Money Management

[[{“value”:”Image source: Getty Images
The average U.S. credit score was 715 in 2023, says Experian, one of the three credit bureaus. And that score is considered good (though not great).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. A credit score of under 600, on the other hand, could be considered fair to poor, depending on how low it is. And with a sub-600 credit score, you might end up paying more the next time you borrow money.For example, say you need to finance a car. With a 590 credit score, you might get stuck with a higher interest rate than someone with a credit score of 640, leading to higher monthly payments for you.But that’s not the only problem with having a credit score of under 600. Here are some less obvious pitfalls you might encounter.1. You might struggle to get a mortgageIt takes a minimum credit score of 620 to get a conventional mortgage. This doesn’t mean you won’t be able to get a mortgage with a score of under 600 at all. But your options for lenders and even mortgages themselves may be more limited.You may, for example, have to apply for an FHA home loan, which could leave you paying costly mortgage insurance premiums for a long time. With a conventional mortgage, you can avoid paying extra provided you put down 20% at closing.2. You may be limited to prepaid cellphone serviceIt’s common for people to sign up for cellphone service and pay for it each month after you use it. With a low credit score, your carrier may not be willing to make that arrangement. Instead, you may be limited to prepaid phone service plans until your score improves.3. You may have to make a large deposit for utility serviceIf you have good credit when you sign up for utility services, like electricity and water, you can often avoid having to make a deposit at the time. But with poor credit, your utility company may require some money down to start your service. This’ll mean you have to dip into your savings account for the extra money.How to boost your credit scoreClearly, having a sub-600 credit score could put you in a tough spot. So it’s best to try to raise that number. And one way to go about that is to pay all bills on time. Set calendar reminders so you don’t forget to make payments, or sign up for automatic payments where it makes sense to do so.Next, try to reduce balances on your credit cards. The less you owe relative to your total credit limit, the more your credit score is likely to improve.One way to pay off credit card debts more easily and quickly is to consolidate them onto a single card with a 0% introductory interest rate. Click here for a list of the best balance transfer credit cards to make that happen.Finally, check your credit report from each of the three bureaus for errors. In addition to Experian, you’ll want to see what Equifax and TransUnion have on file for you.If your credit report contains false information that makes you seem like a less reliable borrower, it’s enough to drag your credit score down. But fixing mistakes, like records of late payments you were actually on time with, could help your score rise substantially.Having a credit score under 600 makes borrowing money tough. But clearly, there are financial consequences beyond that. So it pays to do what you can to give your credit score a lift.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 average U.S. credit score was 715 in 2023, says Experian, one of the three credit bureaus. And that score is considered good (though not great).

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.

A credit score of under 600, on the other hand, could be considered fair to poor, depending on how low it is. And with a sub-600 credit score, you might end up paying more the next time you borrow money.

For example, say you need to finance a car. With a 590 credit score, you might get stuck with a higher interest rate than someone with a credit score of 640, leading to higher monthly payments for you.

But that’s not the only problem with having a credit score of under 600. Here are some less obvious pitfalls you might encounter.

1. You might struggle to get a mortgage

It takes a minimum credit score of 620 to get a conventional mortgage. This doesn’t mean you won’t be able to get a mortgage with a score of under 600 at all. But your options for lenders and even mortgages themselves may be more limited.

You may, for example, have to apply for an FHA home loan, which could leave you paying costly mortgage insurance premiums for a long time. With a conventional mortgage, you can avoid paying extra provided you put down 20% at closing.

2. You may be limited to prepaid cellphone service

It’s common for people to sign up for cellphone service and pay for it each month after you use it. With a low credit score, your carrier may not be willing to make that arrangement. Instead, you may be limited to prepaid phone service plans until your score improves.

3. You may have to make a large deposit for utility service

If you have good credit when you sign up for utility services, like electricity and water, you can often avoid having to make a deposit at the time. But with poor credit, your utility company may require some money down to start your service. This’ll mean you have to dip into your savings account for the extra money.

