Money Management

You’re approved — to learn about credit! 

It’s never too early to start learning about personal finance. And that includes topics like credit and credit cards. But what if you want that education to be both practical as well as theoretical?

The minimum age to get access to a credit card depends on whether you’ll have your own account or be added to someone else’s account. If you’re under 18, being an authorized user is your only option.

Authorized users can be almost any age

If you’re teaching a child about finance, then you could potentially get them a credit card at any age by adding them as an authorized user on your own accounts. Many of the major card issuers don’t have any age restrictions for authorized users, though a few do:

American Express: 13 years oldBank of America: No minimum ageCapital One: No minimum ageChase: No minimum ageCiti: No minimum ageDiscover: 15 years oldU.S. Bank: 16 years oldWells Fargo: No minimum age

Basically, authorized users are people you authorize to make purchases with your credit line. They will get their own credit card with their name on it, but it will be attached to your credit card account. You’ll still be responsible for any balance on the card, including whatever charges are made by the authorized user.

Young authorized users who are learning about credit should be supervised, at least at first. If your child runs up a big bill and you don’t pay for it, your credit history will be in jeopardy. In some cases, it may make the most sense to hang onto the physical card in between lessons.

Even if you don’t want to give the physical card to your child at all, you may still want to add them to your account if it’s in good standing. Adding your child as an authorized user can help them establish their own credit history.

You can get your own card at 18*

Legally, yes, you can get your own credit card account and line of credit once you turn 18. But there some fine print attached to that * up there.

Everyone who applies for a credit card needs to show a minimum income level to prove they can pay their balances. But if you’re between 18 and 21 years old, that income can’t be from just anywhere. You’re basically limited to income earned through a job or scholarships and grants. Third-party income — such as gifts or allowances from a parent — isn’t eligible.

This extra rule was a part of the CARD Act of 2009 that sought to limit the number of young adults being given credit lines when they had no real way to repay them.

If you don’t have an eligible source of income, you may still be able to get a card with a cosigner (someone with good credit who agrees to be responsible for your debt). However, few major credit issuers accept credit card cosigners; you may have better luck with a local credit union.

Restrictions lift at 21

After you turn 21, a lot of the restrictions on what income you can include on your credit card application are lifted. At this point, you can include essentially any income to which you have a reasonable claim. This includes gifts and allowances, government income, and retirement income.

The income hurdle isn’t the only one facing new credit cardholders, however. Without a credit history, you’ll need to stick to cards designed for first-time cardholders.

Whichever route you take, be sure to educate yourself on the basics of credit cards before you start swiping. An ounce of education is worth a pound of digging yourself out of credit card debt.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Brittney Myers has positions in American Express. The Motley Fool has positions in and recommends Bank of America and JPMorgan Chase. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Learn how to stack rewards and maximize your savings. 

If you’re a Costco member, you’re likely already an expert at finding the best Instant Savings coupons and knowing which bulk buys are best for your family. But if you’re not also using a cash back app, you could be leaving money on the table. Cash back apps work in different ways, but what they have in common is that you can earn extra rewards on your spending in various stores.

Here are five cash back apps you can use with Costco, though some only give cash back on membership payments.

1. Ibotta

Ibotta is a popular cash back app and one of the few that pays rewards for your purchases at Costco. It’s free to use and also works with hundreds of other retailers. Once you’ve downloaded the app, you’ll need to check for offers and activate them before you shop. This can be a bit of a hassle, but it’s worthwhile as the dollars you earn eventually translate into more money in your bank account.

At time of writing, shoppers could get as much as $3 back on certain brands of alcohol, as well as money back on beauty products and various foods items. You’ll need to scan the receipt within seven days of shopping to claim your rewards. Once you’ve got $20 worth of rewards stacked up, you can withdraw them to a bank account, transfer them to PayPal, or use them to buy a gift card.

2. Fetch Rewards

It doesn’t matter what store you shop at with Fetch Rewards. The app looks at what products you’ve bought, not where you bought them — whether that’s Costco or any other retailer. Fetch partners with hundreds of big brand names, and you’ll find some of them on sale in Costco. These include Finish, Colgate, Cheerios, and many more.

There’s no need to activate specific offers before you go to the store, though you may want to look and see which brands qualify and where you might earn extra points. Once you’ve done your shop, you have two weeks to upload your receipt. The app will scan your receipt for any qualifying items. When you have enough points, you can redeem them for gift cards with major companies such as Apple, Walmart, and Hulu.

3. Checkout 51

Checkout 51 is similar to Fetch Rewards in that it focuses on the product rather than the store. Its offer list refreshes every Thursday, and you have to activate offers before you shop. You can also search for specific Costco offers. After you’ve been to the store, you have to upload your receipt while the offer is still live. Once you’ve racked up $20 worth of rewards, you can request your cash back. Checkout 51 pays rewards as a mailed check or via Paypal.

