Money Management

You need to be careful when opening a CD. Read on to see why. [[{“value”:”

If you’re looking for a way to generate more interest on your money than what a regular savings account provides, then a CD could be a good bet. Since CDs require you to tie up your money for a preset period and savings accounts don’t, CD rates are typically higher than savings account rates. CD rates are also guaranteed for the duration of their respective terms, whereas with a savings account, the interest rate you’re entitled to could change.

While it’s easy to see the appeal of CDs, you should know that by opening one, you’re taking on a risk. And it may not be the risk you’re thinking of.

When you lose out on a chance to earn more

It’s common for CDs to impose a penalty for cashing out your money early. The extent of that penalty will depend on your bank and your CD’s term, but as an example, some banks charge three months of interest for CDs with a duration of 12 months or less.

You might think that opening a CD is risky because of this penalty. But there’s another risk you should be mindful of — interest rate risk. And it’s something to be concerned about when you’re looking at longer-term CDs in particular.

When you open a CD, you’re locking into a specific interest rate. But if rates rise during your CD’s term, you end up losing out on the potential to earn more interest on your money.

Now, the risk of that happening isn’t as great with a 6-month CD. But if you’re thinking of opening a 24-month CD or longer, it’s something to be mindful of.

What if you put money into a 24-month CD with an interest rate of 4.00%, but a few months later, that rate rises to 4.50%? Suddenly, you’re stuck with a lower interest rate on your money for months on end.

Pay attention to market conditions

Without a crystal ball, it’s impossible to predict exactly what CD rates will look like at any given point in time. But one thing you should do is pay attention to the movement of the federal funds rate, which is the rate the Federal Reserve oversees.

When we say “the Fed raised interest rates,” we’re talking about the federal funds rate, which is the rate banks charge each other for overnight borrowing. When the Fed raises interest rates, CDs tend to start paying more. When the Fed cuts interest rates, CD rates tend to follow suit. So simply following the news and paying attention to what the Fed does or is expected to do could help you make a smart decision with your CDs.

For example, this year, the Fed is expected to cut interest rates in response to cooling inflation. Now’s probably a good time to lock in a longer-term CD, since CD rates are among the highest we’ve seen in many years. Chances are, if you open a 24-month CD tomorrow, in six months’ time, the rate on that product will be lower.

However, if you intend to continue to open CDs, pay attention to what the Fed is doing. If you start to hear rumblings about interest rate hikes, perhaps wait on opening a longer-term CD to see if rates become more favorable eight or 10 weeks down the line.

Another thing it pays to do is ladder your CDs so you have money freeing up at different intervals. This could not only reduce your chances of facing an early withdrawal penalty, but also help you avoid losing out when higher interest rates come down the pike.

During periods when the Fed seems to be in a holding pattern as far as interest rates are concerned, it could pay to stick to shorter-term CDs of one year or less and maintain a rotating ladder so you get the best of both worlds — a higher interest rate than what a savings account will pay, and flexibility with your money and the chance to jump on higher rates should they become available.

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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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Costco sells collectibles at a discount. Read on to find out how much you might save by buying them at the warehouse club. [[{“value”:”

While almost everyone knows Costco is an excellent destination for bulk food items and budget-conscious shoppers, many people may not be aware that Costco also sells signed sports memorabilia on its website. And I was shocked at how much cheaper some items were.

I found some autographed collectibles that were discounted by thousands of dollars.

Here are five autographed collectibles I found on Costco’s website that are far cheaper than the same listing on the Fanatics website, as well as some pros and cons of buying collectors’ items from Costco.

Five discounted signed collectibles at Costco

I wanted to find out how much Costco members could save by buying sports memorabilia at the discount warehouse’s website, and in some cases, the savings were up to $2,000. Here are five items that were significantly cheaper than the same items on the Fanatics website:

L.A. Lakers legends autographed basketball (Costco price $7,999): $2,000 discount compared to Fanatics website.Lionel Messi autographed jersey (Costco price: $3,999): $950 discount.Tom Brady autographed football helmet (Costco price: $2,199): $500 discount.Derek Jeter autographed game used-baseball (Costco price $1,999): $500 discount.Jack Nicklaus autographed photo (Costco price: $799): $200 discount.

