Money Management

We could soon see slightly lower credit card APRs. Read on to learn why paying off your debt is better than hoping for a lower rate. [[{“value”:”

The biggest news in the world of personal finance on Sept. 18, 2024 was the first of what is likely to be multiple federal funds rate cuts. The Federal Reserve cut its benchmark interest rate by half a percentage point, a bigger cut than many experts expected. As a result, we’re likely to soon see lower interest rates across Americans’ savings accounts, personal loans, and credit cards.

If you have a credit card balance, this is good news for you — but not as good as you might hope, given how expensive credit card debt is to begin with. Here’s a closer look at how rates have trended in the past, as well as a few ways to get out of debt.

Credit card interest rates: Then and now

For more insight into how credit card interest rates have risen over the last few years, we can turn to data collected by the Federal Reserve Bank of St. Louis. In May 2022, right after the Federal Reserve began raising its benchmark rate, the average interest rate on credit card accounts assessed interest (as opposed to those with an intro 0% APR) was 16.65%. As of the most recent figure reported (in May 2024), that number had grown to 22.76%.

We could see credit card interest rates tick back downward now if the Federal Reserve makes more cuts this year and into 2025. But ultimately, the difference of a few percentage points in your card’s APR won’t save you a ton of money on payments if you’re carrying a balance. The best way to cope is to pay off that balance, if possible.

Prioritize paying off your cards

Despite the promise of a lower credit card interest rate, credit cards remain one of the most expensive ways to borrow money. And if you’re carrying a balance from month to month, it’s worth focusing on paying it off for good.

If you’re living paycheck to paycheck, that’s easier said than done. Here are a few tips to deal with credit card debt — including one method that can transform your finances entirely.

Balance transfer card

With good credit, you might qualify for one of the best balance transfer credit cards. But this is best suited to those who don’t have a ton of debt and expect to be able to pay it off in a fairly short amount of time. You’ll often get a period (often a year to as long as 21 months) with an intro 0% APR.

You can divide your balance by the number of months at 0% to settle on a monthly payment that will have you out of debt by the time the intro period is over. You’ll most likely have to pay a balance transfer fee of 3% to 5%, so keep this in mind. Transferring your balances leaves your original cards with a zero balance, so avoid using them so you don’t wind up in the same situation again.

Check out our picks for the best balance transfer cards, which can make it easier to pay off your balance while avoiding high interest rates.

Debt consolidation loan

Got a fairly decent credit score (670 or better)? You might be able to consolidate your credit card debt using a top-rated debt consolidation loan. This will come with a fixed interest rate that’s lower than a credit card rate, a set pay-off period (often two to five years), and the ease of making just one payment instead of potentially several. Your credit cards remain open with this option, too, so be sure you don’t take on more debt.

Debt settlement

I’d consider this option a last resort. You may be able to negotiate with your creditors to pay less than you owe to get out of debt. And you can do this yourself rather than paying a scammy “credit repair” company! But unlike in the previous two methods, your credit card accounts will be closed, and the credit score hit from this move is likely to be substantial.

Get professional help

If you’re drowning in debt and out of options, Speak to a nonprofit credit counseling service, like the National Foundation for Credit Counseling. It’ll create a debt management plan for you and limit your access to credit, so there’ll be a credit score hit here, too. But you can also get help with budgeting and managing your finances going forward.

Increase your income

OK, here’s the method I used in 2022 — but I recognize that not everyone has this ability. I was fortunate enough to have extra time that let me take on a side hustle from home. Here’s the important bit: If you start a side hustle, any money you earn (less taxes) can be rolled right to your debt payoff.

And if you hang on to that side hustle after your debt is paid off, you can enjoy the benefits of more income. This could mean achieving a big financial goal (like becoming a homeowner), investing for retirement, or padding your savings account.

Even if we see lower rates on credit cards and carrying a balance becomes less costly, it’s still not wise to let credit card debt linger. Consider using one of these methods to get out from under it.

