender is similar to signing up as a borrower. The only difference is that lenders do not receive a SoLo score. There is no need to determine your estimated ability to repay loans since you’re the one funding loans in the marketplace.

    Lenders have the ability to filter the marketplace by SoLo score, tip percentage, loan amount, SoLo Lender Protection, and SoLo Boost. Personally, I only use the tip percentage filter, from 14% to 15% (cannot filter by 15% only) and sort the list by descending score (default sort). I only fund loans where the proposed lender tip is the maximum amount, which is 15% of the principal. Funding anything with a lower tip is not worthwhile since SoLo charges the lender (yes, the lender, not the borrower) a 12% late fee as soon as the borrower misses their due date.

    Ideally, fund loans that have a score of 80 or higher. Even more importantly, take repayment history into account. Look through the user’s loan history and ensure they have been on the platform for a year or more. Stable repayment history is more important than a high score alone, as some users simply build up their score to request larger and larger amounts until they ultimately default.

    If you choose to fund loan requests from users with low scores as part of your strategy, make the most of SLP (SoLo Lender Protection). When funding very high-risk loans, I opt into SLP for a 5% fee. In the case of non-repayment by the due date, SoLo pays out 90% of the principal and 90% of the SoLo Donation (if any) in the form of credit that you can put towards your next loan.

    Keep in mind that SLP is a double-edged sword. A significant portion of the user base ends up paying loans late, which means you end up losing money with a partial payout if the user does end up repaying shortly after the due date. Conversely, receiving a partial payout is a good use of insurance if the user doesn’t end up repaying the loan, especially for borrowers who are brand new to the platform.

    If a borrower becomes delinquent by more than 20 to 30 days (depending on the length of the loan), the lender is assessed a 35% recovery fee and the borrower is assessed a 15% late fee (payable to the lender). If the user eventually defaults on the loan (non-repayment after 90 days), the loan is forwarded to a debt collection agency. The debt collectors will apply a 35% fee to any money successfully recovered from the borrower.

    Personal performance.

    I’ve used SoLo Funds for three months now. I’ve funded 284 loans, so just slightly under a hundred loans per month on average. The SoLo dashboard shows that I’ve made $30,894.70 in total contributions, and I’ve received $34,617.15 in repayments so far. The total contribution value is inaccurate and should actually be a few thousand dollars higher since the amount displayed doesn’t include unsettled loans (currently active or overdue). Keep in mind that this performance is also inflated since the first 99 loans on the SoLo Funds platform are exempt from the 12% late fee, as a promotional offer to attract new lenders. I expect the performance to gradually drop and stabilize at a much lower rate of return. Here are the compiled stats so far.

    Funded: 34 loans (not yet due)

    Overdue: 14 loans (ranging from 2 days to 79 days past due)

    Credited: 10 loans (SLP insurance, included in repayment total)

    Late Repayment: 64 loans

    On-Time Repayment: 162 loans

    If we exclude the currently funded loans that are not yet due, we can calculate more accurate percentages for each category. About 6% (14/250) of loans are currently overdue, averaging about 36 days late. I’m expecting that the vast majority of these borrowers are not going to repay their loans, so that’s approximately $1,880 in losses (excluding SoLo Donations). About 4% (10/250) had SLP kick in. Six of the ten users actually ended up repaying after the insurance paid out, and the remaining four never repaid their loans. About 26% (64/250) of loans were repaid late (some have the 12% late fee applied, and some also have the 35% recovery fee applied). Lastly, about 65% (162/250) of borrowers repaid their loans on time (includes early repayments).

    These are just my personal results based on my first three months of lending on SoLo. Your results may vary depending on your lending strategy, who you decide to fund, your risk tolerance, the amount of capital deployed, the number of users funded, and other factors. This side hustle is extremely high risk, but has the potential for a moderately high reward if executed well. In a single month, the return on investment could theoretically be up to 15%, which means one month could potentially outperform the average yearly return of the S&P 500. Of course, that’s an ideal scenario and is unlikely to happen in practice. Tread carefully and don’t risk more than you’re willing to lose.

