Money Management

It’s important to understand the ins and outs of life insurance. Read on to get to the bottom of one big myth. [[{“value”:”

If you’ve never really shopped for life insurance before, then there’s a lot about it that you may not know. For example, you might assume that if you’re over 50, getting life insurance is off the table. The truth is that while you might pay more for life insurance as a 50-something applicant as opposed to someone younger, you may very well be able to get the coverage you want.

Another thing you might be misinformed about in the context of life insurance is cost. Many people are wired to think that life insurance is a generally expensive product. In reality, it may end up being more affordable than you’d think, depending on the amount of coverage you buy and the type of life insurance you choose.

Meanwhile, recent data from Assurance found that 30% of consumers are misinformed about how life insurance works in the context of taxes. But that’s important information to have.

Don’t assume the IRS will come after your loved ones’ life insurance benefit

Taxes apply to many different forms of income. If you withdraw from a traditional IRA in retirement, for example, you’ll pay taxes on that money. Similarly, if you’re paid dividends from a stock investment, those will generally result in a tax liability, too.

But you may be pleasantly surprised to learn that life insurance benefits are generally not subject to taxes. And that might get you to think differently about putting a policy in place for your loved ones.

Assurance found that 30% of consumers thought life insurance benefits are taxed. And if that was your assumption, it may have stopped you from buying life insurance.

After all, let’s say you’re leaving your loved ones a $250,000 policy. It’s easy to see why you wouldn’t want the IRS to swoop in and take 25% or 30% of that. But rest assured that life insurance payouts generally go to your beneficiaries in full, and the IRS doesn’t get a piece of that income.

Life insurance may be more affordable than you’d expect

There are different factors that go into determining the cost of life insurance. These include:

Your ageThe state of your healthThe amount of coverage you buyThe type of policy you buy

The first two are factors you can’t control (well, you may be able to take steps to better your health to some degree, but if you have asthma, you can’t help that). But the last two factors are factors within your control. And if you’re worried about affording life insurance, one thing you may want to do is look at term life policies instead of whole life.

With term life insurance, you’re only covered for a specific period of time, and your policy does not accumulate a cash value. With whole life insurance, you’re covered for as long as you live, and your policy builds a cash value you can eventually tap.

Term life insurance tends to be far more competitively priced than whole life insurance. So that alone could result in savings.

Also, to keep your costs down, don’t overbuy insurance. A good rule of thumb is replace your income about 10 times over and cover joint debts you have with your loved ones. So if you earn $50,000 a year and owe $150,000 on a mortgage, a $650,000 policy may suffice. You’d spend more on a $1 million policy.

All told, there’s a fair amount of misinformation out there about life insurance, whether it’s in the context of cost, taxes, or eligibility. It pays to read up on how life insurance works, so you can make an informed decision.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

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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Visa and Mastercard just agreed to cut swipe fees for merchants by $30 billion in five years. Learn the implications for credit card rewards. [[{“value”:”

Visa and Mastercard recently announced a major legal settlement with retailers that promises to reduce credit card processing fees. This deal could lead to $30 billion of cost savings for merchants during the next five years.

But what does the Visa and Mastercard deal mean for credit card customers? Could rewards credit cards get worse because of this deal? Are reward points going away? We talked with Dave Grossman, credit card rewards expert and Founder of MilesTalk (milestalk.com), to get his thoughts on the immediate future of credit cards now that Visa and Mastercard are lowering fees for merchants.

First, some good news for credit card customers: Dave Grossman does not believe that this deal is the end of anything important for your favorite credit card rewards programs. But the future of making payments with your credit cards could get more complicated.

How big of a deal is this $30 billion Visa-Mastercard deal?

Visa and Mastercard have been battling in court with national retailer organizations for almost 20 years about swipe fees. Those are the credit card processing fees that happen behind the scenes whenever you use your card to make a purchase; about 2.24% of every credit card transaction gets paid by the merchant, store, or restaurant where you’re shopping.

Consumers don’t usually notice swipe fees, but merchants hate them. Two-and-a-quarter percent (or more) of every transaction adds up to serious money getting diverted from your favorite restaurant’s bank account. According to the Merchants Payments Coalition, as of 2023, Visa and Mastercard swipe fees reached a record level of $100 billion.

