Christopher Snowbeck | (TNS) The Minnesota Star Tribune

Bobbie Putman-Bailey knows how to solve problems when it comes to medical bills and health insurance.

In one instance, upon the surprise realization her specialist doctor had gone out of network for her health plan, the 42-year-old Maple Grove, Minnesota, resident convinced the insurer to overturn coverage denials that could have cost her hundreds of dollars. The key, Putman-Bailey said, was to write an appeal that was long on details, while also agreeing to eventually switch to an in-network doctor — just not immediately, since she was beginning a new treatment at the time.

In another case, she wrangled with a specialty pharmacy to prevent billing for a shipment of the wrong medication to her house. It helped, Putman-Bailey said, that she was prompt in calling to report the problem and already had talked with the pharmacy several times about ambiguities with its online ordering system.

For consumers, the first step in all such disputes is to stay on top of billing documents, Putman-Bailey advised, and ask questions as soon as possible. She recognizes, of course, this can be easier said than done.

“It sucks because you are sick, and you’re chronically ill, and there are days when … you don’t have the energy to get up and look at things,” said Putman-Bailey, who has Crohn’s disease. “But if you wait until things show up in your mailbox, it’s almost too late.”

Getting sick in the U.S. health care system can trigger an avalanche of confusing paperwork. Here’s what you need to know about how to read a medical bill — plus those documents proclaiming “This Is Not a Bill” from health insurers — to help prevent the illness from spreading to your bank account.

Bills vs. EOBs

Two types of documents typically arrive in a patient’s mailbox and/or online portal after receiving health care services: One is a medical bill from a doctor’s office or health system, the second is an“explanation of benefits” form from your health insurer.

The insurance document, called an EOB, often arrives first. It reflects the health plan’s evaluation of the service received, including the amount of insurance coverage for the service, according to the Minnesota Council of Health Plans, a trade group for nonprofit health insurers in the state.

EOBs typically list the provider’s charge for a service. They also show the negotiated price the insurance company and provider agreed to consider full payment. And then, the form shows how the negotiated cost will split between the insurer and the patient.

Insurers typically describe this split as “cost-sharing,” which factors in deductibles and co-insurance that are key for patients to understand when shopping for a health plan.

“If there is a remaining bill, the doctor’s office directly sends you a bill for the remaining amount,” said Lucas Nesse, chief executive of the Minnesota Council of Health Plans, via email. “If the amount on the bill you receive from your doctor’s office does not match the amount on your EOB, the first step is to call your clinic to see if they have updated their bill to reflect payment from your insurance.”

Patients often notice on EOBs the contrast between the health care provider’s charge and the negotiated payment rate because the discounts can be very large.

“You can see them allow only 10% of the charge sometimes,” said Bill Foley, an insurance advocate and volunteer leader with Cancer Legal Care, a nonprofit group in Oakdale. “The spread can be tremendous.”

Once the bill comes from the doctor’s office or health system, patients should compare the amount due with the EOB to make sure they agree on the patient’s financial responsibility. When they don’t match, patients should call the health care provider and/or health insurer.

“Typically, your medical bill should not be more than what your explanation of benefits says you owe,” said Julia Dreier, the deputy commissioner of insurance at the Minnesota Department of Commerce.

Starting Oct. 1, a new state law goes into effect that lets patients request a review from their health care provider to check the accuracy of medical codes used in their billing. The law prohibits providers from making further collection efforts during this process, which culminates in a notice sent to patients within 30 days of the review’s completion.

“A medical provider will always … provide notice about whether the coding was accurate,” said Joe Schindler, vice president of finance policy and analytics at the Minnesota Hospital Association.

Comparing EOBs and medical bills can be difficult when health care providers practice “global billing” and roll all charges into one final bill, said Eric Ellsworth, director for health data strategy at Consumers’ Checkbook Health. Schindler of the Hospital Association noted patients can always ask for a more detailed bill from their health care provider.

Denials and codes

Consumer advocates say patients, in many ways, are better off relying on their online portals for billing documents rather than paper statements that arrive in the mail. That’s because a health insurer’s decision on whether to pay or deny a claim can change as more information becomes available.

Foley recommends, in fact, patients compare the bill they receive in the mail to the online version to see if that one is more current.

When there’s a balance due, the key question is: Why?

“Is it because insurance hasn’t adjudicated your claim yet?” Foley asked. “Is it because you have a legitimate out-of-pocket expense? Is it due to a denial?”

There are several types of denials, Ellsworth said. Some services just aren’t a covered benefit, he added, pointing to in-vitro fertilization as an example in a number of health plans. Sometimes there’s a limitation patients might not have appreciated, such as when an insurer will pay for cataract surgery but not some multifocal lenses.

Insurers might deny a claim because the health plan deems the service not medically necessary. Some denials result in financial responsibility for patients, Ellsworth said, while others create a financial risk for the health care provider.

The Minnesota Council of Health Plans said insurers list on the EOB a “reason code” to explain the reason for a claim’s denial. Reasons can vary from services being out of network to the lack of prior authorization from a health plan.

It’s not clear exactly how often denials happen across all types of insurance, but consumer advocates say appeals are few and far between. They worry the process of filing appeals is just too confusing and/or difficult for patients to navigate.

To appeal a denied claim, patients must navigate the language of medical coding, which is how health care providers and health insurers communicate about the services provided. Many medical bills and EOBs don’t actually include these codes, so patients must contact either their provider or health plan to understand. Patients can then use the codes and descriptions to determine whether their insurer processed their claims correctly according to their plan’s benefits.

“If there’s a balance due that you’re questioning, then it’s really important to know those codes,” Foley said. “We’ve set up this system where all of these claims are handled by computers now instead of people. So, the codes are really key. That’s the magic.”

When facing big bills for out-of-network care, patients should explore whether the federal No Surprises Act provides any help. And advocates say rather than trying to navigate all this alone, patients should seek help from a friend, family member or even government agencies.

“If someone’s stuck, I would encourage people to call us,” said Dreier of the Commerce Department.

‘I’m not trying to duck the bill’

The Minnesota Attorney General’s Office has online tips for handling medical bills and pointers for ensuring your portion is accurate. The state Commerce Department has online information about denials and appeals. Ellsworth of Consumers’ Checkbook said people in “self-insured” health plans that large employers typically run — especially those operating in multiple states — can seek help from the Employee Benefit Services Administration (EBSA) at the U.S. Department of Labor.

Some advocates refer to a book called “Never Pay the First Bill” when talking about how consumers should think about questionable medical bills. Patients often want to pay promptly, Foley said, either because they received good care or from fear of being sent to collections and suffering credit score dings.

Those are good instincts, Foley said, yet there are times when he advises consumers to let everything play out a bit before making a payment.

“The key is: Just keep the provider in the loop. Let them know that you are aware that they’ve sent you a balance-due statement but that you’re still working through the details of it,” he said. “Make sure you are staying in contact with your provider and telling them: ‘Hey, I’m not trying to duck the bill.’ That’s really an important thing.”

Putman-Bailey, the patient from Maple Grove, said to be suspicious if any medical paperwork is delayed since that can be a sign of trouble.

The Minnesota Medical Association said providers must submit claims to insurance companies within six months of the date of service, although most are quicker. Insurers generally pay claims within 30 days of receipt, the Medical Association said, and EOBs are available when claims process.

As for phone calls, Putman-Bailey said she’s learned the importance of recording the date of the conversation, the name of the customer service representative and the agent’s phone number, if possible. Another tip: When insurers assert a service is not medically necessary, Putman-Bailey asks to talk with the physician who made that decision.

The process can feel adversarial and is often emotional, Putman-Bailey said, but she always tries to stress how it’s not personal.

“I usually am saying to the person on the phone: ‘This is not about you,’” she said, “‘this is about the system.’”

©2024 The Minnesota Star Tribune. Visit at startribune.com. Distributed by Tribune Content Agency, LLC.

By Eliza Haverstock | NerdWallet

If you’ve been skipping your federal student loan bills, or you have defaulted loans, your time is running out to get back on track without harsh consequences. Two key pandemic-era relief programs are set to expire on Sept. 30: the student loan on-ramp and the Fresh Start program.

Millions of borrowers are benefitting from the on-ramp or Fresh Start — and some may not know it. To check, log into your studentaid.gov account and review your monthly payment history and loan repayment statuses. If you have missed or late payments, you’re on the on-ramp. If you have a loan listed as in default, you’re benefiting from the Fresh Start program.

In either case, you need to act by Sept. 30. Here’s how.

Student loan on-ramp: Make a plan to deal with your bills

The student loan on-ramp began Oct. 1, 2023, and lasts until Sept. 30, 2024. It’s intended as a safety net for the “most vulnerable borrowers,” the White House said last summer.

The program is automatic for all borrowers who miss payments during this time — there is no enrollment process. During the on-ramp, you can’t fall into delinquency or default. Missed payments won’t be reported to credit bureaus.

Roughly 3 million borrowers have taken advantage of the on-ramp and were at least 30 days late on their loans as of June 30, according to Federal Student Aid office data.

If you’ve been skipping payments, make a plan for October. Otherwise, you could face harsh and costly consequences. Once a payment is 270 days late, you will enter student loan default. Debt collectors can garnish your wages and charge hefty fees.

Here are steps to take before the on-ramp expires:

• Check your student loan accounts. Log into studentaid.gov, see how much you owe and update your contact and billing info. Your servicer can answer questions.
• Choose a repayment plan. If you don’t select a repayment plan, you’re automatically enrolled in the standard 10-year repayment plan. For more affordable payments, consider an income-driven repayment (IDR) plan.
• Consider a deferment or forbearance. If you won’t be able to afford payments for the foreseeable future, consider a student loan deferment or forbearance to pause payments for up to three years.

If you want to change repayment plans, note that only two IDR plans are currently available: SAVE and Income-Based Repayment (IBR).

» MORE: How the SAVE lawsuits are impacting IDR enrollment

Fresh Start program: Sign up ASAP to lock in defaulted loan relief

If your federal student loans were in default before the pandemic, take advantage of the Fresh Start program. About 7.5 million borrowers with defaulted loans are eligible.

You must enroll in the program by Sept. 30 to get out of default and lock in benefits, including:

• Loans returned to “current” status on credit reports, and negative default marks removed.
• Access to federal student aid and other government loans, like mortgages.
• Access to flexible repayment plans and potential loan forgiveness.
• Access to short-term relief, like deferment or forbearance.
• Suspension of involuntary debt collection efforts.