    June Update.

    Four months have passed since I first wrote this blog post. My personal performance in the section above was from the beginning of February, and this update is for the beginning of June. I’ve broken the $100,000 milestone of “total received” so this is a nice stopping point for the final update. The “total contribution” figures don’t include loans that are currently active, and also don’t include loans that are currently overdue or defaulted. In the end, I’ve roughly broken even (with maybe just a tiny bit of profit), but the risk clearly does not outweigh the returns that you get from this platform.

    In the SoLo Gold meetings, leadership has mentioned that they will be rolling out a “Impact Plus” product (most likely by the end of the 2026). They are targeting an average of 16% APY and the entire thing will be automated. There would be no need to manually choose which loans to fund, everything just works on autopilot. There will be a minimum of three-month blackout timeframes where you can’t withdraw your deposits or earnings. The biggest benefit of the upcoming offering is that returns will be guaranteed. It will be contractually obligated that you will incur zero losses. I’m looking forward to it, but these are all forward-looking statements and plans can drastically change. They claim that this service will start rolling out in one state and eventually be available in all states within a year of launch. Time will tell how that ends up.

  • Credit Card Strategy

    Revisions

    March 31, 2026: Polished for better readability and fixed grammatical errors.

    August 26, 2025: Added information about using debit cards with ATM reimbursement.

    August 11, 2025: Added information about shopping offers.

    August 10, 2025: Added information about retention offers.

    There are many different types of credit cards out there, from basic cash back cards to complicated reward point systems. What should you choose, and why should you even use a credit card over a debit card? Read on to learn the best ways to utilize a credit card.

    Why even consider using a credit card in the first place?

    Debit cards (or ATM cards) are directly linked to your checking account. The moment you use your debit card for a transaction, the funds are immediately taken out of your bank account. What if your physical card is stolen or skimmed? What if your card appears in a breach from a site where you previously made a purchase?

    The FCBA (Fair Credit Billing Act) does provide some protection under federal law, stating that unauthorized transactions are legally capped at $50. Banks usually require that you report it within a certain timeframe (typically less than a week). However, claims can take a long time to resolve, and there are also other kinds of disputes that might not be covered, such as receiving a product that wasn’t as described.

    Most credit card issuers have a zero liability policy, so you’re not liable for any unauthorized use of your card or account. When you make a purchase with a credit card, the bank essentially loans you the money and you pay back what you owe on the due date. No money leaves your bank account, and the credit card issuer typically issues a temporary credit to cover the charge(s) while the case is under investigation.

    On top of all that, debit cards have little to no rewards, whereas a multitude of credit cards earn rewards with every use. Why leave free money on the table when you can earn while spending as you usually do?

    Cash back credit cards.

    Cash back cards are one of the most ubiquitous types of credit cards. Three popular examples are Capital One’s Quicksilver card, Citi’s Double Cash card, and Wells Fargo’s Active Cash card. These three are flat-rate cash back credit cards, with the Quicksilver offering 1.5% cash back on all purchases, while the Double Cash and Active Cash each offer 2% cash back.

    Two popular examples of non-flat-rate cards are Chase’s Freedom Flex card and Discover’s Discover it Cash Back card. This type of card has rotating bonus categories. For these two cards, there are new bonus categories every quarter, offering an enhanced 5% cash back when you make a purchase in those categories. Categories can include things like gas stations, public transit, or utilities. Depending on the card, non-bonus categories may still earn a small reward, typically 1%.

    For those who like the simplicity of never worrying about which credit card to use for each purchase, a flat-rate credit card is a good fit. If you’re the type of person who likes to maximize value and doesn’t find it burdensome to stay on top of rotating bonus categories or occasionally needing to manually activate them, then non-flat-rate cash back cards may be a better fit.