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!

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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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Eye exams at Sam’s Club Optical cost around half the national average. Find out how else the warehouse giant can help you cut your eyecare costs. [[{“value”:”

If you wear glasses or contact lenses, you’ll know the pain of shelling out for optical services. It can be a financial headache if you do and a physical one if you don’t. A study by MyVision found that optical services cost Americans with eyesight difficulties around $500 a year. That can be a significant chunk out of any budget.

The good news is that a Sam’s Club membership can help you cut your eyecare costs. Even better? You can do it in style. Here are five benefits of Sam’s Club Optical that may surprise you.

1. Plus members get extra discounts on frames

As of August 2024, Sam’s Club Plus members who buy two sets of glasses can get a 40% discount on their second pair. If you bought two top-of-the-range pairs at $199 each, you’d get almost $80 off your spare set. Both sets of glasses have to be bought for the same person on the same day. You’ll get the discount on the lower-cost set of glasses.

A Sam’s Club membership costs $50 a year and a Plus membership will set you back $110. As such, if you buy two pairs of their more expensive frames, that discount could go a long way toward covering your annual Plus membership fee.

That said, the Sam’s Club Plus 2% cash back benefits don’t apply to prescription and pharmacy products. You can still earn credit card rewards on these purchases. But if you like to stack your Plus benefits with top cash back apps and other discounts, you’ll get more benefits on grocery shopping than optical services.

If you’re not currently earning at least 2% cash back on your credit card, you’re leaving money on the table. Click here to review our curated list of top credit cards that offer big rewards.

2. Sam’s Club eye tests are some of the cheapest you’ll find

Eye test costs vary depending on which store you visit, but generally speaking, Sam’s Club Optical is a great value. According to Clark.com, the average eye exam at Sam’s Club costs $72. That’s cheaper than you’ll find at other stores like Walmart or Target Optical.

Indeed, All About Vision says the average eye exam costs around $144 — double what you’d pay at Sam’s Club. You don’t have to be a Sam’s Club member to benefit from low-cost eye exams, either. Non-members cannot buy the chain’s optical products, but they can visit the optician for a check-up and a new prescription.

3. Elton John loves Sam’s Club glasses

Sam’s Club has a broad mix of frames, starting from as little as $59. If you’ve got kids, you’ll find similar low-cost deals on stylish frames. It can be hard to find glasses for under $100 you’ll actually want to wear, so it’s worth checking what your nearest Sam’s Club Optical has to offer.

When it comes to designer frames, what better celebrity to endorse your glasses than bespectacled music icon Elton John? The superstar launched his own eyewear collection with Sam’s Club a few years ago. Sadly, his collections are no longer on sale, but it’s still big-name kudos for Sam’s Club glasses.

4. You’ll have your new glasses within a week

In most cases, your new glasses will be ready a week after you order them. You can get them delivered to your home or pick them up from your local Sam’s Club Optical. Some opticians take two weeks or more, so waiting just seven days isn’t bad.

5. It’s easy to order your contacts online

You’ll find all the top contact brands such as ACUVUE, DAILIES, and Biofinity at Sam’s Club. You can order contacts in person, but it is super easy online. You just need to pick your brand and upload your prescription. If you spend more than $45, shipping is free.

Bottom line

Around two-thirds of adults use glasses or contacts in some shape or form. Sam’s Club Optical services can go a long way toward reducing the costs involved. If you have vision insurance, check in-store to see which plans Sam’s Club works with and what co-pays you’d have to pay.

If you have a Sam’s Club membership, it’s worth knowing about any extra benefits such as affordable glasses, contacts, and optical services. From low-cost gas and prescriptions to discounts on tire installation, those perks can help you squeeze more value out of your annual membership fee.