Here are two reasons why this newly announced Visa-Mastercard swipe fee deal really isn’t a big deal for credit card customers:

$30 billion = $6 billion per year: $30 billion of fee reductions sound like a lot of money, but reductions are promised over five years, or about $6 billion per year. That’s only a 6% discount from 2023’s record-high $100 billion of swipe fees.Fees are being reduced by 0.04%: The specific reduction in swipe fees promised by the deal is only four basis points, or 0.04%.

“I do not think this will necessarily be the beginning of a change to credit card rewards,” Dave Grossman said. “The reduction in fees in the short term is only 0.04%. It’s a very small amount and one that Visa and Mastercard have surely planned around for quite some time. They are also agreeing to the lower fees for five years, not forever.”

The Visa and Mastercard fee-reduction deal is not likely to be a big enough deal breaker to cause most banks to stop offering credit card rewards. But the big change could come in how merchants choose to accept credit card payments — or not.

How the Visa-Mastercard settlement could change credit card payments

One big point of contention in the long-running legal battle of retailers vs. Visa and Mastercard was the issue of “honor all cards” rules. Before this settlement, retailers were required to “honor all cards” issued by Visa or Mastercard, whether they’re low-cost basic cards with no rewards, or premium credit cards with big rewards (like 5% points multipliers). Honoring all cards could cost retailers more.

But from now on, as a result of the settlement, retailers will no longer be forced to honor all cards. Instead, merchants will be free to adjust their pricing or set surcharges for different types of cards. This could lead to a complex tangle of surcharges and mental math every time you’re deciding which credit card to use for a purchase. Will the retailers actually go through with this?

“We have no idea right now if merchants will actually do this for many reasons,” Dave Grossman said. “One is that customers would feel put off. If the merchant has a sign that says, ‘These cards have a 1% surcharge, and these other cards have a 3% surcharge,’ and the customer only carries one card, which happens to be a rewards card at the higher surcharge level, what kind of damage does that do to the customer relationship?”

Retailers often feel annoyed by credit card processing fees. But do they want to risk annoying their customers even more? Time will tell.

Why premium rewards credit cards could take a hit

Now that merchants have the freedom to charge higher fees for certain credit cards, this could be bad news for premium credit cards that offer the highest rewards. This could cause a back-and-forth chess match between banks and retailers, trying to re-establish a new profitable equilibrium for the best rewards credit cards.

“If merchants really were to become very aggressive about charging significantly higher fees for rewards cards, an effect might be customers switching into cards with less rewards and lower fees,” Dave Grossman said. “Of course, that could then cascade into credit card issuers reworking cards to give fewer rewards and commensurately lower the interchange fees on those cards. If this happened, it would be the fanciest cards with the highest annual fees and rewards that would get hit the most.”

Bottom line

It’s too soon to say for sure how the Visa-Mastercard $30 billion settlement will affect the future of credit cards. The ball is in the merchants’ court now. “We will have to keep an eye out on how the merchants ultimately react,” Dave Grossman said. “The status quo may in fact be the easiest path forward for merchants.”

But if merchants start to charge extra fees or surcharges for premium credit cards, it’s a whole new ballgame — and credit card companies will likely respond with new fees or other changes.

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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 Mastercard and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

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Sam’s Club is one of the most popular retailers in the U.S. Read on for a few common pitfalls any Sam’s Club shopper would recognize. [[{“value”:”

If you’re a Sam’s Club shopper, there are undoubtedly things about the warehouse store that you appreciate. You may also have a bone or two to pick — issues you would change if you could. Here are five struggles you may be able to relate to.

1. Parking

After more than two dozen moves to different cities, states, and countries, I can confidently say that the parking situation at every Sam’s Club I have ever visited has been a hot mess. Unless you have the patience of a saint, I suspect the same is true for you. I’ve boiled the problem down to these three issues:

Everyone and their mother appear to head for warehouse stores at the same time, and no matter how large the parking lot is, it’s nearly always full.It takes people forever to unload their carts, get into their vehicles, and pull out of a parking spot. I suspect it’s because Sam’s Club is unlike a traditional grocery or department store. There are no bags to quickly grab from your cart and toss into your trunk. Unloading a cart takes more time, and parkers must exercise patience.(This may just be me, but) people seem to be in slow motion. Whether they’re walking through the parking lot or looking for their cars, folks coming out of Sam’s move particularly slow. Is it something in all the samples they tried, or are they simply exhausted from walking up and down aisles, standing in line to pay, then standing in another line to show their receipt?

