Money Management

Some credit behaviors are obviously good or bad. Others are sometimes misunderstood. Keep reading for a few credit score dos and don’ts. 

There are some financial behaviors that are obviously good for your credit score, such as paying all your bills on time or paying your credit card balances down. And there are other behaviors that are obviously bad, such as maxing out your credit cards or missing a mortgage payment.

On the other hand, there are some credit behaviors that are often misunderstood by consumers. Here are three that might have the opposite impact on your credit score than you may think.

Keeping old credit cards open

If you have an old credit card that you rarely use, it might seem like a smart move to close it and simplify your finances. And from a pure financial responsibility standpoint, it may be, especially if you have other credit cards that cover your financial needs.

However, closing unused credit cards — especially those that have been open for years — can have a negative impact on your credit score.

Specifically, 15% of your FICO® Score comes from a category called “length of credit history.” Among other time-related factors, this includes the average age of all of your credit accounts and the ages of your individual accounts. By removing one of your oldest credit accounts from the mix, it can hurt this category of your credit score.

That’s not all. One of the largest categories of FICO scoring is “amounts owed.” And a big part of this is your total credit card balances relative to your available credit. By closing an account, especially one with no balance, you’re removing that card’s limit from your available credit, which could raise your total credit utilization.

Getting several different types of credit accounts

Did you know there is a category called “credit mix” that makes up 10% of your FICO® Score?

In a nutshell, this category considers the variety on your credit report. In other words, if you have a mortgage, auto loan, and credit card, it could be more favorable than if you simply had three credit cards. The idea is that lenders want to see that you can be responsible with all sorts of credit accounts, not just one specific type.

Asking for higher credit limits

Here’s an odd one. It might seem like negative credit behavior to ask your credit card issuers to raise your limits. But it can be a very positive move when it comes to your credit score.

Here’s why. I mentioned earlier that a big part of your credit score comes from a category called “amounts owed.” This accounts for 30% of your FICO® Score and considers factors like your credit card balances as a percentage of your available credit (known as your credit utilization).

Think of it this way. Let’s say that you have three credit cards with a combined limit of $10,000 and total balances of $4,000. You’re using 40% of your available credit. But let’s say that you get your issuers to increase your limits to $12,000. Now you’re only using 30% of your available credit, even though your balances are exactly the same. This is a much better number from a credit utilization standpoint.

Not an exhaustive list

These are just three examples of credit score factors that are often misunderstood. And of course, not all of them apply to everyone — for example, not everyone has an old, unused credit card. But understanding them and using them to your advantage can help you maximize your credit score, and prevent your score from taking a hit that you weren’t expecting.

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My Executive membership from Costco more than pays for itself. Read on to see why I’m able to easily rack up cash back. 

Years ago, I was checking out at Costco when I was asked if I wanted to upgrade my basic membership to an Executive one. Since I was starting to shop at Costco more frequently, I decided to take the plunge. And it’s since paid off big time. Last year, I earned more than $100 in cash back on my Costco membership without making any especially large purchases.

How the Costco Executive membership works

An Executive membership at Costco costs more than a basic one. Right now, you’ll pay $120 for the former and just $60 for the latter. Despite that higher cost, the Executive membership is pretty popular. As of the end of Costco’s last fiscal quarter, the company had 32.3 million Executive members.

The primary benefit of the Executive membership is earning 2% back on your Costco purchases. Those include online purchases and travel packages you book.

It takes just over $3,000 in annual Costco spending for an Executive membership to make financial sense. That’s because you’re spending an extra $60 on that membership, and 2% of $3,000 is $60. So to put it another way, $3,000 is your break-even point, and if you spend a bit more, you’re going to come out ahead financially with an Executive membership.

How I snagged more than $100 back from Costco

In the past, I’ve made my share of larger purchases from Costco — things like laptops and TVs. But these aren’t items I buy regularly. If anything, they’re things I buy every few years.

In fact, last year, I didn’t make any particularly large purchases at Costco. But even so, I managed to snag more than $100 back on my Executive membership by simply shopping at the store weekly and spending about $100 to $150 per trip.

While some people only go to Costco on occasion to stock up on certain bulk items, I shop there weekly. Costco is my go-to source for things like milk and dairy products, sandwich meat, produce, and snacks (which my kids tend to consume a lot of). And a lot of my Costco shopping replaces regular supermarket shopping, only at a lower cost.

So, assuming I go to Costco 50 weeks out of the year and spend $100 each time, that’s $5,000 in spending, and 2% of that is $100. Because my weekly haul sometimes exceeds $100, it’s easy to see why my annual reward last year was a little more than $100.

