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Money Management

Mar 26
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3 Expenses You Should Never Put on a Credit Card

By Money Management No Comments

Credit cards can be a good way to pay some of your bills, but definitely not all. Keep reading for a few examples of expenses better paid in other ways. [[{“value”:”

Image source: Getty Images

I charge almost everything on my credit cards to earn rewards. In fact, I’m a huge proponent of using cards regularly because they make it easy to track your spending, they can help you get cash back or points that reduce your costs, and they can help you build good credit.

But there are some expenses you absolutely shouldn’t put on a card. Read on to find out why charging some items could be a disaster for your personal finances.

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1. Mortgage or rent payments

Mortgage and rent payments cannot be paid directly with a credit card in most situations. You’d have to take a cash advance to get money from your card, which typically is very expensive.

It’s common for a cash advance to come with a higher APR than regular purchases on your card and there’s often an upfront fee that could range from 3% to 5% of the amount of cash you’re accessing from your card.

Third party services like Plastiq can make it possible to pay your mortgage with a card — but you’ll have to pay an added transaction fee that could be as high as around 3.5%.

Making your housing costs more expensive by charging them is not a good idea. You should not take out a home loan if you aren’t confident you can pay the monthly payments out of your bank account. And if you are struggling to cover the payments on an existing mortgage, you should call your lender and find out about options rather than just charging your payments. Your lender may be able to work with you on a payment plan until you get back on track.

2. Medical bills

Charging medical bills is also a bad idea in most cases. Paying interest on medical debt can get expensive and it’s often cheaper to work out a payment plan with your provider.

Medical debt is also treated differently than credit card debt. For example, it can’t show up on your credit report if it’s in collections, unless the balance is above $500. Plus, you have to be at least a year behind for debt in collections to show up on your report.

You don’t want to give up the special legal protections afforded to medical debt, nor pay more in interest than you have to, so don’t put medical bills on your cards. If you can’t afford to cover care out of pocket, first talk with your providers to find out what options you have.

3. Impulse purchases you can’t afford

You should also make absolutely sure you do not charge any impulse items you can’t afford to pay off in full on your credit cards. Doing this even a few times could make it harder to stick to your budget and leave you carrying a balance that can haunt you. If there’s a non-essential item you want, save up to pay for it in cash before you buy. The extra time spent saving also allows you to really think the purchase over before you commit to making it. It could be that you decide the purchase isn’t worthwhile, thus saving yourself money in the long run.

The good news is you have alternatives to charging these expenses. Take advantage of them, and leave your credit cards in your wallet in these situations.

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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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Mar 26
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Here’s Every Vehicle That Qualifies for an EV Tax Credit in 2024

By Money Management No Comments

EV tax credits can take some of the sting out of those high price tags. Here’s a look at which vehicles qualify for them in 2024. [[{“value”:”

Image source: Getty Images

Electric vehicles (EVs) have become a popular way to get from point A to point B while reducing your carbon footprint. But there are a few factors that have kept them from earning a place in every American’s garage.

One of the biggest is their high price tags. The IRS offers a tax credit worth up to $7,500 for buyers of new EVs to help with this, but only certain vehicles qualify. Here’s what you need to know if you’re thinking about buying one this year.

The vehicles that qualify for an EV tax credit in 2024

If you hope to claim an EV tax credit for a new vehicle, you’ll have to purchase one of the following 34 models:

Make Model Model Year Vehicle Type Credit Amount MSRP Limit Audi Q5 PHEV 55 TFSI e quattro 2023-2024 Plug-in Hybrid $3,750 $80,000 Audi Q5 S Line 55 TFSI e quattro 2023-2024 Plug-in Hybrid $3,750 $80,000 Cadillac LYRIQ 2024 All-Electric $7,500 $80,000 Chevrolet Blazer EV 2024 All-Electric $7,500 $80,000 Chevrolet Bolt EUV 2022-2023 All-Electric $7,500 $55,000 Chevrolet Bolt EV 2022-2023 All-Electric $7,500 $55,000 Chrysler Pacific PHEV 2022-2024 Plug-in Hybrid $7,500 $80,000 Ford Escape Plug-in Hybrid 2022-2024 Plug-in Hybrid $3,750 $80,000 Ford F-150 Lightning (Standard Range Battery) 2022-2024 All-Electric $7,500 $80,000 Ford F-150 Lightning (Extended Range Battery) 2022-2024 All-Electric $7,500 $80,000 Honda Prologue 2024 All-Electric $7,500 $80,000 Jeep Grand Cherokee PHEV 4xe 2022-2024 Plug-in Hybrid $3,750 $80,000 Jeep Wrangler PHEV 4xe 2022-2024 Plug-in Hybrid $3,750 $80,000 Lincoln Corsair Grand Touring 2022-2024 Plug-in Hybrid $3,750 $80,000 Nissan Leaf S 2024 All-Electric $3,750 $55,000 Nissan Leaf SV Plus 2024 All-Electric $3,750 $55,000 Rivian R1S Dual Large 2023-2024 All-Electric $3,750 $80,000 Rivian R1S Quad Large 2022-2024 All-Electric $3,750 $80,000 Rivian R1T Dual Large 2023-2024 All-Electric $3,750 $80,000 Rivian R1T Dual Max 2023-2024 All-Electric $3,750 $80,000 Rivian R1T Quad Large 2022-2024 All-Electric $3,750 $80,000 Tesla Model 3 Performance 2023-2024 All-Electric $7,500 $55,000 Tesla Model X Long Range 2023-2024 All-Electric $7,500 $80,000 Tesla Model Y All-Wheel Drive 2023-2024 All-Electric $7,500 $80,000 Tesla Model Y Performance 2023-2024 All-Electric $7,500 $80,000 Tesla Model Y Rear-Wheel Drive 2024 All-Electric $7,500 $80,000 Volkswagen ID.4 AWD Pro 2023-2024 All-Electric $7,500 $80,000 Volkswagen ID.4 AWD Pro S 2023-2024 All-Electric $7,500 $80,000 Volkswagen ID.4 AWD Pro S Plus 2023-2024 All-Electric $7,500 $80,000 Volkswagen ID.4 Pro 2023-2024 All-Electric $7,500 $80,000 Volkswagen ID.4 Pro S 2023-2024 All-Electric $7,500 $80,000 Volkswagen ID.4 Pro S Plus 2023-2024 All-Electric $7,500 $80,000 Volkswagen ID.4 S 2023-2024 All-Electric $7,500 $80000 Volkswagen ID.4 Standard 2023-2024 All-Electric $7,500 $80,000
Data source: Internal Revenue Service.

There are other requirements you have to meet as well, including:

Purchasing the vehicle for your own use, not for resaleUsing it primarily in the United StatesHaving a modified adjusted gross income (MAGI) below:$300,000 for married couples filing jointly$225,000 for heads of household$150,000 for all other filers

For the last one, you can use your MAGI from the year you take delivery of the vehicle or the year before, whichever is less.

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The dealer will be able to determine the eligibility of the vehicle at the time of sale, but it doesn’t have to verify that you meet the buyer requirements listed above. That’s on you. If you claim the full credit when you don’t actually qualify for it, you’ll have to pay the IRS back at tax time.

You can either request that the dealer apply the credit at the time of purchase, effectively reducing your purchase price, or you can wait and claim the credit when you file your 2024 taxes. Either way, you’ll need to fill out Form 8936 to claim it.

Even with a credit, you’ll probably still pay quite a bit for your EV. And then you have other costs, like charging station visits and car insurance to think about. Make sure you’re comfortable with this before you go ahead with the sale.

What if your vehicle doesn’t qualify for a tax credit?

If the vehicle you’re interested in doesn’t qualify for a credit, you may want to consider switching to a different model. Review the options in the above table to see which stands out the most to you.

You could also explore used EV options if you can find any near you. Select used EV models could also qualify for a tax credit worth up to $4,000.

Or it just might not be the right time for you to invest in an EV. That may not be what you want to hear, but waiting could be the best thing for your wallet right now. As electric vehicles become more mainstream, their sticker prices and associated costs, like auto insurance, will come down.

Give it some time and look for an EV in a few years. Just keep in mind that the rules surrounding EV tax credits may change during this time. And other factors, like the availability of insurance discounts for EVs, may have changed as well. Make sure you review all of the associated costs before moving ahead with your purchase.

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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.Kailey Hagen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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Mar 26
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10 Places Where Americans Can Live Large on $100,000

By Money Management No Comments

 In these big cities, the purchasing power of a $100,000 salary is highest. Prostock-studio / Shutterstock.com

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend. There are places in America where it’s tough to get by, even if you make six figures. However, in other cities, you can really live large once your income hits $100,000. Recently, SmartAsset looked at where in the U.S.

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Mar 26
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10 High-Paying Jobs That Are Ideal for Introverts

By Money Management No Comments

 Discover a lucrative future without leaving your comfort zone. Roman Samborskyi / Shutterstock.com

Many workers look forward to heading to an office every day and closely collaborating with peers on important projects. But others prefer a more solitary approach to work — and life. Introverts tend to do their best work when left alone. Recently, the website ResumeGenius identified high-paying jobs suitable for introverts. In compiling its list, ResumeGenius looked at federal data from the U.

