Money Management

Worried about EV range anxiety? Buying a hybrid car could be a good move. But don’t fall for these big myths. [[{“value”:”

Hybrid cars can be a cost-effective way to get around — especially if you still have range anxiety about electric vehicles. If you’re tired of burning money on gas, but aren’t ready to commit to a fully electric car, buying a hybrid car in 2024 could be a good move.

But hybrid cars are often misunderstood. There are a few big myths and misconceptions about hybrid vehicles that could lead you astray from boosting your fuel economy. Don’t believe the anti-hybrid hype!

Let’s look at a few big myths and realities about hybrid cars.

1. “They don’t save you much money on gas”

Typical hybrid vehicles will often get significantly better gas mileage than a comparable non-hybrid car. Based on calculations from FuelEconomy.gov, hybrid cars might get gas mileage that is 33%-50% higher (or more).

For example, here are a estimated gas mileage differences for a few major brands of hybrid cars, vs. their non-hybrid equivalents:

It’s true that hybrid cars usually cost a bit more than their non-hybrid versions, and so you will have to earn back that price difference over time, in the form of a “payoff period.” But if the price of oil (and gasoline) keeps going up due to various global conflicts and uncertainty in the global economy, hybrid cars may become an even better value.

It feels good to burn less gas, and to be less vulnerable to price spikes. Hybrid vehicles can help you save money in the long run — and sometimes in the surprisingly short run. Check out this free calculator tool from the U.S. Department of Energy — you can enter your average miles driven per year and change the gas price based on your area: “Can a Hybrid Save Me Money?”

2. “You can’t get electric vehicle tax credits”

There’s been a lot of media headlines about electric vehicle tax credits of up to $7,500 for the purchase of a new EV. But did you know: some hybrid cars can also qualify for EV tax credits?

You need to choose a special type of car called a plug-in hybrid electric vehicle (PHEV), such as my beloved Toyota Prius Prime. But if you qualify based on your income, and the age and selling price of the vehicle, you can get pre-owned EV tax credits of up to $4,000 for some plug-in hybrid vehicles. Here are a few, according to the U.S. Department of Energy:

Chevrolet Volt (2011-2019)Chrysler Pacifica PHEV (2017-2022)Ford Escape Plug-in Hybrid (2020-2022)Hyundai Ioniq Plug-in Hybrid Electric Vehicle (2018-2022)Toyota RAV 4 Prime Plug-in Hybrid (2021-2022)

3. “Insurance for hybrid cars costs too much”

It’s true that hybrid vehicles tend to have slightly higher auto insurance costs. According to data from Lemonade, hybrid car insurance costs might be about 7%-11% higher than standard auto insurance.

But keep in mind that you have choices to help reduce your auto insurance premium. Shop around for cheap car insurance quotes before you go to the dealership. Consider raising your deductible if you have a decent cash emergency fund. Also, Lemonade (one of our picks for best homeowners insurance companies) offers special discounts for hybrid car insurance.

Bottom line

If gas prices keep going up, the cost savings from a hybrid vehicle can quickly become more significant — making it easier to pay off the difference in sale price vs. a standard car. Hybrid car insurance costs don’t have to be a dealbreaker, either. This is especially true if you choose a plug-in hybrid electric vehicle that can qualify for up to $4,000 of used EV tax credits.

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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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If you want your credit score to improve, you need to focus on paying down debt as well as being timely with debt payments. Read on to see why. [[{“value”:”

Having a great credit score could do a lot of good things for your finances. It could not only make you more likely to get approved for a personal loan, auto loan, or mortgage, but it could also leave you with a lower interest rate on one. The result? Ongoing savings.

You may have heard that if you want to boost your credit score or keep an already solid score in good shape, that you must pay your debts on time. And that’s true. Your payment history carries more weight than any other factor when calculating your credit score. It’s worth 35% of your FICO® Score.

But if you only make your minimum payments on your credit cards each month, you may end up hurting your credit — even if every single payment is made on time. Here’s why.

When your credit utilization gets too high

While your payment history carries the most weight in calculating your credit score, your credit utilization ratio is a close second. That number accounts for 30% of your credit score, and it measures how much of your available revolving credit you’re using at once.

If you have a $10,000 credit limit across all of your cards and owe $3,000, you’re at 30% utilization, which is generally considered the high end for a favorable ratio — meaning, once your utilization goes beyond that point, your credit score could suffer. But if you owe $1,000 on a $10,000 credit card balance, a ratio that low (10%) could give your credit score a boost.

