Money Management

Sometimes, the kitten distribution system knows what it’s doing. Here are some lessons I’ve learned about raising a foundling kitten. 

It was early April of 2023 when a small black and white kitten with his eyes barely opened toddled out from a twisted pile of old gutters and fencing that was destined for scrap metal pickup. Upon closer inspection, I discovered a total of four, the tuxedo kitten and his three ginger brothers, all tucked safely away by their mom.

For weeks I called rescue groups, trying to get them in somewhere, to no avail. Then one day, that little tuxedo trash kitten came out after me, looking really rough, with both eyes sealed shut with massive amounts of crusty discharge.

That was the day I became a cat owner, and the day I took this little trash kitten to the vet. It had been a very long time since I’d had a kitten in my life, and there were a lot of things I wish I had known to prepare for ahead of time.

The naming of cats…

I told my vet that I would not be naming this kitten, as he wasn’t staying, and to please not put a name on his records beside “kitten” or something similar. I insisted the kitten wasn’t mine, I was just helping him out. But the eye infection was serious and he was quite unwell, so he immediately moved into a crate in my laundry room. At this point, “Kitten” Waterworth became “Gomez the Trash Kitten” and all was lost.

Over the last nine months, I’ve learned a lot about being gifted a kitten by the “cat distribution system,” and a couple of those lessons, at least, might be useful if you find yourself face to face with your own unhinged demon child in fuzzy pajamas.

Owning a kitten isn’t cheap

When I was a small child on the farm in the 1980s, kittens were a dime a dozen and there were at least as many in every barn. They just needed some food and shelter, there wasn’t a lot of focus on pet insurance, vet care, neutering, or any of that. Well, that’s a lot different now.

A new kitten is a huge barrel of expenses, from the vaccination series to keep them safe and healthy to a spay or neuter to keep them from roaming (or burdening you with more kittens) — those first few months add up fast. Gomez cost me $1,000 across his first six months, just to get him up and running. That’s probably a bit more than most in my area, because I also had to deal with his upper respiratory and eye infection in the early days.

I’m currently shopping for pet insurance for him, because although cats are generally quite resilient, all that early illness might go the other way and create a kitten that costs a lot more than the national average of $960 to $2,486 yearly. I must get him coverage before we have to consider dealing with pre-existing conditions that could drive premiums through the roof.

Kittens will try your patience in the best and worst ways

Every morning, every single morning, the moment my feet hit the floor, there’s a thunderous stampede of one, running just in front of me, as if to outrace me to the kitchen. Once there, Gomez throws himself down onto the kitchen carpet, on his back, and shows me his incredibly fuzzy belly.

It’s so fuzzy, you guys.

I always give him a bit of a belly rub, and then he’s off racing through the house in a figure eight, from the living room through the kitchen, into my office where I am writing this very article and where his special hang-out area is, and back again to the living room. It’s a lot before I’ve had my morning tea, really.

But this boundless energy has its dark side, too. For example, the number of times I’ve found him in the bottom of my office trash can eating old receipts and tea bags is too high to count, and the ways that he’s tormented the (pet-safe) plants in both my home and office are remarkable. Every time I think the house is kitten-proof, he finds a new way to attempt to injure himself (another reason I really need to get him the best pet insurance possible).

He also loves to hide around corners and pounce on my elderly dogs, who look at him with a mixture of disdain, anxiety, and eager bemusement. I’ve already taken one of the dogs to the vet twice in the last few weeks for eye problems that I’m about 90% sure are caused by Gomez punching her in the face with his little (giant) 10-pound-kitten paws.

There’s no insurance on the dogs, so he’s in pretty desperate need of a job to pay these mounting vet bills. Anybody hiring?

Despite it all, the experience has been priceless

Gomez came to me at about six weeks of age, and having had baby dogs before, I knew to not squander the tiny window I had. After all, he would be a rebellious teenager soon, and I would need a reminder that there were better days before and they would come again. So, now my phone is stuffed full of kitten photos and my social media is just a lot of clickbait kitten posts.