Does an Executive membership make sense for you?

If you consider yourself an occasional Costco shopper, then a basic membership might make the most sense. But if you tend to shop at Costco on a regular basis, then chances are, you’ll come out ahead financially with an Executive membership.

Don’t just guess at a decision, though. Go to customer service at Costco and ask to see what your total spending amounted to over the past 12 months. That’s information a customer service representative can access by pulling up your account.

If that total is over $3,000, it pays to get the upgraded membership. If that total is less, stick with a basic membership unless you expect to start spending more at Costco in the coming year for a specific reason. And if you’re right on the cusp, you may want to take a chance on the Executive membership — especially since Costco will let you downgrade at any time and refund you the difference if you don’t earn enough cash back to make up your $60 upgrade fee.

When I upgraded to my Executive membership at Costco, I was hesitant at first. I now see that move was a no-brainer for my personal finances. Run the numbers to see if you’re in a similar boat and can benefit from an upgraded membership like I do.

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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. The Motley Fool has a disclosure policy.

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You can get groceries delivered for as little as $6.95. Find out the most affordable grocery delivery services. 

Okay, great, you can snag fast grocery delivery…wait a darn minute. For how much extra? Sheesh. You have lines you won’t cross, one of which is affordability. You’d rather wait a little longer for food than pay up for it.

No worries. There are a handful of grocery services that get you food for cheap.

Here are five affordable grocery delivery services, ranked:

KrogerWalmartAlbertsonsCostco 2-Day DeliveryAmazon Fresh

Read on to compare fees and discover which one is right for you.

1. Kroger

Kroger is the largest grocery store in the U.S., with nearly 2,800 stores in 35 states. Kroger offers two grocery delivery options. The most affordable, Kroger Deliver, charges shoppers a low $6.95 fee for next-day delivery. It’s one of the lowest delivery fees out there — very cheap.

Membership discount: Kroger Boost members get free 2-hour or same-day delivery as part of their $99 annual membership. Members must order $35 or more for this discount to apply.

2. Walmart

Walmart is a chain that boasts everyday low prices, operating approximately over 10,000 stores and clubs in 19 countries, as well as e-commerce websites. It’s a big deal, and it offers big discounts to match. Walmart only charges non-members $7.75 to $9.95 for same-day grocery delivery.

Membership discount: Walmart Plus members get free shipping on orders above $35. An annual membership costs $98. Tips are optional. Shoppers who order grocery delivery from Walmart at least once per month would save money by subscribing.

One perk that sets Walmart apart from other online grocers is it doesn’t inflate prices on its website. According to Walmart, items cost the same online as they do in store. You can save an extra 6% or so by checking out with a grocery credit card.

3. Albertsons

Albertsons is one of the largest food and drug retailers in the U.S., chugging along in 35 states and the District of Columbia. Many stores offer shoppers easy delivery and only charge $9.95. You must create a free Albertsons account to add items to your cart.

Tip: Scroll to the bottom of the Albertsons website when shopping. Often, online grocery stores offer hidden deals to first-time shoppers. Keep an eye out for promo codes.

4. Costco 2-Day Delivery

Costco is one of the biggest wholesalers around. Unless you’re buying alcohol in California or ordering through Instacart, it’s members-only. However, prices for nonperishable items are cheap enough to place Costco third on this list. Members can get free delivery on them, too.

An annual Costco Gold Star membership costs $60. If you order from Costco once per month, that’s about $5 per order. It’s a good deal. However, you must add $75 or more worth of items to your cart to qualify for free two-day delivery. Plus, you can only order nonperishables through Costco.

To buy perishable items (like frozen foods and dairy products), you must order through Instacart, which charges delivery fees and marks up the price of items by 15% or so. You typically tip Instacart shoppers, which can bump your total expenses even more. To save on perishables, consider shopping in-store.

5. Amazon Fresh

Amazon Fresh is a grocery delivery service offered by Amazon, a delivery juggernaut. You must be an Amazon Prime member to order through the service. An annual Prime membership costs $139, and you must pay shipping fees if you add less than $150 of goods to your cart.

Amazon Fresh is expensive if you only sign up for the Prime membership to get grocery delivery. Alternatives like Walmart or local grocers may be cheaper. But current Amazon members who order big may want to take advantage of the service — it’s fast and easy.

The most affordable grocery delivery service

Though Kroger has taken the No. 1 spot on this list, competitors that typically charge more may lower prices for the holiday season. Amazon Fresh has lowered its threshold for free delivery to $100 minimum for the holidays — keep an eye out for other discounts near you.

