Money Management

It’s noble to want to pay off your credit cards. But read on to see what essential financial move you should make first. 

If you owe money on your credit cards, you’re not alone by any means. U.S. credit card balances reached $995 billion during the third quarter of 2023, according to TransUnion. That’s a 15% uptick from a year before.

You may be eager to get your credit cards paid off as quickly as possible. And that’s a great goal to work toward. But before you start chipping away at your credit card balances, there’s one important thing you need to do first.

Beef up your emergency fund

Before you start using all of your extra money to pay off your credit card debt, look at your savings account balance. If it’s not much to write home about, then before you continue on the path of chipping away at credit card debt, do your best to build up a solid emergency fund.

You may want to wait until you have a three-month emergency fund before you start putting money toward your credit card balances. And by “three-month emergency fund,” we’re talking about having enough savings to cover three months of essential bills — things like rent, car payments, food, utilities, and healthcare expenses.

Now, you may be thinking, “But my credit card is charging me 20% interest on my balance, and I’m racking up those charges by the day.” And that’s a fair point.

But one thing you should realize is that if you chip away at your credit card debt without making sure you have cash reserves in the bank, what might happen is that you whittle down that debt…only to add to it again the next time an unexpected bill arises. While it might seem counterintuitive to hold off on paying down credit cards when you can, if you don’t have money in the bank, you risk landing back in the hole.

That’s why building an emergency fund should be your first priority. If you don’t, you might pay off your credit cards only to have to fall back on them again and again. That’s not what you want.

A more efficient way to pay off your credit card debt

Building your emergency fund should come before paying off your credit cards. But once you’re ready to do the latter, one option you may want to look into is a balance transfer, where you move your balances onto a single card with a lower APR (or, ideally, a limited-time 0% introductory APR). Lowering the interest rate on your debt could make it easier to pay down.

You can also look at consolidating your credit card with a personal loan. If you have strong credit, you might qualify for a much lower interest rate than what your cards are currently charging you. And this way, you get the benefit of fixed monthly payments.

You may be motivated to pay off your credit cards so you don’t have to lose even more money to interest. But make a point to build up savings first. Otherwise, you might set yourself up to keep falling into the same debt trap time and time again. And you deserve better.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

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.

 Read More 

Many people travel during the holiday season. Read on to see why you should let your credit card company know about your plans. 

It’s common for people to travel to see loved ones during the holidays. And given that more people are working remotely these days, there’s a good chance that some of those holiday visits have the potential to be lengthy.

A good 84% of Americans plan to travel for at least some of the holidays this season, reports the New York Post. If you’re part of that statistic, there’s one important move it pays to make before you board your plane or gas up your car and hit the road.

Let your credit card company know your plans

Any time you expect to be spending a significant amount of time outside of your home state, it’s a good idea to loop in your credit card company. That way, it can make a note of your plans. And that might spare you a world of hassle.

Credit card companies try to do their best to get ahead of potential fraud. So when suspicious activity is detected on your card, your issuer will generally freeze transactions until it’s able to get a hold of you and confirm that all is legit.

Let’s say you normally charge $1,000 worth of bills per month on your credit card, and your credit card company suddenly sees $5,000 worth of apparel charges in a single transaction. That’s the sort of thing that might raise a red flag. And so your credit card issuer might flag that transaction and prevent it from going through until it’s able to speak to you.

But it’s not just large purchases that have the potential to trigger a credit card fraud alert. Sometimes, something as seemingly innocent as filling up your gas tank or putting groceries on your rewards credit card in a different state could raise a red flag with your credit card issuer. After all, if you live in Michigan, why would you be visiting a supermarket in Massachusetts?

Of course, the answer is simple — you’re there for a visit. But if your credit card company doesn’t know that, it might flag that type of transaction.

That’s why it pays to let your credit card company know your plans before you travel for the holidays. If you’ll be visiting your parents in Maine for a week, say that. That way, you won’t have to worry about your credit card being denied at your old neighborhood supermarket when you try to pick up milk and eggs for your folks.

