Money Management

Is bad customer service a deal-breaker when it comes to a bank? Not necessarily. Read on to learn more. [[{“value”:”

If you’ve ever been on the receiving end of poor customer service, you know all too well how frustrating it can be. But while it’s one thing for a store clerk to give you some attitude or for the receptionist at your doctor’s office to be unpleasant when you call with a cancellation, it’s another thing to experience consistently poor customer service from your bank.

In fact, bad customer service is generally considered a good reason to leave your bank. But what if your bank happens to offer a great rate on your savings? If so, that may be reason enough to stay — with some adjustments.

When the bank is simply a place to park your cash

Generally speaking, it’s not a good idea to keep your money at a bank with poor customer service. But if your bank really offers the best rate in town on savings accounts and CDs, then you may want to consider staying put and simply moving your checking account to another institution.

The reason? Your checking account is something you might transact in regularly. Not only might your paychecks land there, but you might pay bills out of your checking account every week and take withdrawals from your checking account when you need money for social outings and one-off purchases.

As such, it’s not a great idea to have money in a checking account at a bank whose customer service leaves much to be desired. Imagine having to wait on hold for 30 minutes every single time a question arises. That’s just not a good situation.

However, if your bank — or another one — has poor customer service but a really attractive interest rate on a savings account or CD, then it could pay to just park your cash there for a while. If that’s money you don’t intend to touch on a regular basis, then you may not have to interact with your bank so much. And as such, poor customer service may not be as much of an issue for you.

Don’t hesitate to escalate

There are different reasons why you might experience poor customer service at a bank. In some cases, it could boil down to technological issues. In other cases, it could be a matter of poor training or getting stuck talking to the one employee who happens to be having a bad day.

If you have a single bad customer service experience at your bank, don’t assume that will be the norm. But if you have a series of poor experiences, that’s something you should escalate so your voice is heard. And you have options there.

First, consider writing a letter to your bank’s customer service department. It might go a lot further than simply telling a single customer service representative that you aren’t happy.

Another option? Reach out to your bank via a social media message and explain your frustrations. You may be surprised at how quickly you get a response.

If you feel like your bank has broken the rules or done something egregious, you can also lodge a complaint with the Consumer Financial Protection Bureau. But in that case, make sure the incidents in question are well-documented. You can also contact your state’s attorney general if you think your bank has overstepped legally.

All told, bad customer service is something you generally shouldn’t put up with. You may decide to make a limited-time exception if your bank’s interest rates are terrific. But in that case, make sure to do your checking elsewhere to minimize your aggravation.

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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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Constantly monitoring your investments isn’t actually a good thing. Read on to see why. [[{“value”:”

Investing money in a brokerage account could do a lot of great things for your future. Over the past 50 years, the stock market (represented by the S&P 500) has rewarded investors with about an average annual 10% return. So if you invest $5,000 this year, in 50 years, you may end up with a brokerage account balance of almost $587,000 — without having to contribute another dime.

Now ideally, your brokerage account will contain a diverse mix of assets, since that can be essential to generating solid long-term growth. And it’s important to check your brokerage account holdings from time to time to make sure your portfolio is well-balanced, and to just plain see how it’s doing.

But one thing you don’t want to do is check your brokerage account on a daily or even a weekly basis. Doing so could mess with your head — and cause you to make decisions that wind up hurting you financially.

When you’re overdoing it

Your brokerage account isn’t something to set and forget. It’s important to keep tabs on how your investments are doing from time to time.

Let’s say you buy shares of a given stock, and those shares keep losing value year after year after year. That’s not going to benefit you. If you never check up on your brokerage account, you may not realize those declines are happening.

At the same time, you don’t want to check your brokerage account too often, either. The reason? The stock market can swing wildly from one day or week to the next. If you check your account constantly, you might get thrown by those market swings. And that might drive you to make rash decisions that cause you to lose money.

Remember, you don’t lose money on stocks unless you sell shares at a price that’s less than what you paid initially. But seeing a loss on screen might prompt you to sell shares at the wrong time.

Let’s take a look at Netflix over the first half of February 2024. On Feb. 1, the stock was trading at about $567 per share. By Feb. 6, it was down to about $556.