Even if he’s a pain sometimes, and he costs me a fortune due to unintended consequences, having a trash kitten around has been a great experience. I recommend it wholly, and I hope you find a community that will remind you before you adopt a kitten that the days of terror won’t last forever.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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It pays to get moving when you’re looking for the best mortgage rate. Read on to see why. 

The average 30-year mortgage rate today is 6.62%, according to Freddie Mac. But that doesn’t mean you won’t find a mortgage lender that will offer you a lower rate.

There are different factors that lenders consider when deciding how much interest to charge for mortgage loans. And a big one is your credit score. The higher that number, the more competitive an interest rate you’re likely to snag, since a lender is likely to look at you as a minimally risky borrower if your credit is outstanding.

You should also know, however, that the mere process of applying for a mortgage has the potential to cause your credit score to drop. If you go about that process strategically, though, you can minimize that damage so it’s basically negligible.

It pays to do your rate shopping quickly

When you’re applying for a really large loan like a mortgage, it’s important to lock in the best rate you can qualify for. To that end, you’ll need to apply with different lenders to see what rate each one is willing to give you.

Normally, when you apply for a new loan or line of credit, a hard inquiry is made on your credit report. A single hard inquiry usually won’t cause much damage; it might lower your score by five points or so, which, for the most part, isn’t a big deal.

And it’s especially not a big deal for someone with a credit score in the 800s. A lender is unlikely to differentiate between an applicant with a credit score of 827 versus 822, since both numbers are outstanding.

However, you also don’t want to end up with too many hard inquiries on your credit report. A single five-point hit isn’t so bad. But if you take four different hits of that nature, you’re looking at a 20-point drop. That’s more significant.

The good news, though, is that when you apply for multiple loans of the same nature within a short period of time, it’s generally counted as a single hard inquiry for credit scoring purposes. So if you don’t space out your mortgage applications too much, you might walk away with just a single hard inquiry on your credit report.

How quickly do you have to move?

Equifax says that loan applications made within 14 to 45 days are usually counted as a single hard inquiry, depending on the credit scoring model being used. That’s a pretty wide range, so to play it safe, you may want to stick to the lower end of it.

As such, what you should really do before you start submitting mortgage applications is check out different lenders’ sites, read reviews, and look at roundups of the rates different lenders are offering. That at least gives you a baseline to work with.

It’s also a good idea to check your credit report and credit score before applying for a mortgage. That way, if you spot mistakes on your credit report that paint you in a less favorable light, you can work to correct them before submitting a mortgage application.

Similarly, if your credit score isn’t as high as you’d like it to be, you’ll have a chance to boost your score before submitting your home loan application paperwork. And even a modest boost to your credit score could result in a lower borrowing rate on your mortgage, which could translate into a huge amount of savings over time.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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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Using a personal loan to get out of credit card debt can be a great financial choice, but not in every situation. Learn why this could be a big problem. 

If you have credit card debt, you probably already know you’re paying a pretty high interest rate. The average rate on credit cards was 21.47% as of November 2023. By comparison, the average interest rate on a personal loan during the same time period was 12.35%.

Since the interest rate is so much lower on the typical personal loan, some people might consider taking out a debt consolidation loan and using it to pay off what they owe on their cards. Doing this can reduce the interest rate, and can make it much cheaper and easier to pay off the balance due.

There is, however, one big catch. In some situations, this approach can backfire big time and leave you in much more debt than you started with. Here’s how that can happen.

You could end up deeply in debt if you make this mistake

If you use a personal loan to pay off credit cards, there’s a big risk you’re taking on. The risk comes from the fact that you are freeing up the credit on those cards.

Let’s say, for example, that you had two cards with $5,000 limits each and you owed about $5,000 on one and $4,500 on the other — and you took out a $10,000 personal loan to pay off the balance.