    Some people opt to use multiple cards from different issuers so they have a wide variety of bonus categories, as well as a backup flat-rate cash back card that they can use for all other transactions. If you’re just starting out, I generally recommend beginning with a flat-rate cash back card first.

    Rewards points cards.

    There are two kinds of rewards points cards. The first type is a basic rewards card that only allows you to redeem the points for cash or products on a portal. The goods available on rewards portals typically offer poor value, so redeeming for cash is usually the best option. The second type is a travel rewards card. These cards grant rewards points (sometimes called “miles”) that you can transfer to travel partners, such as airlines and hotels.

    American Express’ Platinum card, Chase’s Sapphire Reserve, and Capital One’s Venture X are three of the most sought-after and well-known travel credit cards. American Express’s program earns Membership Rewards points, Chase’s program earns Ultimate Rewards, and Capital One’s program earns miles.

    Why consider earning points and miles instead of going the cash back route?

    This is really only applicable if you travel often or want to travel. As you may have heard many times before, using points to book flights is often much cheaper than booking directly with cash. For example, I recently traveled to Germany for 55,000 points each way in business class with lie-flat seats. Paying for the round-trip flight in cash would have cost upwards of $4,000. Domestic (within the U.S.) flights don’t usually offer good redemption value, but international bookings tend to.

    How can I tell if I’m getting good redemption value for my points?

    Since points are usually earned at a rate of one point per dollar spent, excluding bonus categories and other bonus events, we can assume each point is roughly the equivalent of one cent when comparing to a standard 1% cash back card. So 10,000 points would be approximately $100 in value. An easy way to do the conversion is to remove the last two digits of the points value to get the dollar value (123,456 points is about $1,234).

    Imagine you were considering a first class flight that has a dollar cost of $9,000. If the point cost for the same booking is 200,000 points (approximately the equivalent of $2,000), then you would be getting a good deal by using points. The higher the dollar cost compared to the point cost of a ticket, the more value you’re getting out of your points.

    There are certain websites such as Point.me, Seats.aero, and Roame that allow you to find great point redemption deals. If you have an American Express card, a free version of Point.me is available exclusively for finding Membership Rewards redemptions.

    Keep in mind that credit card sites often have their own travel portals where you can book flights and hotels without needing to transfer points. These portals are often just a frontend for Expedia and offer no additional value. The point redemption value is much worse than transferring to an airline and booking there instead.

    Signup offers and promotions.

    Many credit cards offer incentives for you to sign up. Most cards are static and offer the same signup bonus for all visitors. Other cards, like the ones from American Express, are dynamic. You might see higher or lower bonus point offers when visiting the site normally versus visiting it in an Incognito session.

    Rewards cards offer a bonus amount (usually a few hundred dollars or the equivalent in points) once you spend a certain amount within a predetermined timeframe (usually a few hundred or a few thousand dollars within three to four months). On top of that, many cards also offer an introductory promotional APR for purchases and balance transfers. I would recommend against balance transfers unless you’re drowning in high-interest debt, but definitely take advantage of the zero APR period for purchases.

    If your card has a zero APR promotional period (typically 12 to 15 months), you can use your card for purchases (not cash advances) and pay no interest even if you carry a balance month to month. It’s as if you have an interest-free loan. This gives you the opportunity to temporarily invest the money you would have spent paying back the card. A good option is to put the money in a high-yield savings account and pay back the card in full right before the promotional period ends. Make sure not to forget that you still need to pay the minimum amount due monthly.

    Understanding card benefits.

    When signing up for a card, or choosing a card to use for a specific purchase, you should review the benefits offered by each card to determine which one is best. Premium cards like the ones mentioned earlier (American Express Platinum and Chase Sapphire Reserve) offer perks such as one year of extended warranty and certain protections during the first few months after a purchase, including accidental damage coverage, accidental loss coverage, and theft coverage.

    If you have a premium card, it’s a good idea to look at stipends that the card provides. Both American Express and Chase have cards that provide monthly travel, food, and entertainment credits. They also cover the cost of TSA PreCheck and Global Entry applications. Each card is different, so get to know yours.

