Money Management

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The fact that the Federal Reserve cut the federal funds rate twice in 2024 didn’t come as a surprise. The Fed was expected to take its benchmark interest rate down a notch in response to cooling inflation.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. The Fed’s rate cuts are expected to continue in 2025, though. And for that reason, the new year could end up being a great time to refinance a mortgage.Refinances could explodeIn 2020 and 2021, mortgage lenders were swamped with refinance applications when mortgage rates fell to record lows. In 2025, mortgage rates are certainly not expected to fall to the levels borrowers enjoyed those years.But as of this writing, the average 30-year mortgage rate is sitting at 6.78%. And there’s a good chance that mortgage rates will fall below 6% in the new year as the Fed continues making rate cuts. That could set a lot of people up to refinance.To be clear, the Fed doesn’t set mortgage rates. But when its benchmark interest rate falls, consumer borrowing rates tend to follow that pattern. This means it’s not just mortgages that could get cheaper in 2025. We could also be in for more affordable auto loan rates, personal loan rates, and more.Generally speaking, it makes sense to refinance a mortgage when you can lower your loan’s interest rate by about 1% or more. For much of 2023 and parts of 2024, mortgage rates were above 7%.So if you locked in a mortgage rate of 7.25% and rates fall to 5.9% in 2025, that’s a wide enough spread for a refinance to make sense. And since many homeowners are expected to be in that boat, there’s a good chance mortgage refinance activity will pick up a lot next year.How to get ready for a 2025 refinanceRefinancing your mortgage could result in lower monthly payments — and more financial breathing room. So if the idea of refinancing your mortgage in 2025 sounds good to you, there are a few key steps to take.First, start researching lenders in your area to get a sense of your options. Also, check out this list of the best mortgage refinance lenders to see if any might be a good fit for you.Next, check your credit score and work on boosting it if it’s below 800. Experian, one of the three credit bureaus, calls a score of 800 or above excellent. And with a credit score in that range, you put yourself in a great position to snag a competitive rate on a refinance.Of course, if you can’t get your credit score to 800 or above, boost it as best as you can. Even a score of 720 will do you more good than a 620.Boosting your credit score isn’t an overnight thing. But you can bring that number up by:Paying all of your bills on timeReducing balances on your credit cards so that ideally, they’re at or below 30% of your total credit limitChecking your credit report for errors and correcting misinformation that could be dragging your credit score downThere’s a good chance more homeowners will refinance their mortgages in 2025 if it brings lower mortgage rates with it. And if you’d like to be one of them, start doing the legwork now so that you’ll be in a great position to take advantage of those lower rates.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to 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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

The fact that the Federal Reserve cut the federal funds rate twice in 2024 didn’t come as a surprise. The Fed was expected to take its benchmark interest rate down a notch in response to cooling inflation.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

The Fed’s rate cuts are expected to continue in 2025, though. And for that reason, the new year could end up being a great time to refinance a mortgage.

Refinances could explode

In 2020 and 2021, mortgage lenders were swamped with refinance applications when mortgage rates fell to record lows. In 2025, mortgage rates are certainly not expected to fall to the levels borrowers enjoyed those years.

But as of this writing, the average 30-year mortgage rate is sitting at 6.78%. And there’s a good chance that mortgage rates will fall below 6% in the new year as the Fed continues making rate cuts. That could set a lot of people up to refinance.

To be clear, the Fed doesn’t set mortgage rates. But when its benchmark interest rate falls, consumer borrowing rates tend to follow that pattern. This means it’s not just mortgages that could get cheaper in 2025. We could also be in for more affordable auto loan rates, personal loan rates, and more.

Generally speaking, it makes sense to refinance a mortgage when you can lower your loan’s interest rate by about 1% or more. For much of 2023 and parts of 2024, mortgage rates were above 7%.

So if you locked in a mortgage rate of 7.25% and rates fall to 5.9% in 2025, that’s a wide enough spread for a refinance to make sense. And since many homeowners are expected to be in that boat, there’s a good chance mortgage refinance activity will pick up a lot next year.

