Money Management

Although I charge all purchases on my credit card, I will not take a cash advance. Keep reading to learn why the drawbacks of cash advances outweigh the benefits. 

I’m a huge proponent of using credit cards. I charge every purchase I possibly can on my rewards cards so I can benefit from purchase protections and cash back. I firmly believe credit cards are a great tool rather than something to be feared — as long as you can spend responsibly.

That being said, there’s one thing I absolutely would never do with my credit card. Here’s what it is.

A cash advance is off the table for me

Although I’m comfortable charging a ton of stuff on my credit card, I would never take a cash advance on my cards.

A cash advance is essentially a loan that is made by your credit card company. But unlike a typical personal loan, you wouldn’t have to apply for it. You’d just request a cash advance if your card offers one and obtain the requested funds (up to the card’s allowable limit) via a convenience check, ATM withdrawal, or at a bank branch (depending on which options your card offers).

Cash advances can seem like a quick and easy way to get money. But they aren’t. They are an extremely expensive way to get access to funds. My card issuer charges up to 29.24% APR for a cash advance and charges between 4% and 5% of the amount of the cash advance transaction, depending on whether it is a same-day cash equivalent cash advance or not. Many other card issuers impose similar fees.

That makes the interest rate even more expensive than the standard rate on a credit card, which is already pretty high. And it also means paying a huge amount of money upfront just for the privilege of getting the cash advance. A $1,000 cash advance would come with a fee of as much as $50 upfront, even before getting hit with that high interest rate.

Incurring such high costs simply doesn’t make sense to me when there are cheaper ways to borrow.

Alternatives to a credit card cash advance

If you are considering a cash advance, you shouldn’t move forward with doing it until you have explored all of your other cheaper options. Some other potential ways to borrow could include the following.

A 0% APR credit card

If you can use your credit card to just charge whatever items you need to buy, this can be cheaper than taking a cash advance. And if you can qualify for a card offering a 0% introductory rate on purchases, you may be able to pay no interest for a while rather than getting hit with a very high APR like you would with a cash advance.

You can find some great 0% APR cards online to choose from and can often apply for your card online as well. And there are third-party services such as Plastiq that can make it possible to pay for things with a credit card even when a card isn’t typically accepted. You’ll pay a fee but it may be less than the cash advance fee in many cases.

A credit card loan program

Some credit card companies offer more affordable ways to access cash from your credit line when you can’t charge something you need and don’t want to take out a cash advance.

For example, a Citi® Flex Loan could offer you a more affordable way to borrow. You can find out if your card offers this option, and what terms it offers, by signing into your online account with your card issuer.

A personal loan

A traditional personal loan can be a much more affordable option than a credit card cash advance. The average interest rate on a personal loan was 11.48% as of May 2023, so you could more than cut your interest rate in half compared to the typical cash advance APR.

You can apply for a personal loan online and will need to specify how much you’re borrowing as well as pick your repayment terms to find out if this option is affordable.

The bottom line is there are alternatives to a cash advance and generally, there is very little reason to opt for this expensive method of borrowing. If you are considering a cash advance to cover a pressing expense, look into these other options today to see if one will work better for you.

Of course, it’s best not to have to rely on borrowed funds for unexpected expenses. Having an emergency fund can save you from that fate. But, not everyone has emergency savings so if you need money now, looking into these options can save you from the high fees that a cash advance comes with.

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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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Getting pet insurance on a rescue dog is vitally important. Here’s why pet owners should make sure their new family member has the right coverage. 

After getting a rescue dog, new owners will have some decisions to make as they introduce their new family member into their household.

While rescuers may be focused on choosing whether to pick a new name or what food to feed, there’s a much more important question to answer first. That question relates to whether buying a pet insurance policy for a rescue dog is a good idea.

In the vast majority of cases, the answer to this question is a resounding yes. Here’s why.

Rescue dogs may have an uncertain medical history

Sadly, many rescue dogs do not come from the best situations, so they may have had untreated health issues, been fed a low-quality diet, or may otherwise have had a rough start that makes them more susceptible to health problems later.

Caring for a pet who becomes ill can be very expensive, especially if emergency care is needed. In fact, the average cost of an ER visit is somewhere between $180 and $800, according to Canine Journal. And if rescue dogs haven’t had their teeth properly cared for and develop dental issues because of it, this could lead to more big expenses — such as teeth cleanings that average $310 and dental surgeries that average $480.

No owner of a rescue dog wants to be forced to deny their new companion care for financial reasons or to be left with a huge credit card bill due to a pet’s illness. Pet insurance makes certain that this isn’t an issue by offering coverage for most common ailments, including serious health issues such as cancer.

Rescue dogs may be a bit older

Although it’s possible to rescue puppies, often rescue dogs are a bit older than the 8-12 week old babies that a person might get from a breeder. That makes it imperative to get pet insurance ASAP.

