Money Management

Want to save money on car insurance? See how Allstate Drivewise could help you avoid risk and reduce your premiums. [[{“value”:”

Some of the best car insurance companies are now offering data-driven safe driving apps, also called telematics, or usage-based car insurance. With safe driving apps, car insurance customers agree to share some of their driving data and everyday behavior behind the wheel with the insurer. If you drive safely, you can qualify for discounts on car insurance.

But do safe driving apps actually lead to safer driving? New research from Allstate shows that telematics car insurance might help keep people safer behind the wheel.

Let’s look at a few reasons why safe driving apps can reduce your car crash risks — and your car insurance costs.

Allstate Drivewise safe driving app: 25% lower risk of severe crashes

According to Allstate’s data, Allstate customers who use the Drivewise® safe driving app are 25% less likely to have a severe collision compared to Allstate customers who don’t use the app. (A severe collision for this purpose is defined as having bodily injury claims costs of $100,000 or more.)

The Allstate Drivewise app tracks a few different aspects of driving, including safe speeds (whether you stay under 80 miles per hour), safe stops (how gradually or suddenly you hit the brakes), and safe driving times (if you drive late at night on weekends, you could be at higher risk of crashing). It’s interesting to see how drivers who participate in this kind of safe driving tracker app might see big reductions in their serious collisions.

Other ways that Allstate Drivewise customers drive safer

The Allstate Drivewise app also can help people track their safe driving habits (and show their lower-risk driving behaviors to their insurance company). According to the recently released data survey, Allstate Drivewise customers are also more likely to have safe driving habits in a few other ways.

Allstate said that its Drivewise customers:

Handle their phones 44% less while driving compared to non-Drivewise customers (this can help reduce car crashes related to distracted driving)Spend 23% less driving distance traveling at high speedHave an 11% lower rate of hard braking

Less distracted driving, less high-speed driving, and a softer foot on the pedals can create a safer, less stressful, less collision-prone driving experience. Usage-based car insurance like Allstate Drivewise could potentially help reduce fatal motor vehicle crashes, which have tragically surged in recent years. As of 2023, 45,000 people in the U.S. died in car crashes, up 13.6% compared to the last pre-pandemic year of 2019.

How Allstate Drivewise and other safe driving apps help you save money on car insurance

Along with saving lives, safe driving apps can help people qualify for discounts. Many car insurance shoppers might want to try this new strategy to save money, because car insurance costs have been skyrocketing. During 2022–2023, the average price of car insurance increased by about 20.3%.

When you choose to sign up for a safe driving app like Allstate Drivewise, you can qualify for a lower rate on your car insurance based on your actual driving behavior and decisions behind the wheel. If you feel as if your car insurance costs have gone up unfairly, now is your chance to prove to your car insurance company that you’re a low risk and you deserve a lower-cost car insurance plan.

“We offer customers the choice to pay a rate based on their driving,” said Ginger Purgatorio, executive vice president at Allstate. “We find that when customers choose to use Drivewise on their Allstate mobile app, they tend to drive safer. And those who drive safer not only get in fewer accidents, but also can save money on their auto insurance.”

Allstate does not promise specific cost savings from its Drivewise app. Your exact discounts will vary based on where you live and how you drive, and Allstate Drivewise is not available in some states. But Allstate promises to give you an instant discount just for signing up for Drivewise. And some car insurance companies with the best discounts for safe drivers offer savings of up to 30% to 40%.

Bottom line

Usage-based car insurance can help people get cheaper premiums. You just have to agree to share some driving data with your car insurance company. Allstate’s recently announced data survey shows that its Drivewise safe driving app customers have a significantly lower risk of severe crashes and unsafe driving behaviors.

Based on the success of safe driving apps like Drivewise, look for more car insurance companies to encourage customers to sign up for discounts based on safe driving data. And perhaps there will be bigger reductions in car insurance premiums for safe drivers coming soon.

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Opening a CD may seem attractive right now, thanks to higher rates. But keep reading to learn why getting rid of credit card debt is a better move. [[{“value”:”

When you have a limited amount of money to go around, you have to make choices about what to do with it. Right now, you may be really interested in buying certificates of deposit (CDs) because you’ve probably heard that they are offering great rates. And in the right circumstances, opening a CD right now can be a good move.

However, the best choice for you depends on your other financial obligations. If you’re among the millions of people with credit card debt, you need to really weigh the pros and cons before moving forward with CDs.

Paying off credit card debt is usually the smarter financial move

As a general rule, if you have credit card debt, you should not be buying a CD. That’s because the interest rate on your credit card is going to be a lot higher than the yields a CD offers — even the most competitive CD out there.