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Mar 26
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Pros and Cons of ‘Cash Stuffing’ to Save Money in 2024

By Money Management No Comments

Have you tried the latest TikTok personal finance trend of “cash stuffing”? See why cash stuffing can be a good idea — and why you still need a bank account. [[{“value”:”

Image source: Upsplash/The Motley Fool

“Loud budgeting” isn’t the only big TikTok personal finance trend. Some Gen Zers are also using social media to proclaim their enthusiasm for a way of budgeting that is much more old fashioned. Older generations might know it as “the envelope method.” But Gen Z calls it “cash stuffing.”

With cash stuffing, Gen Zers are trying to regain control of their personal finances by spending only cash, and by assigning their cash toward specific purposes, categories, and goals. Cash stuffing videos have gotten millions of views on TikTok, where creators share details about their paychecks, monthly budgets, and future goals — and show videos of their visually appealing cash piles, binders, money-sorting organizers, and envelopes.

But is cash stuffing a good idea for your budget? Let’s look at a few possible pros and cons of cash stuffing for Gen Z — or people of all ages — who want to save more money in 2024.

Cash stuffing: Why it could be the best way to budget cash

Many Gen Zers are looking for a higher level of clarity and proactive planning for how to spend and save; cash stuffing is a response to this understandable need for control.

Here are a few good reasons to try cash stuffing.

Cash stuffing advantage No. 1: Seeing is believing

There’s an old saying that “out of sight is out of mind.” Sometimes the convenience of credit cards and online bill pay causes people to lose track of their spending — before you know it, you’re spending more than you can afford.

Cash stuffing lets you literally see and handle your money, right before your eyes. Seeing an entire paycheck as a pile of cash might feel more “real” than just another number in a bank account. Some people might find that they’re less likely to impulsively spend cash.

Seeing a pile of cash sitting on your kitchen table, it might feel harder to just go out and shop; you might feel that cash is easier to save. If cash stuffing could help you better understand the value of a dollar — and figure out how to save more dollars — then it’s a good thing.

Cash stuffing advantage No. 2: Setting goals

Another trend in the TikTok videos about cash stuffing is that many of these Gen Zers like to use multiple cash stuffing envelopes for specific goals. They’re stuffing money into a wide range of categories, some short-term like “paying off my phone” or longer-term like “saving for a deposit on a new apartment.” Cash stuffing can be a useful way to salt away some extra cash for specific purposes, like a vacation or fun spending money.

Cash stuffing advantage No. 3: Flexible, targeted spending (and saving)

A big advantage of cash stuffing as a budgeting method is that it’s flexible. This makes it a good choice for gig workers, people who get paid in cash, who work multiple jobs, have inconsistent work schedules, or otherwise have paychecks that aren’t the same from month to month.

Cash stuffing can give you a higher level of control over where your money goes. It gives you the reassurance of saying, “I need $900 for rent by the end of the month, and I just stuffed $300 into that envelope.” Or if you get some extra money from a side hustle or a week of working overtime, you can stash that cash according to your most important goals.

Cash stuffing drawbacks: Why you might want to keep your money in the bank

I’m always in favor of people getting excited about personal finances and saving money. But cash stuffing also poses a few big drawbacks and possible risks.

Cash stuffing disadvantage No. 1: Your money could get lost or stolen

Do you really want to have hundreds or thousands of dollars sitting in your home? What if your cash gets lost, stolen, or destroyed in a house fire or natural disaster? Hopefully none of those misfortunes will happen to you, but if they do, you’re out of luck.

Keeping your money in the bank gives you FDIC insurance. Even if the bank gets robbed, burns down, or goes out of business, your money is still safe. The safety of a bank account cannot be surpassed by cash stuffing.

Cash stuffing disadvantage No. 2: Binders and envelopes don’t pay interest

If you’re saving for a long-term goal, or even a shorter-term goal like a vacation or a new car, why not keep your money in a high-yield savings account? (Maybe the cash stuffers are already doing this after they sort their cash from each paycheck; I hope so!)

You deserve to earn interest on your savings. Putting your savings in an interest-bearing savings account can help your money grow faster — and watching that number get bigger each month feels really good.

Cash stuffing disadvantage No. 3: Paying in cash doesn’t build credit

If you want to build credit history and improve your credit score, you can’t just use cash — you need credit cards or other credit accounts. If you want to use cash stuffing to get your money organized each month and make sure you have enough for your bills, that’s great. But consider using credit cards to actually make some payments and increase your FICO® Score.

Bottom line

If cash stuffing can help you feel more confident about controlling your monthly spending, then go for it! But be aware of the possible risks and drawbacks. Even the most passionate Gen Z cash stuffers can benefit from a bank account, credit cards, budgeting apps, and other convenient features of the financial system.

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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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