Let’s say you were checking your brokerage account every few days and saw that on-screen drop from Netflix. It’s possible you would’ve gotten spooked and sold your shares at $556 to avoid further losses.

Doing so would’ve been a mistake. By Feb. 15, Netflix was back up to about $593.

Quarterly check-ins are generally your best bet

Your brokerage account isn’t something to ignore. But as a general rule, you probably don’t need to check up on it more than once a quarter. That’s a pretty good cadence, because it means you’re staying vigilant without going overboard.

That said, it’s a good idea to time one of your quarterly check-ins to early December. The reason? You may decide to strategically unload some stocks at a loss to save money on your taxes. But that would be a thought-out decision — not the sort of rash one that might ensue by checking your portfolio day after day.

All told, a good strategy for investing in stocks is to buy shares of quality companies and hold them for many years. If you stick to that strategy, daily or weekly portfolio check-ins become unnecessary. So there’s no need to put yourself through that stress.

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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 positions in Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

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I’m an Admirals Club member and I fly a lot, so I’m an airline lounge regular. Find out the best and worst features of American Airlines lounges. [[{“value”:”

My family and I fly a lot because we go back and forth between our houses in two different states. In fact, we take at least six round-trip flights every year, and sometimes more. We always fly on American Airlines and, because of that, we got a credit card that provides us with airline lounge access.

This means I visit American Airlines lounges at least a dozen times annually. Since I’m something of a regular there, I’ve developed a lot of opinions on what’s great about them — and what’s not so good. Here are my favorite — and least favorite — things about visiting them.

These are the things I love about the lounge experience

My favorite features of the lounge experience include:

Comfortable seating: The seats in the Admirals Club lounges I’ve visited are a lot more comfortable than the hard plastic chairs at the airline gates. They’re like standard armchairs where you can stretch out and relax a bit. In some lounges, there’s also a business area where you can sit in an office-style chair to work.Free food and drink: Some food and drink are included at the lounge — enough to make a meal out of. This includes certain alcoholic beverages, although not all alcoholic beverages. We don’t drink, but we’ve asked the bartenders to make mocktails for us and they’re always tasty. The food also tastes pretty decent as well, and there’s usually a soup offering as well as two small entree-type dishes, and some snacks and fruit. We’re able to avoid buying food at the airport for our family of four by eating in the lounge.Decent free wifi: The wifi at the lounge is always free and reliable, unlike some free airport wifi networks I’ve encountered.

In all, the benefits far outweigh the drawbacks, and we would never give up our credit card that gives us this access.

These are the things I don’t like

Although the perks are great, there are also a few downsides. Here are the things I dislike the most about visiting airport lounges:

The food offerings are limited and get repetitive: While you can always find stuff to eat, the selection is limited — and the free items don’t tend to be as filling or fancy as the ones on the menu you can pay for. The lounges also seem to serve the same few foods on repeat, which can get boring if you fly often.Sometimes it’s hard to find a place to sit: In some cases, especially if we fly at crowded times, all of the seats are taken and it’s hard to find a place to sit. This can be annoying when you have limited time and plan to eat there.The quality of the lounges varies a lot: Finally, the quality of the lounges can be pretty inconsistent. In some cases, there’s ample seating and more food offerings, while other airports offer small lounges and limited snacks.

If you’re considering becoming a member of an airline lounge, it’s a good idea to think about whether doing so works for you and your finances. You’ll either have to pay a credit card annual fee (which can be a few hundred dollars), or pay for a daily or annual membership — which also comes at a big cost. For example, daily Admirals Club access is $79 for you and a guest.

Before you sign up for a credit card solely to get access, you may want to try a day pass to the lounge at the airport you’ll be flying out of the most. This can help you determine if the quality of the lounge is good enough to justify the price you’d pay for the card.

You can also check out our list of the best credit cards for airline lounge access to see if any of the cards offer a combination of perks you feel are worth paying for.