Third-party delivery services like Instacart and DoorDash didn’t make this list because they prioritize convenience over price. You’ll likely have better luck keeping the delivery fees low by ordering directly from a grocer. (Regardless, delivery is never 100% free.)

You can shop for groceries without emptying your checking account. The most affordable option is often the one you’ve already subscribed to. Failing that, your local supermarket may ship your groceries to you for $10 or so. Shop around your favorites to snag the best deal.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Cole Tretheway has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Walmart. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.

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Donating your car may be more work than you think. Here are a few things you should know before you do. 

Donating your vehicle can be a great way to give something of value to a charity you care about. In some cases, the vehicle may be used by volunteers, given to someone in the community who needs it, or even sold at an auto auction and the proceeds used by the charity.

But there are a few things you should know before you arrange to cancel your car insurance policy, hop into your vehicle, and take it to your preferred charity. Here are five moves you should avoid when donating your car.

1. Not thoroughly researching the charity

This is important because you want to ensure your vehicle goes to a cause you really care about and that it is a legitimate charity.

You can do some initial research using the website CharityNavigator to learn about the organization and how it spends its money. Also, look at the organization’s website to find out more information about it and ask friends and family if they’ve heard anything about the organization.

2. Forgetting to cancel the insurance and sign over the title

While it may seem obvious, you want to make sure you cancel your car insurance and sign over the title to the charity. Organizations that regularly take vehicle donations will likely have a form to fill out and a good system in place to ensure the title is signed over.

But canceling your insurance policy is something you’ll need to remember to do. Just ensure you’re still covered up to the time when you hand the vehicle over.

3. Not delivering the car yourself

You should consider dropping off the car yourself once you’ve made the arrangements. There are some companies that will charge to deliver the vehicle, which defeats the purpose of donating it.

Taking the vehicle to the charity yourself will ensure it receives the car and gets the maximum benefit from the donation.

4. Overestimating your tax deduction

There are some limits to how you can claim the value of the donated car on your taxes. For example, if the vehicle will be sold by the charity, you can only deduct the amount it sells for, according to TurboTax.

This means that even if you use Kelley Blue Book to estimate the vehicle’s worth, you can’t claim that value as your deduction unless it sells for that amount. The only exception is that if the car sells for less than $500, you may be able to claim a deduction up to $500, according to the IRS.

The IRS also says that if your deduction is over $5,000, you’ll need to obtain a written appraisal proving that your vehicle was worth the amount you claim. You can read all of the IRS requirements and find the necessary donation forms on its website.

5. Forgetting to get a receipt of the donation

As with any tax-deductible event, you want a good paper trail. If you choose a large and reputable charity, it will likely provide you with documentation of the donation.

Having an official receipt from the charity will help you keep accurate tax records. TurboTax says that if the organization sells the vehicle, it should provide documentation of the sale within 30 days.

It may be best just to give money or your time

While there are some cases when donating your vehicle to charity makes sense, it may be easier for the organization and more beneficial to donate your time or just give money directly.

And if you really want to use your vehicle for a good cause, sell it yourself and then write a check. You’ll avoid some of the mistakes listed above, and the charity — like everyone — probably prefers cash anyway.

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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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A $100,000 nest egg may not go very far by itself. But that doesn’t mean your retirement is doomed. Read on to learn more. 

You’ll often hear that it’s important to consistently save in an IRA or 401(k) so you can carry a large pile of savings with you into retirement. But it’s hard to prioritize retirement plan contributions when you have a mortgage loan to pay, kids to feed, and medical bills to cover.

If you’re nearing retirement with a nest egg worth $100,000, you’re reasonably on par with the average 60-something today. Americans in their 60s have an average retirement savings balance of $112,500, reports Northwestern Mutual.

Unfortunately, though, you may not get a ton of annual income out of a $100,000 nest egg. So it’s important to do what you can to supplement your income as needed.

Breaking down a $100,000 savings balance

When you see the number $100,000, it reads like a big one. But remember, that money has to last throughout your retirement. And your retirement could easily end up being 20 or 25 years long.

Financial experts have long suggested withdrawing from retirement savings at a rate of 4% per year to help ensure that money doesn’t run out. But at 4%, a $100,000 nest egg only gives you $4,000 of annual income.

Now, you’ll most likely have Social Security on top of that. And the average monthly benefit today is about $1,850. By the time you retire, it might be even higher. So that’s a good amount of income right there.

But all told, a $100,000 retirement savings balance isn’t a lot of money. So if that’s what you’re looking at retiring on, you may need to make an effort to work as a senior, and get creative with your home.