While you previously only had around $500 in available credit on your cards, you now have $9,500 available. And this means you have the option to start charging purchases again.

Unfortunately, you may be tempted to do that. Moving the credit card balances over to the personal loan can make you feel as if you’ve made progress on debt payoff, even though you’ve only shifted the balance and reduced the costs of repayment. You haven’t actually taken any meaningful steps to tackle the debt for good. You may also feel as if you might as well start using the cards again, now that you don’t “owe” on them.

If you do start charging purchases on your cards again that you can’t pay off in full, though, you could quickly end up with a big balance again. But your loan will still be there. If you let things get out of control and max out the $5,000 card again, you’d owe somewhere around $14,500 instead of the $9,500 you’d have owed if you just left the cards alone instead of refinancing them with the personal loan.

How to make sure you don’t charge up your cards again

If you want to avoid this mistake, you should absolutely not even consider taking a personal loan to pay off credit card debt until you are 100% confident you won’t find yourself carrying a balance on the cards again.

To do this, try living on a budget first that involves spending less than you earn. Be consistent in doing this for a few months to see if you can stick to it. And save up at least a small emergency fund of around $500 to $1,000, so you won’t be tempted to reach for your cards to cover unexpected expenses.

By taking steps to ensure that you won’t behave irresponsibly with your cards after transferring the balance of those cards to a personal loan, you can avoid making a very costly mistake that it could be difficult to recover from.

Our picks for the best personal loans

Our team of independent experts pored over the fine print to find the select personal loans that offer competitive rates and low fees. Get started by reviewing our picks for the best personal loans.

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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When you take out a mortgage, most of your early payments go toward covering interest. Learn when you start paying off more of your principal. 

If you’re taking out a mortgage to buy a home, you’re probably already aware that you are going to pay interest in order to borrow. With each payment you make, some of the money will go toward principal while some will go toward interest.

What may surprise you, however, is how little of your monthly payment actually goes toward reducing your balance. Here’s what you need to know about how this works.

Interest eats up a good portion of most of your early payments

The amount of your monthly mortgage payment that goes toward principal changes over time — but at the start of your loan when you first begin making payments, almost all of the money goes toward interest.

There’s a simple reason for that: your monthly payments are the same for the entire life of the loan, assuming you choose a fixed-rate mortgage (which is the right choice for most people, because it provides predictability). At the beginning of the loan, you haven’t paid down any principal. You owe a huge amount of money to your mortgage lender and the interest charges on such a large sum are substantial. So, most of your money goes toward covering them.

Over many years, your balance falls due to the portion of your payment that does go to reducing what you owe. As your balance falls, the interest charged declines. So, more and more of your payment each month goes toward principal, until eventually your balance is very small and you only owe a tiny amount of interest on it.

Here’s what this can look like. Say you borrowed $400,000 using a 30-year fixed-rate mortgage with a 7.00% interest rate. You’d have a $2,661.21 per month payment for the life of the loan. And here’s how much of this payment would go toward principal versus interest every month.

As you can see, your balance falls by a little bit from each payment you make out of your checking account. But the bulk of your money does go to cover the huge interest charges you’re paying since, simply put, paying 7.00% interest on a $400,000 balance is expensive.

You will be chipping away at your debt a little bit each month, but it will be many years until more of your money actually goes towards principal. If you made your first mortgage payment in January of 2024, it would take you until February of 2044 before a greater percentage of your payment went to principal. In that February payment, more than 20 years after you started repaying your debt, $1,331.93 would go toward principal and $1,329.28 would go to interest.

And things only get better from there. Here’s what your last year of payments would look like:

Should you make extra mortgage payments to reduce your principal balance sooner?

As you can see, if you just pay the minimum at the start of your loan, you won’t make progress very quickly. So, you may be tempted to make larger or more frequent payments. If you do, each extra payment you make can go directly to reducing your balance.