    Even if you don’t have a premium card, it’s still worth reviewing what perks are available to you. More and more everyday cards now include cell phone insurance, car rental insurance (secondary collision coverage, not liability coverage), and more.

    Shopping bonuses.

    Several banks offer bonuses when you complete a qualifying purchase after enrolling in an offer, including American Express, Chase, Bank of America, Citi, and U.S. Bank. Bonuses could be in the form of cash back (like earning a $20 bonus for a $50 purchase) or in the form of extra points (like earning 5x points for a purchase). CardPointers is an excellent extension that allows you to add all available offers at the click of a button instead of needing to enroll one at a time. It aggregates all your merchant offers into one list and tells you which card to use to earn the bonus.

    International transactions.

    When making a purchase on an international website or when traveling internationally, make sure to use a card that doesn’t charge a foreign transaction fee. All of Capital One’s cards do not charge any foreign transaction fees, for example. When you make a purchase internationally, ensure that you are being charged in the local currency instead of accepting the conversion back to U.S. dollars. Let the merchant bill you in their own currency, and let the card perform the exchange. Always decline the conversion at the point of sale. This way, the merchant cannot charge you unfavorable exchange rates or conversion fees.

    When traveling, it’s a good idea to bring a debit card that doesn’t charge foreign transaction fees and automatically reimburses ATM fees. You may end up visiting a cash-only establishment or need local currency to leave a tip for hotel housekeeping. That’s why it’s important to visit an ATM at your destination to withdraw funds. Schwab and Fidelity both have debit cards that include these perks. Remember to always use a secure method at the ATM, such as tapping your phone with Apple Pay to protect against skimming, or at least tapping your physical card instead of inserting it.

    Annual fees.

    There are plenty of credit cards available that charge no annual fee. They can be great cards, like the flat-rate cash back cards mentioned in a previous section. You do not need to worry about paying a fee to keep the card open or keeping track of whether or not you are earning enough in benefits to warrant the fee.

    When you do consider a card with an annual fee, do the math and determine whether the benefits outweigh the costs. For example, the American Express Gold card has an annual fee of $325 at the time of this post. With that annual fee, you get $10 in Uber credit per month ($120 per year), $7 in Dunkin’ credit per month ($84 per year), $50 in Resy credit per half year ($100 per year), and $10 in dining credit per month for certain restaurants ($120 per year). If you fully take advantage of all the credits offered, then you would be using $424 in benefits. That’s excluding the card’s bonus categories that earn you 4x the points at restaurants and groceries, 3x the points on flights, and 2x the points on prepaid hotels through their portal.

    Although the credits can often exceed the annual fee, please do consider whether those are the kinds of purchases that you would have made even if you didn’t have the card. If you’re considering the card above, would you have spent $120 on Uber, $84 on Dunkin’, $120 at participating restaurants (like Five Guys), or $100 at Resy restaurants every year if you didn’t have the card? This is a common pitfall that cardholders never consider. If you’re applying for a credit card for perks that you weren’t already using before, then you’re essentially spending more money that you otherwise wouldn’t have.

    Retention offers.

    If you have a card that charges an annual fee, a good way to get the most out of your card is to ask for a retention offer after the annual fee posts (excluding the first year of ownership). Card issuers don’t typically provide retention offers before the annual fee is charged and won’t usually offer them every single year. One example is American Express, which only extends retention offers after thirteen months have passed from your previous offer. That means you should ask for them every other year (for each Amex card).

    You may need to go through a brief conversation about the card benefits you’re receiving and what else is available. It’s a delicate game of back and forth for a few minutes before agents are permitted to present a retention offer. The retention offer will be similar to a smaller signup bonus, where you need to spend a certain amount of money on the card within a set time period to receive the bonus (like needing to spend $3,000 within three months to earn 50,000 points). Other times, they may simply offer to cover a majority of the annual fee instead. Results may vary, but it never hurts to ask.