Money Management

My bank rejected my scheduled credit card payment at the last minute. Here’s what happened next and how to protect your credit. 

The email arrived in my inbox without warning. It was from my bank. Your direct debit has been declined, it said, to the tune of $500. It was $500 that I’d attempted to put toward paying off my credit card balance. But I had insufficient funds in my bank account, so the payment bounced.

Cold sweats. I opened my Discover app. There it was, the $500 balance. Sitting there, very much unpaid and weeks past due.

The consequences for missing a credit card payment range from a small fee to a docked credit score and total account closure. The latter was unlikely — I wasn’t 30 days late — but this was the first time I’d missed a significant charge, so I was nervous.

Holding my breath, I checked to see if I’d at least made the minimum payment.

I had. Phew. I’d never been so grateful to set up automatic monthly payments, saving me from potentially paying a late fee.

It all started because I hadn’t had enough money in the bank to pay my credit card bill. It could have happened to anybody. Here’s what happens when a bank rejects your credit card payment.

The bill doesn’t go through

The transfer will fail to process if you don’t have enough money in your checking account to pay a credit charge. You’ll probably be notified one of three ways:

Via emailVia text messageVia app notification

I received email notifications, twice. Once, when my bank failed to process the charge. The second, when my bank was unable to process the charge two days later. Had I deposited the needed money right after the first email, I could have made the payment without issue.

How often your bank attempts to process your payment depends on the company policies of the bank and credit company, which you can discover via their websites or by contacting a representative.

You may pay interest on any unpaid balance

Let’s say you make the minimum payment but still have an unpaid balance left over. Your credit card may charge you fees on that balance. How much you’re charged depends on your APR, which is unique to each credit card.

Some credit cards offer low APRs, making these fees less horrendous. Some zero-interest credit cards even offer sign-up bonuses with 0% APR for up to two years after joining.

Also, some cards offer grace periods. My card offers a grace period of about one month, which gives me 25 days to make late payments before incurring interest on my unpaid balance.

Note: Typically, grace periods only apply when you’ve paid the previous cycle’s balance in full.

An unpaid balance may also impact your credit score. The balance carries over to your next credit cycle, and it counts toward your credit utilization ratio, which is how much credit you’re using at any one time. Use too much credit, and your credit score will go down. Avoid this by keeping your credit balance low or paying in full.

Credit bureaus may dock your score

If you fail to make the minimum payment, your credit card may be charged interest, and if you’re really late (30 days or more), you may face more severe consequences. Common ones include late fees, increased interest rates, and a hefty hit to your credit score.

It’s worth noting that paying your bill a week late probably won’t hurt your credit score. Credit card companies cannot report late payments until you’re 30 days late.

Your credit score won’t be docked if you make the minimum payment. That said, paying off the whole bill whenever possible is typically a good idea. Credit card debt builds up quickly, and interest rates on unpaid balances (a.k.a. penalty APR) are often in the 20% range.

How to protect your credit

Consider setting up automatic payments to protect yourself from the worse consequences of missing a credit payment. Many large companies let you set up automatic payments in-app. I have mine set to make minimum payments in case I forget. A good thing, too!

If you’re unsure exactly how a missed payment will go down and want answers, your best bet is to contact your credit company. Policies vary by company, so they’ll know best. The best credit cards offer access to professional representatives and other perks.

Consider setting up smart credit habits like payment reminders and automatic payments, and check out your credit company policy for late payment details. Here’s to staying financially healthy this summer, and no more missed payments. Cheers.

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If you are relocating, you will have to decide how to move your possessions. Asking these few key questions can help you decide what’s best for you. 

After you sell your house, you get to pay off your mortgage and find a new and exciting place to live. While there’s often a lot of anticipation involved in this process, there are stressful parts beyond just having to get a new mortgage loan — namely, having to move to a new home.

If you’re like most people, you have a lot of stuff to call your own that’s going to have to be relocated. You’ll need to make a decision about how to handle this process, which usually involves either hiring a mover or trying to do it yourself.

