Money Management

Nothing lasts forever, and that includes your credit cards. 

Credit cards are always issued with an expiration date. Before your credit card expires, the card issuer will send a fresh new one to your mailing address. Most card issuers do this about a month or two before the card’s expiration date. Once you have your new card and activate it, you can start using it.

That still leaves you with an expired credit card, and this isn’t something you should just throw in the trash. Your new credit card will have the same card number as the old one, so that you don’t need to update your payment information every time you get a new card. But this also means if someone digs through your trash and gets your old card, you could become a victim of credit card fraud. That’s a common crime, with nearly 400,000 credit card fraud reports in 2021.

So, what’s the right way to handle old, expired credit cards? That depends on whether it’s a plastic card or a metal card.

What to do with expired plastic credit cards

You can dispose of plastic credit cards yourself with a few household items. To start, here’s how to destroy the card:

Demagnetize the card. Slowly run a magnet along the card’s magnetic strip, as this strip contains account information. A stronger magnet is the best option, but you could use a fridge magnet in a pinch.Destroy the chip. The chip in your credit card also stores information, so you need to destroy it. You could do this with a hammer, scissors, or anything else you have on hand.Cut up the card. Grab a pair of scissors and cut the card into several pieces. Make sure that no piece contains more than a few numbers in a row. The smaller you cut up your card, the better.

Take the pieces of your old card, divide them up, and throw them away separately. If anyone goes through your trash, they’ll only get a fragment of your card and won’t be able to piece it back together.

Another way to dispose of plastic credit cards is a paper shredder, as many of these also shred credit cards. If you have one, or have access to one at your work, you could use it to quickly destroy your old credit cards.

What to do with expired metal credit cards

Lots of people love the look of metal credit cards, but there is one area where they’re more inconvenient than plastic cards. It’s much harder to dispose of metal credit cards yourself.

The best way to dispose of a metal credit card is to mail it back to the card issuer. When your card issuer sends you a new card, it will also include a prepaid mailing envelope. Use this envelope to mail back your expired credit card, and the card issuer will take it from there.

If you don’t get a prepaid mailing envelope, contact your card issuer to ask for one. Or, if your card issuer has any physical branches in your area, you could visit one and drop off your old card.

It’s also possible to destroy an old metal credit card at home. You’ll still need to demagnetize it by running a magnet over the magnetic strip. To cut it up, you’ll likely need metal shears.

Disposing of expired credit cards takes a little time, but it’s an important precaution to protect yourself from identity theft. By doing this correctly, you’ll prevent crooks from getting their hands on your credit card number.

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Are you meeting Suze Orman’s recommended minimum retirement investment? 

Putting money into a 401(k) or a tax-advantaged brokerage account for retirement is important. Since Social Security only replaces 40% of pre-retirement income, you can’t count on it as a sole support source. You are going to need some extra money to make sure you have enough cash in your bank account on an ongoing basis to afford the necessities and perhaps even some retirement luxuries.

But how much should you actually save in order to have a nest egg that can supplement Social Security and allow you a reasonable quality of life in retirement? Finance expert Suze Orman recently laid out the numbers, suggesting both a minimum retirement investment and an optimum one.

Here’s how much Suze Orman said you need to invest for retirement

According to Orman, the ideal amount you should be investing in your 401(k) is 15% of your income. This includes both the contributions you make to this retirement investment account as well as any employer-matching contributions that some companies offer.

While 15% is a good goal to set, Orman acknowledges that not everyone will be able to accomplish it. If you aren’t yet at this ideal threshold, Orman also has a recommendation on the bare minimum you should be contributing to a 401(k) to set yourself up for a secure future.

“At a minimum, you want to save 10% of your salary in your 401(k),” Orman said. “That’s the minimum.”

While contributing 10% to your 401(k) may not necessarily be enough to provide sufficient savings to replace the recommended percentage of your pre-retirement income after leaving the workforce, the contributions will go a long way toward helping you grow your account large enough so you don’t have to constantly worry about money.

What can you do if you aren’t contributing the minimum amount?

If you’re falling short of saving at least 10% — and ideally 15% — of your income for retirement, Orman has a simple suggestion that could help you turn things around.

“If you’re not yet at 10% or 15%, boost your contribution rate by at least 1 percentage point right now,” Orman said. “Don’t tell me you can’t afford it. You can’t afford not to do this. And I am confident a 1 percentage point increase is something you can adapt to.”

As Orman explained, a few years of inching up your contributions will enable you to eventually hit your target 10% to 15% contribution without requiring you to make major (and perhaps unsustainable) lifestyle changes all at once.

Following this tip from Orman is a good way to get started, but there are also other techniques to boost your retirement contributions. If you get a raise, for example, consider contributing at least half the amount to your 401(k). If you do this before you get used to the extra money, you aren’t going to miss it.

Whatever approach you choose, try to get up to a 10% minimum contribution rate ASAP and, if you can, consider going up from there until at least 15% of your earnings are devoted to helping you have a secure life as a senior.