A good system with some inherent flaws

The fact that credit card companies have systems in place to spot fraud is a great thing. Sometimes, though, it can backfire in the form of denying transactions that you’re legitimately trying to make, like a $7 convenience store purchase.

Taking a few minutes to loop your credit card company in on your holiday travel plans could spare you a world of stress and aggravation. So once you’ve nailed down the details of your upcoming trip(s), make that important call. This is actually something worth doing every time you travel — not just during the holidays.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

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.The Motley Fool has a disclosure policy.

 Read More 

Amazon’s third-party sellers offer a wide variety of products, but they’re not all legitimate. Here’s how to make sure you’re not falling for a scam. 

Practically everyone has made a purchase — or 100 — on Amazon in their lifetimes. The retailer has an incredible variety of products, but even this corporate giant can’t possibly stock everything a person could ever want. That’s why it also serves as the middleman for a bunch of third-party sellers.

Most of these sellers are just trying to make an honest living, but there are always scammers out there. Here are a few things you need to know to avoid them.

How Amazon third-party sellers work

Amazon third-party sellers list the products they’re selling on Amazon for people to find. When you find one you’re interested in, you provide your payment information to Amazon and Amazon will make sure the seller gets the money. The third party never has access to your credit card number.

What happens next depends on the type of third-party seller you’re dealing with. If an item is listed as Fulfilled by Amazon, that means the third party has already shipped its goods to an Amazon fulfillment center and Amazon will mail it to you just like it would any of its own products.

Products not listed as Fulfilled by Amazon either come directly from the seller, if it has its own warehouse of products. Or if it’s a dropshipper, they come from another retailer with whom the third-party seller places an order on your behalf.

Amazon third-party seller scams

Amazon does its best to remove scammers from its platform, but it’s tough to get rid of all of them. Scammers may profess to have an item, possibly at a deep discount from its regular retail price. But they don’t. They may go as far as creating a tracking number so Amazon thinks they’re going to ship the product to you, but nothing happens after that.

Or they might sell you something that’s not what you think it is. You might pay full price for what you think is a new item, but in reality, it’s refurbished, damaged, or broken.

How to avoid problems with Amazon third-party sellers

You don’t have to avoid Amazon third-party sellers altogether. Most of them are legitimate and deliver quality products. But it’s important to do your research before you buy to make sure you’re not falling into a trap.

First, know the common signs of a scam, including:

A seller who asks you to send money to them directly instead of through the Amazon platformPrices or shipping times that seem too good to be trueProduct descriptions or images that don’t match up with information from the manufacturerReluctance to share return or refund policiesSuspicious, misspelled names or product descriptions

Next, be sure to check the seller’s shop rating. This isn’t the same as the item’s rating. To find it, look for the “Sold by” company under the “Buy Now” link on Amazon’s website. Click on that and you’ll find reviews for the seller. If there aren’t many or they’re all bad, that’s probably a good sign you don’t want to work with it.

You should also do some digging into the product reviews themselves. Some clever scammers might steal glowing reviews from other sites or manufacturers and comment on their own listings to make them appear more legitimate. The Fakespot browser extension can look at product reviews and determine whether they’re likely to have come from real customers or if they’re fake.

When in doubt, stick to products that are Fulfilled by Amazon. This means Amazon already has the product in house and it’ll handle the payment and the shipping for you.

What to do if you’ve been scammed

The first step if you think you’ve been scammed is always to reach out to the seller directly to see if there’s been some sort of misunderstanding. It might be possible to resolve the issue this way without involving Amazon at all.

But if the seller doesn’t respond or refuses to help, you can invoke Amazon’s A-to-Z Guarantee. Make a claim with Amazon through your online account. It will investigate the situation and refund you if it determines you didn’t receive what the seller promised. However, you only have 90 days from the delivery date to do this, so don’t delay. The sooner you reach out, the sooner you can get your money back in your checking account.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

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

 Read More 

Upping your spending this year during the holidays? Read on for ways to make sure that doesn’t get you into financial trouble. 

The holidays are right around the corner, and you may be getting more and more excited for them with each passing day. You may also be gearing up to spend a small fortune to celebrate them to the fullest.

