Money Management

Costco fees are going up. But here’s why you shouldn’t rush to cancel your membership. [[{“value”:”

Well, it was bound to happen. After a good seven years of holding fees steady, Costco has finally announced that starting Sept. 1, 2024, the cost of a membership is set to increase.

Right now, a basic Costco membership costs $60 per year, while an Executive membership costs $120. Beginning Sept. 1, a basic membership will cost $65 a year, while an Executive membership will cost $130.

At first, you may be inclined to say “see ya, Costco” after hearing this news. Nobody wants to get stuck paying more for any given service at a time when life has gotten so unbearably expensive. But here’s why it pays to keep your Costco membership despite the higher price tag.

1. The increases are fairly small

It would be one thing if you were looking at paying $5 or $10 more per month to keep your Costco membership. That’s a pretty big increase, and one that could put a strain on your budget.

But the aforementioned increases are annual ones. This means that when you break it down, you’re paying about $0.42 more per month for a basic Costco membership and $0.83 more per month for an Executive membership.

At a time when costs are elevated, it’s true that every dollar counts. But here, we’re not even talking about $1 per month. Chances are, you won’t notice the financial impact of paying $5 or $10 more per year.

2. Your savings might well outweigh the extra money you’re spending on a membership

While you might spend more to keep your Costco membership starting in September, the savings you get from your membership might more than make up for the extra $5 or $10.

Take a common household item like ibuprofen (the active ingredient in Advil). A 1,000-count bottle costs $13.99 on Costco.com, and in-store prices are usually even lower than online prices. To buy the equivalent amount of ibuprofen, you might spend close to $75 at a regular supermarket. So in that case, you’re looking at saving $61 on one typical household purchase alone.

Now, multiply that savings by the various Costco items you buy. To put it another way, if you shop at Costco every week during the year and save $10 on groceries and household essentials by doing so, you’re spending $520 less all in. Even when you subtract the $65 or $130 a membership will cost starting in September, you’re ahead financially.

3. If you cancel your membership, you’ll probably just spend the money elsewhere

You may be hesitant to give up any amount of extra money right now. But chances are, in the course of a year, you’re going to find a way to blow that extra $5 or $10. And it’s not because there’s something wrong with you or the way you manage your money — that’s just life.

A rushed morning might make it so you’re unable to pack lunch for work, forcing you to spend $11 to pick up a sandwich at a deli that’s close to your office. Or, you might buy one extra latte on a morning you’re feeling particularly tired and cold, and there goes $5 and change.

It’s one thing to cut back on an expense that’s costing you hundreds of dollars per year and bank the difference. But be honest with yourself. If you cancel your Costco membership, will you really be adding the money you save to your savings account? If not, then you might as well continue to shop at the store so you can spend less on the items you buy all the time.

If you were already thinking about canceling your Costco membership — say, because you hardly ever go anymore or tend to throw out food you buy in bulk — then news of a fee hike may be just the thing that prompts you to take action. But if you’re enjoying your Costco membership and plan to continue maximizing the savings you reap there, then don’t let a slightly higher cost keep you from sticking with it.

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

If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.

Click here to read our expert recommendations for free!

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.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 

No amount of credit card debt is easy to pay off, but $6,500 can feel like climbing a mountain. Learn three great ways to tackle $6,500 in debt. [[{“value”:”

It’s never easy to get out from under your debts. But credit card debt can be especially unruly, due to its high interest rates. The average credit card APR was up to 21.59% in February 2024, according to Federal Reserve Economic Data.

At that rate, the average American credit card balance ($6,501 in 2023) would generate $785 in interest if it were paid with 12 monthly payments of $607. If you were to make a lower monthly payment than that (let’s say $150), your interest payments could start to cost as much as the amount borrowed.

Although credit card debt can be hard to tame, there are some methods to help you regain control. If paying $6,500 or more in credit card debt feels like an uphill battle, here are three strategies that could help you pay it off.