How to get ready for a 2025 refinance

Refinancing your mortgage could result in lower monthly payments — and more financial breathing room. So if the idea of refinancing your mortgage in 2025 sounds good to you, there are a few key steps to take.

First, start researching lenders in your area to get a sense of your options. Also, check out this list of the best mortgage refinance lenders to see if any might be a good fit for you.

Next, check your credit score and work on boosting it if it’s below 800. Experian, one of the three credit bureaus, calls a score of 800 or above excellent. And with a credit score in that range, you put yourself in a great position to snag a competitive rate on a refinance.

Of course, if you can’t get your credit score to 800 or above, boost it as best as you can. Even a score of 720 will do you more good than a 620.

Boosting your credit score isn’t an overnight thing. But you can bring that number up by:

• Paying all of your bills on time
• Reducing balances on your credit cards so that ideally, they’re at or below 30% of your total credit limit
• Checking your credit report for errors and correcting misinformation that could be dragging your credit score down

There’s a good chance more homeowners will refinance their mortgages in 2025 if it brings lower mortgage rates with it. And if you’d like to be one of them, start doing the legwork now so that you’ll be in a great position to take advantage of those lower rates.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to 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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money 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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Even though 401(k) plans come with higher annual contribution limits than individual retirement accounts (IRAs) do, IRAs offer a big advantage. With an IRA, you can invest your money in individual stocks, whereas with a 401(k), you’re generally limited to different funds (like mutual and index funds) that come with varying fees.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. If you have an IRA you haven’t maxed out for 2024, you may want to sneak more money into it before 2024 comes to an end. Here are a few reasons why.1. You can save money on taxesThis year, IRAs max out at $7,000 for savers under the age of 50 and $8,000 for those who are 50 or older. And the more you contribute, up to the limit that applies to you, the more of your income you can shield from the IRS.Traditional IRA contributions are made with pre-tax dollars. So if you put $7,000 into an IRA, the IRS won’t tax you on that specific portion of your earnings.If you earned a lot of money in a savings account or CD this year due to interest rates being high, you should know that that income is taxable. But maxing out an IRA can help offset that tax obligation.2. You can set yourself up with more money for retirementWhen it comes to growing wealth for retirement, your most effective tool is time. Giving your money extra time to grow could lead to higher compounded returns in your IRA. So the more money you’re able to squeeze into your account before the end of the year, the better.Imagine you load up on stocks in your IRA that give you a 10% yearly return, which is consistent with the S&P 500’s average over the past 50 years. If you manage to put $7,000 into that account this year, and you ] leave that money alone for the next 40 years, it’ll be worth about $317,000 — even if you don’t contribute a dollar more.3. You may be less likely to waste money on holiday spendingOne lesser-known IRA rule is that you technically have until next year’s tax-filing deadline of April 15 to finish funding your account for 2024. But there’s a benefit to maxing out your IRA before the end of the current year.If you put that extra money into your IRA in the coming weeks, you might save yourself from needless holiday spending beyond your usual expenses. If you tell yourself you’ll add that money to your IRA in early 2025, you might accidentally blow it on extra stuff for the holidays. And given the pressure and allure of all of those holiday sales, who could blame you?Maxing out an IRA before the end of the year could do your finances a world of good, so aim to increase your contribution rate if you can. And if you don’t yet have an IRA, open one immediately and fund it to the best of your ability so you can start building wealth for retirement.Click here for a list of the best IRAs so you’re able to set yourself up with plenty of money for your senior years.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to 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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money 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.”}]] [[{“value”:”

Even though 401(k) plans come with higher annual contribution limits than individual retirement accounts (IRAs) do, IRAs offer a big advantage. With an IRA, you can invest your money in individual stocks, whereas with a 401(k), you’re generally limited to different funds (like mutual and index funds) that come with varying fees.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

If you have an IRA you haven’t maxed out for 2024, you may want to sneak more money into it before 2024 comes to an end. Here are a few reasons why.

