Money Management

Baby boomers probably have access to more money than you. Read on to find out how to catch up. [[{“value”:”

A high credit limit can be handy if you need to put a large unexpected expense on your credit card, like a major car repair. High credit limits can also signal to other lenders that you’re responsible with your available credit.

Even if you think you’re doing pretty well with your credit, the next retiree you see is probably far outpacing you. Baby boomers continue to lead the pack for credit limits, and in some cases, they have limits that are three-times higher than those of other generations.

Here’s how much higher baby boomers’ credit limits are and how to boost yours.

$41,906 is the average credit limit for baby boomers

A recent Experian survey found that baby boomers have an average credit limit of $41,906, up nearly 4% from the year before and more than three-times the average for Generation Z.

Here’s how the credit limits look across generations in 2023:

While it’s tempting to be jealous of other people’s financial positions, there are some good reasons why baby boomers outpace everyone else with their credit limits.

For one, boomers have decades-long credit histories. Lenders love long credit histories, and those who’ve paid their bills on time have likely earned higher limits. Second, baby boomers generally have a higher credit score than most generations, with an average score of 743.

How to raise your credit limit

A few of the biggest factors impacting your credit limit are your income, debt, and credit score. The higher your income, the more likely you’ll be able to pay off higher balances. And if you have a high credit score, it means you’ve likely paid your loans on time.

Paying off your debt could help improve your credit limit. Click here to 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.

If your credit limit is lower than you want it to be, here are a few ways to improve it.

1. Pay down your balance

A credit card company isn’t likely to give you access to more money if you’re already maxing out your current limit. I recently paid off my credit card debt, and my credit card issuer immediately increased my limit by a few thousand dollars.

2. Pay your bills on time

Lenders want to see a long history of on-time payments. The more you demonstrate this, the easier it’ll be to receive a credit limit increase.

3. Improve your credit score

The best way to increase your score is to pay off your debt and make payments on time. The better your score is, the more likely you’ll receive a higher credit limit.

4. Ask for an increase

Getting a credit limit increase isn’t always automatic, even if you raise your credit score, pay bills on time, and pay off your balances. If your income level has increased or you’ve improved your credit score, you can always ask your credit card issuer for an increase. You can do this over the phone or through your online account.

The good news is that having a high credit limit isn’t necessary. Sure, it’s nice to know you have access to extra money if you need it, but it can also become a problem if you tend to use your credit card often. It’s probably best to think of a high credit card limit as something that’s a nice-to-have (but try-not-to-use) feature of your personal finances.

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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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It’s natural to want to protect your vehicle, but is an extended warranty the way to do it? Find out what we learned about extended warranties. [[{“value”:”

The high cost of buying a car is one reason it can be so tough to decide whether to add the extra expense of an extended warranty. According to Motor1.com, the total cost of an extended warranty ranges from $2,000 to $5,000. The average annual cost is $1,330, or a little over $110 monthly. When expenses like auto insurance and car maintenance are added, it’s easy to get in over your head.

If you’re watching your finances closely, spending an extra $110 or so a month might seem foolish. But there are times when an extended car warranty is a good choice. Here, we’ll cover when it does — and doesn’t — make sense to spring for extended vehicle protection.

Arguments for an extended warranty

Going the extra mile to purchase an extended warranty makes sense if the following is true.

You worry the vehicle will have problems: If you want to avoid surprise repair bills, an extended warranty can offer peace of mind.You’ll keep the vehicle in tip-top shape: An extended warranty makes the most sense when the owner also does their part by keeping up with routine maintenance.You have no intention of selling the vehicle: You plan to drive it for a long time and want coverage to kick in after the manufacturer’s original warranty expires.Your car turns out to be a bit of a lemon: Sometimes, it’s only after a model is on the road for a year or two that experts notice specific problems. A warranty can be a solid investment if you learn that your model is prone to particular mechanical issues.You may receive extra perks: Some warranties include roadside assistance or reimbursement costs for a rental car or hotel if you’re on a trip and have car issues.

Arguments against an extended warranty

You might want to think twice about paying for an extended warranty under these circumstances.

You don’t typically keep a vehicle for long: If your habit is to trade cars every few years, paying for a long-term extended warranty doesn’t make much sense.You have a plump emergency savings account: If you routinely tuck money away in a high-yield savings account and feel confident you can afford auto repairs, you may not require a warranty.Your monthly car payment is straining your budget: The average monthly auto payment in the U.S. hit $760 in May. For most households, that’s a heavy load to carry. If you’re already worried about how you’ll make your monthly payment, you may need to consider whether you can also afford to pay for a warranty.Exclusions and limitations may be unavoidable: Depending on where you buy the warranty, there are often limitations that make it less than ideal. For example, a plan may not kick in for 30 days or more. And if you’re looking to buy a warranty at a discount, it may contain several exclusions, including components that aren’t covered if they break down.There’s no coverage for wear and tear: If you don’t typically keep up with routine maintenance, it’s important to note that a warranty won’t cover the cost of issues arising from wear and tear damage.