So here’s the problem with only making your minimum credit card payments. If you stick to that system, between added charges and accumulating interest, your credit card balances have the potential to grow. That could drive your credit utilization ratio into unfavorable territory, resulting in a hit to your credit score. On the other hand, whittling down your total balance could help your credit score improve.

Of course, from a non-credit-score perspective, it’s extremely beneficial to pay down your credit cards and not just stick to your minimum payments because that could help you avoid getting trapped in a cycle of debt. The longer you carry your balances and the higher they are, the more interest you accrue and the more you’ll have to pay off over time.

Setting yourself up to make larger credit card payments

You may be in the habit of only making your minimum monthly payments on your credit cards because that’s all you can afford. But a few changes could put you in a better position to get ahead of that debt.

First, do a deep dive into your spending. Review your expenses from the past few months and see if there are some you can scale back on or slash without impacting your happiness.

If there’s a streaming service you barely watch these days costing you $20 a month, let it go. That’s $20 that can go toward your outstanding debt. And if you currently spend $200 a month on takeout, cutting that down to $100 might help you get ahead of your balances, all the while still giving you the occasional break from cooking.

Another option is to look to the gig economy for extra income. Your schedule may be busy and not super conducive to working a side hustle. But if you push yourself to hold one down for just a few months, you might make great headway on your debt. You can then cut out that side gig once your debt is a thing of the past.

Being timely with your minimum credit card payments could, to some degree, help your credit score improve, since timely payments carry a lot of weight. But if your balance grows too large, you risk credit score damage. So your goal should be to not only make your minimums on time, but also, make payments beyond those minimums so your debt is whittled down as quickly as possible.

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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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CD rates have already started to fall. If you’re interested in opening one, find out why you might not want to delay your decision for much longer. [[{“value”:”

For savers who want a guaranteed interest rate on a relatively safe bank account, there’s perhaps no better place to store your money than in a certificate of deposit (CD). Over the last two years, rates on short-term CDs have skyrocketed from a meager average of 0.73% in March 2022 to so many 5.00% CD offerings in 2024, it’s hard to even choose which one to open.

Of course, even though CD rates have almost hit two decade highs, you might still feel hesitant to dump your money in one. After all, CDs aren’t like savings accounts. You can’t withdraw money freely, at least not without paying a penalty that could cost you whatever interest you’ve earned. Plus, since CD rates have gone up, who’s to say they won’t climb higher? Who knows — maybe waiting a bit longer could mean scoring a better rate.

In truth, it’s unlikely CD rates will climb much higher than they are now. In fact, if you’re interested in opening one, there’s perhaps no better time to do so than now. Here’s why.

1. CD rates are dropping

CD rates might be high right now, but there’s no telling how long they’ll stay this competitive. In fact, there are some signs that CDs rates have already started to fall.

For example, at the end of February, I wrote about three CDs from TotalDirectBank: a 3-month CD with a 5.51% APY, a 6-month CD with 5.50%, and a 12-month CD with a 5.50%. It’s now April 15, and those same CD terms are now 5.42%, 5.45%, and 5.35% respectively. Likewise, I also wrote about a 6.50% 8-month CD from Financial Partners Credit Union at the end of January. While Financial Partners still offers the 8-month CD special for new members, it’s APY is now 6.00%.

These are small changes. But they could take more drastic leaps if the Federal Reserve decides to cut the federal funds rate later this year, which largely sets the pace for CD rates. While hotter-than-expected March inflation has made it less likely that it will cut rates at its next meeting, many experts are still forecasting some rate cuts in 2024. Even if the central bank doesn’t cut the federal funds rate significantly this year, any sign that it’s ready to drop it back into a lower range could influence banks to cut their CD rates by a much larger percentage.

All this to say, it’s still unlikely that CD rates will go up. If you’re interested in a CD, then, you might regret later not snagging a great rate while you still have the chance.

2. Variety of CD terms to choose from

The problem with CDs is that you’ll restrict access to your money. Unless you have a no-penalty CD, you’ll pay an early withdrawal penalty, usually equal to several months’ worth of interest, to gain access to your savings prior to the end of the CD’s term. This makes building a CD ladder an appealing choice for long-term savers. With a CD ladder, you can combine short- and long-term CDs to give you both flexibility and an above-average rate of return.

In the past, you typically had to add a very long CD term — like five to 10 years — to your ladder to get an even remotely decent APY. These days, however, you can add any number of CD terms, from one month to 10 years, and snag an APY that will grow your money at a generous pace. That makes now a great time to build a long CD ladder, while rates are still elevated.