More than one-third of U.S. consumers plan to spend more this holiday season than last year, according to a survey by Square. But if that’s your plan, make sure to run through these important questions first.

1. How will I pay for my purchases?

Maybe you’ve been saving for the holidays since the start of 2023. If that’s the case, and you have plenty of money set aside to celebrate the season in full force, then by all means, go for it.

But if your plan is to pay for your holiday purchase by charging them on credit cards and tackling your balances when you can, that’s less ideal. In that scenario, you’re setting yourself up to lose money to interest. You should also know that if your credit card debt gets too high, it could hurt your credit score.

When it comes to non-essential purchases — meaning things you don’t need in order to function — it’s generally best not to spend beyond your means. This extends to the holidays, too. So if you only have a certain amount of money in savings to pay for things like gifts and decorations, stick to that limit.

2. Will spending more on the holidays impact my other goals?

Maybe you’re hoping to buy a home in 2024. Or maybe you’re planning to upgrade to a better, more reliable car. You might be able to spend more on the holidays this year without impeding those goals. But make sure that’s the case.

It’s nice to throw a fun holiday party, and that might be a big seasonal expense you’re planning for. But what would you rather do: drive a more comfortable vehicle all year long or enjoy one single night of catered food and drinks galore?

3. Do I really need to spend more to make the holidays special?

Since the holidays only roll around once a year, it’s easy to understand why so many people feel compelled to go all out. But before you up your spending, think about whether that’s really necessary. You may come to the realization that you’re able to enjoy the season to the fullest without spending more than you’ve spent in the past.

For example, you may want to add extra lights to your home this year at a cost of $300. And you may also want to spend $100 extra to host a true Christmas feast.

But that $400 could be money that will serve you well in other ways — for example, by allowing you to upgrade a piece of furniture that’s seen better days or helping you buy a new laptop that won’t constantly crash on you. So think about whether you really need those extras before spending your money.

It’s not so surprising that a good 33% of Americans plan to spend more on the holidays this year. But before you start charging up a storm, think about whether your money should be spent elsewhere. And remember that it’s the spirit of the holidays that matters more so than anything else.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

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.The Motley Fool has a disclosure policy.

 Read More 

No matter the gender, we all make financial mistakes. Here are three in particular that are common to women. 

Sometimes, we as women can be our own worst enemies when it comes to our personal finances. And while some of our mistakes are more harmful than others, what they all have in common is that they’re avoidable.

In all fairness, this list can apply to anyone, regardless of gender. However, we’re looking at these common financial mistakes through the lens of women in hopes of identifying what it is that inspires some of us to undermine our own financial well-being.

Waiting for “what’s next”

If you’ve ever told yourself that you’ll begin contributing to a retirement fund or otherwise investing when (fill in the blank) happens, you’ve already cut yourself short. Let’s be honest; most of us are waiting for something big to happen. It seems as though we move from “when I graduate” to “when I get into a long-term relationship,” or “when the kids are older.”

No one is promised tomorrow. And even if we were, we wouldn’t know what tomorrow will bring. Putting off financial issues until your life seems more stable or until you’re rolling in cash is a costly mistake.

The earlier you start investing, the more time your money has to grow and work for you. Here’s a breakdown of the power of compound interest over time:

Takeaway: The earlier you begin to invest (even a very small amount), the longer your money has to grow.

Handing over financial power

According to the Pew Research Center, not much has happened to narrow the gender gap in pay over the past 20 years or so. Back in 2002, women earned, on average, 80% as much as men in the same job. By 2022, women were still earning only 82% of what men earned.

Worse yet, some of us place our financial well-being into the hands of someone else. That “someone else” is typically a romantic partner. While it may seem logical at first, there is a risk associated with giving up financial independence.

The Pennsylvania Coalition Against Domestic Violence (PCADV) reports that financial abuse occurs in 98% of all abusive relationships and is the top reason a victim stays in or returns to an abusive relationship.

That’s not to say that any woman who hands her finances over to a partner will be abused. That is absolutely not the case. Sometimes, one person in a relationship is better with money, and as long as both partners agree with the arrangement, there’s nothing wrong with leaving the bulk of day-to-day financial concerns with one person.