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.
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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Spending $270 a month at Costco would cover the cost of an Executive membership. See how to get the best value from your Costco shopping without overspending. [[{“value”:”

Earning 2% cash back on the majority of your shopping is one of the best benefits of a Costco Executive membership. Many households will quickly earn enough rewards to cover the Executive membership fee and more. If you combine those rewards with a Costco credit card, you’ll really be cooking with gas.

There’s a limit to how many Executive rewards you can rack up — Costco caps the total at $1,250 a year. But don’t worry. Even if you have a big family and shop at Costco every week, you’d likely struggle to hit that bonus cap. It translates to a total of $62,500 a year in spending — about $5,210 a month.

Below, we’ll talk about how you might reach that cap — as well as the best ways to maximize your Costco membership.

How Costco’s Executive rewards work

You earn Executive rewards every time you shop at Costco. Most spending qualifies, whether it’s in-store, on the Costco website, or through Costco Travel. There are some exceptions, such as gas, cigarettes, gift cards, and alcohol in some states. To check your rewards balance, log on to the Costco website and go to the account details page.

Costco pays out rewards in the form of an annual gift certificate. Executive members will get their certificate about two months before their membership is due to renew. You can put your rewards certificate toward the majority of Costco spending, though you can’t use it at gas stations or the food court.

Reaching Costco’s Executive membership cap

Whenever you sign up for services that charge an annual fee, think about what value you’ll get. For example, work out how much you need to spend to earn enough rewards to cover the fee. If there’s a cap on the cash back, it’s also good to know whether you’re likely to reach it.

In terms of covering the fee, a lot of households would easily get there with their grocery spending. Costco’s Executive membership costs $130 a year, while its basic Gold Star membership costs $65. So if you earned 2% rewards on around $270 of monthly spending, you’d cover the extra $65 you pay for the Executive membership. (A monthly spend of just over $540 would cover the whole membership.)

Maxing out your membership rewards is another story. It certainly isn’t impossible to do — in fact, some Costco redditors say they’ve bought a second annual membership after they’ve maxed out the rewards on their first one. Even so, the majority of households are unlikely to come close.

The average American spends around $830 a month on groceries, per The Motley Fool Ascent’s research. Let’s assume someone buys all their groceries at Costco, along with some personal care products, clothes, and miscellaneous items. That might take them close to spending $1,000 a month at the warehouse giant.

To spend over $5,000 a month in Costco, you might need to book some holidays, buy a lot of gold bars, bring in a few friends to shop with you, and eat nothing but Kirkland products. In short, very few Costco shoppers need to worry about outspending their Executive rewards.

How to get the most out of your Costco membership

Getting value from your membership means spending wisely, which isn’t the same as simply spending more. Those wide aisles are a treasure trove of exciting products and offers, making it easy to spend more than you intended. Stick to your list and keep track of costs.

1. Combine your Executive membership with a cash back credit card

There are some excellent rewards or cash back credit cards that work well with Costco shopping. Combining your 2% Executive member bonus with a credit card that pays 1% or 2% on grocery shopping is a powerful combo. Just be sure to pay down your balance in full every month so interest charges don’t eat into your earnings.

2. Use all your Costco membership perks

That Costco membership fee gives you more than just low-cost groceries. Check out the Costco Travel portal for deals on vacations and car rentals when you’re booking your next trip. Costco’s optical and pharmacy services can also be excellent value. And that’s before we touch on insurance and auto deals. Don’t assume Costco will always have the best deal, but don’t forget about those extra services, either.

3. Watch out for extra savings

Be alert for offers on the products you buy regularly. The more you shop at Costco, the more you’ll develop a nose for which items are often discounted. Use Costco’s coupon booklet, website, or the app to find the latest deals.

Bottom line

If you spend a lot of money at Costco, it’s worth being aware of the Executive membership reward cap. But if you’re spending that kind of money, it’s more important to maximize your rewards. Combine your executive rewards with credit card bonuses and cash back apps to get more back from every dollar you spend.

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.
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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