If you miss the Sept. 30 deadline and let your loans stay in default, you could face harsh consequences. Debt collectors might garnish your paychecks and tax refunds. You may face steep collections fees. Your credit score could plummet, making it difficult to qualify for future loans, mortgages or even apartment rentals.

You can avoid that headache — and get back on track with an affordable repayment plan — by signing up for the Fresh Start program. Here’s how:

• Submit a Fresh Start request. Fresh Start enrollment is free and can take less than 10 minutes. You can do it online on myeddebt.ed.gov, over the phone by calling 1-800-621-3115 or by sending a letter postmarked by Sept. 30.
• Watch for servicer communication. After you sign up for Fresh Start, the government will transfer your payments from the Default Resolution Group to a federal student loan servicer. Your new servicer will contact you once your loans transfer over.
• Choose a repayment plan after getting out of default. You’ll be automatically placed into the standard 10-year repayment plan, but about 80% of Fresh Start borrowers sign up for an IDR plan, according to the Education Department. Half of Fresh Start borrowers have $0 monthly payments under an IDR plan.

You can apply for an IDR plan within a week or so of your loan transfer.

Eliza Haverstock writes for NerdWallet. Email: ehaverstock@nerdwallet.com. Twitter: @elizahaverstock.

The article Act Now: Two Key Student Debt Relief Programs Expire Sept. 30 originally appeared on NerdWallet.

In 2020, there were 1,108 data compromises. By 2023, the number of compromises reached 3,205, according to the Identity Theft Resource Center.

The most recent high-profile breach: An estimated 2.9 billion Social Security records, or 272 million unique Social Security numbers, were stolen from a Florida company in April.

The numbers have been available for months. What does that mean for consumers?

“When someone assumes your identity with your Social Security number, they could apply for credit cards or a loan; they could open cellphone or other accounts in your name or use the information in other ways,” said Luke Ervin, a San Diego-based financial adviser with UBS Financial Services Inc.

Meghan Land, the executive director of Privacy Rights Clearinghouse, a national privacy nonprofit, said it’s best to assume your data will eventually end up in the wrong hands.

“Data breaches are unfortunately incredibly common,” Land said. “Even if you weren’t a victim in this one, information about you has likely been compromised in another breach. It can only help you to take proactive steps because this isn’t the first breach to compromise SSNs and it won’t be the last.”

The San Diego Union-Tribune asked people working in personal finance and online privacy, as well as representatives of the Internal Revenue Service and the Social Security Administration, how to prevent becoming a victim of fraud if your Social Security number is compromised. Here is their advice.

Check if your Social Security number is out there

There are at least two websites where you can see if your Social Security number was stolen in April’s massive breach. The following two sites do not require you to share your complete SSN. One is npdbreach.com, jointly created by a company named Atlas Privacy and a data rights organization called the Data Dividend Project. It asks for your name, ZIP code, and then either a phone number associated with you or your SSN. A tool from cybersecurity company npd.pentester.com asks for your name, state and birth year. In case of a breach, the site displays results of compromised information that can include street addresses, ZIP codes, phone numbers, birth date and a redacted SSN.

This leads to an important caveat about this second website: Anyone who inputs someone’s full name, state and birth year has a chance at pulling up that person’s addresses, birth day and month, associated phone numbers and/or a partial Social Security number.

Ann Clifton, a press officer with the Social Security Administration, also recommends monitoring your Social Security account.

“A person can check their my Social Security account regularly to see if there is any suspicious activity,” she said. “If a person has not yet applied for benefits, they should not see information about payment amounts on their my Social Security account and will be able to access their Social Security Statement to receive estimates of their future benefits.”

Immediately do the following if your SSN was stolen

Alert financial institutions. “Any time your data is compromised, the first thing to do is alert your financial services providers,” said Ammar Abuyousef, the U.S. Bank branch banking market leader for San Diego. “Whether it’s for a credit card or a checking and savings account, you can freeze your accounts before any bad actors are able to access or drain them.”

Get credit reports. “You should obtain a copy of your credit report from the three major credit bureaus (TransUnion, Equifax and Experian) to review for errors or possible fraudulent accounts and freeze your credit file — both steps are free,” said Land, with Privacy Rights Clearinghouse.

Free credit reports are available at annualcreditreport.com.

Alert authorities. “You can also consider filing a police report so that you have the information on file if you should encounter problems in the future,” said UBS’s Ervin.

Clifton, with the SSA, added that it’s good to ask for a copy of that report as proof. “It’s also a good idea to contact the Federal Trade Commission at www.idtheft.gov, or call 1-877-IDTHEFT (1-877-438-4338); TTY 1-866-653-4261,” she said.

Clifton also recommended informing the fraud unit at any one of the three consumer reporting companies. “The company you call is required to contact the other two,” she said. Here are their phone numbers: Equifax: 1 (800) 525-6285, Trans Union: 1 (800) 680-7289, Experian: 1 (888) 397-3742.

Fraud alert or credit freeze?

“A credit freeze is more effective than a fraud alert when it comes to preventing criminals from opening new accounts with your information,” Ervin said. “When a credit file is frozen, a creditor can’t access your report to evaluate you for a new account — meaning neither you nor a criminal can open a new credit account without unfreezing the file.

“By contrast, a fraud alert requires a business to verify your identity before opening a credit account under your name. Depending on how the business verifies your identity, a criminal with access to enough information about you might still be able to open an account,” he added.

Land, with Privacy Rights Clearinghouse, said doing both is another option. “You don’t have to choose between the two and both are free,” she said. However, she added, one might be more convenient, depending on circumstances.

“For instance,” Land said, “you must contact each of the three credit bureaus … to place a freeze, but a freeze will remain in place until you lift it. If you plan to open new credit accounts you must lift a freeze and then replace it each time you open a new account. To place a fraud alert, you only need to contact one credit bureau and it will alert the other two. You will not need to lift the alert to obtain new credit accounts, but you will need to renew the fraud alert on a regular basis (this can vary depending on the type of alert you use).”

Federal tax implications of a stolen SSN

For federal tax purposes, Raphael Tulino, a San Diego-based spokesman for the Internal Revenue Service, recommended reading the agency’s Taxpayer guide to identity theft. It’s less than 400 words and has links, resources and tips.

One tip: Beware if “You get a letter from the IRS inquiring about a suspicious tax return that you did not file. You can’t e-file your tax return because of a duplicate Social Security number. … You get an IRS notice that an online account has been created in your name.”

You can also apply for an IP PIN, or Identity Protection Personal Identification Number. This six-digit number adds another layer of protection by preventing someone else from filing a tax return using your Social Security number or Individual Taxpayer Identification Number (ITIN).

“If our records show that you were a victim of identity theft, you will automatically be enrolled into the IP PIN program,” the agency says. More on IP PINs at this FAQ.

If you think you’re a victim of tax-related identity theft — “when someone uses a taxpayer’s stolen Social Security number (SSN) to file a tax return claiming a fraudulent refund,” the agency says — you can submit Form 14039, Identity Theft Affidavit, online. You can also print a Form 14039 PDF and send it to the IRS.

In most cases, that affidavit isn’t necessary, because the IRS looks for suspicious tax returns. But here’s when it could make sense, according to the agency: You can’t e-file your tax return because of a duplicate tax return filed using your SSN; you are assigned a Employer Identification Number (EIN) without asking for one; you get a notice from a tax preparation software company that an account was made or closed in your name, and you didn’t do this. More red flags are at the IRS’s ID theft affidavit guide.

Staying safer after a breach

Once your number is out there, scammers have options. There are many ways they can try to get your money or access credit in your name.

Clifton, with the SSA, pointed to two links that explain what can go wrong if your private identity data is out there. One is about Social Security scams (blog.ssa.gov/social-security-and-scam-awareness) and one teaches how a stolen Social Security number can be exploited by thieves (ssa.gov/pubs/EN-05-10064.pdf).

She added, “If a person receives a suspicious call or email that states there is a problem with their Social Security number or account, they should hang up or not respond to the email. People should then go online to oig.ssa.gov to report the scam to Social Security. For more information, go to www.ssa.gov/fraud,” she said.

On a similar note, Land said it is important to “keep an eye out for imposter scams where criminals pretend to be someone you know, a government official or agency, a tech support company, your bank, your utility company or another company you are familiar with. Scammers may try to reach you by phone, email, social media, text message — really any way you can imagine.

“Scams can be convincing and elaborate, so it is helpful to stay up to date on trends and err on the side of caution when it comes to clicking links or providing information,” she said.

Abuyousef, with U.S. Bank, reminded people to change passwords “for any accounts where you have stored personal financial information.” He added, “This would include any banking or investment accounts. These passwords should also be updated regularly and stored in a secure password manager, with many affordable options available.”

Erwin, with UBS, shared these password best practices: “Make sure you are using unique passwords for each account that are 15 characters or longer; don’t use distinguishing information (like your birthday or pet’s name); and consider using a password manager versus saving each to your computer. Also set up multi-factor authentication and/or a biometric login on each account on top of the username/password.”

Two-factor authentication “is one of the easiest proactive steps you can take to protect your accounts,” Land agreed.

Not a victim? Don’t let your guard down

If you ran your name through those two portals and it looks like your SSN hasn’t been compromised, can you keep carrying on as before? That is a rhetorical question with a non-rhetorical answer: No.

“Protecting your identity and financial assets should always be a proactive part of your routine, whether that means daily, weekly or monthly monitoring,” said Abuyousef, with U.S. Bank. “You can do this yourself through your online statements and by ensuring that you protect your data through effective online security measures, such setting up password management tools or multi-factor authentication. It’s also vitally important to teach your children and loved ones to remain vigilant and aware of scam tactics so they can put measures in place to protect themselves.”

Ervin, with UBS, said it’s essential to plan how you’ll secure and recovery key information, before your data gets stolen.

“In developing your approach, consider: What is the data that you want to protect? How do you and your family access data? What could be the impact if there was a confidentiality breach? How can you back up data and protect yourselves?” he said.

Practicing vigilance

Abuyousef, with US. Bank, recommends ongoing monitoring of savings, credit and retirement accounts. Check statements or log in and review the ledger daily.

“If you notice anything suspicious, let your provider know so that they can investigate and take action to protect your account, if needed,” he said.

Ervin, with UBS, shared some pointers for staying safer online, whether or not your SSN is up for grabs:

Be proactive: Back up important files. Educate children about safe practices online and encourage safe social media guidelines.

Hardware: Secure your home and small business network by changing the default administrator password of the device controlling your wireless network. Enable encryption on your Wi-Fi router, preferably WPA2. Don’t plug in suspicious USB devices, such as unknown flash drives.