How to boost your credit score

Clearly, having a sub-600 credit score could put you in a tough spot. So it’s best to try to raise that number. And one way to go about that is to pay all bills on time. Set calendar reminders so you don’t forget to make payments, or sign up for automatic payments where it makes sense to do so.

Next, try to reduce balances on your credit cards. The less you owe relative to your total credit limit, the more your credit score is likely to improve.

One way to pay off credit card debts more easily and quickly is to consolidate them onto a single card with a 0% introductory interest rate. Click here for a list of the best balance transfer credit cards to make that happen.

Finally, check your credit report from each of the three bureaus for errors. In addition to Experian, you’ll want to see what Equifax and TransUnion have on file for you.

If your credit report contains false information that makes you seem like a less reliable borrower, it’s enough to drag your credit score down. But fixing mistakes, like records of late payments you were actually on time with, could help your score rise substantially.

Having a credit score under 600 makes borrowing money tough. But clearly, there are financial consequences beyond that. So it pays to do what you can to give your credit score a lift.

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 

[[{“value”:”Image source: The Motley Fool/Unsplash
Costco is different from other stores in that you can’t just walk in on a whim to do some shopping. Rather, you have to show proof of a paid membership. Top credit card to use at Costco (and everywhere else!)
We love versatile credit cards that offer huge rewards everywhere, including Costco! This card is a standout among America’s favorite credit cards because it offers perhaps the easiest $200 cash bonus you could ever earn and an unlimited 2% cash rewards on purchases, even when you shop at Costco. Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.
Click here to read our full review for free and apply before the $200 welcome bonus offer ends!A Gold Star Costco membership costs $65 a year, while an Executive membership costs $130. With the Executive membership, though, you get 2% cash back on your Costco purchases. If you spend enough at the store (at least $3,250 a year), it makes sense to pay for the upgrade.Now, you should know that there are ways to make purchases at Costco without having to worry about a membership fee at all. But here’s why I wouldn’t try to avoid paying.When it makes sense to pay for a Costco membershipYou have a few options for shopping at Costco without a membership. But each one has at least one flaw.First, anyone can shop on Costco.com. But non-members are charged 5% extra on their orders, which can add up over time. Also, certain online items are designated as member-only, so you can’t buy them if you don’t have a membership ID number to enter when you go to check out.Next, you can visit Costco in person as a paying member’s guest. But then you’re tied to their schedule. You can also shop at Costco on your own as a non-member if you have an existing member buy you a Shop Card — Costco’s version of a gift card. But again, you’re reliant on someone else to make that purchase. And do you really want to deal with having your friend who’s a member buy you a Shop Card every week and figuring out how to reimburse them?Why it makes sense for me to pay upTechnically, I could get away with not having a Costco membership. My neighbors, who I’m friendly with, have a membership and go all the time, so I’m sure I could easily hop in their car when I want to. But it makes sense for me to buy a membership because it actually ends up putting the most cash back in my pocket. I typically spend $150 a week at Costco, and I shop at the store most weeks during the year. So if we assume 50 weeks of shopping, I’m spending $7,500. As an Executive member, I get 2% back on $7,500, or $150. When you subtract the cost of an Executive membership, which is $130, I still get to pocket $20. And if you shop at Costco often enough or spend enough, you may end up in the same boat where your Executive membership is not only fully paid for thanks to your cash back, but you’re also ahead a bit of money.Another thing I do to maximize my Executive membership at Costco is pair it with the right credit card. So all told, I commonly get at least 4% back on my purchases. Click here for a list of the best credit cards for Costco so you can do the same.So it’s possible to get out of paying Costco’s annual membership fee. But if you run the numbers, you may find that it makes the most sense to pay up. You should also know that Costco uses its membership fee revenue to offset its costs, allowing for the low prices and affordable services it’s known for. So by paying for Costco access, you’re helping to improve the store’s offerings, which is something you can feel good about.Top credit card to use at Costco (and everywhere else!)
We love versatile credit cards that offer huge rewards everywhere, including Costco! This card is a standout among America’s favorite credit cards because it offers perhaps the easiest $200 cash bonus you could ever earn and an unlimited 2% cash rewards on purchases, even when you shop at Costco. Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.
Click here to read our full review for free and apply before the $200 welcome bonus offer ends!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 positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Costco is different from other stores in that you can’t just walk in on a whim to do some shopping. Rather, you have to show proof of a paid membership.

