Money Management

It’s an easy one to make, too. 

If you’re sitting on a pretty substantial credit card balance, you’re not alone. As of the end of 2022, U.S. credit card debt had reached $986 billion, according to the Federal Reserve Bank of New York.

Of course, the problem with credit card debt is that the longer you continue to carry it, the more money you might lose to interest. The reason for this is twofold.

First, credit cards generally charge a high amount of interest to begin with. You’ll often get stuck with a much higher borrowing rate on a credit card than you will with, say, a personal loan.

Also, many credit card companies compound interest on a daily basis. What this means is that for each day you carry a balance, you not only accrue interest on your principal, but also, the interest you’re racking up. It’s an easy way to get caught in a dangerous cycle of debt — which is the exact situation a lot of consumers are in these days.

If you’re hoping to pay off your credit cards as soon as possible, there’s one move to consider making to increase your chances of success. And the best part? It’s a really easy one.

Put the process on autopilot

One reason your credit card debt might linger is that you keep struggling to free up money for debt payoff purchases. You might tell yourself, “Hopefully I won’t spend my entire paycheck this month, and whatever I save will go toward my credit cards.”

But what often happens in that situation is you do spend your entire paycheck. That’s why a good bet is to shrink your paycheck — or, more specifically, give yourself less of it to spend.

If you set up an automatic transfer that moves funds from your checking account to your savings account at the start of each month, you’ll have that much more money to apply to your credit card balance. And because you’re making that transfer happen before you get a chance to start spending down your paycheck, it’ll help you stay on track.

In fact, this move is commonly made when people want to boost their savings account balance — they set up an auto-transfer so they don’t have to think about it. But the concept works just as well in the context of paying off credit card debt.

Don’t let that debt linger

You might think that carrying a credit card balance for a few extra months is no big deal. But remember, that could result in more interest charges — and more delays to becoming debt-free. If you set up an automatic transfer from your checking account and use that money for the purpose of paying off your credit cards, you might save yourself a world of interest — and stress.

Plus, eliminating credit card debt could help your credit score improve. And that could open you up to a lot of opportunities, whether it’s getting a landlord’s approval to rent a home or getting approved for a terrific credit card offer that puts piles of cash back in your pocket.

Top credit card wipes out interest until 2024

If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR for up to 21 months! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read our full review for free and apply in just 2 minutes.

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

 Read More 

The president wants to ease the cost of housing, healthcare, and childcare. 

President Biden set out his spending priorities for the 2024 fiscal year this week in a $6.8 trillion budget proposal. Biden says he wants to “lift the burden on hardworking Americans” and reduce costs for healthcare, childcare, and housing.

Before you get too excited about his proposals, know that it’s extremely unlikely the budget will pass as it stands. Indeed, the plans have already been criticized by Republicans and the New York Times said many consider the budget to be “dead on arrival.”

All the same, it marks the beginning of budget negotiations in Washington, and if any of his measures survive the back and forth, there are several that could ease the pressure on your bank account.

1. Expand Child Tax Credit and help parents with childcare

Earlier in the COVID-19 pandemic, the government increased the scope and amount of the Child Tax Credit from the current maximum of $2,000 per child. Those provisions expired at the end of 2021, but Biden wants to bring them back. Specifically, he proposes to:

Increase credit to $3,000 for children age 6 and over and $3,600 for those younger than 6.Make credit fully refundable, which means more parents will be able to benefit. Right now the credit is partially refundable, so families who don’t owe a lot of tax may not be able to claim the full amount.

The budget also includes proposals to reduce childcare costs for working parents, including providing high-quality free preschool as part of a Federal-State partnership. He also wants to establish a paid family and medical leave program.

2. Reduce healthcare costs

According to The Ascent research, the average American spends over $5,000 a year on healthcare. Biden wants to bring that figure down. Here are some of the ways he hopes to do that:

Allocate more money for Medicare. Biden believes he can ensure the fund has enough money to operate for another 25 years, without cutting benefits or raising costs. He proposes to do this by channeling money from tax reforms and changing the way Medicare negotiates drug prices.Make Affordable Care Act (ACA) insurance savings permanent. The White House says the enhanced subsidies for the ACA, which was initially a pandemic policy, reduced the cost of health insurance by an average of $800 per year. It was set to expire last year, but the Inflation Reduction Act extended it until 2025. Biden’s budget proposes to take away the end date.Reduce costs of prescription drugs. Biden wants to cap the costs of certain prescriptions such as insulin and generic drugs, making it cheaper for Americans to access the medicine they need.