2. Crowds

I hear tales of people running into Sam’s Club, surprised to see that there’s barely anyone shopping. I’ve never had an upgraded membership, so I’ve never been able to take advantage of early shopping. The only thing I can figure out is that the people who brag about “practically having the store to themselves” either purchased upgraded memberships or live in a much less populated area than I do.

I’m okay with having people around, as long as they’re not all crowded into one area of the store. Unfortunately, the last time I shopped at Sam’s Club, everyone seemed to congregate near the bakery. I’ll admit it smells great back there, but come on, people! How long does it take to look at crescent rolls (even if they are stuffed with chocolate)?

If you don’t leave Sam’s determined to avoid people for the rest of the day, you’re a far better person than I am.

3. Overbuying

As much time as I spend working on our household budget, you’d think I would buy only what we need. However, I typically walk out of the store with too much stuff. Some of what I buy in bulk makes sense. For example, paper towels, toilet paper, and a huge bag of dark chocolate-covered pretzels make sense. What makes no sense is when I pick up a bag of limes when I only need two, or two boxes of cereal when it takes me two weeks to eat one box of cereal.

One day, when I feel brave, I will figure out how much money I could have saved by buying only what my husband and I can consume.

4. Rotating stock

When I walk into our local grocery store, I’m pretty sure of what I’ll find. And while that’s true of many Sam’s Club items, it doesn’t seem to apply to products I fall in love with.

I fully recognize that these are first-world problems. I also know how fortunate I am to be able to walk into a store and stock up. Still, as a creature of habit, it bothers me when something disappears.

5. A low price isn’t always a low price

There are definitely bargains to be found at Sam’s Club, especially if you need large quantities. However, it’s still important to compare prices with useful apps and to be honest about how quickly you’re likely to use up anything you plan to buy.

For example, Sam’s Club offers a three-pack of Banana Boat sunscreen for under $15. At first blush, it sounds like a great deal. There’s an issue, though.

A three-pack of anything may be too much for a single shopper. While we think of food going bad, products like lotions, creams, makeup, and sunscreens also have expiration dates. Unless a person is going to whip through the first bottle, they may not get to use the second (or third) before its expiration date.

Ultimately, shopping at Sam’s Club may not always save you money (gasp). If you pay for a three-pack but only use one bottle of a product before the other two expire, you’ve paid more than you would have by purchasing a single bottle elsewhere, particularly if you have a manufacturer’s coupon.

These days, we’re all doing what we can to save money, from using rewards points on our credit cards to virtually clipping online coupons. If you’re a Sam’s Club member, the ideal situation not only involves saving money, but also enjoying the experience.

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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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Certain cruise upgrades may be worth the money, especially if you’re new to cruising. Read on to learn more. [[{“value”:”

Taking a cruise is a truly unique experience. And if it’s one you’ve never had before, you may be eager to book a cruise for your next vacation.

Now in the course of budgeting for a cruise, you’ll need to factor in expenses like:

Getting to your destinationThe cost of your roomMandatory feesExcursions

It’s also a good idea to budget for the upgrades you may decide to pay for. But are they really worth the money? Although that’s a personal choice, here are three specific cruise upgrades you might appreciate as a first-timer.

1. A room with a balcony

If you’re used to staying at hotels and resorts, you may be surprised — and not in a good way — at how small cruise cabins tend to be. That’s why it could pay to upgrade to a balcony room for your first trip.

Balcony rooms tend to be larger, so you may not feel as claustrophobic. And also, you get your own private outdoor area where you can sit, listen to music, read, and stare at the ocean without having to deal with the bustle and crowds that cruise ships are known for.

Now the cost to upgrade to a balcony room will depend on a number of factors, such as your cruise line, the length of your trip, and the number of people in your booking. But as an example, for a five-night Royal Caribbean cruise in June, the cost for two guests to stay in an interior room is $652. For a balcony room, it’s $1,127.

Clearly, that’s a big difference in cost. But while you are paying $95 more per night, remember that you’re on vacation. You don’t want to feel cramped in a room. And if you tend to need downtime during your travels, then the higher cost may be worth it if you can swing it.

