Money Management

You can use your credit card to withdraw cash from an ATM, but it’ll cost you. Find out what fees are charged when you use a credit card to get cash. 

Credit cards are a convenient way to pay, but using them in certain ways could mean you incur fees. Luckily, it’s possible to make strategic purchase and payment decisions that don’t cost you extra. While using a credit card to pay for everyday purchases you can afford is a good idea, you may want to rethink using a credit card to get cash from an ATM if you dislike wasting money. Here’s what to expect when you use your credit card to get cash.

Can you use a credit card to withdraw cash from an ATM?

Not every business accepts debit or credit card payments — some only accept cash. If you only have a credit card, you may consider using it to get cash from a nearby ATM. Using a credit card to withdraw cash from an ATM is possible — it’s called a cash advance. However, you’ll pay more for this convenience.

Using your credit card to withdraw cash is costly

You may want to rethink using your credit card to get cash. Why? Because you’ll be charged a cash advance fee when you use a credit card to withdraw cash from an ATM. Since you’ll be borrowing money from your credit card issuer instead of using a debit card to access the cash in your checking account, this type of credit card transaction can be expensive.

Cash advance fees vary, but you can expect to pay anywhere from 3% to 5% of the total amount of the cash advance. If you’re using your credit card to withdraw $1,000 from an ATM and your credit card company charges a fee of 5%, you’ll pay $50 in cash advance fees. But that’s not the only extra cost you’ll incur.

You’ll also be charged interest on the cash you borrow. Usually, there’s a grace period when you use your credit card to make a purchase, which is the period between the end of the billing cycle and the date your credit card payment is due. During the grace period, no interest is charged. You can avoid credit card interest by paying off your balance on or by the due date.

But cash advance transitions are treated differently than regular purchases. There is no grace period for this transaction type, which means interest will begin to accrue from the date of your cash advance. It’s also worth mentioning that the interest rate for cash advance transactions are often higher than your usual credit card interest rate. A higher interest rate means you’ll pay more for the transaction than you would for using your credit card as a direct payment method.

You may also be charged an ATM fee when using an ATM. These extra charges add up, quickly making your cash advance more expensive than planned. You should be aware of additional fees like this to avoid overspending and to stay out of credit card debt.

Be aware of extra fees

Extra fees, no matter how small, impact your personal finances. If you use credit cards regularly, you’ll want to be aware of all potential fees. Your cardholder agreement lists all fees and other important account details, so it’s recommended that you review this document so you’re in the know. By making strategic credit card usage decisions, you can avoid wasting money on fees.

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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 Sam’s Club membership costs $50 or $110 per year depending on which tier you choose. Find out three signs that this money is being wasted. 

Becoming a Sam’s Club member comes at a cost. You’ll need to pay a membership fee of $50 per year for a standard club membership or $110 annually for a Plus membership. That’s quite a bit of money to put on your credit cards just for the privilege of shopping at the warehouse club.

For many people, paying this membership fee is well worth it. If you are able to take advantage of Sam’s Club’s discounted prices on groceries and other items you need, you may be able to keep more money in your bank account in the long run due to the savings — even after paying the membership fees.

But for some consumers, paying for a membership fee doesn’t make sense. To avoid wasting your hard-earned cash, look out for these three signs that becoming or remaining a Sam’s Club member doesn’t make financial sense for you.

1. You don’t shop at Sam’s Club often

In order to make up the cost of your membership fee, you’d need to save at least $50 a year on products you would have purchased anyways as a result of shopping at Sam’s Club.

You can probably do this easily if you visit the store every week, or even every month. After all, if you saved just $4.17 each month by buying items that are cheaper at Sam’s Club than at your local grocery store, the membership fee would pay for itself.

But if you rarely shop at Sam’s Club, then the membership is probably a waste of money for you. This could be the case if the warehouse club is far from you or if you simply prefer to visit other stores to buy things.

If your Sam’s Club membership is just a habit and you haven’t been to the store in months, consider canceling to see if you really miss it. You can always rejoin if it turns out you value your ability to shop there after all.

2. You aren’t using the products you buy

One of the biggest ways Sam’s Club helps you save is by offering bulk items for less money. But not everyone can make effective use of bulk products. If you’re single and live alone, purchasing huge quantities of food and household items may end up being a big waste if you can’t use everything up before it goes bad.