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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.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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I’m proud of a few banking moves I made last year. Read on to learn about my personal wins. [[{“value”:”

It’s fair to say that 2023 was an interesting year from a banking standpoint. Not only were savings accounts paying generously, but rates on certificates of deposit (CDs) soared at several points during the year following the Federal Reserve’s numerous interest rate hikes.

There were a few banking moves I made last year that I’m pretty proud of. Here are three in particular I’m glad I made.

1. I built a CD ladder when rates were up

During the first half of 2023, I realized that CD rates were looking very attractive thanks to the Fed’s string of interest rate hikes. I decided to take advantage by putting money into CDs. But instead of opening a single CD, I opted for a laddered approach.

What I did initially was put some money into a 12-month CD. Then, a couple of months later, I opened another 12-month CD, and then did the same a couple of months after that.

I wanted my money in 12-month CDs because my bank had a better rate for that term than any other at the time. But I also made a point to stagger my CDs so portions of my cash would free up at different intervals, thereby reducing my chances of having to cash out a CD early and incur a penalty.

2. I opened a 12-month CD at the end of the year when it became clear that rate hikes were over

December of 2023 marked the third consecutive meeting in which the Federal Reserve opted to leave interest rates unchanged. Since I’d been following the Fed’s meetings, I knew that three rate hike pauses in a row was likely an indication that the central bank was done raising rates, period.

So what I did immediately after that December meeting was open another 12-month CD, even though that was a bit off schedule based on my laddered approach. My logic was that rates would soon start to fall, and I wanted to get in at a time when I could earn more interest on my money.

It turns out I was right. My bank’s current rate on a 12-month CD is no longer as high as it was in December.

3. I kept enough money in my regular savings to cover myself for emergencies

When CD rates started rising, I was very tempted to move as much money as possible out of my savings account. I know full well that the rate on a savings account is never guaranteed, whereas with a CD, your rate is locked in for the duration of its term.

But still, I was careful to keep enough money in savings to leave my emergency fund intact. Many people opt to leave enough money in emergency savings to cover three to six months of essential bills. I like to aim a bit higher due to factors that include being self-employed and having a variable income.

It would’ve been nice to earn a little more money on some of my emergency cash last year. But keeping it accessible in savings was the right move.

Case in point: Late last year, I had to replace the heating system in my home, and it cost me about $12,000. Had I moved too much cash out of emergency savings and into a CD, I would’ve been in a tough spot.

You can learn from my wins

The reason I’m sharing these smart banking moves from 2023 is not to be boastful. Rather, it’s to underscore the importance of laddering CDs, paying attention to interest rate hikes in the context of opening CDs, and keeping yourself covered for emergencies.

At this point, CD rates remain attractive, but this could change in the course of 2024. So if you have money you don’t need for emergencies, consider opening a CD in the next few months. But also consider laddering your CDs to reduce your chances of having to cash out early and face a penalty. And no matter what decision you make as far as CDs go, aim to leave yourself with enough emergency savings to cover three full months of bills at a minimum.

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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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Inflation has cooled. So why aren’t interest rates going down? Read on to find out. [[{“value”:”

In 2022, inflation ran rampant, wreaking havoc on consumers’ personal finances. These days, inflation is in a much better place, and prices aren’t soaring the way they were roughly two years ago.

Despite that, the Federal Reserve hasn’t begun to lower its benchmark interest rate. And the Fed may not start cutting interest rates until the midpoint of 2024. But there’s a big reason for that.

The fight against inflation isn’t over

In June 2022, annual inflation peaked at 9.1%, as measured by that month’s Consumer Price Index (an index that measures changes in the cost of goods and services). By comparison, in January 2024, annual inflation only came in at 3.1%. So all told, there’s been a world of improvement.

However, inflation still isn’t where the Fed wants it to be. The Fed has long maintained that it likes to target a rate of 2% inflation over the long run. It’s this rate, the central bank feels, that’s most conducive to long-term economic stability.

As such, the Fed may not move interest rates at its upcoming March meeting. Rather, consumers may need to sit tight a bit longer for interest rates to start falling.

It pays to bide your time

You may be hoping for interest rate cuts sooner rather than later so you can sign an auto loan, personal loan, or home equity loan at a potentially lower interest rate than what you’d be looking at now. Unfortunately, those rate cuts could still be several months away. If you’re able to wait, do so. Waiting until later in 2024 to put a loan in place could result in lower monthly payments.