For most people, though, this doesn’t make a whole lot of sense. A mortgage is a pretty low interest debt (even at today’s high rates) and you can usually get a better return on investing by putting your money into the stock market. If you itemize on your taxes, you can also deduct mortgage interest on loans up to $750,000. Plus, since your payment stays the same but the value of money falls over time due to inflation, your housing costs effectively get cheaper each month.

Ultimately, it can be frustrating to see your balance fall so slowly. But that’s the nature of the loan. As long as your mortgage is affordable, it’s not something to worry about because each payment does help you build equity and make progress toward a debt-free future.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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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People in financial trouble sometimes stop paying their credit card bill. Learn about the serious consequences and what you can do instead. 

If money’s tight, not paying your credit card bill may cross your mind. It could seem like the only option, especially if it’s between that or not paying more important bills, like your rent. Keeping a roof over your head always takes priority over keeping your credit card company happy.

Even though your credit card bill probably isn’t first on the priority list, it’s not something to skip for long, either. A missed payment that you catch up on within a week or two isn’t a huge issue. The card issuer will probably even waive the late fee if you call and ask. But going a month or longer without paying your credit card can have dangerous consequences.

Here’s what can happen, and what you can do if you’re having a hard time making your payment.

1. You’ll get charged late fees and interest

When you miss your credit card payment, your card issue can charge a late fee. The maximum amount is $30 for your first late fee, and $41 for additional late payments within six billing cycles.

So, miss one payment, and it could cost you $30. Miss the next two, and there goes another $82. That’s $112 in fees within a couple of months.

Your card issuer can also charge you interest when you don’t pay off your card’s full statement balance. Most credit cards have hefty interest rates — the most recent average is 21.47%, according to the Federal Reserve. On a $5,000 balance, three months of credit card interest could cost you over $250.

2. The card issuer could raise your rate

Credit cards have high rates to begin with, but they can get even worse. If you get behind on your payments, the card issuer can apply a penalty APR. Card issuers normally do this when a payment is at least 60 days late.

The penalty APR depends on the card, but 29.99% is the typical rate. This could tack on hundreds of dollars in interest charges.

3. Your credit score will fall off a cliff

Many factors go into your credit score, but your payment history is the most important. If you have a high credit score to start, a single late payment can cause it to drop by as much as 110 points.

Here’s the good news: Your payment needs to be at least 30 days late before it can be reported as late on your credit report. If you miss a payment, but get caught up within 30 days, then your credit will be fine.

Once your credit card is at least 30 days past due, that’s when it can drop your credit score. And the longer your card is past due, the more it will damage your credit.

4. That credit card (and your other credit cards) could be closed

Eventually, your card issuer will decide to cut its losses and close your card. How long this takes varies. Card issuers typically wait until your account is at least 90 days past due. Keep in mind that you’re still responsible for the remaining balance, even after your card issuer closes your account.

If you have any other credit cards, those might be canceled, as well. This can happen even if you made all your payments on those cards. If your credit score drops quite a bit, which is what happens when you don’t pay your credit card, your other card issuers will know about it. They may decide to close your cards with them, because you represent a greater risk than before.

5. You may face legal action

When you open a credit card, you agree to pay any debt you incur with it. If you fail to do that, the credit card company may decide to take you to court.

Some card issuers decide to sell the debt to a collection agency, instead of pursuing it themselves. If that happens, debt collectors will start calling you. And if you don’t come to an agreement with them, the collection agency that owns your debt could decide to sue you.

What to do when you can’t pay your credit card bill

Before skipping it, see if there’s any way you can at least make your minimum credit card payment. For example, see if you can cut spending elsewhere or pick up extra hours at work. The minimum payment is usually just 1% to 2% of your balance, and paying it keeps you current on your credit card.

If not, call your card issuer and explain the situation. Ask if it has a hardship program available. It may give you the option of putting a pause on your payments, lowering the minimum payment amount, or reducing the interest rate. It’s in your card issuer’s best interests to have you continue making payments, so there’s a good chance it will work with you to make that happen.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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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