Top credit card to use at Costco (and everywhere else!)

We love versatile credit cards that offer huge rewards everywhere, including Costco! This card is a standout among America’s favorite credit cards because it offers perhaps the easiest $200 cash bonus you could ever earn and an unlimited 2% cash rewards on purchases, even when you shop at Costco.

Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.

Click here to read our full review for free and apply before the $200 welcome bonus offer ends!

A Gold Star Costco membership costs $65 a year, while an Executive membership costs $130. With the Executive membership, though, you get 2% cash back on your Costco purchases. If you spend enough at the store (at least $3,250 a year), it makes sense to pay for the upgrade.

Now, you should know that there are ways to make purchases at Costco without having to worry about a membership fee at all. But here’s why I wouldn’t try to avoid paying.

When it makes sense to pay for a Costco membership

You have a few options for shopping at Costco without a membership. But each one has at least one flaw.

First, anyone can shop on Costco.com. But non-members are charged 5% extra on their orders, which can add up over time. Also, certain online items are designated as member-only, so you can’t buy them if you don’t have a membership ID number to enter when you go to check out.

Next, you can visit Costco in person as a paying member’s guest. But then you’re tied to their schedule.

You can also shop at Costco on your own as a non-member if you have an existing member buy you a Shop Card — Costco’s version of a gift card. But again, you’re reliant on someone else to make that purchase. And do you really want to deal with having your friend who’s a member buy you a Shop Card every week and figuring out how to reimburse them?

Why it makes sense for me to pay up

Technically, I could get away with not having a Costco membership. My neighbors, who I’m friendly with, have a membership and go all the time, so I’m sure I could easily hop in their car when I want to. But it makes sense for me to buy a membership because it actually ends up putting the most cash back in my pocket.

I typically spend $150 a week at Costco, and I shop at the store most weeks during the year. So if we assume 50 weeks of shopping, I’m spending $7,500.

As an Executive member, I get 2% back on $7,500, or $150. When you subtract the cost of an Executive membership, which is $130, I still get to pocket $20. And if you shop at Costco often enough or spend enough, you may end up in the same boat where your Executive membership is not only fully paid for thanks to your cash back, but you’re also ahead a bit of money.

Another thing I do to maximize my Executive membership at Costco is pair it with the right credit card. So all told, I commonly get at least 4% back on my purchases. Click here for a list of the best credit cards for Costco so you can do the same.

So it’s possible to get out of paying Costco’s annual membership fee. But if you run the numbers, you may find that it makes the most sense to pay up.

You should also know that Costco uses its membership fee revenue to offset its costs, allowing for the low prices and affordable services it’s known for. So by paying for Costco access, you’re helping to improve the store’s offerings, which is something you can feel good about.

Top credit card to use at Costco (and everywhere else!)

We love versatile credit cards that offer huge rewards everywhere, including Costco! This card is a standout among America’s favorite credit cards because it offers perhaps the easiest $200 cash bonus you could ever earn and an unlimited 2% cash rewards on purchases, even when you shop at Costco.

Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.

Click here to read our full review for free and apply before the $200 welcome bonus offer ends!