Software: Only install applications from trusted sources, such as app stores or known websites. Make sure your computer and devices are set up to receive automatic software updates. Delete apps you no longer need or don’t know the origin of and monitor your children’s’ downloading and use of apps. Use your cellphone data plan instead of public Wi-Fi when on the go.

Eyes open: Review your Social Security Administration records. Go through your health claims carefully to ensure you’ve received the care listed.

Opt out: Contact organizations to remove your name from marketing lists, including for the credit reporting bureaus (Experian, TransUnion, Equifax), to prevent unsolicited credit offers.

Be private: Consider what you disclose online. Avoid publishing that you are traveling or including personal information such as your birthday/year or mother’s maiden name or pets’ names — typically used for security or verification purposes — on social media. Use privacy settings to control who can access your information, and review them regularly. Don’t take online polls and be selective about friend requests from people you might not know.

Be skeptical: Be wary of phishing schemes, which continue to grow; never open unfamiliar attachments or click on unfamiliar links. Ignore emails or text messages that ask you to confirm or provide personal information by replying to the email or message.

By Tommy Tindall | NerdWallet

Is driving for Uber worth the money? I put this side hustle to the test and nervously drove strangers around northern Maryland for a couple days to find out.

Here’s what I earned:

• I made $143.73 over the course of three Uber “shifts” that totaled roughly 10 hours of active driving.
• I completed 10 trips, put 305 miles on my economical Uber rental and spent $38.80 on one tank of gas.
• Subtract the gas cost from $143.73, and I earned $104.93, or $10.49 an hour.
• Only $3 of my earnings were tips, which I found surprising — because I’m nice!

If you’re wondering, the minimum wage in Maryland handily beats my earnings at $15.00 per hour.

Uber wasn’t a lucrative side hustle for me, but it was an interesting experiment. Here are four things to keep in mind if you’re thinking about trying Uber. And if you want to watch all the ups and downs of this side hustle stress test, here’s a video of my experience.

Give yourself the flexibility to roam

During each of my three Uber “shifts,” I had the idea that I’d do rides relatively close to where I live. But the reality of living in a less populated area is that short, local trips can be few and far between. I found that to be the case even on a Friday evening in my suburban town, located roughly 50 minutes north of Baltimore.

I learned that to earn higher fares, you need to be open to where the Uber trip takes you. I left a lot of money on the table by skipping trips that would end too far from my home base. Uber works by matching riders with nearby drivers. As a driver, you have just a few seconds to accept a ride request when it comes in. I often took too long to decide when considering distance.

Toward the end of that Friday, I caved and accepted a 30-mile trip with a fare of $30.42. But when it was over, it was after 9 p.m. and I was a long way from home.

If I had put in 8-hour shifts and left myself to the mercy of the Uber Driver app, I’d have done better. But if I’m going to be driving all over creation for hours, is Uber a side hustle, or is it a main hustle?

Your car is a taxi cab and your primary tool

All that driving means you need a car that’s up to the task — something affordable, reliable and efficient. My personal vehicle is a gas-guzzler so I used Uber’s car rental service to rent a more appropriate vehicle and make this test more realistic.

But what I realized is a lot of people rent their Uber rides on the regular. If you go this route, you must rent from one of Uber’s approved rental company partners. The rental office I used, a local Hertz that partners with Uber, was packed, and I found the experience to be super hectic. It took three hours to get my car, and the one they gave me was a downgrade from what I reserved in advance.

Because of my experience, I don’t recommend renting if you can avoid it. Uber rentals cost $260 or more per week, so the recurring cost will eat heavily into earnings.

Finding your own affordable used car would likely cost less in the long run, even in cases where you get a car loan with bad credit. For example, let’s say you finance a $20,000 used car for 60 months with a high 19% interest rate. The $518 monthly payment costs less than the $260 a week rate for a rental car.

You will need to factor in insurance (which can include rideshare insurance), maintenance and repairs when comparing costs. You can turn to the Nerds for resources on how to build credit and finance a vehicle you can afford.

Consider a “slush fund” for car costs

I had the pleasure of meeting and riding home with a true Uber pro after I returned my rental car. His name is Greg Hiteshew, and Uber is his post-retirement hustle. He drives most days, says he earns between $1,000 and $1,500 in a typical week and is disciplined about saving money for car costs.

Hiteshew says he sets aside $40 at the end of every day and has done so for years without fail. He says it’s a daily habit that ensures he has enough to cover maintenance and repairs for his current car, and helps him save for the next car.

Consider putting your daily $40 (or whatever you can swing) in a high-yield savings account for the added bonus of interest on top.

Embrace the human side of rideshare

While we chatted on my ride home, Hiteshew opened up about how driving for Uber helped him cope with the loss of his wife. She passed away from cancer 12 years ago, and in the years after, he found himself in a pretty dark and lonely rut. Then one day a friend had a suggestion for a side hustle that would change his life.

“He said, ‘I want you to Uber,’” says Hiteshew, talking about meeting with his friend. The friend hoped it would give him something to keep his mind occupied. Hiteshew thought about it and decided to give it a try a week later.

“It worked,” he says. “Turns out I love it. I really enjoy doing it. I’ve met a lot of nice, nice people.”

I get what he’s talking about. I’ve been working from home for years, and trying Uber put me back into the world. I interacted with different people, visited parts of my area I hadn’t been to and realized how critical a service like Uber is for those who may not be able to afford a car. It reminded me how important it is to communicate with others, strangers even.

Turns out that part of the experience was more valuable than the money. And if I drive for Uber again, I think I learned enough to do better than $10.49 an hour.

Tommy Tindall writes for NerdWallet. Email: ttindall@nerdwallet.com.

The article How Much Does an Uber Driver Make? I Drove for Uber to Find Out originally appeared on NerdWallet.

By René Bennett, Bankrate.com

Many of us have given in to the temptation to buy something we don’t need.

Maybe you were passively scrolling through your social media feed when a sponsored post came up, showcasing the latest tech gadget with glowing reviews. Unable to resist, you clicked the “buy” button for fear of missing out, only to find the excitement faded not long after, leaving you with regret and a dent in your bank account.

What is impulse buying?

Impulse buying is the act of making unplanned purchases on a whim without considering long-term goals and needs. From flashy tech to trendy fashion items, impulse purchases can quickly drain your bank account and hinder your long-term financial goals.

The temptation is further fueled by social media — 48% of social media users have made an impulse purchase, according to Bankrate’s Social Media Survey. And 68% of those said they regretted an impulse purchase they made on social media.

Coupled with the current high-inflation environment, succumbing to impulse purchases can have even more detrimental effects on our savings than usual. But there are ways you can curb impulsive spending habits and focus on more long-term financial goals.

Strategies to stop impulse buying

1. Reflect before purchasing

Getting into the habit of slowing down and reflecting before making an impulse buy can be a big money-saver.

Some questions you should ask yourself:

• Is this item a want or a need?
• Can I afford it without sacrificing something more important?
• Will this bring long-term value and satisfaction?

2. Stick to a shopping list

Before heading to the store or browsing online, make a shopping list of items that you genuinely need. A shopping list provides a clear plan for your shopping trip, eliminating ambiguity and reducing the chances of being swayed by impulses. It also acts as a reminder of your goals and priorities.

You could try using a shopping list app which can help you organize your shopping lists and even share them with friends or family members to streamline your shopping process.

3. Implement the 24-hour rule

When you come across something you’re tempted to buy immediately, give yourself a cooling-off period of 24 hours. Why? The purpose of the 24-hour rule is to create a space between the initial impulse and the actual purchase — often, the initial excitement and compulsion to buy can fade after that time period. By waiting, you give yourself a chance to reconsider the purchase in a more neutral state of mind.

During those 24 hours, you can take the time to research the item’s features, read reviews, compare prices and consider if it aligns with your needs and budget.

4. Unfollow accounts that fuel your temptation

The constant stream of captivating images, flashy ads and influencers promoting products on social media can make it incredibly tempting to click that “buy now” button without a second thought. With just a swipe or a scroll, we’re exposed to a never-ending array of products and services, each promising to improve our lives in some way. But that promise can be deceiving and succumbing to the temptation can lead to financial stress and instability.

One big step you can take to help resist the siren call of impulse buys is to carefully curate your social media feed to prevent yourself from seeing those items in the first place. Unfollow brands and promoters that consistently tempt you. You might even want to remove certain shopping apps from your phone or set time limits for those that have the strongest pull on you. Even a few changes to your social media feed can reduce the constant exposure to shopping triggers and help you save money.

5. Prioritize clear financial goals for long-term gratification

Envision your ideal financial future, and set clear goals. Instead of simply saying you want to save money, set a specific target, such as saving $5,000 within the next year. Once you’ve established goals, you can fit them into your budget to align your spending with what you want to achieve in the long term.

It’s easy to give in to temporary pleasures when we’re surrounded by lures to buy stuff all the time, but reminding yourself of your financial goals and learning to wait can help you find long-term fulfillment. As you achieve smaller milestones toward your goals, reward yourself (within reason) to maintain a positive mindset and reinforce your commitment to the larger goals.

6. Pay with cash

Take the time to budget exactly how much you can spend on your purchases and withdraw cash to spend on those purchases. By using cash, you avoid overspending and impulse purchases.

If you’re used to paying with a card to rack up credit card points or cashback rewards, you’ll lose out on these benefits when you pay with cash. But once you start to gain more discipline by paying with cash, you might be able to transition back to responsible credit card use.

Be aware of signs of impulsive spending habits

The thrill of impulsive buying might not show up right away, but there are some signs to look out for, including:

• You’re spending beyond your means or more than you intended during your purchase.
• You hide purchases from family members or a partner.
• You’re unable to pay bills or save as much as you’d like because of high spending elsewhere.
• You feel guilty or regretful about spending.

Bottom line

By establishing clear financial goals and prioritizing your long-term needs over short-term impulse purchases, you can regain control of your finances and make decisions that support future aspirations. Keep track of how much you’ve saved from cutting back on impulse buying — those savings can go toward a specific savings fund or be invested in a high-yielding certificate of deposit (CD) to earn money back in the form of interest.

Key takeaways

• Impulse buying means purchasing items you did not plan to buy.
• Impulse buying can result in more spending which can lead to less savings and even an increase in debt.
• There are steps you can take to reduce impulse buying, such as prioritizing financial goals and sticking to a shopping list.

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Visit Bankrate online at bankrate.com.

©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.

By Julie Myhre-Nunes | NerdWallet

I had never driven an electric car before, so, naturally, I made sure my first drive covered 500 miles across two states in one day.