So, how should you make this choice? Here are some questions to ask yourself to help you decide.

Are you physically capable of moving your stuff?

The first question you have to ask yourself is whether you are physically capable of moving all your possessions — including heavy items like mattresses and dressers and dining tables.

If you are not strong enough to handle moving these large items, then you will have no choice but to hire a moving company unless you have friends or family who are willing to step in and who you are comfortable asking.

How much money can you spend on the move?

Hiring professional movers is very expensive. According to U-Haul, the average cost of hiring two movers for two hours ranges from $211 to $354 depending on the state. If you don’t have a hefty checking account balance, you could easily end up spending several thousand dollars on a move — especially if you have a lot of stuff or if you must move your items over a long distance.

The cost of hiring professionals is a huge downside. But, if you aren’t physically capable of moving all your items, you may have to pay for help for at least some of them. You could potentially save money by doing most of the packing and moving yourself and just bringing in the pros for the things you can’t manage on your own.

How much time can you spend on the move?

You’re going to have to spend a lot more time moving yourself compared with if you hire professionals to come in and do the job. Consider whether you’re able to do this. If you have a lot of work commitments or small children, it may not be worth it.

You should also think about the value of your time. If you can work and make more money per hour than you’d pay the professionals, you may as well do your job and let the movers take care of the tough tasks of packing and relocating your possessions.

How far are you moving?

The length of your move is important too. If you are moving over a long distance, it will cost more to hire professional movers. But, it may be more worth it to you if you don’t want to pack and load a large truck. If you are relocating just down the road, you may want to handle things yourself if you can take over items over time and if you can drive a smaller truck and just make more trips.

By considering these issues, you can decide what makes sense for you. In most cases, DIY is the way to go if you have the strength to do it and are short on cash, but hiring a professional makes sense if you can afford it or are incapable of moving your items on your own.

If you must hire a professional, consider trying to do as much prep work as you can to save on costs. And whether you’re doing it yourself or bringing in the pros, try to downsize as much as possible and declutter, because the less you have to move, the easier and cheaper it will be.

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Changing the status of your credit accounts can impact your score. Read on to learn what happened when one writer ditched a long-standing credit card. 

When was the last time you pulled out your credit cards, had a good long look at all of them, and asked, “What have you done for me lately?” I recently decided to cancel one of my credit card accounts, and it was special because it was in fact my oldest active card. I got that credit card back in 2010, when I was just two years out of graduate school and in the early years of my old career.

A lot has changed since then, and the credit card was no longer serving me. It had a very low credit limit, and the issuer refused my requests for an increase. It didn’t offer very good benefits. And to add insult to injury, it had an annual fee. I hadn’t even used the card in a few years, but continued to pay that fee, just to keep the account active. But after paying off all my credit cards last year and whipping my finances into shape, I was done being annoyed about this card. I closed the account, and waited for the fallout.

A very inconsequential dip

I have spent the last few weeks since canceling the card on the edge of my proverbial seat, anxious to see the hit to my credit score. This morning, I signed into one of my bank accounts, as one of the benefits given to me as a customer is the ability to see my FICO® Score every month, both on the website and in the bank’s app. It’s finally been updated, and I have my answer. *drumroll*

Two points. My FICO® Score went down a measly TWO POINTS.

And I know the account closure was likely to blame, as there were no other significant changes to my credit during that month. Plus, my bank offered the following note to explain the change:

“FICO® Scores consider the age of a person’s oldest revolving account and/or the average age of revolving accounts. Your score was impacted by the relatively low age of your oldest revolving account and/or the average age of your revolving accounts.”

In fact, credit history represents 15% of a FICO® Score, which is why I took my time deciding whether I wanted to close this account.