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 positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

“}]] Read More 

[[{“value”:”Image source: Getty Images
We’re a few weeks away from the official start to the holiday season, and if you’re like a lot of people, you might not even think about buying gifts until then. But preparing in advance of Black Friday can help you find the best deals.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. Planning how you’ll pay for your purchases can also help you reduce your costs. You might already have a top-rated rewards credit card in your wallet. But if you’ve been thinking about opening another one, doing it now could offer four valuable benefits.1. Better bonus rewards in the categories you needA great travel rewards card can be a valuable addition to your wallet, especially if you travel frequently, but it may not be what you need for holiday shopping. You could benefit a lot more from having a rewards credit card that offers bonus rewards on department stores or certain online retailers.Or, if you prefer a card that offers a high cash back rate on all purchases, check out our list of the best cash back credit cards. These cards make it easy to earn rewards no matter where you’re shopping.Think about where you plan to shop the most during the holiday season and see how that fits with the credit card rewards you currently earn. If you think you’ll be stuck earning a standard 1% cash back on most of your purchases, you may want to add a new card to your wallet before Black Friday to maximize your rewards.2. A 0% introductory APRGenerally, carrying a balance on a credit card isn’t advisable because it can cause you to rack up expensive debt. Many people wind up in a debt cycle they struggle to get out of and pay considerably more than their original balance due to high interest charges.However, some credit cards have a 0% introductory rate so they don’t accrue interest at first. The exact amount of time varies by card, but in some cases, it’s more than a year.One of these cards could be a smart choice for your holiday shopping if you’re confident you can pay back all that you owe before the 0% APR period ends. The best part is, many of these cards offer rewards, too, so you don’t have to choose between cash back and zero interest. Check out some of our favorite 0% intro APR cards to see which could provide you with the biggest savings this holiday shopping season.3. A sign-up bonus you wouldn’t normally reachCredit card sign-up bonuses let you earn extra bonus points by meeting certain criteria within the first few months of account opening. Usually, you have to spend a certain amount in that time, and therein lies the challenge. If you don’t spend enough, you might miss out on the bonus.But the holiday season typically leads to increased spending for most people, so now could be the perfect time to go after that credit card bonus and snag up $300. Read all the fine print before opening the card so you understand exactly what you have to do to earn the bonus.4. Purchase protections on your itemsSometimes, we buy holiday gifts months in advance. Most stores understand this and adjust their return policies to accommodate the holidays. But this isn’t always enough.Credit card extended warranties are a huge help if you realize an item you purchased is broken or defective well after the purchase. Your card issuer might pay to have the item repaired or replaced even if the original retailer or manufacturer won’t.Some credit cards also offer purchase protection, which guards your items against theft or accidental damage for a limited time, and price protection. This reimburses you for the difference if you later find an item that you bought with that card for sale at a lower price. However, you usually have to watch for sales and contact your card issuer to get this refund.Not all credit cards offer these protections, so you’ll have to check the cardholder agreement to see if yours does. Be sure you understand the limitations these services offer, and contact the credit card issuer if you have any questions.Remember, it can take a week or more to get your credit card in the mail after you’re approved. If you plan to open a new one before Black Friday, it’s best to act soon. Choose a few cards you’re interested in and compare their perks to determine which one will save you the most this holiday season.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”:”

We’re a few weeks away from the official start to the holiday season, and if you’re like a lot of people, you might not even think about buying gifts until then. But preparing in advance of Black Friday can help you find the best deals.

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.

Planning how you’ll pay for your purchases can also help you reduce your costs. You might already have a top-rated rewards credit card in your wallet. But if you’ve been thinking about opening another one, doing it now could offer four valuable benefits.

1. Better bonus rewards in the categories you need

A great travel rewards card can be a valuable addition to your wallet, especially if you travel frequently, but it may not be what you need for holiday shopping. You could benefit a lot more from having a rewards credit card that offers bonus rewards on department stores or certain online retailers.