Just watch that you can meet the minimums. Some banks have excellent rates on short- and long-term CDs but high minimums that could leave your ladder shorter than you want. One way around this is to get CDs through the financial platform Raisin. Raisin isn’t a bank, but it can connect you with top CD providers. Your CD accounts will have FDIC insurance, and you only need to deposit $1 to get started.

3. No-penalty options also available

No-penalty CDs let you liquidate your CD early without paying a penalty. They can be a good option if you’re afraid of losing money in a regular CD, but also don’t want to miss out on earning interest at today’s great CD rates.

Traditionally, no-penalty CDs weren’t worth it because their APYs were so darn low. But, with today’s rates, you can find many no-penalty CDs that are on par with standard CD contracts. Again, Raisin has some great no-penalty options with a variety of terms that could help you build a no-penalty CD ladder.

All in all, CD rates may not stay this high for much longer. In fact, the day may not be far off when CD rates return to pre-2022 levels, which were earning less than a penny on the dollar even at some of the highest rates. If you’re interested in CDs, take a look at the best rates available now and see how much interest you could earn in 2024.

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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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Business class is a much more comfortable way to fly. Check out a few situations when flying business class makes sense and how to book it for less. [[{“value”:”

It’s no secret that business class is more expensive than economy. The normal price for business-class airfare to Europe is $4,500 and up, according to travel deal site Going. There are ways to get a much better deal, but still, most people aren’t flying business class often because of the cost involved.

While you may not book business class tickets every time you fly, there are a few situations where it can be well worth it. Here are the best reasons to consider flying business class, and how you can get your ticket for far less than the normal price.

1. You’re going on your honeymoon

Business class is perfect for special occasions, and there are few better examples than going on your honeymoon.

You’ll start off your trip in an airport lounge, not a noisy boarding area. You’ll have a much more comfortable seat, and you and your new spouse can toast your honeymoon with in-flight champagne. If, like many newlyweds, you want a luxurious experience on your honeymoon, flying business class is a good decision.

2. It’s a long trip and you want to arrive well rested

There’s a reason some companies pay for employees to travel in business class on long flights. They need employees to arrive ready to work, and they won’t be if they just spent 10 hours getting sporadic bits of sleep in a cramped economy seat.

If you’re hoping to rest on your flight, that’s much more likely in business class. Some people can sleep fine in economy, and it’s certainly possible to make an economy seat more comfortable. But for most travelers, a seat in business class makes a huge difference. It’s the only way I’ve been able to get decent sleep on a plane.

3. You don’t travel often and you want to make it special

The biggest downside of flying business class is that it’s hard to go back to economy. You get used to the comfort and the higher level of service.

This can be tough if you’re a frequent flyer. There’s a good chance you’ll want to book business class every time you travel, and that gets expensive. If you only travel once in a blue moon, it’s not as much of an issue. You can splurge on occasion, and when you don’t travel often, why not make the most of it?

How to book business class without paying a fortune

Even when you have a great reason to book business class, you still need to be able to afford it. Most travelers don’t want to spend thousands of dollars on every flight. Don’t worry — there are a few ways to fly this way without spending nearly that much.

Get a travel rewards card

Cash isn’t the only way to pay for airfare. You can also book with miles, and this makes business class much more accessible. It’s often possible to book roundtrip business-class tickets for 60,000 to 120,000 miles.

The fastest way to earn miles is with travel credit cards. If you normally travel with the same airline, then you could open one of its airline credit cards. But if you want the flexibility to book with a larger number of airlines, look for a card with transferable travel rewards. You can transfer your rewards to several airline partners if you have a card in any of these rewards programs:

Chase Ultimate RewardsAmerican Express Membership RewardsCapital One Venture RewardsCiti ThankYou Rewards

Sign up for a flight deals service

There are plenty of business-class deals available. One of the easiest ways to learn about them is through a flight deals subscription. Two of the most popular are Going and Dollar Flight Club.

These services find cheap flights for you departing from your home airport. They each have free plans, although you need to sign up for a premium plan for access to their best deals, including business-class tickets. Even after paying a membership fee, you could save quite a bit with one of these services if you travel often.

Be flexible with your travel plans

If you want to pay less for airfare, it always helps to be flexible with your travel dates. That’s especially true with business-class airfare, since there are fewer seats available and they’re in higher demand.

Try to at least be open about the day and time that you fly. Flights may cost half as much if you don’t mind moving your travel date by one or two days or flying at a different time. Most flight booking sites and airlines have calendar tools that allow you to compare prices on different dates.

Travelers usually don’t need to book business class, but doing so can be a fun upgrade. Now that you know a few ways to book it at a lower cost, you can start planning, get a credit card that earns travel rewards, and figure out when you want to give business class a try.

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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.Citigroup is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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