Money Management

Conquering credit card debt can help you reclaim your financial freedom. Read on for a few ways to approach your debt. [[{“value”:”

Credit card debt is very common — 3 out of 5 Americans (61%) have it, with an average balance of $5,875. Dealing with credit card debt can feel like you’re trying to climb a mountain — but in quicksand. However, don’t let the overwhelming numbers get you down.

It’s entirely possible to get out from under your debt quickly and efficiently as long as you have the right strategy. Here are five practical tips to help you tackle that credit card debt at lightning speed and get your personal finances back in order.

1. Get serious about budgeting

First things first: You need a budget that works — not just on paper, but in real life. Start by tracking every penny you spend for at least a month. You’d be surprised at how those little purchases can add up and eat into your potential savings. Once you’ve got a clear picture, categorize your expenses and identify where you can cut back. That daily takeout lunch or the premium streaming subscription? They might have to go, at least for a while.

Craft a budget that prioritizes debt repayment. Money might be tight for a few months, but remember, this is about getting you free from interest’s clutches faster. Every extra dollar you put toward your debt reduces the total amount of interest you’ll pay in the long run.

2. Choose your payoff strategy

When it comes to paying off your debt, there are generally two strategies that financial advisors recommend: the snowball method and the avalanche method.

The snowball method involves paying off the smallest debts first while maintaining minimum payments on the others. It’s great for quick wins and building momentum — it’s like rolling a snowball down a hill.

The avalanche method involves paying off debts with the highest interest rates first, which can save you money on interest over time. It requires a bit more patience, but is incredibly efficient mathematically.

Choose the method that best fits your personality and financial situation. If you’re motivated by quick wins, go for the snowball. If you hate the idea of paying more interest than necessary, the avalanche might be right up your alley.

3. Get creative with extra income

If your budget is stretched thin and cutting expenses isn’t enough, it might be time to look at increasing your income. Side hustles can be anything from freelancing online, selling crafts, or even picking up a part-time job. The gig economy offers many opportunities tailored to your skills and schedule.

The money you earn from these side gigs should be funneled directly into your debt repayment. It’s easy to think of extra income as “fun money,” but remember your goal: Climbing out of debt fast.

4. Consider a balance transfer

If you’re juggling debt on multiple cards with high interest rates, transferring your balances to a card with a lower interest rate could save you a ton of money on interest and simplify your payments. Many credit cards offer introductory periods with 0% interest, which can give you a window of opportunity to pay down your balance without accruing extra interest.

Read the fine print before you jump in, though. Check for balance transfer fees, understand how long the promotional period lasts, and find out what the go-to interest rate will be after the promotion ends. This method requires discipline; the goal is to pay off as much debt as possible during the promotional period without making new purchases on the credit card.

5. Seek professional help

Sometimes, we need a little extra help — and that’s okay. If you’re feeling overwhelmed, consider consulting with a credit counselor. Nonprofit credit counseling agencies can offer you advice, help you make a plan, and even negotiate with creditors on your behalf to lower interest rates or set up a debt management plan.

Credit counselors can also help you build a sustainable budget and give you tools and education for managing your finances in the future. It’s not just about getting out of debt; it’s about staying out.

Tackling credit card debt might seem daunting, but with these strategies, you’ll arm yourself with the tools to pay it off faster than you might think. Whether it’s adjusting your budget, picking a repayment strategy, earning extra income, doing a balance transfer, or seeking professional help, each step brings you closer to financial freedom. Remember, the journey of a thousand miles begins with a single step — and your first step starts today.

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

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The average American household has multiple TVs that will eventually need to be replaced. Find out why it makes sense to buy a TV at Costco. [[{“value”:”

If you’re a big fan of television, it may come as no surprise that the average U.S. household has 2.3 televisions. But have you ever wondered where all those televisions come from, where people buy their much-loved sets? And have you ever wondered if you’re the only one on the planet who doesn’t know precisely what they’re looking for when it comes to buying a TV? If so, you may want to consider Costco. Here are five good reasons why.

1. Competitive pricing

A basic rule of personal finance is to search for high-quality products at a fair price. Due to the sheer volume of televisions Costco moves, the retailer is able to keep its prices low. If you’re one of those savvy shoppers who knows precisely what you’re looking for, you can easily go online to compare prices.

When it comes to TVs with all the bells and whistles, it pays to comparison shop. Any retailer can sell cheap models in an attempt to lure customers, but if you’re looking for a quality item, you want to know you’re getting the best price, and Costco makes that easy by revealing its no-haggle prices online.