Although public opinion on electric cars is still mixed, facts suggest these cars are not a passing fad. Electric vehicle sales in the U.S. topped 1 million for the first time in 2023, quadrupling the figure three years prior. And although demand has slowed, a recent study by industry group Cox Automotive found that more than half of shoppers previously identified as skeptics are poised to enter the EV market in the second half of the decade.

While my first experience with an EV was unusual — I rented one to drive from San Jose, California, to a work event in Las Vegas — it included many situations a prospective buyer would want to consider. If you’re new to EVs or just curious about what a road trip in one is like, here are the lessons I learned.

Maximum range isn’t the actual range

The 2023 Chevy Bolt EV 1LT that I drove has a combined miles-per-gallon equivalent (MPGe) of 120 and a maximum range of 259 miles, according to the U.S. Department of Energy. These totals didn’t translate to real life.

That’s because an electric vehicle’s maximum range doesn’t take into account the use of anything in the car, including air conditioning/heater, the infotainment system, charging your phone or the terrain you’ll drive through. It’s just a measurement of what the 100% charged battery is capable of.

It turns out, though, that an electric battery functions best when it is between 20% and 80% full, because going over that exposes the battery to high voltages that can accelerate degradation over time. (Think of your phone battery and how the battery dies faster as the phone ages.) So if you’re keeping the car’s battery between 20% and 80% most of the time, your battery should last longer.

When I picked up the car, the battery was at 80%, which gave me a minimum of 151 miles. I had mapped out my trip based on where I could find public charging stations, and I knew the first leg of my trip would cover about 150 miles while driving through a mountain pass. Before heading out, I decided to top up the charge to a minimum of 163 miles — but, happily, I got to the first stop with 60 miles left, mostly due to regenerative braking that takes the energy usually wasted with braking and puts it back into the battery.

Charging isn’t always available

I charged the vehicle four times on my trip, using three of the four largest public charging companies: Electrify America, ChargePoint and EVgo. Because all three charging companies function differently, this meant that each time I was figuring out how payments and plugging in worked. It felt like I was 16 again and learning how to fuel up my car for the first time.

Depending on your area, you might have a plethora of charging options or not many at all, and it’s not always predictable. Consider two California cities of comparable size: Fresno with a population of 542,107 and Sacramento with a population of 524,943. When it comes to charging stations with Level 2 and direct-current (DC) fast chargers (the two fastest charging options), Sacramento has more than double the number of chargers in Fresno — 359 and 174, respectively, according to the U.S. Department of Energy. And there’s even more of a divide in different areas across the country.

Keep in mind, too, that not all of those chargers work for every car. Tesla has the largest network of charging stations by far, but while the company is opening up that network to other manufacturers and charge-point operators, that process is very much in-progress. What’s more, at any given station some of the chargers may be out of order (two of the four stations I visited had chargers that weren’t working), and if you get to a station and it’s full, you may have a wait ahead of you.

Charging may take a long time

Enter a drive from San Jose to Vegas in your favorite mapping software and it’ll say it takes about eight hours. My drive required 11 and a half.

Travel time in an EV depends on the vehicle you’re driving and what kind of public chargers you use. DC fast chargers can fill a battery electric vehicle to 80% in as little as 20 minutes or as long as an hour, according to the U.S. Department of Transportation. When I stopped at the ChargePoint in Coalinga, California, I had a minimum of 60 miles left in the battery. I used a DC fast charger for 1 hour, 9 minutes to gain an additional 103 miles.

But most plug-in hybrids and many electric cars are not yet equipped for that type of fast charging, and so realistically it may take longer. I didn’t do any Level 2 charging on my trip, but that technology can charge a battery electric vehicle to 80% in four to 10 hours and a plug-in hybrid in one to two hours.

In total I charged for 3 hours and 6 minutes over my 529-mile drive. For comparison’s sake, I drove a gas-powered car back from Vegas and had to gas up only once for eight minutes.

Charging anxiety is real

Awful. That’s how it feels to be on a long drive in an EV wondering if you’ll make it to the next charging station.

I experienced this twice on my trip — when I reached Mojave, California, with a minimum of 20 miles left, and then pulling into Las Vegas, with a minimum of 32 miles left. Both times I was genuinely concerned that I wouldn’t make it to my next stop. I turned off the air conditioning, stopped listening to my audiobook, unplugged my cell phone and tried to remain positive.

I started to plan out my options for what to do if the car died. I looked up charging stations near me using my phone, but had no luck. Worst case, I was ready to use my AAA membership, although I don’t know what they could do other than tow the vehicle to a charger. Of course, this was first timer’s nerves, but in survey after survey, anxiety over charging and range is among the biggest blockers to widespread EV adoption, with one noting that some 40% of current EV owners still report having a little.

A smartphone is essential for EV drivers

When you’re driving a gas car, there are plenty of opportunities to stop. In fact, you’ll see road signs along the highway to let you know when you can stop. This isn’t something you can rely on in an electric car. Instead, you’ll have to rely on your phone or previously mapped out charging stations. Despite mapping my stops ahead of time, I ended up looking for stops when I started getting charging anxiety.

Additionally, paying for charging may require your cell phone. Gas stations generally have two payment options: at the pump or with an attendant. None of the charging stations I visited had an attendant working, and ChargePoint didn’t let me tap or pay at the plug. Instead, I had to pay using its app, which isn’t ideal if your phone is dead or you can’t get the app to work.

Would I buy an EV after this trip?

Yes, but there are some caveats. I’m fortunate enough to be a two-car household, and if we were to get an electric car, it would replace one of the gas vehicles. I suspect electric cars are great for short trips, like a daily commute, but I’m not ready for one on a longer journey. And if I did buy an electric car, I don’t think I would rely on public charging. I would install a Level 2 charger in my home, which costs extra for the charger and the electrician but gives peace of mind that I could quickly top up every night.

Julie Myhre-Nunes is an editor at NerdWallet. Email: jmyhrenunes@nerdwallet.com.

The article What I Learned From My First EV Road Trip originally appeared on NerdWallet.

Patrick Clarke | (TNS) TravelPulse

Summer is coming to a close but that doesn’t mean your travel plans have to be put on hold until the holidays.

Labor Day weekend signals the arrival of shoulder season, a fantastic time for travelers with some flexibility to save big on a spectacular getaway while avoiding the large crowds at the same time.

Make this the year that you capitalize on this golden opportunity.

The coming days and weeks will see airfares drop and become more affordable before beginning to climb again and eventually peaking around the Thanksgiving holiday.

“Summer is winding down and consumer focus is on returning to normal work and school schedules. Our data shows that airfares are trending downward, and we expect that to continue for the immediate future,” says Glenn Cusano, President of Fareportal, the corporation behind OTA brands CheapOair and OneTravel.

There are plenty of great deals out there right now as several airlines are launching sales with one-way fares under $40 and even offering discounted all-you-can-fly passes as demand dips.

Plus, travelers should be able to find plenty of favorable hotel rates, especially if they’re able to put those unused vacation days to work and stay mid-week.

Shoulder season globetrotters could potentially save even more on a more comfortable stay by booking a vacation rental. Vrbo experts point out that travelers can save hundreds per night on beach houses in popular coastal destinations such as North Carolina’s Outer Banks; Gulf Shores, Alabama; Charleston, South Carolina; and Pensacola, Florida.

Guests can even save up to $900 a night on an eight-bedroom beachfront property in Miramar, Florida, by booking during the shoulder season compared to peak summertime.

In addition to lower rates and smaller crowds, travelers can still take advantage of awesome weather, especially in southern locales that remain warm well into October.

Nonetheless, the potential for destructive and disruptive tropical storm systems and hurricanes remains through November. So those heading to the most at-risk destinations should strongly consider protecting their investment with travel insurance.

If the idea of planning a shoulder season trip is daunting, working with a trusted travel adviser can help as these helpful experts can not only point you toward the best savings based on your own unique interests and help protect your trip but also land you special perks through their connections with various suppliers.

However you decide to make plans, don’t let another golden shoulder season go by the wayside.

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©2024 Northstar Travel Media, LLC. Visit at travelpulse.com. Distributed by Tribune Content Agency, LLC.

By Eliza Haverstock, Kat Tretina | NerdWallet

A typical four-year degree can cost $115,000 or more, according to a 2023 College Board report. Borrowing money to pay for college adds to the total cost, due to interest.

Federal student loan interest rates range from 6.53% for undergraduate borrowers to 9.08% for parents. Private student loans have an even greater range, and the rate you get generally depends on your credit.

To lower the overall cost of your education, consider making optional student loan payments while you’re in school or during your grace period. Even if you can only afford a small amount, every payment you make will decrease the amount of interest that accrues. You could save thousands over the life of your loan.

“Interest begins accruing on most private student loans and some federal student loans as soon as students receive the money, even if payments aren’t due,” says Jill Desjean, senior policy analyst with the National Association of Student Financial Aid Administrators.

Nerdy Tip There is one exception: If you qualify for federal subsidized Direct loans, the government covers the interest charges while you’re in school and during your grace period.

The impact of making student loan payments while in school

Paying even small amounts while you’re in school can add up. Consider this hypothetical example: Let’s say you take out $10,000 your first year of school at 6.53% interest on a 10-year repayment term. Here’s how different repayment amounts impact your total savings:

• If you don’t make in-school payments, you’ll pay $141 per month once your repayment period starts. By the end of your repayment term, you’ll pay a total of $17,653.
• If you pay $25 per month while in-school, you’ll pay $132 per month once your repayment period starts. By the end of your repayment term, you’ll pay a total of $17,161 — a savings of $492.
• If you pay $50 per month while in-school, you’ll pay $116 per month once your repayment period starts. By the end of your repayment term, you’ll pay a total of $16,669 — a savings of $984.
• If you pay $100 per month while in-school, you’ll pay $86 per month once your repayment period starts. By the end of your repayment term, you’ll pay a total of $15,686 — a savings of $1,967.

If you have multiple loans and can’t afford to make payments toward all of them, pay the one with the higher interest rate first, says Amy Lins, vice president of customer success with Money Management International, a non-profit financial education agency.

Making payments will also help you avoid the effects of capitalization — where interest is capitalized and added to your principal balance. Capitalization is typically what people mean when they talk about paying interest on your interest. By making payments while in college, you can cut down on the amount that’s capitalized, preventing your loan balance from ballooning out of control.

When should you skip in-school payments?

Depending on your circumstances, making in-school payments may not make sense. If you fit into one of the following groups, you may be better off deferring your payments until you leave school and your grace period ends.