Prices for a pet insurance policy tend to get higher as an animal ages. Owners who wait a long time to get pet insurance could find themselves priced out. To avoid having to pay expensive premiums for insurance costs, it’s best to act as soon as possible after getting a rescue pup. After all, the dog isn’t going to get any younger so each day of delay can simply lead to further premium increases.

There are some potential challenges with insuring a rescue dog

While it’s a good idea to get pet insurance on a rescue dog, there are a few challenges that might come up:

New owners may not have the rescue dog’s medical records. Insurers typically want to see an animal’s medical history before issuing a policy. If this isn’t available, the insurer may require the dog to get an exam to develop a baseline report on the animal’s health before offering insurance coverage.Pre-existing conditions will be excluded. If a rescue comes to a new household with a health issue, this will likely be considered a pre-existing condition that makes coverage of related medical problems unavailable. For example, if a person adopts a dog with a heart murmur, any cardiac problems going forward may be excluded from coverage.

These challenges can generally be overcome. Pet owners can simply get their new companions an exam and apply for insurance right away. Pre-existing conditions won’t be covered, but owners can still have coverage for other problems that may come up along the way and cost a fortune.

Pet insurance can provide peace of mind for an affordable price. Rescue dogs deserve the very best, so those who have brought one home should begin shopping around for an affordable insurance policy today.

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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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Getting ahead of your personal loan could save you money. Read on to learn more. 

There’s a reason personal loans are a popular borrowing option. With a personal loan, you can borrow money for any purpose, whether it’s to fix up your home or start a business.

As of the first quarter of 2023, U.S. personal loan balances came to $225 billion, according to data from TransUnion. And the average borrower had almost $11,300 in personal loan debt. So if you have one of these loans, you’re in good company.

But you may be eager to pay off your personal loan early. Doing so could save you money on interest. But there are a couple of less favorable consequences that could ensue, so it’s important to know what to expect.

The upside of paying off a personal loan early

The sooner you pay off a personal loan, whether by applying a lump sum payment to your loan’s principal or increasing your monthly payments steadily, the less you stand to spend on interest. That’s a good thing.

Let’s say you sign a five-year, $10,000 personal loan at 7% interest. If you pay an extra $100 a month on your loan, you can save yourself about $719 on interest compared to sticking to your regular payment schedule. That’s money you can spend on a host of other things, from bills to leisure.

The downside of paying off a personal loan early

You can reap some savings by repaying a personal loan ahead of schedule. But some personal loans impose a prepayment penalty for going this route. To see if yours does, check your loan documents.

Now, it may be the case that the money you stand to save on interest will well outweigh the prepayment penalty you’ll face for an early payoff. So you’ll need to crunch the numbers.

Also consider the mental benefits of paying off a personal loan early. Some people hate the idea of carrying debt and find it stressful. If you’re in that boat, it may be worthwhile to pay off your personal loan early even if your prepayment penalty virtually wipes out your interest savings.

Another thing to consider is that paying off a loan early can sometimes cause your credit score to dip temporarily. This may seem counterintuitive at first. After all, why would shedding debt be considered a negative event from a credit standpoint?

But one factor that’s accounted for in your credit score calculation is the length of your credit history. If you close out a personal loan, it might shorten the length of time you have your credit accounts open on average, resulting in what should be a fairly modest but nonetheless annoying hit to your credit score.

All told, paying off a personal loan early is generally considered a good thing. And often, the savings you stand to enjoy will outweigh the negatives. But it is important to consider the drawbacks of an early payoff just in case they’re significant enough to deter you from paying off your debt ahead of schedule. And even if they don’t deter you from an early loan payoff, you should at least know what consequences to anticipate.

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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This writer saves herself a lot of money by purchasing fruits and vegetables at Costco. But read on to see why this strategy may not work for everyone. 

As of July, grocery prices were up 3.6% on an annual basis, according to that month’s Consumer Price Index. Compare that to July of 2022, when grocery prices were up 13.1% on an annual basis, and there’s clearly been some nice improvement.

Still, a lot of people are struggling to put food on the table even though inflation is cooling. And a lot of households have a particularly hard time affording fruits and vegetables, which, unfortunately, tend to be more expensive than foods that are generally considered to be less healthy.

Because feeding my family plenty of produce is important to me, I do my best to find ways to save money on it so we don’t have to cut back. And one strategy I use is loading up on fruits and vegetables in bulk at my local Costco. But while this strategy works well for me, it may not be best for everyone.

Why I love getting my produce at Costco

Some people will tell you that the produce at Costco isn’t as high in quality as the produce you’ll find in supermarkets. I disagree.

Sure, I’ve had situations where certain produce purchases at Costco didn’t last as long as I would’ve liked. But for the most part, I find that my Costco produce has a very comparable shelf life to the items I buy on a one-off occasion at my local supermarket. That’s pretty impressive given the larger quantities.