The average credit card interest rate right now is 21.59%, according to the Federal Reserve. And while there are plenty of great CDs paying rates above 5.00%, it’s pretty easy to see that the return on investment (ROI) that comes from paying off debt at 21.59% is going to be higher than the ROI CDs would provide at 5.00%.

You always need to consider the opportunity cost when you decide what to do with your funds. Any money you tie up in a CD is money you can’t use to pay down your credit card balance. That’s an especially big issue here, since CDs have terms that typically range from three months to five years. It’s not as if you could just put your money in a CD until the credit card bill comes each month.

Does it ever make sense to buy a CD when you have credit card debt?

While the general rule is that you should absolutely focus on paying off your credit card debt first, there could be very limited exceptions.

Say, for example, you’re saving money for something very important and you’ll need the money within a few months. Maybe you’re paying for an important medical procedure, or waiting for a contractor to do some essential repairs on your house and you need that money to come out of your account in just a few months’ time.

It may not make sense to pay down your credit card balance with that cash, only to have to potentially charge the upcoming bill when the time comes. In that case, putting the money in a short-term CD could help you both earn interest and avoid touching the money or spending it on anything else. since there’s a penalty to getting money out of a CD early.

Or, let’s say you’re really close to paying off your cards and will be debt-free in a few months time — but you think interest rates are going to go down very soon and you want to lock in some money in a 5-year CD before it’s too late. If you absolutely know that you can open that CD now and still get those cards paid off in a few months, it may be worth it, in case rates do drop.

You can’t beat the ROI of paying off credit card debt

If you have credit card debt, the interest is so expensive that outside of investing enough to earn your full 401(k) match and making sure you have a small amount of emergency savings accessible in a savings account, paying off that debt should almost always be your first priority.

This may mean missing out on the chance to get in on CDs at today’s best rates. But there will be other opportunities to invest in the future. And the ROI of early credit card payoff absolutely can’t be beat.

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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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The current high rates mean everyone is pushing CDs. But these signs may mean CDs aren’t right for you. [[{“value”:”

There are a lot of downsides to high interest rates. But one of the few perks to rates rising is that CD rates also rise. And right now, the best CDs are in the 5% range, which is downright remarkable given the lows of the last decade or so.

Despite such high rates, however, not everyone should run out and open a new CD. For some folks, CDs just aren’t the right move. Here are a few signs you should stay off the CD bandwagon.

1. You have high-interest debt

If you’re carrying around high-interest debt, the best investment you can make with your money is to pay off that debt. What counts as “high interest” here? Essentially, any rate that’s higher than you would get from a CD.

For example, suppose you have $5,000. You could use that money to pay off your $5,000 in credit card debt with a 20% APR, or you could invest in a 12-month CD with a 5% APY.

If you invest in the CD, you’ll earn around $250 in interest when the CD matures after a year. But that high-interest debt will have accrued over $550 in interest. So you’d actually lose more than $250 by investing in the CD instead of paying off your credit card right away.

2. You might need the money soon(ish)

Even if you’re debt-free, you may not want to put your savings into a CD. That’s because CDs tie up your money until they mature. If you need to take your money out of a CD before it matures, you’ll get hit with a giant fee.

Some CDs have early withdrawal penalties equal to all of your interest earnings. Even if you only lose a few months’ worth of interest earnings, your effective APY would be slashed well below what you’d have earned otherwise.

You can minimize this risk by sticking with short-term CDs. For instance, 6-month CDs have great rates right now and only tie up your funds for half a year. If even that could potentially be too long to go without access to your money, skip the CD entirely.

Yes, no-penalty CDs exist, but the rates are lower

Some banks may offer no-penalty CDs, which are CDs that don’t charge early withdrawal penalties. While this sounds great in theory, in reality, the interest rates are terrible. Like, below the already-low 1.57% national average for 6-month CDs.

In fact, it’s actually closer to the national average for regular low-rate savings accounts (0.46%).

I’ve seen no-penalty CDs with APYs as low as 0.05%. Inflation would eat your savings alive at that rate.

Put your emergency fund here instead

If you want to keep access to your money but still want it to grow, just look for a high-yield savings account. The top savings accounts offer rates in the same 5% range as the best CDs, so you won’t lose out on much earning potential.

Folks who want even quicker access to their money should check out high-yield money market accounts. Competitive money market accounts will have similar high rates as CDs and high-yield savings accounts, while offering ATM access and/or check-writing capabilities.

3. You have better investment opportunities

Another reason you may wish to skip the CD craze is because you simply have better investing prospects. Your retirement, for instance; if you aren’t already maxing your IRA or 401(k) contributions, you may be better off putting the money there instead of picking up a CD.

If you have the ability to put that money into purchasing a home, that could also offer a better return in the long run than a short-term 5% CD. (Your mileage may vary — the housing market is kind of wonky.) Similarly, small business investing is growing in popularity as a mid- to long-term investment.