You can adjust your budget

If you find that you can afford to pay $50 or more per month, you may need to rethink your budget and approach to borrowing.

“While making payments during school can save student loan borrowers money, the cheapest option is to not borrow at all because of loan origination fees,” Desjean says. “If you’re in a position to make payments on your loans during school, examine whether you can use that extra money to pay for school expenses directly without borrowing.”

Similarly, if you borrow money, the school will send you a check for the excess amount after covering your tuition and fees. You can use the cash to cover other education expenses, including your textbooks and meal plan. But according to Robert Farrington, founder of The College Investor, those excess dollars are an opportunity to reduce your debt.

“I would always encourage you to minimize lifestyle expenses,” he says. “Maybe get an extra roommate or anything you can do to save money, and then you can take that refund and put it right towards your student loan. Even if you wait until the end of the semester or the end of the academic year, I would throw it right back at your student loans ahead of time instead of keeping that.”

You’re pursuing loan forgiveness

If you’re planning on working as a teacher or for a non-profit organization, you may qualify for loan forgiveness under Public Service Loan Forgiveness (PSLF), so making extra payments may not make sense.

“If you’re working in public service and qualify for PSLF, you could end up a lot wealthier in life by paying as little as legally allowed on your loan and receiving loan forgiveness,” Farrington says. “If you know what direction you’re taking while in college, you can give yourself a head start.”

You have other debt

Your student loans may not be the only form of debt you have. And if you have other debt with higher rates, it may be financially wise to target the highest-interest debt first.

“If someone has accumulated credit card debt, for example, that’s likely to be at a much higher interest rate [than student loans],” says Lins. “And I would tackle that first to keep that credit card balance from growing.”

You have subsidized federal student loans

If you have subsidized federal student loans, which are available to students with financial need, interest does not accrue while you’re in school or during your six-month grace period. If you have this type of loan, your balance won’t be larger upon leaving school than it was when the loan was disbursed.

However, making in-school payments if you’re able can still help you in the long run, because interest will accrue on a smaller balance once you leave school.

Eliza Haverstock writes for NerdWallet. Email: ehaverstock@nerdwallet.com. Twitter: @elizahaverstock.

The article Want Cheaper College? Pay Interest While in School originally appeared on NerdWallet.

By Rosalie Murphy | NerdWallet

Rising costs tighten margins for business owners. And to make up for that increased pressure, businesses usually have to raise prices — which, when it’s done month after month, can start to wear on customers.

Customers are facing “price increase fatigue,” says Kirk Jackisch, president of consulting firm Iris Pricing Solutions. “They’re done. They can’t take it anymore — just across-the-board price increases. So you have to look at more surgical solutions.”

Targeting price increases carefully and communicating them clearly can help ease the pain customers feel, Jackisch says. Here’s how you can go about it — and what you need to avoid as legislators across the U.S. focus on fees and surcharges.

Balance price increases with new deals

Matthew Heaggans is co-owner of Preston’s: A Burger Joint, a restaurant in Columbus, Ohio. When sambal, an ingredient they used in a signature sauce, more than doubled in price, Preston’s began buying chili peppers to make their own — but then those tripled in price, too.

In light of such rising costs, Heaggans says Preston’s raised prices by about 7% on average. But that doesn’t mean they’ve raised every price by 7%.

For example, while a burger might be more expensive than it used to be, sides are now cheaper when you buy them as part of a combo.

“People are driven very significantly in our market by price,” Heaggans says, so it’s essential that Preston’s keeps prices competitive.

If you’re concerned about the long-term impact of price increases, you can opt to adjust them temporarily to account for cost shocks. For example, as egg prices spiked in 2023, some restaurants temporarily increased the prices of dishes containing eggs. Shipping companies have long adjusted their fuel surcharges as gas prices rise and fall.

Fortunately, for all of the “agonizing” he put into price changes, Heaggans says customers didn’t mind.

“My constant plea to consumers is that if you really, really like a thing, you should support it or it’s going to go away,” Heaggans says.

Don’t inflate your fees to avoid raising sticker prices

Customers often feel duped by last-minute or opaque fees — and regulators are taking aim at them, too.

At the federal level, the Biden administration has announced plans to crack down on junk fees on everything from event ticketing to college textbooks. And as of July 1, California has banned “drip pricing,” or advertising a price that doesn’t include mandatory additional fees and surcharges.

California’s law is designed to target last-minute, high-cost service fees on products and services like concert tickets and hotel rooms, says David W. Wright, an attorney at Pillsbury Winthrop Shaw Pittman LLP in Los Angeles.

The law is “not necessarily preventing businesses from trying to recoup those costs, but instead trying to make it so that businesses disclose those costs up front so consumers know what they’re getting themselves into,” Wright says.

Under California’s rule, handling fees have to be listed as part of the advertised price. “Reasonable” shipping fees and taxes, however, do not.

“The safest way to protect yourself is to include all prices” within the sticker price, Wright says.

Other states limit pricing practices in additional ways. For instance, some companies pass credit card charges onto customers to offset their payment processing costs. But several states restrict the practice. For example, New York requires you to include these fees in the posted price but allows you to charge a lower price for customers paying cash. And Colorado caps credit card surcharges at 2%.

Offer customers fee-free alternatives when possible

Jackisch also recommends increasing prices in ways that focus on the customers who cost the most to serve — like those that request rush jobs or ask for last-minute changes.

For example, if your company typically delivers orders in four weeks and a customer requests a two-week turnaround, you might apply a rush charge. After all, your business will have to absorb the costs of disrupting your normal operations to meet that customer’s needs.

Most customers see fees tacked onto their bills as “punitive,” Jackisch says. The key is to make sure there’s a way to avoid those fees and explain what it is.

The fee-free alternative in this case? For the customer to wait the typical four weeks.

Salespeople should be able to explain that when it comes to customer requests, “we’re happy to do it. But just recognize that there’s a cost to us, and we’re passing some of that along to you,” Jackisch says. “That communicates the value and the fairness of the fee.”

Rosalie Murphy writes for NerdWallet. Email: rmurphy@nerdwallet.com.

The article How to Increase Prices Without Losing Customers originally appeared on NerdWallet.

The home-selling business is by no means the first financial-service industry upended by a forced change in how commission-based transactions are paid.

It was almost a half-century ago – May 1, 1975 to be precise – when Wall Street was required to rearrange how brokerages were compensated for the stock trades they processed. Ending that industry’s fixed commission rates surprisingly ignited a revolution in how Americans invest in the stock market.

So anybody forecasting the outcome of this summer’s homebuying confusion is, at best, making a wild guess.

The rules regarding who gets paid what are undergoing a sharp retooling this month. It’s the result of legal settlements made by the National Association of Realtors and other parties after a jury found real estate brokerages colluded to keep commissions artificially high.

In the short run, the switch frees home sellers from a longtime industry norm – paying commission to the buyer’s agent. New procedures have the potential to dramatically alter how house hunters look for housing – and what they pay for transaction services.

It’s a mess, with the scope of the transformation up for serious debate. And the comfort of status quo may muzzle dramatic alterations to the process.

But what occurred on Wall Street during the past half-century suggests there are plenty of possibilities for massive changes for house hunting.

Revolutionary change

The New York Stock Exchange – the world’s biggest trading platform and an icon of ruthless capitalism – had for nearly two centuries barred brokerages from competing for clients based on commissions.

Rules dating to 1792, just after the Revolutionary War, led to industry standards for commissions, which did not vary, no matter the size of the customer or the trade.

It took the nation’s 1960s deregulatory itch to put Wall Street’s pricing habits under scrutiny by its regulator, the Securities and Exchange Commission, and antitrust litigators at the Department of Justice. Much of the industry fought these outsiders pushing for market-based commission pricing.

Look, old habits die hard in many fields. Fear – real or imagined – slows necessary changes.

Insiders worried that competitive commission pricing would wipe out many brokerages and cost numerous employees their jobs. The stability of the entire stock market was in question, they claimed.

In addition, the changes were spun as hurting small investors the most. The industry had been quietly giving big institutions price breaks, and those discounts were forecast only to grow. Brokerages would make up for those losses with higher commissions for others. And there were fears that small investors might simply be ignored.

As the debate raged, the SEC simply set the date for change. Congress then seconded the move. The stock exchange and its brokerage members were left with a “what’s next?” moment in what were otherwise very bad times on Wall Street.

Note that the stock market in the 1970s was not a popular place for individuals or institutions to put their money. For the entire 10 years, Wall Street’s venerable Dow Jones index rose a total of 5% – never crossing the 1,000 mark in that decade. In the past year, the Dow crossed 40,000, FYI.

Perhaps it was all those industry stresses that sparked an entrepreneurial fervor, at least for a projected loser in the turmoil – the small investor. And it took a California entrepreneur to pioneer the promise of suddenly untethered commission rates.

Charles Schwab – yes, the founder of the brokerage that bears his name – decided to create services for what today is a less-than-tiny niche: the do-it-yourself-investors. Schwab offered discounted commissions to this flock, which rarely drew serious interest from many old-fashioned brokers.

The discount brokerage had been hatched. And these price breaks sparked an investor revolution that fueled many consumer-friendly innovations.

One big change was the mutual fund business, once a speciality option mainly for wealthy investors. These funds – professionally managed pools of stocks, bonds and other assets – became immensely popular with energized small investors who saw them as a simple way to build a well-rounded portfolio.

And, in the spirit of discounted commissions, “no load” options were a popular twist that charged no up-front sales commissions.

Bottom line

The long-run results of commission slashing on Wall Street are quite stunning.

What in today’s dollars might cost $3 a share to trade before 1975, now cost an investor pennies – if anything at all, depending on one’s relationship with their brokerage.

Stock ownership – directly or indirectly through funds – has gone from roughly one-fifth of all Americans in the 1970s to more than half of US households today.

And those mutual funds that had $40 billion in collective assets in 1975? This year, they hold $30 trillion-plus.

To be clear, it’s not just lowered commissions that are driving small investors. The elimination of many corporate pension plans, replaced by consumer-directed retirement options, has boosted individual investing.

The stock market exited the unprofitable 1970s into a half-century of huge gains. Even the often dull bond market created immense wealth, riding the drop in double-digit interest rates to near-zero in the pandemic.

Hey, investing became sexy. Still, 1975’s breakup of competition-stifling rules helped tweak Wall Street’s mindset.

Money management went from a transaction-based business model to one where long-term relationships with clients – folks who’ll pay modest annual fees – are the big profit maker.

OK, that’s not home sales. At least not in 2024.