What paying for an extended warranty buys you

Extended warranties are designed to help you keep your vehicle on the road longer. They come in all shapes and sizes, but most cover repair bills for your vehicle’s most important components, such as its engine, transmission, and drivetrain.

These factors determine the final cost of an extended warranty:

The provider you chooseThe level of coverage you desireHow long you want to carry coverageMake and model of your vehicleVehicle’s age and mileageThe size of deductible chosen

While you may not have any control over how many miles are on your vehicle, you can decide which warranty provider you want to work with and the level of coverage you desire. Keep in mind that the more coverage you sign up for, the more you’ll pay for a policy.

And, like buying auto insurance, the lower the deductible you choose, the higher your premium will be. We’re all looking for ways to save money, and paying less for auto insurance is one way to do it. But depending on your situation, purchasing an extended warranty may be another way to save.

Deciding on an extended warranty may ultimately come down to answering two questions:

Do I have enough money put away to pay for vehicle repairs?Do I plan to drive this vehicle for many years?

If the answer to both questions is yes, why not budget for an extended warranty while budgeting for a new vehicle? For example, if you’re putting $100 or $200 away each month to build a down payment, save an extra $25 to $50 monthly to cover the cost of an extended warranty.

Extended warranties may not be suitable for all drivers, but they can certainly come in handy when the unexpected arises.

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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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Want to save money on groceries and household essentials? Costco isn’t the only retailer with low prices. Check out these three other stores with great deals. [[{“value”:”

Many shoppers seek more ways to save money to combat rising living costs. For some, one solution is to join Costco to shop members-only deals. However, since Costco membership costs $65 to $130 a year, it’s not an expense that fits everyone’s budget. That’s understandable.

But I have some good news. Even without a Costco card in your wallet, you can save money when you shop. Buying groceries and household essentials at alternative retailers can help you keep more money in your budget. Here are a few retailers with great deals.

1. Target

Target is an ideal place to shop if you love a deal. Many everyday essentials are affordable. In addition, the retailer runs weekly sales that can help you honor your budget. You can browse the weekly flier at Target.com or the Target mobile app and draft your shopping list accordingly.

But that’s not all. The Target Circle Rewards program provides more ways to save. The Target mobile app has offers that function like coupons, making eligible buys cheaper. These offers are automatically added to your Target Circle Rewards account and applied at checkout.

You can also activate bonuses to earn cash back rewards and apply your earnings to future Target purchases to lower your bill. The retailer also has gift card bonuses to activate. While you must be a Target Circle rewards member to benefit from these offers, it’s free to join. If you have a Target nearby, consider shopping there to reduce your spending.

2. Aldi

Aldi is another retailer with fantastic deals that help you save. Many shoppers get groceries and other household goods at Aldi because they find the prices are reasonable. If you’re tired of leaving the grocery store with a hefty bill, it may be time to try shopping at Aldi.

One thing to keep in mind is Aldi is a no-frills grocery store. Expect to see shelves stocked with products in their original shipping boxes. Some brand-name finds are sold here, but most essentials are private-label. You’ll need to bring a quarter to use a shopping cart — but don’t worry, you’ll get it back when you return your cart.

Finally, plan to bring reusable shopping bags — otherwise, expect to buy them at checkout. These features allow Aldi to keep its prices low. If you want to trim your spending, Aldi can help. Ready to shop? Review Aldi’s weekly sales flier at Aldi.us or in the Aldi mobile app.

3. Trader Joe’s

Trader Joe’s is another retailer that can help you save more. Not every purchase here is a good deal, but many staples are priced reasonably.

For example, I’ve found canned coconut milk, seasonings, olive oil, and peanut butter to be cheaper here than at my local grocery retailer. I wheel out a cart full of essentials without feeling financially depressed.

You can check prices for specific products at your local store on the Trader Joe’s website. I also recommend browsing the retailer’s Fearless Flyer to learn about new and seasonal finds.

Here’s one tip to avoid a costly bill at checkout: The prepared foods section is one area of the store to skip if you’re on a tight budget. Once you get familiar with your local store, you’ll learn which essentials offer the most savings.

Maximize your savings with cash back rewards

Buying discounted goods isn’t the only way to save. Remember, you can also earn rewards when paying for everyday essentials by using reward credit cards. With the right cash back credit card in your wallet, you can earn cash back each time you swipe your card.

The best part is this strategy requires little effort. Every dollar you earn from credit card rewards can help you maximize your savings.

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.

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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.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Target. The Motley Fool has a disclosure policy.

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