That said, there’s one important thing you should try to do between now and when you sign a loan — boost your credit score. The higher that number is, the more likely you are to not only get approved to borrow the sum you want, but also, lock in a more competitive interest rate.

One effective way to boost your credit score over time is to pay all bills on time. And since we could still be a few months away from rate cuts, that’s a good strategy to employ today. Another option is to pay down some existing credit card debt if possible, to lower your credit utilization ratio.

Don’t forget to review your credit report for errors

Of course, paying off credit card debt isn’t easy, especially at a time when inflation, though better than it was before, is still persistent. But one credit score-boosting move that is easy is to review your credit report for errors. Correcting a mistake could result in a nice bump that makes you a more appealing loan candidate.

You can request a free copy of your credit report every week from each credit bureau — Experian, Equifax, and TransUnion. And it pays to check all three at regular intervals for a comprehensive review.

The Fed is likely to start cutting interest rates at some point in 2024. But more progress probably needs to be made on the inflation front for those rate cuts to happen. So for now, your best bet is to wait on signing a loan if possible, but also, to put yourself in the best position to snag an affordable one.

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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 positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Looking to downsize your home? Read on to see why it may not be the savvy financial move you think it is. [[{“value”:”

If you’ve been struggling to keep up with your housing costs, you may be considering the idea of downsizing to a smaller place. Downsizing isn’t just something for retirees or empty nesters to do. There may come a point when you decide that you’re tired of sky-high property taxes and utility bills, and that you’d rather swap your current home for one with less square footage.

In many cases, downsizing a home can result in nice savings. But here are a few financial pitfalls you might encounter in the course of downsizing your home.

1. Having to pay capital gains tax

It’s common for home values to rise over time. But if you sell your home at a profit in the course of downsizing, you might owe the IRS a piece of your profit in the form of capital gains taxes. And that could make it more difficult to pay for a replacement home.

The good news is that there’s a capital gains tax exclusion for homeowners. If you’re single, you don’t pay taxes on your first $250,000 in gains. If you’re married, that exemption rises to $500,000.

But still, let’s say you bought your home for $150,000 a good 20 years ago, and it’s now worth $950,000. If you’re married, you’re still looking at capital gains taxes on $300,000 of that $800,000 profit, which might make it harder to come up with the down payment on your next mortgage.

2. Not being able to find a smaller home due to limited inventory

The National Association of Realtors found that in January, there was only a three-month supply of available homes on the market. It commonly takes up to a six-month supply of homes to meet buyer demand in full.

Because there’s not a lot of inventory to go around, you might struggle to find a smaller home that meets your needs. For example, you might have to go outside your current neighborhood, which may not be desirable. Or you might have to give up certain amenities you’ve come to appreciate.

Another issue you might encounter is having to buy a smaller home that’s outdated. If you’re forced to sink money into making upgrades, it could eat away at your savings.

3. Paying up for a new mortgage on a smaller home

Mortgage lenders are no longer offering the record-low interest rates on loans that they were a few years ago. Quite the opposite — mortgage rates are relatively high today, so much so that downsizing may not save you as much money as expected.

The average 30-year mortgage rate as of this writing is 6.9%, per Freddie Mac. But if you bought a home prior to 2023 or refinanced during the pandemic, the rate on your current mortgage may be a lot lower.

In fact, let’s say you’re paying 3% interest on a 30-year fixed $500,000 mortgage today. That’s a monthly payment of $2,108 for principal and interest. If you were to swap that for a $300,000 mortgage at 6.9%, you’d be looking at $1,976 a month instead.

That’s some savings — $132 a month’s worth. But all told, you’re saving under $1,600 a year. That may not be worth the stress and hassle of moving.

Of course, downsizing could also mean saving on expenses like property taxes and utilities. But still, your overall savings may not be so substantial due to the high cost of signing a mortgage today.

Downsizing your home isn’t necessarily a poor choice. For a lot of people, it could make financial sense. Just be mindful of these pitfalls as you weigh your options.

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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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