Swapping housing is pretty much a one-time sales transaction for most parties involved. Now, good agents may get repeat business over the decades – or referrals to friends and family that can boost their bottom lines. But again, it’s primarily buying and selling.

In 1975, virtually nobody on Wall Street had a clue the small investor revolution was coming.

So, for housing, it might take an entrepreneur or two to figure out how 2024’s commissions overhaul could produce something nobody’s talking about today as a win-win for consumers and industry alike.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Matthew Goldberg | (TNS) Bankrate.com

Savers, take note: Your options for high-yielding certificates of deposit (CDs) are getting fewer by the day. What’s more, high-yield savings and money market accounts – variable rate deposit accounts that are prone to change in lock step with changes to the federal funds rate as set by the Federal Reserve – could see their yields drop before the Fed’s next interest rate meeting on Sept. 18.

Financial pundits and market prognosticators are confident that the Fed will lower interest rates in September. As of Aug. 8, the CME Group FedWatch tool, which is based on federal fund futures contract prices, projects a 100 percent likelihood of a rate cut. Inflation is down and unemployment is up, two reasons for the Fed to lower rates at its next meeting.

But the latest performance in financial markets has also affected some yields on deposit accounts, most notably CDs. In the course of a few days late last week, economic uncertainty in the U.S. over inflation, a weakening jobs report and fears of a possible, yet unsubstantiated, recession, sent financial markets roiling, particularly in Japan.

Here’s what you need to know about how global financial markets and economic indicators can affect yields on deposit accounts such as CDs and high-yield savings, and how you should prepare for other future roadblocks in a declining rate environment.

What has happened in the financial markets as of late?

The dog days of summer have hardly been lazy for both the U.S. and global economies as markets were reacting wildly to economic rumors and predictions. Although the Fed decided once again not to lower rates at its July 31 meeting, Fed chair Jerome Powell said rate cuts could be on the table in September, causing some banks to begin lowering annual percentage yields (APYs) on their CDs.

Then there was the disappointing U.S. jobs report on Aug. 2, followed by the unwinding of the Japanese “Yen carry trade” – where institutional investors borrowed against the yen at near-zero rates to buy growth stocks – causing Japan’s Nikkei index to plunge 12.4 percent on Aug. 5, it’s worst drop since 1987. Later that day, in the U.S., the Dow Jones Industrial Index fell 2.6 percent, a drop of more than one thousand points, further prompting speculation that the Fed may cut rates sooner.

It’s been a little more than a year since the Fed last increased the fed funds rate for the 11th time in the current rate cycle, which remains at a range of 5.25-5.50 percent. After being in an increasing and elevated rate environment since March 2022 – and with inflation currently more or less under control – what goes up has to come down. And that’s why the Fed is likely to lower the federal funds rate to help maximize employment and stabilize prices.

What recent trends in the markets mean for deposit accounts

Recent economic uncertainties and financial sentiment suggests that rates on deposit accounts will decrease into 2025. Some financial institutions, including online-only banks, have already lowered yields, prompting more savvy savers to open CDs and take advantage of still-high yielding APYs before rates go down further.

Some banks have noticed more demand as of late to these fixed-rate deposit accounts. David Becker, chairman and CEO of First Internet Bank of Indiana told Bankrate that he saw an increase in customer interest in CDs over the past weekend and into Monday in the form of email inquiries.

“We got a yell from the first floor that [demand for] CDs are going through the ceiling,” Becker said. “Let’s back them down a little bit.” As a result, First Internet Bank lowered APYs on its shorter-term six-month and one-year CD terms by 0.10 percent, or 10 basis points, and cut its longer-term CDs (18 months and longer) by 0.15 percent, or 15 basis points.

First Internet Bank, which had the highest one-year CD APY, as tracked by Bankrate over the past two weeks, isn’t the only bank to reduce its APYs. Barclays also lowered CD rates across the board on Aug. 6, which included a 125 basis-point decrease on its 18-month CD, which started the week at 4.50 percent APY and is now 3.25 percent APY. What’s more, BMO Alto cut the APY of its two-year CD by 0.55 percent, or 55 basis points, to 4 percent APY.

Greg McBride, CFA, Bankrate chief financial analyst, says the amount of interest banks pay on savings and CDs at any point in time, is more a reflection of their need for deposits than anything else. “They don’t pay those returns out of benevolence,” McBride says, noting that those cutting rates more drastically likely have less of a thirst for deposits than those who continue to offer the most competitive returns. “As savers, we’re in a position to exploit that difference to our benefit,” McBride adds.

Where are yields headed among deposit accounts?

CDs

Just like at First Internet Bank and Barclays, expect CD yields to move generally in one direction: downward. “We’re on the downslope and that is going to accelerate once the Fed starts cutting interest rates,” McBride says. “So there is no benefit to waiting to lock in.”

Since July 29, four of Bankrate’s top 10, one-year CDs have seen their APYs decrease. But all of those 10 top-yielding CDs still offer yields at 5.1 percent APY or slightly higher. So, if a 5 percent one-year CD is what you’re looking for, it’s still available. But that might not be the case before the Fed’s next rate meeting on Sept. 18. Generally, you can expect CDs to have a rate cut built into its APY by the time a Fed rate cut actually arrives.

CD yields generally peaked at the end of 2023.

High-yield and traditional savings accounts

High-yield savings account yields might decrease ahead of a still-possible Fed rate cut in September, or it could come later. For instance, Ally Bank lowered its yield on June 25, 2019, a little more than a month before the Fed announced it was decreasing its fed funds rate at its meeting on July 31, 2019, the first rate cut at the time since 2018.

Unlike CDs, which typically have fixed-rate yields, the rates on savings accounts are generally variable, meaning they move in relation to the federal funds rate. One exception is a savings account with an introductory APY.

Yields for some traditional savings accounts might not move at all, especially those that haven’t increased their yields during the time the Fed’s raised rates 11 times starting in March 2022. For example, Chase’s Savings and Premier Savings accounts each have a standard rate of 0.01 percent APY.

Money market accounts

Money market accounts are a type of deposit account that sometimes combines features of both checking and savings accounts. Just like a savings account, money market yields might move before or after a Fed rate decision.

Becker, who founded First Internet Bank, says the bank intends to keep its savings and money market accounts at their current yields until the day after the Federal Reserve changes the fed funds rate.

What’s ahead for 2024, and how should you prepare for possible headwinds?

Rates are poised to move lower and might move lower for some time. CDs allow you to lock in rate for a period, unlike savings deposit accounts which generally have variable yields. But they might not be for everybody.

For instance, a CD might not be a good option for people who are using cash in the near future or people who don’t have an emergency fund, which is usually kept in a savings account.

Those considering a CD should consider these questions:

• Will you need to withdraw the money during the CD’s term?
• Will the money you’re locking away in the CD earn a guaranteed APY?
• Do you have enough money available to ensure you won’t need to withdraw from the CD and pay an early withdrawal penalty?

If you feel that a CD is right for you, don’t wait, as it might lead to lower yields. “We’re at the tip of the iceberg,” McBride says. “We’re going to see reductions in yields on both CDs and liquid accounts. And that pace will accelerate in the months ahead as the Fed starts to cut rates.” A bank or credit union that changes its yield on your savings and/or money market account could make your APY no longer competitive. That’s why McBride says it’s a good idea to compare APYs when you receive your monthly statement. “You’ve got to know where you stand and what else is available,” McBride says.

Bottom line

Even though rates are beginning to decrease after 29 months of a rising and prosperous rate environment, it’s still a great time to save as top yields are still outpacing inflation. As long as you’re earning a yield that’s well above inflation, currently at 3.0 percent, then your money isn’t losing purchasing power.

With lowering inflation, and 11 interest rate increases totalling 525 basis points, a small cut in the federal funds rate isn’t going to make much of a difference. At least for now.

___

(Visit Bankrate online at bankrate.com.)

©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.

Lezanne Winshaw | Bankrate.com (TNS)

Pet owners want the best for their furry friends, which often involves making decisions about their health care. One common dilemma is whether to invest in pet insurance or a pet wellness plan. In many cases, pet owners may want both.

Both pet insurance and wellness plans offer ways to manage your pet’s health expenses, but they serve different purposes. Understanding these differences will ensure you choose the right option for your pet’s needs.

What pet insurance is and how it works

Pet insurance is a financial product designed to cover unexpected veterinary costs that arise from accidents, illnesses and other unforeseen health issues. Like human health insurance, it provides a financial safety net for high-cost medical expenses.

How pet insurance works

Pet insurance policies typically involve paying a monthly premium in exchange for coverage of various medical expenses.

When your pet requires veterinary care, you pay the bill upfront and then submit a claim to the insurance company for reimbursement. The reimbursement amount depends on your policy’s coverage details, such as deductibles, copays and coverage limits.

Some insurers, like Trupanion, have a VetPay facility, meaning your insurance company pays the covered portion of your bill directly to the vet.

Pet insurance usually covers:

— Accidents and injuries (broken bones, swallowed objects)

— Diagnostic tests (blood tests, X-rays)

— Illnesses (cancer, diabetes, infections)

— Prescription medications

— Surgeries and hospitalizations

Some policies may also offer optional wellness care add-ons.

What pet wellness plans are and how they work

A pet wellness plan is designed to cover routine and preventive care. These plans help manage the cost of regular veterinary services that keep your pet healthy. Preventive care may help detect issues early before they become serious problems.

How pet wellness plans work

Pet wellness plans are offered as pet insurance add-ons or as stand-alone financial assistance.

They function on a subscription basis, where you pay a monthly or annual fee in exchange for a set of covered services. Unlike pet insurance, wellness plans usually do not involve filing claims and waiting for reimbursement. Instead, you receive discounted or fully covered services during your visit.

Not all pet insurance providers have wellness plans or preventive care add-ons. Some vet clinics offer wellness programs to help pet owners budget for routine pet healthcare. These may only be utilized at their clinic or network of animal hospitals.

Pet wellness plans typically cover:

— Dental cleanings

— Flea, tick and heartworm prevention

— Microchipping

— Routine blood work

— Routine check-ups and physical exams

— Spay/neuter procedures

— Vaccinations

These plans are ideal for budgeting regular veterinary care and ensuring your pet receives consistent preventive treatments.

Pet insurance vs. pet wellness plans

While pet wellness plans help to budget for routine pet care, pet insurance focuses on the unexpected.

When deciding between pet insurance and wellness plans, consider the following:

— Age and health: Young, healthy pets might benefit more from wellness plans focusing on preventive care, while older pets or breeds prone to health issues may need the comprehensive coverage of pet insurance.