In fact, it’s because I buy my produce in bulk that I’m able to save so much money on it. Now it’s hard to put a finger on exactly how much I save because produce prices fluctuate constantly both at my neighborhood supermarket as well as Costco.

But right now, in my area, you’ll pay $2.73 per pound by ordering plums for same-day delivery at Costco. And the cost of same-day delivery is always noticeably higher than the in-store cost. At my local supermarket last week, plums were $3.49 a pound.

There are weeks when I can easily save myself $10 to $20 on the cost of produce alone by getting it at Costco. Seeing as how my Executive membership to Costco costs me $120 a year, I can often make up for that expense in just a few months.

Plus, because Costco produce is so affordable, I’m able to purchase a variety of it. And keeping things interesting is a good way to get my kids to eat plenty of fruits and vegetables.

If I were to keep serving them the same steamed broccoli night after night, they’d probably get bored and start to rebel. But if I can mix things up by doing sides of spinach or squash or even mixed greens in a salad blend, my kids are less likely to protest.

A strategy that won’t work for everyone

The reason it makes sense for me to buy produce in bulk from Costco is that there are five of us (plus, often a stray child from another household who’s at my place after school and asks to stay for dinner). So the produce we buy doesn’t go to waste.

But if you have a smaller household, it may not make sense to purchase produce in bulk. If doing so shaves something off of your bill compared to the supermarket but you end up throwing half of your haul away, you might end up wasting money rather than saving it.

Also, if your family is larger but doesn’t eat a lot of fruits and vegetables, be honest with yourself about your personal habits. You may be inclined to take the mindset that you’re going to commit to a three-pound bag of broccoli, and gosh darn it, you’re going to make sure you eat it. But if your kids have historically refused broccoli and you’re not such a big fan yourself, you’re probably going to end up throwing most of those three pounds away.

All told, I’m grateful that Costco offers a wide selection of fruits and vegetables in bulk. If that weren’t the case, I’d still do my best to serve lots of produce to my family, but it would have to come at the expense of other things.

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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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Our basket of 12 common items cost around 10% less in Walmart than Dollar General. Find out how small savings can add up to hundreds of dollars over a year. 

Shoppers have flocked to bargain stores like Dollar General in recent years. Part of the attraction is a perception that switching to lower-cost stores and own-brand goods can be a good way to save money. In some cases, that’s true — but not always.

In fact, Walmart cost less than Dollar General in our price comparison. We checked prices on a basket of common goods in their online stores. Walmart was cheaper overall, and beat Dollar General in 10 out of 12 of the items in our basket. Not only that, but Walmart also had a wider selection of goods and offered more opportunities to save by buying in bulk.

Dollar General vs. Walmart: Which is cheaper?

There are so many variables in comparing prices. Package sizes often aren’t the same, you might not find identical brands in each store, and every household will have a different basket of regular goods. Plus, online prices don’t necessarily reflect in store savings or the benefits of coupons or cash back apps.

All the same, tracking prices can save you money. Particularly if you look beyond the price tag and check the weight or volume of items too. Let’s say one shop sells a 16 ounce bottle of orange juice for $2 and another sells a 14 ounce bottle for $1.90. In that scenario, the smaller bottle looks slightly cheaper, but it actually costs more per fluid ounce.

Here’s how Walmart and Dollar General stack up in terms of prices:

To simplify the comparison, we took the lowest cost item in each store. For example, Walmart sells a more expensive branded penne pasta. But if you want to save money, you’d probably opt for the own-label option. We also tried to compare like with like where possible. Walmart has a wider variety of toothpastes that you can buy in packets of three or even six, but we looked for matching brands and similar package sizes.

Small savings can multiply quickly

You might be looking at the table above and thinking, “Walmart was only $3.80 cheaper, what’s all the fuss about?” It’s true. But you also got more bang for your buck at Walmart. The toothpaste, broccoli, chicken, and pizza all came in bigger packages, so that $36.05 bought more food. Plus, that $3.80 is actually a savings of around 10%.

The Ascent research shows that the average American spent about $691 on food each month in 2021. In that context, a 10% savings could mean almost $70 more in your bank account each month — or $840 a year. You’d save even more if you were able to build a two-stop shop into your routine and buy the items that cost least in each store.

Bottom line

If shopping in more than one store or laboriously comparing prices feels like too much hassle, there are lots of other ways to cut the cost of groceries. For example, you might shop with a list, and stack benefits from coupons, rewards credit cards, and cash back apps. I only buy big-ticket items like laundry detergent on discount, and I’m a big fan of bulk buying.

All the same, price comparisons can be powerful money-saving exercises. You don’t have to do it for every item every time you shop. But try to get an idea of which products cost less in each store. That way, you won’t automatically assume that Dollar General costs less because of its name.

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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.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool recommends Walmart. The Motley Fool has a disclosure policy.

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