3. Boost affordable housing programs

The cost of housing has soared in recent years, and low-income families were hardest hit. According to the Department of Housing and Urban Development, there was a shortage of 7 million affordable homes before the pandemic. Biden wants to make it easier for people to buy homes and afford their rent. He proposes to:

Incentivize construction of affordable housing. With $59 billion in funding and tax incentives, Biden wants to increase supply of affordable housing for low-income households.Help first-generation home buyers. The budget includes $10 billion in down payment assistance for low-income first-time home buyers whose parents do not own a home. According to a White House release, the idea is that 35% of potential program participants would be African-American and more than 25% would be Latino.Expand rental assistance for high risk groups. Over 2 million households receive rental assistance vouchers right now. But the White House says another 10 million are eligible and aren’t getting the help they need, in part due to a lack of funding. The budget aims to help young people coming out of foster care and veterans to access housing vouchers.

4. Tax credits for energy efficient appliances

There are several parts of Biden’s budget that aim to reduce our energy consumption and help the environment. One that could have a direct impact on your home is tax credits for energy-efficient appliances, including heat pumps.

Speaking from Philadelphia, Biden said, “All of this is going to lower energy costs for families on an average of $1,000 a year and create good-paying union jobs.” The president also wants to invest $24 billion in helping communities become more resilient to extreme weather such as floods, wildfires, storms, and drought.

Bottom line

There are a number of ways that Biden’s budget proposals could save average Americans money. If you’re wondering whether he’ll also raise your taxes to fund those savings, he says he’ll do it by “making the wealthy and big corporations pay their fair share.” Indeed, Biden says that if you’re making less than $400,000 a year, you won’t “pay a penny more in new taxes.”

The real question now is what parts of the budget lawmakers in Washington will be able to pass, particularly what Republican-controlled House might agree to. House Republicans want to see cuts rather than increased spending, and they aren’t big fans of increasing taxes, period.

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 

Don’t resign yourself to weeks of feeling worried and anxious. 

Whether you work for yourself, an employer, or are retired, chances are, filing taxes isn’t your favorite thing to do. But if you’re a small business owner, you might find the process of getting your taxes done, well, taxing.

A recent survey by Freshbooks found that 80% of U.S. small business owners feel stressed at tax time. And almost 63% of small business owners rate their stress level at a three or more on a scale of up to five during tax season.

The stress is real

It’s easy to see why small business owners consider the tax-filing process so harrowing. Small business tax returns can be complicated. There can be lots of paperwork involved, from bank account statements to credit card bills to invoices and payroll data. Individual tax-filers commonly have far less paperwork to round up and deal with.

How to alleviate the stress of tax season

A good 60% of small business owners would rather get a root canal or be tasked with removing a nest of angry bees than deal with taxes. And that’s saying something.

If the idea of filing your small business taxes has you stressed out beyond belief, first, get organized. Take a look at last year’s tax return to get a sense of the documentation you might need. Then, start going through your files and putting those documents together for your 2022 return. A good move is to make a checklist, and then tick items off as you go so you stay on top of things.

Next, don’t go it alone. Filing a small business tax return can be tricky, and there are rules you may not even be aware of that you’re required to follow. So your best bet is really to hire a seasoned tax professional who has experience working with businesses that are similar to yours.

Hiring a tax professional might also alleviate another concern of yours related to taxes — getting audited. In the aforementioned survey, 43% of small business owners cited that as a worry.

Now, the reality is that any time you’re claiming a host of deductions, it potentially opens the door to having your taxes further scrutinized. But remember, tax audits aren’t always a terrible thing.

Sometimes, it’s a simple matter of the IRS sending you a letter in the mail asking for more information or documentation with regard to a specific aspect of your tax return. If you’re claiming a $5,000 deduction for business equipment, for example, the IRS may just want a more detailed copy of the invoice associated with that purchase.

Working with a tax professional won’t necessarily guarantee that you’ll avoid an audit. But if the IRS does require more information about your return, you’ll have someone you can consult who can walk through the matter.

All told, it’s easy to see why filing taxes can be stressful for those who own small businesses. But one final way to relieve some of that worry is to give yourself plenty of time to tackle your taxes and not wait until the last minute. This means that if you haven’t gotten started on your 2022 return yet, carve out some time this week to at least get the ball rolling.

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 

Is it time for Costco members to get a new credit card? 

If you’ve ever shopped at Costco, you’ll know that the store only accepts a few types of credit cards for payment. This policy has been in place for years, and it can be confusing to many shoppers who are eager to use other credit cards. For 16 years, American Express was the exclusive credit card company for Costco. Then in 2016, Costco ended its relationship with AMEX and named Citi as its exclusive credit card issuer and Visa as its new exclusive credit card network for Costco. So, will Costco make any changes and accept another type of credit card?

The current situation

At present, U.S. Costco warehouse locations accept:

All Visa CardsCostco Anywhere Visa® Card by CitiMost PIN-based debit/ATM CardsCostco Shop CardsCashPersonal checks from current Costco MembersBusiness checks from current Costco Business MembersTraveler’s checksEBT cardsMobile payment (Apple Pay, Google Pay, Samsung Pay)

While you can only use Visa at Costco’s warehouse locations, on Costco.com, you can also use MasterCard and Discover Cards (including JCB and Diners Club). American Express is not accepted, however.

Why no other credit cards?