— Budget: Evaluate your financial situation. Pet insurance can save you from unexpected, high medical bills, while wellness plans help manage routine care costs.

— Risk tolerance: If you prefer financial predictability, a wellness plan might suit you. Pet insurance could be the better option if you’re more concerned about potential high costs from accidents or illnesses.

— Vet visits: Consider how often you visit the vet. Regular visits for preventive care may justify the cost of a wellness plan, whereas infrequent visits might not.

Pet insurance pros

— Comprehensive coverage: Pet insurance provides extensive protection against unexpected and often costly medical emergencies.

— Financial safeguard: It helps manage large, unplanned for expenses that arise from serious illnesses or injuries.

— Peace of mind: Knowing you have a plan for crises can reduce stress and worry about your pet’s health.

Pet insurance cons

— Cost: Monthly premiums can add up, and there may be deductibles and copays to consider.

— Exclusions and waiting periods: Not all conditions are covered, and certain types of coverage may have waiting periods.

— Reimbursement process: You usually need to pay the vet bill upfront and wait for reimbursement, which can be a hassle.

Wellness plan pros

— Budget-friendly: Wellness plans allow you to spread out the cost of routine care over time, making it easier to manage your budget.

— Immediate benefits: There is usually no need to file claims or wait for reimbursement; covered services are provided during the visit.

— Preventive focus: These plans emphasize regular check-ups and preventive care, which can lead to early detection of health issues.

Pet wellness cons

— Limited coverage: Some wellness plans only cover a portion of the preventive care costs or only pay a maximum value per treatment or per year.

— Not customizable: Wellness plans often come as packages, which may include services you don’t need.

— Overlapping costs: If you already have pet insurance, adding a wellness plan might result in overlapping coverage and increased overall costs.

When to consider pet insurance

Pet health insurance is valuable for pet parents seeking financial protection and peace of mind in the event of unexpected accidents or illnesses. It covers emergency situations that demand immediate and often expensive veterinary care.

Some dog breeds have a higher chance of developing chronic illnesses such as diabetes or cancer. If you sign your pet up for insurance before signs of these develop, your pet’s policy can go a long way to helping cover the significant expenses that stack up for chronic medications and surgeries.

If you are one of the lucky ones whose four-legged friend gets through life without serious incident, paying monthly insurance premiums may seem like a waste of money. Contributing to a medical emergency fund may be a better use of your money. If something unexpected happens, you can always draw from your emergency account to cover vet bills.

When to consider a pet wellness plan

Pet wellness plans are ideal for pet owners who wish to prioritize preventive care and budget for routine veterinary services throughout the year.

“Routine veterinary check-ups and preventive care can substantially lower the risk of expensive treatments for severe injuries and illnesses in the future,” says Melissa Meyer, veterinarian at Boksburg Animal Hospital, South Africa. “As a veterinarian, I understand how daunting a diagnosis can be, but I have seen significantly higher success rates when conditions are detected early. If a wellness plan can help you achieve this level of care for your pets, it is certainly a worthwhile consideration.”

A wellness plan can help puppies and kittens who undergo several vaccinations and other routine procedures in their first year or two of life manage these expenses. However, a wellness policy with these specific benefits may be excessive for older pets who have been microchipped, spayed or neutered.

With a little research, it is easy to budget for routine veterinary costs like vaccinations and annual check-ups.

However, if some of these happen in a short space of time, it may be challenging to have that amount of cash on hand. In this case, paying smaller, more regular amounts as a monthly wellness plan premium may be more manageable.

Next steps

Pet insurance is a financial safety net for unforeseen illness and injury that can lead to hefty vet bills.

The cost of pet insurance varies depending on your pet’s age, breed and location, as well as which policy parameters you select (reimbursement percentage, deductibles, maximum coverage). Plans for pet wellness help pet owners budget for routine pet care such as vaccinations, teeth cleanings and annual check-ups.

Deciding between pet insurance and a pet wellness plan depends on your pet’s specific needs and your financial situation. Pet insurance might be the right choice if you are concerned about covering the cost of unexpected emergencies.

On the other hand, if you want to ensure consistent preventive care and manage routine veterinary expenses, a wellness plan could be more suitable.

By understanding the differences between pet insurance and wellness plans, you can make an informed choice that best suits your pet’s health needs and your financial situation. Remember, the goal is to ensure your pet receives the best care possible, keeping them happy and healthy for years to come.

Frequently asked questions

— Can I have both pet insurance and a wellness plan? Yes, many pet owners choose to have both. Pet insurance covers emergencies and serious illnesses, while a wellness plan covers routine and preventive care. This combination can provide comprehensive coverage for your pet.

— What does pet insurance typically not cover? Pet insurance often excludes pre-existing conditions, routine and preventive care (unless added as an optional rider), and certain hereditary conditions. Be sure to read the policy details to understand the exclusions.

— How do I choose the right pet insurance policy? Consider factors such as coverage options, deductibles, reimbursement rates and customer reviews. Compare multiple providers to find a policy that fits your budget and meets your pet’s needs.

— Are pet wellness plans worth it? If you regularly take your pet for check-ups and preventive care, a wellness plan can be a cost-effective way to manage those expenses. Evaluate the services included in the plan and compare them to your pet’s needs to determine if it’s worth it for you.

— Can I switch from a wellness plan to pet insurance? Most pet insurance providers will allow you to switch from a wellness plan to an accident and illness policy or vice versa. However, be aware that switching may involve new waiting periods and potential exclusions for pre-existing conditions. It’s essential to time the switch carefully to avoid gaps in coverage.

(Visit Bankrate online at bankrate.com.)

©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.

James Royal, Ph.D. | (TNS) Bankrate.com

A volatility exchange-traded fund (ETF) lets traders bet on an increase in the stock market’s volatility. It can be a highly profitable wager if the market suddenly becomes more volatile — for example, if it crashes — but the fund’s price constantly erodes due to how the fund is structured.

Here are some of the best volatility ETFs and ETNs, with data as of August 2, 2024.

What is a volatility ETF?

A volatility ETF gives traders the ability to wager on the stock market’s volatility. Unlike a typical ETF, which owns stock or options of actual companies, a volatility ETF uses complex financial instruments called derivatives (such as futures) to create a fund that rises in value when the market gets rocky. If the market does become more volatile, the fund may soar, often quickly.

Volatility is often measured by the CBOE Volatility Index, commonly known as the VIX. It’s called “the fear gauge” since the index spikes when investors get nervous. The index historically moves inversely to the direction of the Standard & Poor’s 500 Index. So a volatility ETF may be useful as a short-term hedge against a portfolio or as a one-way bet on the market’s direction.

Like many other kinds of leveraged ETFs, volatility ETFs are meant to be owned over a very short period, often for just a day or two. Because they use derivatives, whose value tends to decline over time, volatility ETFs are often swimming against a fast-moving current. Because of this structure, volatility ETFs often do very poorly over time, as value leaks out of the fund.

Volatility funds may also technically be exchange-traded notes (ETNs), which is a somewhat different structure from ETFs, but may still track the volatility of the market.

Best volatility funds

iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX)

This ETN provides exposure to S&P 500 VIX Short-Term Futures Index Total Return. Because it’s an ETN, holders have no principal protection and own unsecured debt of the company sponsoring the notes, Barclays Bank.

—YTD return: -18.9%

—5-year returns (annualized): -50.1%

—Expense ratio: 0.89%

ProShares VIX Short-Term Futures ETF (VIXY)

This fund tracks the S&P 500 VIX Short-Term Futures Index, which follows a portfolio of futures contracts with a weighted average of one month until expiration.

—YTD return: -19.5%

—5-year returns (annualized): -50.4%

—Expense ratio: 0.95%

iPath Series B S&P 500 VIX Mid-Term Futures ETN (VXZ)

This ETN tracks the S&P 500 VIX Mid-Term Futures Index Total Return. Because it’s structured as an ETN, holders have no principal protection and own unsecured debt of the issuer, Barclays Bank.

—YTD return: -2.5%

—5-year returns (annualized): -5.0%

—Expense ratio: 0.89%

ProShares VIX Mid-Term Futures ETF (VIXM)

This ETF tracks the S&P 500 VIX Mid-Term Futures Index, which follows a collection of futures contracts with a weighted average expiration of five months.

—YTD return: -3.0%

—5-year returns (annualized): -5.8%

—Expense ratio: 0.94%

ProShares Short VIX Short-Term Futures ETF (SVXY)

This ETF tries to provide daily results that are one-half the inverse of the daily performance of the S&P 500 VIX Short-Term Futures Index. In other words, if this index rose 1% in a day, the fund would aim to fall 0.5%. If the index fell 1%, this fund aims to rise 0.5%.

—YTD return: –3.8%

—5-year returns (annualized): 12.9%

—Expense ratio: 0.95%

The pros and cons of volatility ETFs

Advantages of volatility ETFs

—Easy-to-access exposure to volatility: When the market gets rocky, traders may flee to volatility ETFs to take advantage of the increasing uncertainty in markets. So this kind of fund offers an easy way to quickly get access to that exposure.

—Hedge on a portfolio: A volatility ETF may offer the ability to hedge a portfolio over a short period of time, offering an asset that rises as most others fall.

—Price may spike quickly: When the market suddenly turns volatile, the price on some volatility ETFs may rise hundreds of percent in just a few days. So if they place a well-time trade, traders can earn many times their wager quickly.

Disadvantages of volatility ETFs

—Meant to be held for very short periods: Volatility funds are really meant to be held only for short periods, giving exposure to the short-term movement of volatility.

—Value tends to decay over time: Because of the use of derivatives in the structure, the price of volatility funds tends to decay over time naturally.

—Unattractive long-term returns: Buying and holding a volatility fund is unattractive, as value seeps out of the funds over time through futures contracts.

What to look for in an ETF

When investing in ETFs, it’s useful to look at a few aspects of each ETF so that you actually buy what you intended to buy. Here are three key things to look for:

—The targeted exposure: Volatility ETFs provide different exposures to the market, in terms of time frame (short and medium term), whether they perform inversely to what they’re tracking and whether they take a leveraged approach to magnify gains.

—The investment track record: You’ll also want to know the track record of the ETF. The track record can give you some idea of what to expect from the ETF. But volatility ETFs are designed to perform well only over short periods, so in many cases long-term returns look awful.

—The expense ratio: Pay attention to the expense ratio, which tells you how much it costs to own the fund annually as a percentage of your total investment in it.