While you may be able to team up with friends or neighbors to split bulk purchases, this is not an option for every situation. So pay attention when you buy a Sam’s Club item to see how often part of it goes in the trash. If this happens more than once or twice a month, membership may not be right for you.

3. You already have other warehouse club memberships

Finally, if you already have a membership to other warehouse clubs like Costco or BJ’s, it may not make sense to keep your Sam’s Club membership as well. There’s a lot of overlap between the products you can buy at these different places so it usually makes sense to pick just one.

If you keep a membership to a specific warehouse club and your friends and family members belong to a different one, you can always trade off and take each other shopping once and a while if there are a few items only one club offers.

If you spot any of these three signs, consider canceling your Sam’s Club membership you can keep your club fees in your bank account. Remember, your choice to stop isn’t irrevocable, so you can always change your mind if you decide you value the membership more than the $50 or $110.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Are you no longer using one of your credit cards? You may want to request a product change. Find out what to expect when you downgrade your credit card. 

Credit cards are a valuable financial tool, but not every card in your wallet will meet your needs forever. There may come a time when you no longer utilize the benefits provided. When this happens, one option is to cancel the card. Another option is to downgrade it to a different credit card from the same issuer. We’ll explain what you can expect to happen when you do this and why you may want to go this route instead of canceling your card.

What is a credit card downgrade?

A credit card downgrade is when you downgrade an existing credit card that you have to one with a lower fee from the same credit card issuer. You can do this if the card issuer has another card that’s part of the same product line.

Some cardholders decide to downgrade a credit card when they have one with an expensive annual fee and no longer get value from the included perks. Switching to a credit card with a more affordable annual fee or no annual fee could be a win for some consumers. There are plenty of no annual fee credit cards to choose from if you’re on a limited budget.

One benefit to downgrading a credit card is maintaining your current credit card’s account history. When you switch to a lower-tier product, the account will remain open, so you won’t lose your history, which could benefit the age of your credit. Doing this could also help you maintain a lower credit utilization ratio, which is another important credit score factor.

However, when you do this, you’ll lose your current card’s benefits. If you switch to a lower-tier product, you may have fewer credit card perks available. You may also earn fewer rewards if it’s a rewards credit card. But if you’re okay with this, it could be a good move for your wallet.

How to downgrade your credit card

If you’ve been thinking about canceling one of your credit cards, you may want to consider downgrading it instead so you can maintain the account history. How do you downgrade a credit card? It’s easy to do by contacting your credit card issuer.

Before calling your credit card issuer, research available card options. Check to see if your card issuer has other cards available in the same product line. If so, ask if it will downgrade your credit card to an alternative product that you prefer.

If your downgrade request is approved, your credit card company will send you a new card, and your account will remain open. Your credit card issuer may deny your request, especially if no alternate options exist in the same product line. But often, the credit card company will be happy to approve your downgrade request to keep you as a customer.

Note: When you downgrade a card, you’ll be ineligible for any welcome bonuses for the new card. If you prefer to earn the new account bonus, a downgrade isn’t the right move for you.

What to do if a card downgrade is unavailable

You may wonder what options exist when you’re denied a downgrade. You can cancel the credit card. But keep in mind that this decision could impact your credit report.

Often, those with credit card accounts in good standing find that prior accounts remain on their credit report for some time, even years. But with time, old accounts can drop off your credit report. Canceling your card can also impact your credit utilization ratio, which impacts your credit score.

An alternative option is to continue using the credit card. If your card has an annual fee, you’ll need to decide if you feel comfortable continuing to pay it. Consider whether the fee will drain your checking account balance and whether you’ll benefit from the perks and rewards offered. Only you can decide the best option for your personal finances.

If your current card is no longer for you, that’s okay. Luckily, there are plenty of other credit cards to explore. To learn more, check out our list of the best credit cards.

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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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Hoping to snag a discounted Costco membership? Read on to see why that opportunity is unlikely to arise in the near term. 

If you’ve been thinking of joining Costco, you may be hoping to sign up at a time when memberships are on sale. The cost of a basic Costco membership is currently $60 a year. And an executive membership will set you back $120 a year, but in exchange, you’ll snag 2% cash back on all of your Costco purchases. And to be clear, that extends to online purchases and travel booked through Costco as well.