Sports memorabilia collectors can clearly save money by buying some sports items on Costco rather than the Fanatics website directly. It’s worth mentioning that I only compared these two websites, so it’s possible you could find these items for cheaper on other collectors’ websites.

Pros and cons of buying collectibles at Costco

Costco has built an excellent reputation for customer satisfaction, so collectors looking to make purchases through Costco should have confidence in the memorabilia Costco sells on its website. Here are a few pros and two cons I found when looking at collectors’ items.

Pros of shopping for collectibles at Costco

Price: Most of the collectible items I compared were cheaper at Costco than at Fanatics. However, some items could be cheaper or the same price on the Fanatics site, and I just didn’t see them.Satisfaction guaranteed: On every collectible items page Costco had a section called “shop confidently” that said items sold on its website have a risk-free 100% satisfaction guarantee. I looked at the company’s return policy and couldn’t find any exceptions for collectible items.Authenticity: Some of the items I searched for on Costco said they were authenticated, and others didn’t mention it. But the Fanatics site, which is the brand from which Costco collectibles are sold, says that it ensures all items are 100% authentic.

Cons of shopping for collectibles at Costco

Search results: I found searching the site for specific items difficult. It was easier to start the search on Google and add “Costco” after the description to find some collectibles.Images: In some cases, Costco only had one image of the collectible, while the Fanatics site had two or more. For expensive collectibles, the more images you can view ahead of time, the better.

Note that I’m not an experienced sports memorabilia collector, but after a little comparison shopping, Costco appeared to have good deals on legitimate autographed collectibles. And with the company’s commitment to customer satisfaction, shoppers can feel confident buying a collector’s item at a lower price from Costco.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Costco Wholesale. The Motley Fool has a disclosure policy.

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You don’t need to sign a long-term contract for wireless service. Learn why a prepaid phone plan could be a better option. [[{“value”:”

When people get cellphone service, most go with a postpaid plan. This type of plan requires a contract, and you pay for the service at the end of the month. Many of these plans also have special financing offers for new smartphones, so you don’t need to pay in full upfront.

Your other option is a prepaid plan. You pay for service upfront, normally month by month. This isn’t nearly as common. Case in point, T-Mobile has the most prepaid customers, but they still only make up about 20% of its customer base.

I used to have a postpaid plan, but I switched to prepaid several years ago. Even though prepaid phone plans aren’t as popular, there are a few reasons they’re well worth considering.

1. Prepaid plans are usually cheaper

If you’re trying to cut back on your bills and boost your savings, switching to a prepaid plan could be an easy way to save. Mint Mobile’s plans start at $25 per month, and it’s currently offering a special with three-month plans for $15 per month. Visible Wireless also has prepaid plans starting at $25 per month. Connect by T-Mobile even has prepaid plans starting at $10.

For one- or two-line plans, you’ll almost always get a better deal by going prepaid. It’s closer if you need a family plan with several lines. Some carriers have discounts available if you get service for multiple lines through a postpaid plan. Even so, it’s still a good idea to compare prepaid and postpaid prices so you can see which is more affordable.

2. There’s no credit check required

Credit cards and loans aren’t the only situations when you need to pass a credit check. When you apply for wireless service with a postpaid plan, the carrier runs a credit check on you. It does this to gauge the risk that you won’t pay your bill, in which case it would lose money.

If you don’t have a high credit score, you may be required to pay a security deposit to get a postpaid plan. The deposit amount depends on the carrier and the plan you want. Carriers typically return your deposit after you’ve made enough on-time bill payments.

With prepaid plans, you don’t need to worry about a credit check. You’re paying for service upfront, so your credit score won’t be a factor. This also means the application process is faster and doesn’t require as much personal information — always nice if you’d like to reduce the risk of a wireless company losing your information in a massive data breach.

3. It’s good motivation to pay for your phone upfront

Prepaid phone plans don’t have the special financing offers you can get with postpaid plans. Some people look at this as a drawback, but personally, I consider it a plus.