1. You can save money on taxes

This year, IRAs max out at $7,000 for savers under the age of 50 and $8,000 for those who are 50 or older. And the more you contribute, up to the limit that applies to you, the more of your income you can shield from the IRS.

Traditional IRA contributions are made with pre-tax dollars. So if you put $7,000 into an IRA, the IRS won’t tax you on that specific portion of your earnings.

If you earned a lot of money in a savings account or CD this year due to interest rates being high, you should know that that income is taxable. But maxing out an IRA can help offset that tax obligation.

2. You can set yourself up with more money for retirement

When it comes to growing wealth for retirement, your most effective tool is time. Giving your money extra time to grow could lead to higher compounded returns in your IRA. So the more money you’re able to squeeze into your account before the end of the year, the better.

Imagine you load up on stocks in your IRA that give you a 10% yearly return, which is consistent with the S&P 500’s average over the past 50 years. If you manage to put $7,000 into that account this year, and you ] leave that money alone for the next 40 years, it’ll be worth about $317,000 — even if you don’t contribute a dollar more.

3. You may be less likely to waste money on holiday spending

One lesser-known IRA rule is that you technically have until next year’s tax-filing deadline of April 15 to finish funding your account for 2024. But there’s a benefit to maxing out your IRA before the end of the current year.

If you put that extra money into your IRA in the coming weeks, you might save yourself from needless holiday spending beyond your usual expenses. If you tell yourself you’ll add that money to your IRA in early 2025, you might accidentally blow it on extra stuff for the holidays. And given the pressure and allure of all of those holiday sales, who could blame you?

Maxing out an IRA before the end of the year could do your finances a world of good, so aim to increase your contribution rate if you can. And if you don’t yet have an IRA, open one immediately and fund it to the best of your ability so you can start building wealth for retirement.

Click here for a list of the best IRAs so you’re able to set yourself up with plenty of money for your senior years.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to 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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money 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 

[[{“value”:”Image source: Getty Images
I’ve written about credit scores quite a bit over the years, so I have plenty of knowledge about how they work. You might figure I’ve used that knowledge to get a perfect 850 credit score. Not quite — mine normally fluctuates between the high-700s to low-800s.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Sometimes being a perfectionist is good. But when it comes to your credit, there’s nothing wrong with settling a little short of perfection. Here’s why.Perfect credit is hard to getNot many people have perfect credit. Only about 1.7% of Americans with credit scores have a perfect 850 FICO® Score, according to data released by FICO last year. FICO® Score, in case you’re wondering, is the most widely used type of credit score by lenders.To get perfect credit, you need to do well in all the credit scoring criteria. That means:You have no late payments on your credit report. Consumers with perfect credit have no reported late payments or collection accounts.You have low credit utilization. The average utilization among consumers with perfect credit is 4.1%, according to FICO.You have a long credit history. FICO reports that the average age of the oldest credit account is 30 years for consumers with perfect credit.You have a good credit mix. For credit scoring purposes, it’s better to have credit cards and loans instead of just one of the two.You don’t apply for new credit too often. Credit applications cause a small dip in your credit score.In my case, I have a spotless payment history, low credit utilization, and a long credit history. But I’ve never gotten a loan, and I frequently open new credit cards to save money on travel. (If you’d like to do the same, click here to check out our favorite travel rewards cards.) I’d need to micromanage my credit to get perfect credit, and I don’t want to do that.You don’t need a perfect credit scoreThere aren’t any special benefits to perfect credit. FICO even explains this on its website, saying “an all-consuming focus on trying to have a ‘perfect’ 850 FICO® Score won’t really change how lenders look at you as compared to other high scoring applicants.”Lenders generally look at credit ranges more than specific credit scores. The highest range, based on online information from FICO, is 760 to 850. Once you have a 760 FICO® Score, you’ll already be getting all the benefits a high credit score can bring. You’ll qualify for the lowest rates on mortgages and other loans, and you’ll be able to get the credit cards with the most features.For many of the top credit cards, you don’t even need that high of a credit score. It’s possible to get approved with a good credit score of 670, or sometimes less.If you have good credit, a quality credit card is a must. Click here to see our list of the best credit cards. You’ll find cards with cash back, travel rewards, big sign-up bonuses, and 0% intro APR offers.How to get a high credit scoreWhile you don’t need a perfect 850, a high credit score has financial benefits. Here are some simple habits you can follow to get and maintain excellent credit:Pay your bills on time every month. Credit card and loan payments are the most important, because if you pay them on time, it will raise your credit score.Don’t overspend with your credit cards. Ideally, pay them off every month to avoid interest charges.Keep track of your credit with a free online credit score tool. You can monitor your progress and check any factors hurting your credit score.Review your credit report at least once a year and dispute errors. You can get your credit report free of charge at AnnualCreditReport.com.That’s what I do to maintain my own credit score. It may not quite get you to perfect credit — that’s a much bigger challenge. But you’ll build a high score that will get you all the same benefits.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to 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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