The main reason why no other credit cards are accepted is because of an exclusive partnership between Costco and Visa. Credit card processing fees normally range from about 1.3% to more than 3%. Costco has negotiated a partnership agreement with Visa in exchange for much lower processing fees, and pays transaction fees of only 0.4%. This allows Costco to keep prices low. It would be difficult for any other company to compete with these low fees.

As long as this partnership remains in place, it’s unlikely that any other type of credit card will be accepted in-store. Furthermore, introducing additional credit cards could also create confusion among customers, many of whom are accustomed to using just one type of card when shopping at Costco.

What to do if you’re a Costco member

If you want to shop at Costco and use a credit card, you will need at least one Visa credit card. Shoppers are also allowed to pay by cash, checks, debit cards, and a few other forms of payment. Credit cards, however, offer certain advantages, such as cash back, rewards, and complimentary protections like purchase protection, travel insurance, no foreign transaction fees, and extended warranty coverage.

Costco also offers members the Costco Anywhere Visa® Card by Citi, which allows cardholders to earn Costco cash rewards anywhere Visa is accepted. You can earn:

4% on eligible gas and EV charging for the first $7,000 in charges per year, and then 1% thereafter3% on restaurants and eligible travel2% on purchases from Costco and Costco.com1% on all other purchases.

This card also doubles as a membership card.

For now, it seems unlikely that we’ll see any major changes to Costco’s credit card policy anytime soon. The store currently enjoys a strong relationship with Visa. Introducing additional credit card options could disrupt this profitable relationship while also causing confusion among customers who are used to using one type of card when shopping at the store. The Visa partnership also gives Costco the ability to keep its prices low!

Top credit card wipes out interest until 2024

If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR for up to 21 months! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read our full review for free and apply in just 2 minutes.

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.Citigroup is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. American Express is an advertising partner of The Ascent, a Motley Fool company. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Alphabet, Costco Wholesale, Mastercard, and Visa. The Motley Fool recommends Discover Financial Services and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

 Read More 

You may want to put them on your shopping list. 

For me, shopping at Trader Joe’s is a real treat. I don’t get to do it all that often due to my closest Trader Joe’s supermarket being a good 30 minutes away from my house. But when I do make it over to Trader Joe’s, I often find myself trying out new products based on fan recommendations.

Meanwhile, Trader Joe’s recently shared its Product Hall of Fame, and I was pleased to see a number of my favorite items on the list. Here are some I highly suggest you check out.

1. Trader Joe’s Mandarin Orange Chicken

Cooking dinner isn’t always in the cards for some of us. And while you could revert to takeout during those busy weeks, that could result in quite the large credit card tab.

That’s why I’m so grateful for Trader Joe’s and its ability to come to the rescue with affordably priced entrees you can stick in your microwave or oven and heat. This Mandarin Orange Chicken fits that bill, and you can score a 22-ounce package of it for just $4.99. And while I’ll admit that it’s not a meal I’ve indulged in (due to not being a meat-eater), my husband promises it’s quite tasty.

2. Trader Joe’s Dark Chocolate Peanut Butter Cups

In my world, there’s perhaps nothing more delicious than the combination of chocolate and peanut butter. And so I can tell you from firsthand experience that these Dark Chocolate Peanut Butter Cups are downright delicious.

The dark chocolate helps cut the sweetness overload you might experience when biting into a Reese’s peanut butter cup. And while you might pay a touch more for this product, the $4.49 price point for a 16-ounce container certainly won’t break the bank.

3. Trader Joe’s Peanut Butter Filled Pretzel Nuggets

While we’re on the topic of peanut butter, here’s another way to get your snack on if you happen to be a fan like me. These delicious pretzel nuggets are worlds better than your typical pretzel, and they’re more willing as well. I’ve been known to scarf down several servings’ worth while cranking out content late at night or watching sports. You can snag a 16-ounce bag for $2.49.

4. Trader Joe’s Unexpected Cheddar

If you’re a gourmet cheese fan and have yet to peruse Trader Joe’s selection, I suggest you stop what you’re doing and take a trip over to your local store. This Unexpected Cheddar is just one of many excellent cheese offerings available. It’s creamy, sharp, and just a touch gritty.

All told, it’s a really delicious bite, whether consumed solo or on a cracker. And you can grab a 7-ounce wedge of it for just $3.99.

5. Trader Joe’s Soy Chorizo

As a non-meat eater, it’s always nice to see different proteins hit the shelves at supermarkets. Now I’ll admit that I’m not always a fan of fake meat products, but I have to say, this soy chorizo is actually pretty tasty.

Since it’s pretty salty, a small amount will go a long way. But you can put it in everything from omelets to quesadillas to salad, and it’ll give your meal a nice little kick. You can buy a 12-ounce package for just $2.49.

Whether these specific Trader Joe’s items appeal to you or not, you may want to pay a visit to Trader Joe’s if you haven’t done so in a while. The supermarket chain is constantly releasing new products, and you never know which ones might become favorites of yours.

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

 Read More