But if you’re going to hold off on a Costco membership until it goes on sale, you may end up waiting a long time. Costco doesn’t tend to offer discounted memberships for a few big reasons. So if you feel that joining is a smart move for you, expect to pay full price.

Why Costco memberships don’t tend to go on sale

Membership fees are commonly a huge revenue driver for Costco. In fact, Costco uses the revenue from its memberships to help offer low prices on the items it sells. For that reason alone, Costco doesn’t tend to discount memberships.

But another big reason we’re unlikely to see a membership discount from Costco anytime soon is that the warehouse club giant doesn’t need to go that route. That’s because Costco membership sales have, in recent months, picked up nicely even without a discount.

During the company’s most recent earnings call, Costco CEO Richard Galanti said, “The biggest thing that we don’t do is in any big way discount our membership…And we’re still getting, as I mentioned on the call, year over year 7% increase in new memberships with about just under a 3% increase in number of new warehouses. So we’re still getting people indoor.”

Galanti then went on to say, “I’d like to think we’re pretty good at what we do, and that’s why more people are signing up.” And he’s totally right.

Since Costco offers such great value to customers, many people don’t mind paying $60 or $120 for a membership. And also, those fees are pretty low to begin with, amounting to just $5 or $10 a month. Given the amount of savings shopping at Costco can lead to, it’s easy for many consumers to justify the cost of a membership because they more than make their money back by loading up on inexpensive groceries and household essentials.

If anything, membership costs might increase

The last time Costco raised the cost of a membership was June 2017. Since the company tends to raise membership costs about every 5.5 years, there’s a higher chance of seeing membership fees rise in the near term than go on sale. So if you’ve been thinking about signing up for Costco, you may not want to wait.

It’s always nice to feel like you’re getting a deal, so you may be bummed to learn that Costco doesn’t tend to offer promotions on memberships or new membership discounts. But the simple act of shopping at Costco means getting access to a world of deals. So that should hopefully help soften the blow.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

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 until 2024, 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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Gala. The Motley Fool has a disclosure policy.

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I don’t have pet insurance for my dog, but I will get it for future dogs. Read on to learn which coverage doesn’t make sense to buy, though. 

My dog is 16.5 years old and while she’s still in great health, she has a number of pre-existing medical conditions, including a heart defect that has been surgically repaired. Her care in the last few years has cost me a pretty penny and put a big dent in my checking account balance.

Unfortunately, I did not have pet insurance for my dog — largely because I brought her home when I was young and still in school and didn’t realize the importance of getting covered. Over her life, I’ve wished often that I had purchased a policy and I will definitely be getting covered with any future animal companions.

But while I’m definitely going to be buying a pet insurance policy going forward, there’s one type of policy add-on I won’t get. Here’s what it is and why I’ll skip it.

Buying this pet insurance coverage doesn’t make sense to me

Although I want to make sure my next dog has both accident and illness coverage to protect against major health issues that arise, I will be skipping the purchase of wellness coverage.

Wellness coverage pays the bills for routine veterinary expenses. For example, it might cover expenses like:

An annual examFlea and tick preventionBehavioral therapyDewormingNail trimsSpay and neuter surgeryMicrochippingHeartworm testing and preventive medication

In most situations, a wellness plan allows pet owners to get this care at any licensed veterinarian and to submit a claim for reimbursement. However, there are typically caps on coverage, such as a limit of $45 for an exam.

While it may sound appealing to have this kind of coverage, I don’t think it’s worth it for one key reason: The premiums will often add up to more than the amount paid annually — and the policy limits may leave owners with significant out-of-pocket costs anyway.

The reality is, many of the services covered by wellness care may not be used by a given pet at all, or may only be used once. Procedures like spaying and neutering and microchipping, for example, are one-time expenses. Because of this, an analysis by the pet insurance company Trupanion found many pet owners would pay more in premiums each year than the actual services used that are covered by a wellness plan.

While this is often true of insurance (for example, a pet owner may pay premiums every year for accident and illness coverage and not use the services for many full years), in most cases, the purpose of paying the premiums is to transfer the risk of huge unexpected costs. For example, it’s impossible to predict if or when a dog might need $5,000 in cancer treatment, so paying premiums in case that happens makes sense.