CDs can offer a relatively low-risk way to keep your savings growing ahead of inflation, especially right now when rates are so high. But they’re not for everyone. Make sure to consider the pros and cons, as well as your other options, before investing your money into anything, CDs included.

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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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Have you traveled out of state for a big concert or must-see live event? Here’s how you’re part of a big Gen Z travel trend that is shaping the travel industry. [[{“value”:”

Travel has become a new kind of mass-market status symbol and national pastime, as millions of Americans have shaken off the doldrums of the pandemic and spread their wings. But today’s younger generations are traveling differently than their parents. Millennials and Gen Z are breaking out their credit cards to buy plane tickets and book hotels and Airbnbs for a unique new travel trend: destination events.

A new summer travel survey from Bread Financial and AAA found that young people are highly likely to travel long distances for big live events like concerts and sports. Let’s dig deeper into why destination events are the new driving force in Gen Z and millennial travel.

More young people travel for big live events

The Bread Financial and AAA survey found that 65% of Gen Zers and 58% of millennials have traveled in the past 12 months (or plan to travel in the next 12 months) to live events more than 50 miles from home. Only 43% of Gen Xers and 27% of boomers said the same. Destination events are informing travel packages for younger Americans.

The survey also found that Gen Zers are especially willing to spend big money on air travel as part of a destination event travel plan. Over half (53%) of Gen Zers have a plan to travel by plane to attend a destination event, and 18% of Gen Z said they would consider traveling 1,500 miles or more to attend an event. (Only 9% of boomers were willing to travel that far.) And 48% of Gen Z and 42% of millennials said they would even consider traveling internationally to see their favorite events if they could get cheaper tickets.

People have always traveled and attended big-time sporting events and concerts. But this new focus on destination events as the center of people’s travel plans seems to be a new shift in consumer spending by Gen Z and millennials.

The Taylor Swift effect: How The Eras Tour is shaping the travel industry

One big example of how destination events have captured the imagination of young music fans (and travelers) is a certain big-name pop star — Taylor Swift. Marriott Bonvoy® recently announced a monthslong sweepstakes for fans to win free Taylor Swift concert tickets in cities around the world.

According to the Bread Financial/AAA survey, 20% of Gen Zers have traveled or plan to travel to a Taylor Swift concert. That’s a huge percentage, and it shows how powerful music can be as a driving force in people’s travel decisions. If it’s hard to get tickets to see your favorite artist in your home city, traveling to another city might be a smart financial move. After all, if you and your friends are already spending hundreds of dollars for tickets, it could be worth spending more on flights and hotels.

How people spend (and stay) with destination event travel

Whether it’s Taylor Swift, the NBA Finals, or the Super Bowl, today’s young travelers are willing to spend big money for live event tickets. And 39% of millennials and 37% of Gen Z said they have spent $500-$5,000 (or more) for live event tickets — not including travel costs.

Young travelers are also more likely to turn their destination event travel into a larger vacation experience. The Bread Financial/AAA survey found that 72% of Gen Z and 68% of millennials are likely to book extra travel time to sightsee and explore the host city of their destination event, compared to only 56% of Gen X and 51% of boomers.

This could be a sign that destination event travel will have positive spillover effects for the local economies that host big concerts. Instead of getting the concert crowd in town for just one night, local bars, restaurants, and businesses can attract new customers for an entire long weekend or midweek jaunt.

Destination events and the future of travel rewards cards

Millennials and Gen Z are known for being motivated by the attitude of YOLO (“you only live once”). These young travelers tend to be willing to spend more money on experiences and happy memories, even if there are extra costs in getting to the show.

Here are a few tips to use travel rewards credit cards to get the most out of your destination event travel.

Use expensive concert tickets to earn credit card welcome offers

If you’re shelling out hundreds or thousands of dollars for concert tickets, you could put that money toward a new credit card welcome offer. Some of the best travel rewards cards let you earn thousands of bonus reward points or free frequent flyer miles if you spend a few thousand dollars within the first few months of opening your card.

Don’t overspend or rack up a big balance. But if you’re planning ahead for covering your next concert trip, using the best credit cards can help you earn extra value.

Transfer travel rewards for flights or hotels

Some of the best travel rewards cards make it easy to transfer your credit card reward points to airline frequent flyer programs or hotel loyalty programs. This can make your destination event travel more affordable, if you can use credit card points to get a discount airline ticket or free hotel for the weekend.

Bottom line

Gen Z and Millennials are leading the charge on a new way of travel, and they’re willing to spend money to see the shows, music, sports and destination events that matter most to them. Travel rewards credit cards can help you earn extra benefits and special deals for the new world of traveling to destination events.

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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 recommends Marriott International. The Motley Fool has a disclosure policy.

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