Money Management

Credit card debt is usually expensive, but if you’re taking advantage of a 0% APR offer for an important purchase, it may not be so bad. Find out why here. [[{“value”:”

Pretty much everyone has heard the advice that you should never carry a credit card balance. And in general, this is pretty good financial advice. The average credit card interest rate is 21.47%, and who really wants to make all of their purchases cost that much more?

There is, however, one exception to the general rule that you should avoid credit card debt at all costs. In fact, in one particular circumstance, borrowing on your cards may actually make the most financial sense.

Here’s what that situation is, along with some tips for how to decide whether using your card in this way could be a good move.

Credit cards come with a huge interest rate — except in this situation

The one situation where carrying a credit card balance could be a good move is if you can get a card offering a 0% promotional APR on purchases in order to fund an essential purchase that you need but cannot afford to pay cash for.

Let’s say, for example, some expensive part like a transmission goes out on your car. If you need $2,000 to replace it so you can get to work and you have a card with a 0% promotional APR on purchases, you could charge that transmission rather than, say, taking out a personal loan for it.

A 0% promotional APR is usually good for purchases you make within a certain time period after you get the card, so you might need to get a new credit card in order to do this. And it’s usually good for a limited period of time, such as 12 months or 15 months. So, if you got a new card to charge your $2,000 transmission and had 15 months to pay back the money without interest, you might be able to avoid borrowing costs altogether by paying $133.33 each month for 15 months until the balance is repaid in full.

A 0% promotional APR card would be your only real opportunity to do that, unless you could come up with money from savings or borrow from a loved one interest free. Outside of those situations, paying no interest far beats paying for personal loan interest (especially given that the average rate on a personal loan right now is 12.35%).

The caveat, though, is that if you don’t pay back the borrowed amount by the end of the 0% period, you’d have to pay interest at the card’s standard rate on any balance that remains. This could get expensive, especially if you have a big balance left on your account. So you’d want to be sure you could pay off the balance before the 0% rate ended.

Should you use a 0% APR card for a big purchase?

Using a 0% APR card can be the most affordable borrowing option out there. But that’s true only if you are 100% confident you’re going to pay enough to become free of credit card debt before you get stuck with months of interest at the standard rate. Figure out exactly how much you’d need to send to your creditors each month and work that amount into your budget.

Since there’s always some risk to taking on credit card debt (for example, you’d still be responsible for paying it if you lost your job or suffered from other unforeseen hardship), you don’t want to charge non-essential purchases at all. So, unless the purchase is an important one, save up to pay in cash rather than relying on a 0% APR card and risking something going wrong in the end.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Two of your favorite Costco buys may be inflation-proof for quite a long time. Read on to learn more. [[{“value”:”

Inflation is something a lot of consumers are familiar with these days due to recent spikes. In 2022, annual inflation peaked at 9.1% during the month of June. And that did a number on a lot of people’s personal finances.

Even though the pace of inflation has slowed since 2022, consumers are still paying up for expenses like groceries, utilities, and apparel. And while Costco has done its best to maintain its low prices in the face of inflation, you’ve probably noticed that some of the items at your local warehouse club store are more expensive these days than they were a few years ago.

But there are two items at Costco whose prices haven’t risen since inflation started surging. And those specific items may be immune to inflation for the foreseeable future.

You won’t pay more for these favorites anytime soon

There are certain deals that Costco has come to be known for. One is the $1.50 hot dog–and–soda combo that you’ll find at the food court. The other is the $4.99 rotisserie chicken.

Costco’s long-term CFO Richard Galanti made a point to keep these ultra-low prices locked in despite raging inflation so that customers could get some relief from surging costs. And even though Galanti stepped down from that role on March 15, prior to his departure, when asked in an interview about the price of the hot dog–and–soda combo, his response was, “It’s probably safe for a while.” Galanti also echoed that sentiment for the chain’s rotisserie chicken.

This doesn’t mean that the cost of the combo or rotisserie chicken won’t rise at some point down the line. First of all, with a new CFO could come changes that include a shift in prices. And while Costco may not make changes to its prices for these popular items in 2024, that doesn’t mean they won’t rise eventually. But for now, consumers don’t need to stress about having to shell out extra money.

Keep your fixed expenses on the low side to brace for inflation

It may be quite some time before you find yourself having to spend more on a Costco hot dog or chicken. But the cost of these and other items could rise in time due to inflation.

Remember, the inflation we’ve experienced in recent years has been beyond the norm. But moderate inflation is extremely normal, and it’s something everyone should anticipate.

One of the best things you can do to cope with rising costs is to keep your fixed expenses on the low side. You can’t help it if the cost of your cable and internet bundle rises from $89.99 a month to $97.99 from one year to the next. But you can make a point to sign a fixed-rate mortgage you can easily cover the payments on, so you’re only spending a small portion of your paycheck on housing. And similarly, you can buy an inexpensive car so your auto loan payments for the next five years are nice and manageable.

It’s natural for consumer expenses to rise with time — even at a store like Costco. But even if the cost of a Costco hot dog–and–soda combo or rotisserie chicken never increases, most of your other bills probably will. The best way to avoid getting hurt financially is to limit what you spend on the expenses whose costs you can lock in for many years.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Gala. The Motley Fool has a disclosure policy.