4. BeFrugal and 5. TopCashback.com

These apps only pay cash back on membership purchases.

BeFrugal: $4 back on a new Gold Star membership and $8 back on a new Executive membership. The offer is not available to existing Costco customers.TopCashback.com: $3.15 back on a Gold Star membership and $6.30 back on an Executive membership.

The annual Gold Star Costco membership costs $60 and allows you to shop at Costco stores across the world. The Executive membership costs $120 ($60 for the normal membership and an additional $60 to upgrade). It lets customers earn 2% rewards on certain purchases, as well as giving extra savings on Costco travel and other services.

Stack your rewards

The great thing about using cash back apps is that you can stack benefits by using them with other offers. For example, if you have a rewards credit card, you could earn those rewards in addition to anything the cash back app pays. Even better? You can stack them with in-store discounts and Costco’s Instant Savings coupons too. Bear in mind that you can only use Visa credit cards at Costco warehouses and gas stations, though Costco.com takes other forms of payment.

One word of warning: Don’t buy things just because they’re on special offer or pay out more points on an app. That’s a recipe for spending more rather than saving money. Look for offers or points on products you were going to buy anyway as that will shave money off your regular shop.

Inflation has pushed up the cost of groceries considerably this year. If you can save a few extra dollars by using cash back apps, they could be another tool in your arsenal against cost-of-living increases.

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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.Emma Newbery 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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Being too optimistic about your healthcare expenses could come back to bite you. 

For the first time in years, the Medicare Part B premium and deductible are expected to drop in 2023. This is great news for seniors who have been struggling with inflation this year, but it might not help you as much as you’d expect.

Here’s a look at how much Medicare Part B costs are expected to drop next year and why you could still face rising healthcare costs.

How are Medicare’s costs changing next year?

Original Medicare consists of two parts — A and B. Part A is hospital insurance and this kicks in if you need to stay in the hospital or a long-term care facility. Part B is medical insurance and this covers most standard doctor visits and outpatient care.

Part B’s 2022 premium is $170.10 per month for most people, but higher earners pay more. The deductible is currently $233. In 2023, the typical monthly premium will fall to $164.90 and the deductible will drop to $226.

But Part A’s costs are rising a little next year. Most people don’t have to pay a premium for this, but the deductible will climb from $1,556 to $1,600 in 2023. This may not matter to you if you don’t have to use your Part A coverage in 2023, but there are no guarantees.

Health issues can crop up unexpectedly, leading you to spend more on healthcare than you anticipated. Even a single hospital stay could negate any savings benefit you get from the small dip in Part B expenses.

You could also wind up paying more next year if you have a Medicare Advantage (Medicare Part C) or a Medicare Part D plan for prescription drug coverage. These plans are offered by private health insurers and their prices can vary. If yours goes up, you could still spend more on Medicare in 2023 than you did this year.

How to keep your medical costs as low as possible

Doing everything you can to stay healthy, including eating well and exercising regularly, is key to reducing your risk of health issues. But you still need to take extra steps to prepare yourself for unexpected health conditions.

Original Medicare has a lot of gaps, so you may want to look into supplemental coverage to reduce your out-of-pocket costs in the event of a serious illness or injury. Some people do this by opting for a Medicare Advantage plan over Original Medicare. Unfortunately, the open enrollment period that enables you to choose a new Medicare plan for 2023 is closed. But you may still be able to do so if you’re signing up for Medicare for the first time or you qualify for a special enrollment period due to the loss of other insurance.

You could also look into a Medicare supplement plan. This is a separate insurance policy with its own premiums and deductibles that helps cover some of the things Original Medicare doesn’t. It might also be difficult to secure one of these outside of the annual open enrollment period. But it doesn’t hurt to inquire with a few insurance companies to see if it’s still an option.

Those who saved money in a health savings account (HSA) can rely upon these funds to help cover their healthcare expenses in retirement. Keep in mind that you can no longer contribute funds to an HSA once you sign up for Medicare. But you can continue to use the money you already have, and if you spend it on medical expenses, it’s tax free.

Everyone wants to be optimistic about their health in retirement, but being too optimistic can be dangerous financially. Review your retirement healthcare plans now and make sure you’re doing all you can to prepare yourself for the unexpected.

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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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Read this advice before you make any money moves. 

When you invest money in a brokerage account, obviously the hope is that your portfolio balance will grow all the time. But that’s not the reality. Even when you make smart investments, the market goes in cycles and it’s inevitable that there will be a downturn sometime that can lead to your investment balance declining.

When this happens, it’s far too easy to fall victim to investing mistakes that could cost you in the end. To avoid this undesirable outcome, finance expert Dave Ramsey has three tips to avoid big errors you’ll end up regretting.

