Money Management

Payment apps offer a convenient way to send and receive money, but they also attract scammers. Read on to learn how to keep your money safe. 

Payment apps are one of those futuristic modern conveniences that many of us have come to rely on. By using them, you can pay for goods or services, donate to your friend’s fundraising efforts, or even pay your rent. I’ve been lucky enough to be able to pay mine this way for several years now, and it beats the pants off mailing a check.

Some big names in the payments apps space you’ve likely heard of include PayPal, Zelle, Venmo, and Cash App. You link your checking account or credit card to your account in the app to make payments, and to transfer money out when you get paid.

Unfortunately, payment apps also offer scammers the chance to rip you off. They make it extremely easy to send someone money, but if you send it to the wrong person, it might be difficult to reverse or cancel the transaction. And if you were taken in by a scammer impersonating someone you know or an entity you do business with, your bank may not be able to get your money back if you willingly authorized the payment. Here are six ways to keep your money safe when you use payment apps.

1. Only use them to pay/get paid by people you know

To stay safe, only use payment apps with people you know. For example, if you go out to dinner with friends and someone puts the meal on their credit card and requests that everyone else chip in, this is a great time to use a payment app to send your cut of the bill.

An example of when not to send money through a payment app is when a stranger messages you that you’ve won a sweepstakes prize and must pay some fees to collect your winnings. Stop and think: Did you enter such a contest? This could also come in the form of a stranger sending you a payment and claiming it was an accident. They’ll request that you send the money back, but it may have been stolen to begin with, exposing you to trouble. If you get a weird payment from a stranger, contact customer service for the app.

Beware of anyone you don’t know requesting payment through an app. Remember when we were kids and were told not to talk to strangers? Dust off that bit of wisdom and keep it front of mind when using payment apps.

2. Make sure you have the right contact info

Along with ensuring that you’re only paying someone you know, it’s also a good idea to double check that you have the right information for them. If you accidentally transpose two numbers in a phone number, or mistype a user name, you could pay the wrong person.

3. Verify any unexpected requests you receive from someone you know

Scammers can “spoof” a phone number or email address and pretend to be someone you know, in dire need of cash now. Let’s say you receive a message through the app from a friend saying they’re stranded in a foreign country and can’t afford to fly home unless you send them money.

Rather than immediately replying with a transfer of cash, reach out to your friend outside the app to confirm the story. They could end up being quite surprised by the lie being told about them by a random scammer in a payment app, and you won’t have to dip into your savings account to help a friend.

4. Don’t click suspicious links purporting to be sent by the app company

Phishing scams can easily be deployed via payment apps. A scammer might text or email you a link to click, and tell you that your account has been suspended or locked. If you click that link and provide your login information, that scammer now has access to your account. If you are concerned about your account, don’t check up on it via a suspicious link. Instead, log in to the real website or app and check from there.

5. Enable safety features in the app

Mobile apps roll out security updates all the time, so it’s important to update the app whenever a new version comes out. Similarly, you can often opt-in for multi-factor authentication for signing into your account, which is a great way to ensure that only you have access to the payment data contained there. And you might want to turn on app notifications too, so you can have an early warning when there’s unfamiliar activity on your account.

6. Consider using a credit card if possible

Some apps might give you the option to use a credit card to make payments, and since credit cards offer such robust customer protections, this is a good idea. But note that some apps may charge a fee for using a credit card, so greater security could cost you extra.

If you’re the victim of a scam on a payment app (or someone attempts to con you, but you don’t fall for it), report the incident to the app company itself, as well as to the Federal Trade Commission. Use caution when paying someone or receiving money, and keep your wits about you, so you don’t fall victim to scammers.

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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 PayPal. The Motley Fool recommends the following options: short June 2023 $67.50 puts on PayPal. The Motley Fool has a disclosure policy.

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Putting extra money into your mortgage could save you money on interest. Read on to learn more. 

As of February 2023, the typical monthly mortgage payment for a median-priced home was $1,880, according to the National Association of Realtors. Your monthly payments, however, may be higher or lower depending on the cost of your home and the mortgage rate you locked in.

Now, one good thing about most mortgage agreements these days is that they don’t penalize borrowers for paying off their loans early. So, let’s say you sign a 30-year mortgage and really want to try to pay off your home in 25 years. In most cases, you can do so without an early payment penalty.

But what exactly happens when you make an extra payment on your mortgage? Does it reduce your next mortgage payment, or simply lead to an expedited payoff date? Here’s what you need to know.

Extra mortgage payments could go a long way

Making an extra payment on your mortgage generally will not get you out of making a future one. So let’s say your monthly payment is $2,000, only in May, you’re able to make a second $2,000 payment after getting your tax refund.

That extra payment won’t necessarily mean that you don’t have to send over a $2,000 payment in June. If you want your extra payment to be considered an early payment, you’ll need to reach out to your loan servicer and make that known.

Otherwise, what will generally happen when you make an extra mortgage payment is that your funds will be allocated to cover the principal portion of your loan. Normally, when you pay your mortgage, some of the money you send over is applied to your loan’s principal, and some is applied to the interest portion.

An extra payment, however, will generally be applied to the principal only — and you can always reach out to your loan servicer and make sure that’s the case. From there, you’ll end up lowering the amount of interest you pay on your mortgage over time. That’s because interest is calculated based on your loan’s principal amount, and if it shrinks, you’ll owe a little less interest.

Plus, if you continue to make extra payments on your mortgage, you might shrink your repayment window quite a bit. In fact, even a single extra mortgage payment could make it so you’re carrying that debt for less time.