1. Use a balance transfer credit cards to eliminate interest payments

The best balance transfer cards are designed to facilitate balance transfers. This is a transfer of credit card debt from one card to another.

On the downside, balance transfer credit cards have balance transfer fees, usually about 3% to 5% of the total transfer. That means, for every $1,000 you transfer, you’ll likely pay between $30 and $50 in fees.

These cards will also cap how much you can transfer, and it’s usually the same amount as the card’s credit limit. While it’s not unheard of to get approved for credit limits above $6,500, it’s not guaranteed either. If you have insufficient credit on one card, you might need more than one balance transfer credit card to transfer the entire balance.

2. Negotiate credit card interest rates

Credit card companies aren’t always the bad guys. Though they make money off interest payments, they do, in the end, want you to pay your debts back. To that purpose, credit card companies will sometimes work with borrowers to create a repayment plan that helps them eliminate their debt.

To negotiate your credit card debt, call the number on the back of your credit card and ask to speak to a representative in the debt settlement department. Once connected, explain your situation. You could propose your own solutions or ask them what payment plans they might offer.

For instance, some credit card companies will reduce your credit card’s interest rate for a specific period. During this time, it might set up a payment plan to ensure you pay the balance off before the reduced rate period ends. Others will accept a smaller sum than what’s owed if you agree to pay it all upfront.

Not every credit card company is willing to work with you. But asking is worth a try, especially if your options are limited.

3. Consider debt consolidation loans

Debt consolidation loans combine balances from different credit cards into one monthly loan payment. The APR on these loans is often lower than the APR on credit cards, so you can take the savings on interest and put it toward your principal. Unlike some balance transfer credit cards, many of these loans will have high enough limits to allow a $6,500 debt transfer.

You might need to make some sacrifices

Hang in there. As tough as this time feels, staying focused and making a plan can be what you need to chip away at your credit card debts. Most importantly, be sure to celebrate the victories along the way. Paying off $6,500 in debt is a big accomplishment, so plan for something exciting to help you get there.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

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.

“}]] Read More 

Costco’s membership fees are rising. Does an upgraded Executive membership make financial sense in light of that? Find out here. [[{“value”:”

It’s the news Costco fans have long been anticipating but didn’t want to hear: The company just announced that beginning Sept. 1, the cost of a membership will increase.

Once Costco’s fee hikes take effect, a basic Gold Star membership will cost $65 per year instead of $60, while an Executive membership will cost $130 instead of $120. That’s not exactly awesome considering that most people’s bills are higher these days than they were a year or so ago.

Given the increased cost of an Executive membership, you may be wondering if the upgrade is worth it. The answer? It depends on how much you expect to spend at Costco each year.

Calculating your break-even point

There’s a reason an Executive membership at Costco costs double what a Gold Star membership will run you (both now and once the store’s fee hikes take effect). With a regular membership, you enjoy savings on the Costco items you buy, but that’s about it. An Executive membership, on the other hand, will give you 2% cash back on your Costco purchases, including those you make online.

If you’re not sure whether an Executive membership will make sense at the $130 price point, all you really need to do is calculate your break-even point — meaning, figure out how much you need to spend at Costco to make back the extra $65 that membership will soon cost. And since we know that the Executive membership offers 2% back on purchases, some simple math tells us that your break-even point is $3,250.

In other words, 2% of $3,250 is $65, which is the difference between a basic Costco membership and the Executive version. So if you think you’ll spend even a dollar more than that per year, the upgrade makes sense.

So what does it mean to spend $3,250 a year at Costco? On a monthly basis, you’re looking at about $271. On a weekly basis, you’re looking at $62.50.

But remember, Costco doesn’t just sell groceries and household essentials. You can also buy big-ticket items like electronics and furniture that might get you close to that $3,250. Or you might book a vacation through Costco that costs more than $3,250. So before you write off getting an Executive membership because of the newly announced higher price point, consider whether you’ll make your money back even once you’re forced to spend $10 more.