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Be sure to check all of these off your list. 

Whether you’re a first-time home buyer or have owned a home before, you’re probably aware that it’s important to set a budget before going out and making an offer on a home. That way, you won’t go overboard and put yourself at risk of falling behind on your mortgage payments.

Now, you might set a budget of, say, $400,000 for home-buying purposes but secretly (or not so secretly) hope you’ll pay less. But what if your dream home comes with a $400,000 price tag?

Buying a home at the top of your budget isn’t necessarily a poor choice. After all, you’re not going over your budget — you’re simply using all of it. But if you’re going to go this route, make sure to tackle these key items.

1. Leave yourself with plenty of money for emergencies

When you own a home, a lot of things have the potential to go wrong. Your foundation could start to sink. Termites could take up residence in your walls. Or your heating system might decide to malfunction right in the middle of winter.

That’s why it’s so important to go into homeownership with a healthy savings account balance — especially if you’re buying a home at the top of your budget that will leave you spending more money on your monthly mortgage payments. If you don’t leave yourself with plenty of money to tackle emergencies, you might easily end up in debt — a fate that the 32% of Americans who couldn’t cover a $400 emergency with savings run the risk of.

2. Make sure your home inspection comes back clean

If you’re buying a home at the top of your budget, then you probably can’t afford to tackle too many major repairs — at least not initially. That’s why it’s crucial to pay attention to your home inspection — and be prepared to back out if any major red flags pop up that your seller refuses to address.

Thankfully, we’re past the days of sellers being able to get away with not addressing issues. That was common in 2021 when buyer demand was sky-high, but it’s less common today. But if you happen to be working with a seller who won’t budge, you may need to walk away.

3. Budget out all of your immediate renovations

Even if you’re buying a home in fairly good condition, there are probably some smaller projects you’ll want to tackle as soon as you move in. If you’re buying a home at the top of your budget, map out the costs of these projects thoroughly and prioritize them in order of importance. You may not have the financial leeway to tackle all of them at once, so you’ll need to put your limited funds to good use.

There’s nothing wrong with buying a home at the top of your budget. It’s going beyond that point that’s a risk. But still, you may have less financial flexibility if you’re buying at the top of your budget, so be mindful of these key moves as you go about the process of finalizing that home purchase.

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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.
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There are a few things to think about before you buy a policy. 

If you were to pass away tomorrow, what would happen to the people who love and depend on you? If this thought keeps you up at night, you’re definitely not alone. The good news is that life insurance is designed to allay these fears by supplying financial support to replace what you provide for your loved ones. If you don’t have a life insurance policy at all, or are hoping to replace an existing policy this year, here are the mistakes to avoid along the way.

1. Waiting too long to get coverage

Unfortunately, no one stays young forever, and good health isn’t guaranteed at any point in your life, but the odds do go up that you’ll be diagnosed with a serious health condition as you get older. This is especially true by the time you reach your senior years, as the National Council on Aging notes that older Americans are disproportionately affected by chronic conditions. But you can safely assume your health will decline at least gradually as you get older.

As such, if someone is in their 20s or 30s right now and needs a life insurance policy (you may not need insurance, depending on your personal circumstances), they can expect to pay less for it than if they waited. The odds are good that if a person has children and is still fairly young themselves, their kids are also quite young and would have more to lose if they lost their parent in the short term. It’s worth it to prioritize looking for the right coverage while it’s possible to get a good deal on it.

2. Not calculating your needs

Buying a life insurance policy involves some planning as far as coverage needs are concerned. Many experts recommend purchasing a policy that will pay 10 to 12 times a person’s annual income, which is a good rule of thumb. You might also consider the DIME formula, which considers how much you owe in debt, your income, mortgage loan payoff amount, and paying for education for your children. Policy seekers should take some time to figure out how much insurance they should actually buy before securing a policy. An insurance agent can help with this, too.

3. Getting only one quote

Just like so many financial considerations, the likelihood of being better served and getting a better deal is higher when shopping around for life insurance. If you’ve already considered your coverage needs before contacting insurers, it should be fairly painless to discuss them with a few different life insurance companies to see what kind of premiums you’d owe for the payout you want.

4. Buying a whole life policy

Finally, the last life insurance mistake to avoid is assuming you should get a whole life policy. These policies cover policy holders for their entire life, and have a cash value as an investment, meaning money can be taken out of them. As a result, the premiums will be much more expensive than a term life policy with a comparable payout. Term life policies cover policy holders for a set period of time, say 20 or 30 years. If someone gets such a policy right before having children, the policy will be in effect until they become adults.

Term life policies aren’t an investment and gain no cash value. But they are more affordable than whole life policies. A term life policy is likely a better fit for most peoples’ needs, as there are much better investment options out there than whole life insurance.

There are some potential pitfalls in buying life insurance, as you can see. But if you avoid the ones above, you’ll be able to find the right policy for your needs — one that you can afford and that gives you peace of mind.

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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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