Should you make an extra mortgage payment?

If you’re in a good spot financially and have spare cash on hand, then it could pay to put that extra money into your mortgage on a one-off basis. But if your savings need work or you have costlier debt, like a credit card balance, then it generally pays to put your money into the bank or pay down your credit cards rather than make an extra mortgage payment.

What’s more, if you happen to have a very low interest rate on your mortgage, then it may not make sense to make extra payments. Say you signed a mortgage at 3%, and you’re now getting 3.5% interest in your savings account. In that case, it’s more beneficial to just keep your money in the bank.

Ultimately, extra mortgage payments could allow you to shed your home loan debt sooner and spend less on interest. But if you have other financial objectives to tackle, it could make sense to prioritize those over paying more money into your mortgage.

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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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If you want to move from renter to homeowner, there are some essential steps to take. Read on to learn more. 

There are many financial benefits you get to reap once you buy a home. Not only do you get to build equity in a home, but you can deduct the interest you pay on your mortgage on your taxes. There really isn’t a comparable deduction for those who rent.

Meanwhile, a late 2022 survey by Worth Insurance found that 36% of American households rent a home rather than own one. But 72% of renters say they want to own a home. If you’re in a similar boat, these key moves might get you closer to that point.

1. Research prices in your target neighborhood

You can’t easily save up for a down payment on a home if you have no idea what housing prices look like in the neighborhood you want to live in. Figure out where you’d like to buy, and from there, research prices to get a sense of what homes are selling for. Once you’ve done that, you can decide how much of a down payment you’re looking to make on a home and map out a plan to boost your cash reserves.

2. Cut your spending and boost your earnings to scrounge up that down payment

Coming up with a down payment on a home isn’t something most people can do in a matter of weeks. But once you know what that number looks like, you can make changes to your budget that allow you to free up more cash.

You might, for example, decide to seriously cut back on leisure and entertainment so you can get closer to your down payment. Or, you might give up a car temporarily, or sell a more expensive one and replace it with a cheaper one.

Another option to look at for saving up a down payment is to get a side job. Since the money you earn from it won’t be earmarked for regular bills, you’ll have the option to apply most of it to your down payment-related savings (the reason it’s “most” and not “all” is that you may need to allocate some of that money for taxes, depending on how you’re paid).

3. Re-sign your lease strategically so you have flexibility

You may end up having to re-sign the lease on your rental before you’re ready to become a homeowner. That’s where you’ll want to get strategic. You don’t want to commit to a 12-month lease if you think you’ll be ready to buy a home in four or five months.

Your landlord may be amenable to a month-to-month lease, where you’re allowed to leave at any time as long as you give 30 days’ notice. Or, your landlord might agree to a custom lease term, like a four-month lease, even if most tenants sign a lease for 12 months at a time.

Have that conversation and negotiate, especially if you’re a tenant in good standing who always pays on time. Your landlord may be motivated to keep you as long as they can.

You may be eager to stop renting a home and buy a place of your own. Make these moves to make that transition all the more possible.

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.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Many shoppers like having multiple convenient free return options. Soon, Target will offer free drive-up returns. Find out how the free service will work. 

Whether you shop in-store or online, having several convenient return options can be helpful. After all, not every online order ends up being a win. Some retailers are reducing the free return options available to consumers to cut costs. Meanwhile, some retailers, like Target, are finding new ways to expand their free return offerings to give customers more convenience. Target will allow shoppers to make free drive-up returns starting later this spring.

Some retailers are charging fees for returns by mail

At The Ascent, we recently discussed how more retailers are beginning to charge return fees. With more shoppers making returns by mail, some retailers are no longer offering free mail returns to reduce costs. Those who don’t want to pay additional fees may need to make an in-store return. But not every retailer is making it harder for customers to make returns.

Target wants to make it more convenient to make returns

Beginning this spring, Target will accept drive-up returns. Currently, customers can place drive-up orders through the Target mobile app and pick them up by pulling into a drive-up parking spot when their order is ready. Soon, customers will also be able to make returns by pulling into a drive-up parking spot.

The best part is it will cost nothing to use this service. If you don’t like waiting in line to make a return or are too busy to drop a return in the mail, this solution will offer a convenient way to return unwanted purchases quickly. Once available, you may be able to save time and keep more money in your checking account by shopping with Target over other retailers.

This service will officially launch this spring and is expected to be available at most Target locations by the end of summer. Shoppers will be able to initiate a drive-up return by selecting an eligible purchase and starting the return process in the mobile app.

Love free returns? Target offers free returns on most items within 90 days of purchase. You can return items in-store or by mail for free. This new drive-up return service will give you more ways to make Target returns without paying fees.

Consider the return process before you shop online

If you frequently shop online, you’re not alone. Many consumers shop online because it’s convenient. But before you rush to place your next online order, it’s a good idea to consider the retailer’s return policy. Not every company offers free returns and you don’t want to be charged a fee you’re not expecting.

If it’s an online-only retailer, you’ll want to check to see if returns are free or if you’ll need to pay a fee. The good news is some online retailers offer other ways to return eligible unwanted purchases at no extra cost. For example, Amazon has a partnership with Kohl’s. Shoppers can return purchases at their local Kohl’s, and their items will be packed and shipped for free.

Knowing your return options before placing an order can help you avoid paying unnecessary fees. We’re all seeking ways to save money in today’s expensive world. Are you looking for more ways to save money? Check out our personal finance resources to learn more.

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

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com and Target. The Motley Fool has a disclosure policy.

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