It’s a no-risk proposition either way

Maybe you’re not sure whether you’ll manage to spend more than $3,250 a year at Costco. Even so, it could still pay to upgrade to the Executive membership for one big reason: There’s zero risk.

One lesser-known Costco rule is that its Executive members are guaranteed to get at least the cost of their upgrade in cash back form because those who don’t reach that threshold can downgrade their membership and get refunded the difference.

So let’s say you decide to pay the extra $65 on an Executive membership this fall, but then you only end up spending $3,000 over the next 12 months. That only puts $60 back in your pocket. At that point, you can downgrade your membership to a basic one and Costco will refund you $5. So all told, you’ve made back your $65 upgrade fee one way or another.

For this reason, if you’re a frequent Costco shopper, it pays to spring for an Executive membership even once it costs $130. You may not love the idea of having to pay more, but chances are, you’ll come out ahead financially in the end.

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

If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.

Click here to read our expert recommendations for free!

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.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 

Looking to grow your kid’s college fund without doing anything risky or involved? Well, we’ve got the answer for you. Read on for the details. [[{“value”:”

You’ve spent all their lives saving for college, and you finally have a pretty hefty sum — but now that interest rates are high enough to be worth considering, you wonder if there are more ways you could be growing your kid’s college fund.

My friend was in this pickle last year after getting a windfall from selling a rental property. She didn’t see the value in putting the money into a 529 plan so close to her kids starting college, so she was looking for other ways to make the money grow without putting it at risk.

Choosing a savings vehicle

I got a rather surprising message out of the blue from this friend, who had been keeping this money tucked away in a traditional savings account that was paying almost nothing in interest. She’d noticed that certificate of deposit (CD) rates had increased dramatically after the federal funds rate’s harrowing rise, and she was considering investing in one.

“What’s the catch?” I remember her asking me.

“They keep your money for a year, but they tell you that upfront,” I told her.

“So there’s no catch?”

“Nope. They just need more funds so they can loan their own money out to make more money with it. As long as you leave your money in the CD for a year, there’s no catch.”

We discussed that withdrawing money from CDs early can come with very steep penalties. But considering that this money had a very specific purpose and her oldest son would be in high school for another year, there was exceptionally little risk involved.

And so that was how my friend decided to buy her first certificate of deposit. She didn’t shop around, and she didn’t compare rates. She just set one up from the boys’ savings account online. It was all very easy, and she told me that after the taxes are paid, she’ll have realized about a 3.5% gain on the money that was just sitting around doing nothing.

Are CDs right for your college savings?

My friend’s kid got into a really amazing school with a full scholarship, so most of his money will be put away until he truly needs it. She plans to roll most of this existing CD into a new one when it matures this summer, since rates are pretty much unchanged from last year.

She was very pleased with her experience. But that doesn’t necessarily mean CDs are the right vehicle for you. If you have a bunch of money sitting around that you absolutely do not want to touch, though, they could be an awesome solution.

Choose a certificate of deposit if:

You have money that you know you will not need to touch for the CD’s term.You need to preserve your principal above all else.You are risk-averse.You want to get what is essentially free money for doing nothing.

It’s that last factor that appealed to my friend. She wanted to grow the college fund as much as she could without putting any of it at risk. And since it was under the FDIC limit of $250,000, even if something happened to her bank while the money was in the CD, it would all come back in the end thanks to FDIC insurance.

How much can your college fund make in a year?

Even in just one year, a college fund can make a fair amount of money when left in a certificate of deposit. You’ll owe tax on your earnings, of course, but that’s based on your income. You’ll need to calculate that for your own situation.

But in general and before taxes, if you have a $100,000 college fund and it’s put into a 12-month certificate of deposit at 5.0% with monthly compounding, your CD will have gained $5,116.19 when it matures.

If it took you 12 years to put that money together at an average of $8,333 per year, you just gained 61% of a year’s worth of effort by doing absolutely nothing.