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The tax-filing deadline is almost here. Read on for some last-minute tips you might need. [[{“value”:”

As of the week ending March 8, the IRS had received more than 62 million tax returns and issued more than 43 million refunds. But since the April 15 deadline hasn’t yet arrived, there’s a good chance those numbers will grow quite a bit as the season chugs along.

At this point, though, you really only have a short amount of time to complete your taxes. And you might be feeling the pressure. With that in mind, here are a few last-minute tax tips that could help you avoid problems.

1. File your return electronically

If you’re someone who’s historically filed a tax return on paper, you may be inclined to do so again this year. But you should know that filing electronically may reduce your chances of making an error. And that could lead to your refund arriving sooner, assuming the IRS owes you money.

You should also know that if your adjusted gross income is $79,000 or less, you’re eligible to file your taxes electronically for free. Check out this page about IRS free filing to learn more about how to submit your tax return without having to pay.

2. Make sure you’re entering the correct Social Security number

If you make a math mistake on your taxes, the IRS will usually try to reconcile an error like that rather than reject your tax return outright. But if you botch your Social Security number, you may have your return rejected.

Do yourself a favor and check that number carefully before submitting your return. Once you’ve done that, walk away for a few minutes, clear your head, and then check it one last time just to be sure.

3. Double-check your bank account and routing number for direct deposit

If you’re due a tax refund from the IRS, signing up for direct deposit is a good way to get that money sooner. But if you botch your bank account details, you might delay your refund substantially.

Make a point to double-check not just your bank account number, but the routing number you put in. If you put in the wrong banking details, what may happen is that the IRS issues your refund to the wrong account. Often, in that case, the receiving bank will reject the deposit and send it back to the IRS, at which point the agency will issue you a check. But all told, that could delay your refund by many weeks.

4. Get an extension if you’re down to the wire and won’t be done on time

If April 15 is getting closer and you don’t think you’ll manage to get your tax return done on time, make sure to request an extension. An extension won’t give you more time to pay your taxes should you owe money, though. So if you’re late paying your 2023 tax bill, you’ll incur interest and penalties even with an extension in place.

However, when you owe the IRS money, there’s a costly penalty for failing to file a tax return on time. An extension will get you out of that penalty so you can take an extra week or two if needed to finish up.

Filing taxes electronically and checking your numbers carefully could spare you a world of hassle when submitting your 2023 return. And if you don’t think you’ll make it by April 15, remember that an extension is a fall-back option every taxpayer is entitled to.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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With all the choices of where to put your savings, who should put money into a CD? Check out our list to see if a CD is right for you! [[{“value”:”

The banking industry is seeing high demand for CDs in 2024. The top CDs are offering high APYs, and savings account APYs could be coming down soon if the Federal Reserve decides to cut interest rates this year.

However, CDs are not the best choice for everyone’s savings. Many people have misconceptions that CDs are always better than savings accounts, or that CDs are the “only” place to keep your money if you want to earn interest.

The truth is that CDs can be a great fit for some investors. Here are a few examples of people who should strongly consider opening a CD in 2024.

1. Retirees who need income from their cash

Are you retired and living off of your retirement savings? If so, opening a CD in 2024 should probably be part of your financial plans. The top CDs in 2024 can give you a better yield on your cash than even the top high-yield savings accounts.

As a retiree, you’re no longer in the stage of life where you have to save money and invest for the future — you’re living in the future! You are “future you.” Congratulations! Since you don’t have to worry about saving that cash for other possible goals, your No. 1 priority is to maximize your yield. You don’t need the flexibility of a high-yield savings account, you just need maximum income. And that means investing in the top CDs could be the best option for your cash.

2. People who just received a windfall

Have you recently received an influx of one-time cash that you weren’t expecting and don’t need to spend right away? It doesn’t have to be life-changing money like winning the lottery, but any kind of one-time windfall deserves special handling. If you got a big tax refund, a bonus at work, a cash gift from relatives, an inheritance, proceeds from the sale of a home, a legal settlement, or any other one-time money, you might want to put that cash into a CD.

Here’s why opening a CD is a good choice for windfall money.

CDs are a one-time decision

Windfalls are “one-time” money, and most CDs require you to deposit money on a one-time basis. Unless it’s a special type of CD, you’re not allowed to deposit additional cash each month like you can with a savings account.

CDs pay a fixed rate

With a CD, you know you’re going to get a guaranteed rate of yield on your cash. That can be comforting if you’re trying to decide what to do with a larger-than-usual chunk of money.

CDs give you time to plan

CDs require you to commit your money for a set period, like six months or one year or longer. If you just received a windfall and aren’t sure how or when to spend it or invest it, socking away that money in a CD can give you some mental breathing room before you have to make any larger decisions. And your money can earn a good APY in the meantime.

3. People who need extra “nudges” to save money

I don’t want to open a CD in 2024 because I don’t want to lock up my money. But some people might see that level of commitment as a feature, not a bug. Sometimes locking up your money in a CD can be good for you.

This is one of the few reasons why a CD is better than a savings account: for some people, too much flexible access to your savings can be a bad thing. If you struggle to save, or need extra motivation to leave your savings untouched, a CD could be a better choice. Sometimes we all need incentives, guardrails, and nudges to improve our financial decisions; CDs “force” you, in a good way, to leave your savings in the bank and let your money grow.

Bottom line

I’m not the biggest fan of CDs. The top high-yield savings accounts are paying APYs that are almost as good as the top CDs, without making you lock up your money. But for some people and investment situations, opening a CD could be your best choice.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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