Here’s what Ramsey says you should do — along with some advice on whether he’s right, and how to implement his advice.

1. Stick with your investments

Ramsey warns that it may be tempting to try to move your money out of “riskier” assets when market downturns happen. And he said even relatively safe mutual funds can start to seem “risky” when you see your portfolio balance decline.

But while bailing on your investments to avoid further losses can seem like a good idea, the reality is it could be a costly mistake. Ramsey points to data showing that an investor who started with $10,000 who missed just the five best investment days would end up $265,000 poorer than if they’d been invested the whole time. The lesson: Trying to time the market doesn’t work.

Rather than selling your investments during bad times, Ramsey believes you should stay the course. And he’s correct to give this advice. As long as you have made good investments (like ETFs or mutual funds that track the stock market, or buying solid companies with a strong performance record), you should recover from any temporary losses and make back your money and then some if you just stay invested and wait for recovery.

“It takes years of financial discipline and investing consistency—no matter what’s happening with the stock market—to build sustainable wealth,” Ramsey reminded. “You really need to approach it as a long-term process.”

2. Keep on contributing to your brokerage account

Ramsey also gave some other great advice. He said you should keep making investments even during downturns.

While he acknowledged it “seems backward” to keep putting money in during a down market, doing so allows you to buy more assets for less because the things you’re investing in may be selling at a reduced price due to overall economic conditions even if they are solid investments.

Ramsey gave the example of buying furniture to show why you wouldn’t want to pull back on investing in a bad market. “If you need a new couch, saw one for sale a month ago for $700, and it’s on sale right now for $400…that’s a pretty good deal,” he said. The same is true for stocks or funds that see their value decline with the market as a whole even though there’s nothing wrong with them.

This is also a suggestion you definitely should follow. In fact, you might not just want to stick with your investing plans — you may want to go a step further and increase how much you are investing during a downturn so you can take full advantage of buying opportunities.

3. Get help from an investment professional

Finally, Ramsey advised talking with an investment advisor before you make decisions on a down market. “The best way to keep things in perspective—and to keep your investments on track—is to work with an investment professional,” he said.

Now, while Ramsey’s other advice was great, this one is more questionable. If you’re investing regularly in ETFs, mutual funds, or stocks you’ve selected after careful research, there’s little an investment professional is going to do to help you thrive in a down market. There’s no magic formula other than continuing to be a smart long-term investor and there’s no reason to pay someone a fee to tell you that.

So, while you should follow two of Ramsey’s three tips, you probably don’t need to waste money talking to a pro as long as you can hold on tight to the investments you have and try to make more of them if you can.

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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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Should you take advantage of these tricks to try Costco products? 

Costco is one of several warehouse clubs that offers memberships for shoppers, along with Sam’s Club and BJ’s. You can take advantage of bargain prices on big-name brands that Costco offers, and you can also buy exclusive Kirkland-brand products, which many people love.

You have to pay for a Costco membership to be a shopper, though — in most cases. If you aren’t ready to break out the credit cards for a membership fee, though, you have two possible options you can use to shop at the store anyway.

1. You can shop at Costco through Instacart

If you are not a member but want to shop at Costco, you can do so through Instacart.

You will not be eligible for same day delivery as Costco members are, and you will also have to pay a higher price for groceries from Costco through Instacart if you are not a member. These are big downsides. But, if your goal is to try out Costco products before you become a member, this approach could make sense for you.

Just be aware, you may also have to pay an Instacart delivery fee on top of also getting hit with higher prices at Costco. If you plan to make grocery delivery from Costco a habit, you’d likely be better off in the long run if you just became a member rather than using this approach regularly.

The good news, though, is that you can order pretty much any Costco items through Instacart so you can try out just about everything the club has to offer. If you find out you like the products you are buying, then you can opt for club membership if you’ll use it often enough for the fees to be worthwhile.

2. You can shop at the club using gift cards

If you have friends or loved ones who are Costco members, you also have another option available to you. And unlike the Instacart approach, this one won’t require you to pay higher prices.

This approach simply involves asking the people you know with Costco memberships to purchase gift cards for you. If your loved ones give you a Costco Shop Card, you are allowed to shop at the warehouse club in store or online without having a membership of your own.

If your friends are willing to buy you Costco Shop Cards often, you could theoretically follow this approach forever. There would be no surcharges, and you’d just get to shop at the club like anyone else as long as you paid with your Shop Card.

Of course, you may not want to bother your friends to do this all the time for you. So, this may also work best if you’re just looking to see if a Costco membership is worth the price.

Both of these approaches allow you to give Costco a test run, so if you’ve been wondering if Kirkland’s products are as good as advertised or want to experience some of Costco’s great customer service for yourself, give them a try ASAP.