2. Internet service

Many people feel uncomfortable cutting off communication with the outside world when they travel. But without internet service, that might be your experience on a cruise ship.

The cost of internet service can vary based on the length of your cruise, your cruise line, and other factors. But usually, you’re looking at somewhere in the vicinity of $20 per day. So for a five-night cruise, that’s $100. It’s not a negligible sum, but it’s a cost you may want to plan for.

3. The specialty dining package

Some cruise lines offer a specialty dining package that allows you to book meals at different restaurants on board, as opposed to having to dine in your ship’s main dining room. If you’re someone who doesn’t love noise and crowds, this might be a good option for you. (Though to be fair, if you’re really averse to noise and crowds, you may want to question your decision to book a cruise in the first place.)

Now once again, the cost here can vary based on your cruise and its offerings. According to Royal Caribbean Blog (which is not the cruise line’s official site), the unlimited dining package generally costs $115 per guest for a three-night cruise and $260 per guest for a seven-night cruise. This may be worth it for a more pleasant dining experience every night. And also, you may find that the food at the specialty restaurants is better than the main dining hall food.

Booking a cruise has the potential to result in a pretty large credit card tab. So before you decide on specific upgrades, see what your budget allows for. But if you can swing these, it could make your first cruise experience a lot more enjoyable and comfortable from start to finish.

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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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New Costco members can get a huge bonus on their first membership. Learn how to get cash back using this lucrative promotion. [[{“value”:”

An annual Costco membership costs $60, or you can pay $120 to upgrade and earn 2% cash back on an Executive membership. But as most seasoned Costco members know, paying full price for your first Costco membership is a rookie mistake. Costco frequently runs promotions on its annual memberships for new members. Often, these promotions will give you a Costco Shop Card — basically a gift card you can use at Costco — when you purchase your first annual membership.

If you’ve been considering a Costco membership lately, but haven’t had the impetus to jump off the fence, the warehouse club’s current promotion might just help you make a decision.

Get a Costco Shop Card for your first membership

New members can get a $20 digital Costco Shop Card when they purchase an annual Costco membership ($60), or a $40 Shop Card when they purchase a new Executive membership ($120). You can access this deal through StackSocial, or you can apply the code CJREV on Costco’s checkout page (you’ll see a $0.01 deduction on your membership cost; this is how you know the promotion was successfully applied).

If you purchase a membership through StackSocial, you have until June 16, 2024 to redeem your offer, though the company encourages you to do it within 30 days of purchase. Once the offer is redeemed, you might have a brief blackout period during which StackSocial won’t issue a refund until it’s confirmed with Costco that the offer was redeemed. Don’t worry: Costo will still honor its 100% Satisfaction Guarantee with a full refund if you’re not satisfied with your membership in the first year.

You must provide a valid email address to receive your Shop Card. As long as you do that, you should receive your Shop Card by email within two weeks of signing up. Note that this deal is only for nonmembers seeking their first Costco membership — current members are not eligible to renew using this promotion.

Will you get more value from the Gold Star or the Executive membership?

The current promotion will give you a $20 Shop Card when you choose a basic Gold Star membership ($60) or a $40 Shop Card when you choose Executive membership ($120). But the membership that provides the best value for your budget depends on how much you expect to spend at Costco.

The Executive membership costs more but pays you 2% in cash back on Costco purchases made in-store and online (up to $1,000 in rewards per 12-month period). You can also earn 2% back on Costco Travel, as well as receive other benefits on Costco services, such as roadside assistance and home lockout assistance when you purchase car and home insurance through Costco.

In terms of earnings, spending $3,000 would net you $60 in rewards, which is the price difference between the two memberships. Factoring in the promotion, spending $2,000 would net you the difference ($40). To earn the full value of your first year for an Executive membership ($80, after factoring in the $40 Shop Card), you would need to spend at least $4,000 at Costco.

Regardless of which membership you choose, you’ll earn about 33% of the membership fee in Costco cash back through this promotion. And if you can’t commit to a Costco membership this month, don’t worry — there’s a good chance Costco will run another promotion on new memberships in the future. Check online before you purchase your first membership and see if an active promo code will help you save money.

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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 Costco Wholesale. The Motley Fool has a disclosure policy.

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