Or, if you prefer a card that offers a high cash back rate on all purchases, check out our list of the best cash back credit cards. These cards make it easy to earn rewards no matter where you’re shopping.

Think about where you plan to shop the most during the holiday season and see how that fits with the credit card rewards you currently earn. If you think you’ll be stuck earning a standard 1% cash back on most of your purchases, you may want to add a new card to your wallet before Black Friday to maximize your rewards.

2. A 0% introductory APR

Generally, carrying a balance on a credit card isn’t advisable because it can cause you to rack up expensive debt. Many people wind up in a debt cycle they struggle to get out of and pay considerably more than their original balance due to high interest charges.

However, some credit cards have a 0% introductory rate so they don’t accrue interest at first. The exact amount of time varies by card, but in some cases, it’s more than a year.

One of these cards could be a smart choice for your holiday shopping if you’re confident you can pay back all that you owe before the 0% APR period ends. The best part is, many of these cards offer rewards, too, so you don’t have to choose between cash back and zero interest. Check out some of our favorite 0% intro APR cards to see which could provide you with the biggest savings this holiday shopping season.

3. A sign-up bonus you wouldn’t normally reach

Credit card sign-up bonuses let you earn extra bonus points by meeting certain criteria within the first few months of account opening. Usually, you have to spend a certain amount in that time, and therein lies the challenge. If you don’t spend enough, you might miss out on the bonus.

But the holiday season typically leads to increased spending for most people, so now could be the perfect time to go after that credit card bonus and snag up $300. Read all the fine print before opening the card so you understand exactly what you have to do to earn the bonus.

4. Purchase protections on your items

Sometimes, we buy holiday gifts months in advance. Most stores understand this and adjust their return policies to accommodate the holidays. But this isn’t always enough.

Credit card extended warranties are a huge help if you realize an item you purchased is broken or defective well after the purchase. Your card issuer might pay to have the item repaired or replaced even if the original retailer or manufacturer won’t.

Some credit cards also offer purchase protection, which guards your items against theft or accidental damage for a limited time, and price protection. This reimburses you for the difference if you later find an item that you bought with that card for sale at a lower price. However, you usually have to watch for sales and contact your card issuer to get this refund.

Not all credit cards offer these protections, so you’ll have to check the cardholder agreement to see if yours does. Be sure you understand the limitations these services offer, and contact the credit card issuer if you have any questions.

Remember, it can take a week or more to get your credit card in the mail after you’re approved. If you plan to open a new one before Black Friday, it’s best to act soon. Choose a few cards you’re interested in and compare their perks to determine which one will save you the most this holiday season.

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 

[[{“value”:”Image source: Getty Images
As a baby boomer myself (although one not looking to retire soon), I — and my wife — have been working to steadily reduce and retire some old debts. My exorbitant law school debt is long gone, and our home mortgage rate is as low as it can go and is almost paid off. Credit card debt is now almost non-existent.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. Why? Because typically, one’s peak earning years are in their 50s, and as that decade recedes, it is smart and prudent to look to cut back wherever possible. This in turn frees up disposable income for whatever we choose to do with it.So let’s explore which debts are the most important to eliminate prior to retirement, and how eliminating them (to the extent possible) can protect your savings, and your future.1. High-interest credit card debtCredit card debt is one of the most financially draining liabilities you can have due to high interest rates. As of 2024, the average American credit card APR is 23.37%. Carrying ongoing huge expenses like these can easily chip away at your retirement funds, quickly turning your nest egg into a goose egg.Paying off revolving credit card debt should be Public Enemy No. 1 in your debt-reduction plan. At a minimum, transfer over your credit card debt to one of these balance transfer cards that we rank highly. You may be able to pay it off sooner without additional interest charges.2. Mortgage balanceCarrying a mortgage into retirement can be manageable, but only if you have budgeted for it. Many experts suggest paying off your mortgage entirely before retirement, especially if the interest rate is high or if you will be living on a fixed income. Diverting retirement funds to pay your mortgage will limit your financial flexibility.Now, if paying it off completely is not feasible, consider at least refinancing your home loan or downsizing to a more affordable property to keep monthly costs in check.3. Car loansThe monthly payments on car loans can be a significant drain, particularly given that the average car loan rate ranges from a low of 5.25% to a whopping 21.55% (dependent on your credit score), and maintenance costs may also increase with older vehicles. Instead, pay those suckers off! It really is wise to pay off any auto loans before retiring so that you have one less monthly bill to worry about.Or, at least consider selling one of your extra vehicles. You may even want to opt for a more economical car to reduce this financial burden.4. Medical debtWhile Medicare and supplemental insurance help considerably with healthcare costs (thank you, FDR!), unexpected medical expenses can still arise, especially in retirement. Check it out: It is estimated that a senior will need $165,000 to cover healthcare costs in retirement.One thing to know about medical debt is that it is typically negotiable. This means you can call up the provider and inquire about settling the bill for less than the stated invoice amount. Play the senior citizen card. It works.So here’s the bottom line: Eliminating and/or reducing debt before retirement is essential for a more secure, stress-free retirement. By tackling these debts head on, you will set the stage for a financially stable (not to mention much easier) and more fulfilling retirement.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”:”