2. Knowledgeable staff

Another advantage associated with a retailer that moves so many televisions is the fact that staff receives on-the-job training. It’s natural that staff would learn more about televisions than they ever expected to know after chasing down the answers to dozens (and dozens) of questions.

If you ask a question about a particular model that can’t immediately be answered, you can be confident that the staff member you initially asked will find the answer for you. And if they don’t happen to take the initiative themselves? You can always go to the customer service counter to ask for more information.

3. High-quality selection

You’re probably familiar with the Black Friday sales that feature super-discounted televisions. Did you know those televisions are nearly always manufactured specifically for Black Friday and are so cheaply made that the company selling them still makes a profit? Americans’ rush to buy these televisions comes from a good place: a desire to stick with their household budgets. For some retailers, it’s a dirty little Black Friday secret.

Due to Costco’s relationship with high-quality television manufacturers, you have access to some of the best models available.

4. Extended warranty

All Costco televisions come with a minimum 2-year warranty and the option to upgrade to a longer protection period. It may not last forever, but it’s good to know that you’re buying from a company that stands behind what it sells.

5. Generous return policy

Online stories abound of items Costco members have returned for a full refund. If, for any reason, you’re not satisfied with the television you purchased, you can return it within 90 days of purchase. That’s a long time to ensure you’re happy with your new television.

These days, we’re relying on everything from comparison shopping to cash back apps to save money. If you save money by shopping at Costco, don’t forget to visit the retailer the next time it’s a television you’re shopping for.

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.

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Some banks and credit unions are offering extremely high rates on CDs. Find out why you may want to think twice before opening one. [[{“value”:”

Certificates of deposit (CDs) are having a moment. Before 2024, the only people I knew who used CDs were my grandparents. Now, they’re one of the most talked-about banking products.

When you see the best CD rates, it’s easy to understand why. There are plenty of CDs with APYs of 5.00% or more. Then there’s California Coast Credit Union, which is offering an incredible 9.50% APY on its Celebration Certificate.

On the surface, the highest-paying CDs seem like an unbelievable deal. But the fine print sometimes reveals a few big drawbacks.

The shortest CDs have the highest rates

You can get a high APY on a CD right now, but you might not be able to get it for as long as you want. There has been talk of interest rates dropping later this year. To protect themselves in case that happens, banks and credit unions often have their highest rates on their short-term CDs.

For example, that Celebration Certificate from California Coast Credit Union is a 5-month CD. Sure, it pays 9.50%, but it doesn’t last very long. The credit union’s longer CDs earn less than 3.00% at the time of this writing.

Some CDs have maximum deposit amounts and other conditions

Another way that CD issuers protect themselves is with deposit maximums. Going back to that Celebration Certificate, it has a maximum deposit amount of $3,000. So if you were planning to put in a large amount of savings, you may be unpleasantly surprised.

It also has other requirements, including that you’re a member of California Coast Credit Union. Only people who live or work in certain counties in California can join.

Conditions like these are fairly common among the highest-paying CDs, especially CDs from credit unions. They often have strings attached that could make it harder to open an account or maximize your earnings.

You might not earn as much as you expect

Before you get too excited about a CD, it’s worth calculating how much you’ll earn. For example, let’s say you open that 5-month CD with a 9.50% APY. You deposit the maximum $3,000. After five months, you’ll have earned $115.62.

Not a bad return by any means. And if you don’t qualify for that CD, there are plenty more with high APYs. But if a CD has a short term or a maximum deposit, that will limit how much money you can make.

Is a CD right for your savings?

There are a few issues with using CDs for your savings:

They charge an early withdrawal penalty. You need to keep your money deposited the entire term, so a CD wouldn’t work well for your emergency fund.You usually can’t add more money to a CD later. That’s problematic if you’re using a CD for a savings goal, such as a down payment on a home, and you want to add money to it every month.They’re not the best long-term investment. If you’re trying to build wealth and your retirement savings, the stock market offers much larger returns than CDs.

For those reasons, I’ve never been a fan of CDs. I prefer high-yield savings accounts, which have similar rates and much more flexibility.

That’s not to say CDs don’t have any value. They’re a good way to lock in an APY while rates are high. If you have some savings sitting around that you won’t need in the immediate future, a CD could be the way to go. But if one of those CDs with big APYs has caught your eye, make sure to read up on all the terms first.

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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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