Even if your partner is “better with money,” you owe it to yourself to understand how the household budget works, know where your combined money goes each month, and create a plan for how you’ll take over financially if your partner leaves or dies.

Takeaway: It’s okay for one partner to head up financial planning, especially if they have a gift for it. However, each partner in a relationship should have the same access to money. Just as importantly, each partner should understand how household finances work.

Spending on others rather than investing in ourselves

A large majority (80%) of all single-parent households are headed by women, and more than 1 in 5 American children live primarily with a single mother. And for several reasons, including the way women are socialized to “be nice” from an early age, women tend to become family caregivers. In fact, we’re often looking out for our parents while still raising children.

It’s natural that we are first to notice when a parent needs a new living room lamp or one of our children is due for a new pair of tennis shoes. It’s not at all unusual for a woman to see to the needs of the people she loves without considering her own needs.

Note: We recognize that this is a gross generalization, and while it is sometimes accurate, there are plenty of families in which a man is both the caregiver and more self-sacrificial partner.

Takeaway: If you don’t have an emergency fund in place, start building one now, even if you can only put a few dollars away at a time. Before you’re tempted to spend money on someone you care about, ask yourself if you’re on track for retirement and if the person you’re hoping to rescue has the capacity to rescue themselves.

We’ve come a long way since before 1974 (when a woman needed her husband’s signature to open a bank account), but we still have a long way to go. Fortunately, there are steps we can take to avoid repeating our past mistakes.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

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.The Motley Fool has a disclosure policy.

 Read More 

Mortgage rates have been high this year. Is near-term relief in sight? Read on to find out. 

There’s a reason so many home buyers have been struggling with the real estate market this year. Not only is housing inventory pretty low on a national scale, but home prices remain elevated because of that. Throw in the fact that it’s gotten really expensive to sign a mortgage, and it’s no wonder so many buyers are having a hard time.

In late October, the average 30-year mortgage rate was 7.79%. In mid-November, it dropped to 7.5%.

But let’s be real — mortgage lenders are still charging very high rates to borrow for a home. And things are unlikely to change significantly before the end of the year.

It’s a matter of economic conditions

A big reason mortgage rates are up right now is that borrowing in general is expensive in the wake of the Federal Reserve’s numerous interest rate hikes. The Fed has raised rates multiple times since early 2022 in an effort to slow the pace of inflation.

The Fed doesn’t set mortgage rates, or any other consumer borrowing rates for that matter. Rather, the Fed sets the federal funds rate, which is what banks charge each other for short-term borrowing. But when that gets more expensive, financial institutions tend to pass the cost along to their customers. That explains why loan rates are generally elevated right now, whether it’s on mortgages, car loans, or home equity loans.

The good news is that the Fed opted not to raise interest rates at its last two meetings. If the central bank decides it’s made good progress with inflation, it may opt to start cutting rates in 2024. That could make borrowing less expensive on a whole in the new year — mortgages included.

Near-term rate fluctuations will likely be minor

In the absence of a crystal ball, it’s hard to say what the rest of 2023 has in store for mortgage rates. But chances are, if rates do continue to drop, they’ll only do so to a modest degree. It’s unlikely that we’re going to see rates fall into the mid-6% range, for example, between now and Dec. 31.

But are 6% mortgages possible in 2024? Absolutely. There’s a good chance that rates will grow increasingly competitive as the Fed gradually cuts rates, and that might happen in the new year.

That said, don’t expect the record-low rates lenders were offering up in 2020 or 2021. We may not see rates like that for a really long time, and that’s something buyers need to accept.

Of course, if you’re eager to buy a home now, you may not want to sit tight and wait for rates to fall. So if you can afford to sign a mortgage based on today’s rates, go for it.

Rates are apt to drop eventually, and at that point, you can look to refinance your loan. So as long as you’re able to swing the cost of a mortgage now, you might as well buy if there’s a suitable property for you so you can begin to reap the many benefits of being a homeowner.

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.

 Read More