As a baby boomer myself (although one not looking to retire soon), I — and my wife — have been working to steadily reduce and retire some old debts. My exorbitant law school debt is long gone, and our home mortgage rate is as low as it can go and is almost paid off. Credit card debt is now almost non-existent.

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.

Why? Because typically, one’s peak earning years are in their 50s, and as that decade recedes, it is smart and prudent to look to cut back wherever possible. This in turn frees up disposable income for whatever we choose to do with it.

So let’s explore which debts are the most important to eliminate prior to retirement, and how eliminating them (to the extent possible) can protect your savings, and your future.

1. High-interest credit card debt

Credit card debt is one of the most financially draining liabilities you can have due to high interest rates. As of 2024, the average American credit card APR is 23.37%. Carrying ongoing huge expenses like these can easily chip away at your retirement funds, quickly turning your nest egg into a goose egg.

Paying off revolving credit card debt should be Public Enemy No. 1 in your debt-reduction plan. At a minimum, transfer over your credit card debt to one of these balance transfer cards that we rank highly. You may be able to pay it off sooner without additional interest charges.

2. Mortgage balance

Carrying a mortgage into retirement can be manageable, but only if you have budgeted for it. Many experts suggest paying off your mortgage entirely before retirement, especially if the interest rate is high or if you will be living on a fixed income. Diverting retirement funds to pay your mortgage will limit your financial flexibility.

Now, if paying it off completely is not feasible, consider at least refinancing your home loan or downsizing to a more affordable property to keep monthly costs in check.

3. Car loans

The monthly payments on car loans can be a significant drain, particularly given that the average car loan rate ranges from a low of 5.25% to a whopping 21.55% (dependent on your credit score), and maintenance costs may also increase with older vehicles. Instead, pay those suckers off! It really is wise to pay off any auto loans before retiring so that you have one less monthly bill to worry about.

Or, at least consider selling one of your extra vehicles. You may even want to opt for a more economical car to reduce this financial burden.

4. Medical debt

While Medicare and supplemental insurance help considerably with healthcare costs (thank you, FDR!), unexpected medical expenses can still arise, especially in retirement. Check it out: It is estimated that a senior will need $165,000 to cover healthcare costs in retirement.

One thing to know about medical debt is that it is typically negotiable. This means you can call up the provider and inquire about settling the bill for less than the stated invoice amount. Play the senior citizen card. It works.

So here’s the bottom line: Eliminating and/or reducing debt before retirement is essential for a more secure, stress-free retirement. By tackling these debts head on, you will set the stage for a financially stable (not to mention much easier) and more fulfilling retirement.

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