I’ve written about credit scores quite a bit over the years, so I have plenty of knowledge about how they work. You might figure I’ve used that knowledge to get a perfect 850 credit score. Not quite — mine normally fluctuates between the high-700s to low-800s.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Sometimes being a perfectionist is good. But when it comes to your credit, there’s nothing wrong with settling a little short of perfection. Here’s why.

Perfect credit is hard to get

Not many people have perfect credit. Only about 1.7% of Americans with credit scores have a perfect 850 FICO® Score, according to data released by FICO last year. FICO® Score, in case you’re wondering, is the most widely used type of credit score by lenders.

To get perfect credit, you need to do well in all the credit scoring criteria. That means:

• You have no late payments on your credit report. Consumers with perfect credit have no reported late payments or collection accounts.
• You have low credit utilization. The average utilization among consumers with perfect credit is 4.1%, according to FICO.
• You have a long credit history. FICO reports that the average age of the oldest credit account is 30 years for consumers with perfect credit.
• You have a good credit mix. For credit scoring purposes, it’s better to have credit cards and loans instead of just one of the two.
• You don’t apply for new credit too often. Credit applications cause a small dip in your credit score.

In my case, I have a spotless payment history, low credit utilization, and a long credit history. But I’ve never gotten a loan, and I frequently open new credit cards to save money on travel. (If you’d like to do the same, click here to check out our favorite travel rewards cards.) I’d need to micromanage my credit to get perfect credit, and I don’t want to do that.

You don’t need a perfect credit score

There aren’t any special benefits to perfect credit. FICO even explains this on its website, saying “an all-consuming focus on trying to have a ‘perfect’ 850 FICO® Score won’t really change how lenders look at you as compared to other high scoring applicants.”

Lenders generally look at credit ranges more than specific credit scores. The highest range, based on online information from FICO, is 760 to 850. Once you have a 760 FICO® Score, you’ll already be getting all the benefits a high credit score can bring. You’ll qualify for the lowest rates on mortgages and other loans, and you’ll be able to get the credit cards with the most features.

For many of the top credit cards, you don’t even need that high of a credit score. It’s possible to get approved with a good credit score of 670, or sometimes less.

If you have good credit, a quality credit card is a must. Click here to see our list of the best credit cards. You’ll find cards with cash back, travel rewards, big sign-up bonuses, and 0% intro APR offers.

How to get a high credit score

While you don’t need a perfect 850, a high credit score has financial benefits. Here are some simple habits you can follow to get and maintain excellent credit:

• Pay your bills on time every month. Credit card and loan payments are the most important, because if you pay them on time, it will raise your credit score.
• Don’t overspend with your credit cards. Ideally, pay them off every month to avoid interest charges.
• Keep track of your credit with a free online credit score tool. You can monitor your progress and check any factors hurting your credit score.
• Review your credit report at least once a year and dispute errors. You can get your credit report free of charge at AnnualCreditReport.com.

That’s what I do to maintain my own credit score. It may not quite get you to perfect credit — that’s a much bigger challenge. But you’ll build a high score that will get you all the same benefits.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to 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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money 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