I expected this outcome

Truth be told, I wasn’t worried too much about the effect on my score. My credit score was already in the “exceptional” range for FICO (800-850), thanks to my efforts last year. And I knew that if I lost a handful of points, it wouldn’t have a real impact on my finances at this time. I don’t have any current need to borrow money, as I’ve just opened two new (and excellent) credit cards since last fall, and while I am hoping to apply for a mortgage loan next year, that’s a long way off. And besides, this score dip isn’t forever. I can keep making the right moves to keep my credit score in good shape.

Care and feeding of your credit score

Your credit score is pretty darn important if you’re hoping to borrow money at any point. For you, that could be getting a mortgage loan, buying a car, or getting that awesome travel credit card to earn points toward future travel. So how can you ensure your credit score is in good shape? Try these tips:

Keep old accounts open: YES, I know you just read about me closing my oldest credit card. However, this was not a choice I made lightly, and in fact, through all my years of revolving debt and a lower credit score, I kept that card open to give my score the best shot possible. I waited until I had a score in the “exceptional” range to close it.Pay your bills on time: This move kept my credit score above 700, even with a lot of debt. So don’t discount its significance. Payment history represents a whopping 35% of your FICO® Score.Give your credit report a read-through: If it’s been a while since you looked at your credit report, now’s a good time. You can get it free every week for the rest of the year! Look for old delinquent accounts that should’ve fallen off your report by now, and ones that you aren’t yours — credit report errors are common. If you can show the credit bureaus that there’s been a mistake, you can have it removed, bumping your score.

I have no plans to cancel any other credit cards at this point. But I am glad I managed to close this one with minimal drama (other than impatiently waiting for an updated credit score). If you’re considering closing a credit card account, especially an old one, approach with caution, and be aware of the risk of a minor drop to your credit score as a result.

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If you don’t have a good place to do your job, you can’t expect to succeed. Read on to learn what one writer focused on when she decided to freelance. 

One of the biggest changes to our world wrought by COVID-19 has been the rise of remote work. During the pandemic lockdowns in spring 2020, many people suddenly found themselves working from home. At the time, I was still a museum professional, and ended up writing and designing an entire exhibit about the history of the city I lived in, all from a laptop in my bedroom at home.

Just a year later, I changed careers and became a fully remote employee. I wasn’t alone; according to the U.S. Census Bureau, the number of people working from home more than tripled (from around 9 million to 27.6 million) between 2019 and 2021. Not too long after that, I started freelancing as a writer and editor. But just as I was beginning to spread my freelance wings, I made a big change to my work setup that led to more money in my checking account.

Working from home comes with a lot of potential distractions

When I first started working remotely for good (rather than as a stop-gap at the beginning of COVID-19), I opted to set up my work station in my dining room. I don’t live with any other humans, so I figured that I didn’t actually need a home office, and a desk against the dining room wall (and in the middle of my apartment) was sufficient. As it turned out, I was wrong.

I might not share my home with humans, but I do share it with cats. And I had recently adopted a rambunctious kitten that enjoyed wreaking havoc in my apartment while I was trying to work. This meant interrupted Zoom meetings and pausing on my tasks while I went to fetch said kitten from a variety of distracting and potentially dangerous situations.

In addition to animal wrangling, working from my dining room meant listening to vehicles driving down my street, neighbors doing lawn care, and my washer and dryer running their cycles. It wasn’t ideal. So I invested in that home office after all.

Money well spent

I was fortunate enough to have a spare bedroom that lacked a purpose, and when I decided to give it one, I had some work to do. The room had very dark wood paneling on the walls, so the first order of business was to dip into my savings account to pay for paint to brighten it up. My father is a professional painter and kindly lent his expertise to the process. I also bought rugs and curtains to give the room a more comfortable vibe. Finally, I made the biggest investment of this process: a computer for freelancing.

All told, I spent about $2,000 on everything (the bulk of that being the computer), and it was money well spent. Having this space has proved to be great for my productivity, my work-life balance, and more.