This works especially well if your child has a few years left before college. Let’s say my friend had started her CD adventure when her son had three years of high school left. Assuming the CD rate remained steady, she’d have a gain of $16,147.22 if all other things are equal.

That’s nearly two years of savings that are just extra. Growing your child’s education fund has never been so simple or so easy. There’s not a thing wrong with certificates of deposit, and there’s no catch. There’s just a simple return for doing nothing but letting the bank borrow your money for a little bit.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

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.Kristi Waterworth 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 

As generous as Costco policies may be, membership can still be revoked. Find out what bad behaviors can cause you to lose your membership. [[{“value”:”

Costco is famous for going out of its way to satisfy members. Everything, from sample stations throughout the store to its generous return policy, is meant to keep customers happy. However, that’s not to say that members can do whatever they want. Specific actions just may get a membership canceled.

And once a Costco membership has been canceled by the warehouse giant, it’s not easy to purchase a new one. Even if you would never take any of these actions, it’s interesting to know what others are up to.

1. Getting creative with the store’s return policy

For a few Costco members, protecting their personal finances means taking advantage of the store’s return policy. Most items purchased at Costco can be returned at any time, while products like televisions and computers have a (still) generous 90-day return window.

RELATED: The #1 Strategy for Saving Money at Costco

Unfortunately, Costco employees are sometimes faced with dealing with shoppers who routinely make questionable returns. For example, on a Costco employee Reddit board, someone calling themselves dyzlexiK told the story of two customers who apparently had more nerve than common sense.

As dyzlexiK told it, “Years ago, we had a GM that was very aggressive with return abusers. I mean like bad abusers, not just people who return a lot. So these guys come in to return two TVs. This is their 7th and 8th returned TVs in 90 days, always just before the 90-day mark.”

DyzelexiK went on to say that it had become obvious that the gentlemen were going to continue buying and returning televisions before the 90 days expired, so they would never actually have to pay for them.

DyzlexiK continued, “GM comes out to accept the return and say, ‘Well, I guess the quality of our product isn’t up to your standards, so we hope you find somewhere that fits your needs.'”

The general manager laid the men’s $55 membership fee on the counter and wished them a good day. One has to wonder how long it took them to realize their membership had just been canceled and their days of watching a new television every 90 days were over.

2. Abusing an employee

If it seems like people are becoming bolder about showing their ugly side in public, you’re absolutely right. According to the National Retail Federation – the world’s largest retail trade association – nearly four out of five companies have seen a rise in guest-on-associate violence.

The impact on employees can be dramatic, leading to emotional and psychological distress, decreased job satisfaction, reduced productivity, and higher turnover rates. That doesn’t even begin to account for the danger to an employee’s physical well-being when a customer gets carried away.

Verbally assault or touch a Costco employee, and you can expect to have your membership immediately revoked.

3. Theft

Whether a member hides a package of lightbulbs under their coat, slips on a new pair of boots and leaves their old boots in the store, or takes the price tag off an inexpensive cut of meat and puts it on a more expensive cut, it’s theft.

There’s no doubt that sticking to a budget can be tough, but stealing from any retailer will bring trouble. At Costco, it can also lead to revocation of membership and a permanent ban from the retailer.

4. “Timing” your membership

Another Costco employee on Reddit — this one with the handle CostcoPanda — shared the story of a very bold former member who went to the customer service desk asking to cancel their membership. The man had used about 10 months of the 12 months he originally paid for. Once the man received his refunded membership fee, he handed it back to CostcoPanda and said, “Just take that and sign me up again.”

The creative member went on to admit that he makes the same move every year because he doesn’t believe in membership fees. After checking the customer’s membership history, CostcoPanda realized that the man had canceled and immediately renewed his membership once a year.

It would be interesting to see the expression on the member’s face when he was told that his membership was being deactivated for violating Costco’s membership policy.

The easiest way to avoid a membership cancellation may be to remember the Golden Rule. Treat others (even multinational corporations) the way you want to be treated.

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

If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.

Click here to read our expert recommendations for free!

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.Dana George 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