With wellness care, though, the entire point is that the care happens on a predictable schedule and is intended to keep the animal healthy and happy. Since there’s no unexpected risk being transferred to the insurer, paying for wellness care would only make sense if the total costs of care were lower with coverage — and often they are not.

Here’s what I’ll be doing instead

Rather than paying more for insurance to cover routine care, I’ll simply be adding up the anticipated cost of this each year and putting that money into my savings account. That way, the funds will be there when I need them and I won’t be sending insurance premiums to a pet insurer who then pays out less than I paid in.

Pet owners should carefully research what pet insurance for wellness care does cover. If, like me, they determine the premiums aren’t worth paying, passing up on this type of coverage can be smart. Just don’t skimp on accident and illness coverage, as those kinds of policies really are important to avoid the risk of huge bills after a medical emergency.

Our picks for the best credit cards

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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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We’re here, we’re queer — and we deserve equal pay. Read on to learn a few moves you can make to help stamp out pay inequality. 

While we’ve certainly made a lot of strides toward greater visibility and equality in American life, it’s not exactly smooth sailing for the LGBTQIA+ community. Looking at money matters in particular, queer Americans are more likely to struggle with personal finances. For example, we face higher poverty rates than straight Americans, according to 2021 research from The Ascent. This is due in part to getting paid less for our labor.

The data is in — and we earn less

An analysis by the Human Rights Campaign (HRC) found that LGBTQIA+ workers earn an average of $0.90 per $1 earned by the typical worker — and the difference in earnings for BIPOC, transgender, and nonbinary members of our community is even greater. The HRC notes that discrimination likely plays a big role here, and 36% of those surveyed reported experiencing it in the workplace.

If you’re currently dealing with discrimination at work, it’s worth looking up the laws for your area and seeing if you can take legal action. The American Civil Liberties Union (ACLU) is a great resource for information about workplace nondiscrimination protections.

Earning less money for doing the same work could mean struggling to cover bills, get out of debt, or become a homeowner. The pay gap is one area where individuals can make a difference, however. Make the following moves to highlight and combat pay inequality and help create a more even playing field for every American.

1. Invest in yourself

One excellent way to help boost your earnings (and perhaps become a role model for others in the community) is to invest in yourself. To quote Warren Buffett, “The best investment by far is anything that develops yourself, and it’s not taxed at all.” This could mean furthering your education in your field via a certificate or degree program, or even just looking for ways to develop skills via online courses and learning opportunities.

And don’t forget that if your current job situation isn’t working for you, the job market is still tight and there are likely other companies (and perhaps other industries) that would welcome you and your talents with open arms. Now might be a great time to contemplate a job change — or even a career change.

2. Talk about pay

Talking about financial matters is still a major taboo for people, but hewing to a culture of secrecy around money is doing no one any favors. And contrary to what your employer might have told you, you are most likely allowed (under federal law) to discuss salaries with your colleagues and share how much money lands in your checking account every payday. Most businesses in this country fall under the National Labor Relations Act, which protects your right to share salary information.

What good can discussing salaries at work do, though? I’m glad you asked! If you find out from a colleague that they make significantly more or less money than you do, for doing the same job and with the same sort of education and experience, you have ammunition to approach management about the inequality and see if it can be rectified. If there’s a pattern of pay inequality that seems to be along racial, gender, or sexual orientation lines, you might even have a case for an employment lawyer.

3. Be out at work, if it’s safe for you — or be a vocal ally

It’s a sad fact that in some places, LGBTQIA+ Americans aren’t safe to be ourselves at work. If you’re in a situation where you cannot be, my heart goes out to you. If you do work for an open and equitable employer, though, it’s worth being open about who you are, including who you love. You might not think this will make a difference, but you could become a resource and perhaps even a mentor to others. You might have colleagues who are struggling with coming out and worrying about how it will impact their work lives, and knowing they have a ready support network and they aren’t alone can really help.

This is also true even if you aren’t part of the LGBTQIA+ rainbow but care about those who are. If you’re in a management position at work and have a say over salaries and human resources matters, your support and advocacy are even more crucial.

Although we’ve come so far in the last few decades, the battle is clearly not over — and sometimes it seems as if our standing is more tenuous than ever. If you can serve as an ally or mentor to others, openly discuss pay at work, and keep working to improve your own professional standing, you’ll be helping to fight the LGBTQIA+ wage gap.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

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 until 2024, 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