A home office offers multiple benefits

My office has a door that can be closed (with my three cats on the other side of it; my youngest has grown up a lot, but he still enjoys distracting me from my work when he can). I can effectively block out nearly all the sounds that used to be a nuisance. And if I have a crucial Zoom meeting or project that requires a lot of concentration, this is vital.

Having an office also means a better work-life balance for me. I enjoy my work, and do sometimes find it hard to take time off, but having my workspace in an area other than my dining room means that all I have to do is step out of the room when I’m done with work. I can sit on my living room couch without staring at my computer and feeling the pangs of guilt that come with not working.

Finally, a home office opens the door to a tax deduction for me as a freelancer. Remote workers can only claim the home office deduction if they are classified as self-employed (so if you are a W-2 employee and happen to work from home, you’re not eligible). My office is overwhelmingly my main place of business, and work is the only activity I use it for, so it qualifies for this deduction, saving me money on my taxes.

I can’t overstate the positive impact my office has had on my work and my personal finances. If you work from home and have the space and ability to do the same for yourself, I highly recommend it. It could be the ticket to greater productivity at work and a better financial outlook, too.

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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 positions in and recommends Fetch. The Motley Fool has a disclosure policy.

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Love Sam’s Club? Here’s what you ought to know about its Member’s Mark products. 

If you’ve ever shopped at Sam’s Club before, you may have noticed a number of products with the Member’s Mark label gracing the shelves. Member’s Mark is Sam’s Club store brand — basically, what Kirkland is to Costco. You might see the Member’s Mark label on everything from food to home goods to furniture.

You may be pleased to know that loading up on Member’s Mark products might result in a lower credit card tab in the course of your shopping. But here are some other things you might find interesting about Member’s Mark.

1. One in five Sam’s Club products is a Member’s Mark item

Member’s Mark products comprise about 20% of the inventory you’ll find at Sam’s Club, according to Chandra Holt, VP of Private Brands for Sam’s Club. These products are commonly priced competitively to offer Sam’s Club members extra value.

2. They drive Sam’s Club membership renewals

Consumers who shop at Sam’s Club commonly have the goal of saving money. That’s why they’re willing to pay a fee to join Sam’s Club. Since Member’s Mark products tend to be priced very competitively, they’re a big draw for customers. As such, in a 2022 press release, Sam’s Club said that “more and more members are citing Member’s Mark products as a reason they renew their memberships.”

3. Many of them are sustainable

In 2020, Walmart, which owns Sam’s Club, announced a push toward sourcing sustainable products, and that’s since tricked down to the Member’s Mark label. Many of the Member’s Mark products you’ll see at Sam Club’s have sustainable attributes. The company also has the goal of increasing its assortment of items that are made using practices that “promote animal welfare, support land and ocean health, mitigate deforestation, utilize more sustainable textiles, and come from renewable sources.”

4. They’re not just sold at Sam’s Club

The whole purpose of Member’s Mark products is to provide Sam’s Club members with high-quality goods at competitive prices. But those products aren’t necessarily limited to Sam’s Club. You might also find them at Walmart.

Given that Sam’s Club is a division of Walmart, that makes sense. But Member’s Mark products are also sold on Amazon. You may not find the same range of products and price points as what Sam’s Club itself offers. But if you’re not ready to spring for a membership, or getting one doesn’t make sense, you can still access some of these goods.

Give Member’s Mark a try

Some people are hesitant to try store brands. But if you have a Sam’s Club membership, it pays to give the store’s Member’s Mark brand a chance. You might not only reap savings, but get to enjoy new products you can’t find anywhere else.

And if you’re worried about quality issues, fear not. Sam’s Club stands behind the products it sells. Whether it’s a Member’s Mark purchase or another item, you can generally bring items you aren’t happy with back to the store at any time for a full refund (though some purchase categories, like electronics, have special rules). You may also have the option to ship items back if you can’t make it over to a warehouse club location for an in-person return.

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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 Walmart. The Motley Fool has a disclosure policy.

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