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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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We checked out the Model 3, the most affordable Tesla car. 

My mom wants to upgrade her Camry SE to a Tesla. Everyone is doing it — over 1 in 50 cars are Tesla these days. If driving an electric car is piloting a Millennium Falcon spaceship, then driving a gas-powered car is steering an angry space tractor.

But Teslas are expensive. The Tesla Model 3, the most affordable option, starts at around $47,000. The Model Y, a compact SUV, starts at about $65,000, and the Model S and Model X, Tesla’s flagship vehicles, begin at around $104,000 and $121,000, respectively.

We’ve heard you can save money by claiming up to $7,500 in EV tax credits. Plus, charging electricity is cheaper than gas. But is it enough to convince us to upgrade?

It’s easy to judge cars by their sticker price, but cars cost more than their upfront price. Here’s a breakdown of how much it actually costs to own a Tesla Model 3 over three years.

Financing

To purchase a Tesla, we’d take out a loan. Drivers can take out loans through the Tesla website. The default APR for a Model 3 Rear-Wheel Drive loan is 5.34%. With a down payment of $4,500 and a six-year repayment term, it would cost about $720 per month to finance a Model 3.

Over three years, it costs about $30,420 to finance a Tesla Model 3, not including potential tax credits. Drivers would pay an additional $25,920 over the next three-year period. Shop around for better deals if you want a lower APR on one of the best personal loans on the market.

Charging costs

Electricity is cheaper than gas. My mom drives about 10,000-15,000 miles per year. Her Camry has an efficiency of about 30 miles per gallon. Let’s assume the following is true:

Gas costs $4.78 per gallon (AAA average gas price in CA)Electricity costs $0.28 per kWh (EnergySage average price of electricity in CA)

Over three years, it would cost about $2,625 to charge a Model-3. It costs about $5,225 to fuel a gas-powered 2021 Camry SE. That’s $2,600 in savings. Longer charging times would partially offset those savings.

However, my mom could charge her car overnight with an at-home charger to reduce the time spent at the Supercharger. Bundling a Tesla wall charger with a Model 3 order costs $400 without taxes, according to the Tesla website.

Maintenance

Electric vehicles are typically cheaper to maintain than gas-powered alternatives. My mom’s 2021 Camry SE is under a lease, so she doesn’t have to pay for routine maintenance. Toyota recommends drivers bring their cars in for service three to four times per year.

Tesla recommends that owners have their vehicles serviced every 12,500 miles or 12 months, whichever comes first. The company also offers a four-year, 50,000-mile warranty on all cars, which covers the cost of any necessary repairs or maintenance.

Over three years, it costs little to nothing to maintain a Model 3. That doesn’t include the gradual loss in operating performance due to normal wear and tear. We would spend less time bringing the car to a dealership for routine maintenance.

Battery trading

You’ll unlikely need to replace the battery within the first three years of owning a Model 3. If the battery malfunctions, you’re protected by a warranty for eight years or 100,000 miles, whichever comes first.

Over three years, it costs nothing to trade in a malfunctioning battery. The warranty covers the batteries for all new Teslas. We’d double-check with the company before making a final decision — things like warranties are updated frequently.

Insurance

The Model 3 is significantly more expensive than a 2021 Camry SE, so we’ll likely have to pay more to get covered. The cost of insuring a Tesla Model-3 is about $2,267 per year, according to CarEdge. The average cost of insuring a Toyota Camry is about $1,474 per year.

Over three years, it costs about $6,801 to insure a Model 3. That’s $2,379 more than it costs my mom to insure her current vehicle.

Tesla offers insurance to drivers in California. Insurance considers things like safe driving status and how much you drive. It’s worth shopping around to ensure we get the best car insurance.

Takeaways

My mom and I want to make sure upgrading to a Model 3 is worth it. We have a couple of budgeting apps we use to keep track of our finances.

We added up the cost of financing, charging, maintenance, battery trading, and insurance. Altogether, we found it would cost my mom about $41,000 to own a Model 3 Rear-Wheel Drive over three years. Yes, we rounded up.

There’s simply no way to quickly bridge the cost-savings gap between a $25,000 and a $47,000 vehicle. Over three years, the Model 3 would cost us more money than it saves. Barring significant software updates, the Tesla would unlikely pay itself off anytime soon.

But when considering low charging and maintenance costs, the Model 3 is cheaper to own than an equivalent gas-powered car. Furthermore, it would cost almost nothing over three years to maintain the Model 3.

We’ll look further into the cost of car ownership. We don’t want to break the budget, but a Model 3 offers good value for its price. I’m crossing my fingers I’ll get to hitch a ride in the passenger seat of a four-wheeled spaceship.

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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.Cole Tretheway has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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