Your retirement isn’t necessarily doomed

A $100,000 retirement savings balance is far better than having $0 to your name. If you’re willing to continue working in some capacity and are able to monetize your home at the same time, you may find that you’re able to live quite comfortably as a retiree.

Let’s talk about the former first. It used to be that working in retirement would mean doing things like taking a boring desk job or committing to bagging groceries at a supermarket three days a week. Thanks to the gig economy, working in retirement now looks very different.

You could take a hobby you love, like crafting, and turn it into an income source. Or you could do something like catering or pet care if you enjoy doing that.

Meanwhile, if you own a home as a retiree, perhaps you have an opportunity to turn it into an income source. Rent out a finished basement or garage if you no longer need the space. Or if you have a two-car driveway and only one car, rent one of your spaces out.

You can even rent out portions of your home for storage if you don’t want someone living under your roof. There are many options to consider.

Retiring on $100,000 isn’t ideal. But it’s not a terrible thing, either — especially if you’re willing to continue working in some capacity and get creative with your living space.

Of course, if you want to set yourself up to retire with more than $100,000, start early — ideally in your 20s — and aim to invest aggressively by loading up on stocks in your brokerage account. But if you’ve already missed that boat, don’t despair, because all certainly isn’t lost.

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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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Grocery delivery services can save time and make your life easier. Find out how to save money on your grocery bill when using grocery delivery services. 

For many people, a simple trip to the grocery store can quickly become more expensive than planned. With how busy life gets, you may be looking for a way to stock up your fridge with all the necessary food essentials without wasting time at the store. The good news is that you don’t have to break your budget when getting groceries delivered to your house.

Here are a few tips to help you save big when using grocery delivery services.

Use your grocery store’s app or website to stay on budget

Before you get your groceries delivered, you must first place an order. That means you’ll need to fill a virtual cart so the store knows what to put in your shopping bags. If you’re ordering directly through your grocery store or a third-party delivery service, you can use the website or app to your advantage. You’ll see the item price before you add it to your cart.

This can help you avoid spending beyond your means. When you shop in person, you’ll see the prices listed, but it can be hard to keep track of the total as you shop. That makes it easy to overspend, and you could end up with a high grocery bill. Getting groceries delivered makes it easier for many people to stick to their budget and helps to avoid a costly bill.

Consider a grocery delivery subscription

If you get your groceries delivered regularly or hope to start doing so soon, paying for a grocery delivery subscription can be beneficial. You’ll need to pay a monthly or yearly subscription fee, but it could save money on delivery and service fees — which could be a win for your checking account if you get groceries delivered frequently.

Instacart+ is one grocery delivery subscription to consider. You’ll pay $9.99 per month or $99 per year and can enjoy free delivery on qualifying orders of $35+ and reduced service fees. Is Instacart+ worth it? Our detailed guide can help you decide.

Before signing up for a service like this, check if your rewards credit card offers a free, limited-time subscription as a credit card benefit. Some of the best Chase credit cards currently offer this perk to cardholders. You could save money by activating a free subscription.

Don’t ignore in-app coupons and deals

Many grocery stores offer additional ways to save money through loyalty programs. Often, these programs provide clippable coupons or meal deal opportunities to help shoppers save more money. You can discover these extra ways to save through your grocery store mobile app or website.

As you complete your online shopping order for grocery delivery, pay attention to these deals so you don’t overspend. Every opportunity to save adds up and impacts your wallet.

Stock up on dry goods

While it’s difficult to stock up on foods that spoil quickly, like milk and fresh produce, you can stock up on other essentials like paper goods, canned fruits and vegetables, nuts, cereals, and canned fish and meats. If you have extra storage space and prefer grocery delivery, you can save money by loading up on these essentials.

Doing this can reduce the number of grocery delivery orders you need to place throughout the year. The fewer orders you need to make, the more money you’ll save on service fees, delivery fees, and tips. Plus, it’ll feel good knowing you’re prepared by having fully stocked shelves.

Opt for grocery pickup instead

While it’s not quite the same as getting your groceries delivered to your doorstep, you can order groceries from your favorite local grocery store and do curbside pickup. Many small and big retailers offer this service, and it’s an affordable solution that allows you to add convenience to your life without paying additional fees. I’ve personally done this to save time.

Grocery delivery doesn’t have to break the bank

If you value convenience, you may want to give grocery delivery a try. While this service comes at an extra cost, it doesn’t need to be expensive. Using the strategies above, you can save money on grocery orders while freeing up extra time in your busy life.

For more ways to save money, check out our personal finance resources.

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In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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