When you finance a phone, you’re locked into a contract until it’s paid off. The standard contract length is 36 months — a long time to be paying off a smartphone. These installment plans can also encourage overspending. You might think twice about buying the latest iPhone for $800, but for $23 per month, that’s a different story.

Because I use prepaid plans, I always need to pay for my phones in full upfront. That has motivated me to keep my phones longer and to look for deals when buying a new phone.

Postpaid phone plans may be what most people use, but prepaid plans are often the best deal. Not only do they have lower monthly rates, but they also don’t tempt you with lengthy financing agreements. And if your credit score isn’t the best, that’s no problem.

If you haven’t done so yet, check out what prepaid carriers like Mint Mobile, Visible, and Connect by T-Mobile offer to see how much you could save.

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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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There’s no perfect answer when it comes to airline upgrade probabilities. But find out what you need to know about the process. [[{“value”:”

If you’ve earned elite status with your favorite airline or recently moved up a status level, you might be wondering how often you should expect to get upgraded to business class.

I wish I could tell you things like, “With Delta SkyMiles Silver status, you can expect to be upgraded about X% of the time,” but unfortunately it isn’t that simple. It depends on several factors, and some travelers can experience far more success with complimentary upgrades than others.

With that in mind, by understanding the factors that determine your upgrade probability, you can be a little more strategic when it comes to selecting flights where an upgrade is more likely. Here are five factors in particular that can determine whether you’re likely to get a free business class upgrade on your next flight.

1. Your elite status level

First, and most obvious, one major factor is your elite status level. I’ll use American Airlines’ AAdvantage program as an example, as it’s the one I’m a member of, but the same idea applies to most major airlines’ frequent flyer programs.

In the AAdvantage program, there are five status tiers, listed in descending order:

Concierge Key (this one is by invitation only)Executive PlatinumPlatinum ProPlatinumGold

When the airlines decide who gets a free upgrade, they first rank travelers by status. Within each level, there are usually tie-breakers, such as who earned more qualifying points or who has one of the airline’s credit cards. But in the above list, those with Executive Platinum status will be in a higher spot on the upgrade list than those with Platinum Pro status, and so on.

READ MORE: Best Travel Credit Cards

2. What route are you flying?

Some routes are more commonly used by leisure travelers, while others are more frequently used for business travel. It’s not uncommon for there to be a dozen top-tier status members on routes like New York City to Los Angeles, for example.

More business travelers typically means more competition for upgrades. Not only are business travelers more likely to have elite status than leisure travelers are, but many simply buy business class seats since their company is paying.

3. What day and time are you flying?

Continuing with the business traveler theme, the date and time you travel matters as well. Business flyers tend to fly during the week, and in times that aren’t in the middle of the day. For example, early morning flights are often full of elite status flyers (especially on Mondays).

4. How full is business class a few days before the trip?

If business class is nearly sold out at the time you book your ticket, the upgrade probability is much lower than if it is almost empty within a few days or weeks of the flight time. If a lot of people purchased business class tickets for your flight, it can leave few seats available for upgrades.

5. How much does it cost to upgrade?

To the dismay of many elite flyers, many airlines have started to sell upgrades to flyers who have purchased main cabin tickets. And in some cases, the cost of upgrading can be rather low.

You may also find that the cost of a business class ticket in some cases isn’t much more than a main cabin flight. When recently searching for a round-trip flight to Washington, D.C., I found a fare of roughly $260 for a main cabin seat, or a relatively budget-friendly $320 cost for business class. If this is the case, it’s not uncommon for the business class cabin to be completely booked before anyone gets an upgrade.

The bottom line

There’s no way to know for sure how often you’ll be upgraded after you achieve elite status with an airline, as there are many different variables at play. There are routes where I almost always get upgraded even as an AAdvantage Gold member, and there are routes where it’s virtually impossible, even with Executive Platinum status.

By knowing the factors discussed earlier and using them to your advantage, you can certainly increase your odds. But the fact remains that the only way to guarantee yourself a large, comfy seat in the front of the plane is to pay for it.

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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.Matt Frankel 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.

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