How to invest in volatility ETFs

A volatility ETF can make it easier to profit if the stock market makes a sudden move lower or it may even help you quickly hedge a position over a short period of time. But some funds have more upside if volatility rears up, while short volatility funds perform well if the market remains calm, taking advantage of the time decay to profit. So it’s vital to know what exposure you want.

The ETFs listed above give traders a way to gain exposure to volatility, but how they invest is up to them. Traders can shoot for the moon with short-term volatility funds or take a more modest approach with medium-term funds or even take advantage of calm markets with short funds.

Traders will also want to understand why they’re using volatility funds and when they’re helpful. Volatility ETFs may be helpful over short periods, but their structure means that the typical fund declines in value over time. So they may be OK as a short-term hedge when the market suddenly encounters danger, but traders looking for a longer-term hedge will look elsewhere.

You can buy volatility ETFs at any of the best brokers for stock trading.

Bottom line

Traders looking to make a short-term bet on the direction of the market may decide to use a volatility ETF to express that view. But volatility funds have significant drawbacks and their value tends to decay over time, even if it spikes sometimes as the market volatility heats up.

(Bankrate’s Brian Baker contributed to an update of this story.)

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.

(Visit Bankrate online at bankrate.com.)

©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.

By Sam Kemmis | NerdWallet

Remember those old internet ads promising one “weird trick” to improve your fitness forever? I never clicked on those, but I wonder if the trick was “exercise often.” Because that would work.

Similarly, I’m asked all the time about the best way to use credit card reward points — specifically, points issued by banks designed to cover a variety of travel expenses. Three-quarters of credit card accounts offered rewards in 2022, according to the Consumer Financial Protection Bureau, and many come with flexible redemption options. The answer is surprisingly simple: Learn how to transfer those points to travel loyalty programs.

Transferring points isn’t a particularly easy or obvious option. But the value of the points from popular issuer loyalty programs — such as Chase Ultimate Rewards®, American Express Membership Rewards and Capital One miles — can vary dramatically depending on how they’re used. That’s why NerdWallet offers both a “baseline value” and “maximized value” in our point valuations.

The baseline value is how valuable points are when used for booking travel directly through the issuer’s rewards portal, such as Chase Travel℠ or Capital One Travel. The maximized value relates to how much these points are worth when transferred to their best partner program. For example, the baseline value of American Express Membership Rewards is 1 cent, while the maximized value (when transferred to the best partners) is 2 cents.

Don’t be deterred

Most credit card reward programs make it easy to use your points for their baseline value. They usually show the cost of using points right next to the cash price when searching for travel on their booking platforms.

To be clear: There’s nothing wrong with using your points this way. Sometimes it’s actually the most valuable redemption option. And you generally get benefits like earning miles on flights booked this way. But there is another way.

American Express puts the “transfer points” option at the bottom of a hard-to-find menu on its account page. Don’t be deterred.

Figuring out how to actually transfer your points is one thing. Then comes the real challenge: Which partner program should you transfer them to?

This is the step where most people — including me — are most likely to get deterred. Each credit card program has a long list of transfer partnerships ranging from well-known U.S. brands like Delta Air Lines to international airlines like EVA Air. Which transfer partner is “best”?

Be clear about your goals

Many articles about maximizing points focus on redemptions that yield the best dollar-per-point value, which are almost always business and first class awards. But it’s worth asking: Is that what you want?

If you were planning to fly in a premium cabin already these articles can be helpful. But there are many problems with trying to book these awards, including restricted availability, complex booking processes, large fuel surcharges and other fees.

Flying economy might give you a worse dollar-per-point value than flying first class, but you might be able to squeeze more trips out of your points. And transferring points to loyalty programs for economy flights could still give you an edge over booking directly through an issuer. Don’t suddenly turn into a champagne-swilling points maximizer just because some article told you to.

Also important: Don’t transfer your points until you know the redemption you want to book is actually available. Otherwise you’ll be stuck with a bunch of points in random programs, and this one trick will turn into a big hassle.

Stick with it

The thing about this one weird trick — just like exercise — is that it requires persistence. It’s not a magic bullet.

Credit card holders earn $40 billion worth of rewards each year, according to a 2022 report from the Consumer Financial Protection Bureau. And most of those rewards won’t be used to maximum effect.

By simply considering transfer partnerships as an option when using your credit card points, you’ve already put yourself 10 steps ahead of most people.

Sam Kemmis writes for NerdWallet. Email: skemmis@nerdwallet.com. Twitter: @samsambutdif.

The article Maximize Credit Card Points With Just One (Big) Skill originally appeared on NerdWallet.

By Anna Helhoski | NerdWallet

Climate change is frightening, inconvenient, expensive and, increasingly, deadly. And there’s really no escape.

In this year alone, the U.S. has had a myriad of natural hazards worsened by climate change: the earliest recorded Category 5 hurricane to make landfall; floods throughout the country; record-breaking heat everywhere; tornadoes in the Midwest; and wildfires in the West. The La Nina weather pattern is expected to arrive soon, which is likely to fuel storms in the Atlantic during this year’s hurricane season.

Climate change amplifies the frequency, duration and intensity of extreme weather events. It can cause all kinds of disruptions and health hazards while driving up expenses like heating, cooling and homeowners insurance.

Get hammered enough by amplified weather events and you might wonder if there’s somewhere a little less hazard-prone to live. While there is no place on Earth that is immune to the impact of climate change, some places are less exposed to risk than others.

Last year, NerdWallet examined federal data and found that most of the fastest-growing places in the U.S. are also at high risk for natural hazards that are exacerbated by climate change. This year, we explored which places — in this case, counties — are least likely to feel the impact of natural hazards.

Isolation doesn’t guarantee fewer risks — just fewer people

If you rank places only by Federal Emergency Management Agency rating, the counties in the U.S. with the lowest risks are the places with the fewest people.

At the top of that list is Loving County in North Texas, where just 64 people reside — the least populous county in the country. No. 2 is Kalawao, Hawaii, which was originally established as an area of forced isolation for people with Hansen’s disease, or what was once more colloquially known as a leper colony. And No. 3 is Keweenaw, Michigan, a peninsula containing a national park where, as the county’s website says, you can “find solitude in the pristine, remote wilderness while sharing trails with the island’s moose and wolves.”

However, solitude doesn’t make for the best measure of risk from natural hazards. FEMA’s risk index takes population into account as part of social and community risk when it makes its risk designations — it stands to reason that the fewer the people, the lower the risk. But, of course, the natural hazards are still there: North Texas isn’t immune from extreme heat, tornadoes or extreme thunderstorms, for example. A Hawaiian island won’t be immune from a hurricane, earthquake, flash flood, wildfire or tsunami. And any area that is designated a peninsula, like Keweenaw, Michigan, is highly likely to be flood-prone.

While FEMA’s National Risk Index measures current risk, it must be noted that extreme weather effects are projected to worsen as the planet continues to warm on our current trajectory, and in coming decades, coastal flooding will increase as sea levels rise.

Note also that FEMA’s ratings consider not only the kinds of events that can be worsened by climate change (floods, droughts, wildfires, storms), but also natural hazards that aren’t affected by climate change, like earthquakes and volcanoes.

What midsize counties have the lowest climate change risks?

To get a better picture of what might make an area least vulnerable to natural hazards and still boast the creature comforts of basic infrastructure, NerdWallet set a population control of at least 100,000 people. It includes the annual cost of living in 2023 dollars, according to the Economic Policy Institute’s Family Budget Calculator for households comprising two adults and two children.

What most populated counties have the lowest climate change risks?

People migrate to some of the most populated areas in the country for obvious reasons, like the availability of housing, jobs, entertainment and a desire for proximity to lots of other people.

Among the counties with populations above 1 million residents, here are the counties where the risk of natural hazards is lowest. The analysis also includes the annual cost of living in 2023 dollars, according to the Economic Policy Institute’s Family Budget Calculator for households with two adults and two children.

No matter where you live, climate change will cost you

The terrible truth about climate change is that even if you uproot your life and move to a place with low risks of natural hazards, intense weather events are still likely to find you. For example, most of the relatively high risks in midsize counties have to do with winter weather. In some places, winters are becoming less severe, but in others, they are worsening. And one big event could be devastating.

In the U.S., extreme weather events cost nearly $150 billion per year, according to The Fifth National Climate Assessment, a report released in November 2023 by the federal government. That sum doesn’t account for additional costs including loss of life, health care costs, or damages to what are known as ecosystem services — for example, food, water, timber and oil. There’s a billion-dollar weather or climate disaster in the U.S. every three weeks, on average, the report found. That is compared with one every four months in the 1980s.

Despite all this, nearly half of all Americans (45%) don’t believe that climate change will affect them personally, according to a December 2023 survey by Yale University. So how about what a single person pays: Issues related to climate change will cost a child born in the U.S. in 2024 at least $500,000 — and as much as $1 million — over their lifetime due to indirect and direct costs (such as missed cost-of-living increases and lower earnings), according to an April analysis conducted by ICF, a global consulting firm, and released by Consumer Reports.

Some current and future costs are likely to include:

• Homeowners insurance. If you’re a homeowner, you know all too well how heightened weather-related disaster risks play into your homeowners insurance premiums. In certain places where risk is highest, private insurers won’t provide coverage for floods and wildfires.
• Home maintenance, upgrades and safeguards against climate risks. These could include installing a sump pump or resealing basement walls; upgrading insulation and windows; adding or enhancing heating or ventilation systems; roofing upgrades and more.
• Energy bills. With increased heating and cooling needs come higher energy bills.
• Food. Weather changes present challenges to food production, which could lower supply and increase prices.
• Higher taxes due to more government spending and lower government revenues. The Consumer Reports report cites reduced personal and corporation earnings that lead to less tax revenue combined with higher expenses that the government must take on for health care and infrastructure damages.
• Lower income. The Consumer Reports analysis cites a possible decrease in labor hours due to extreme weather, which may lead to lower earnings.

Climate migration within the U.S. is already happening. A 2021 survey by the real estate website Redfin found that among those who plan to move, half say climate change-fueled conditions like natural disasters and extreme temperatures are factors in their decision. There are expenses associated with uprooting your life and moving elsewhere — and those aren’t costs that everyone can afford.

Anna Helhoski writes for NerdWallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

The article You Can’t Escape Climate Change, but in Some Areas, Risk Is Lower originally appeared on NerdWallet.

Jeff Ostrowski | (TNS) Bankrate.com

Mortgage rates broke below the 7% barrier this week, according to Bankrate’s latest lender survey. It was the first time since February that the average 30-year rate was in the sub-7 range. The reason: optimism that the Federal Reserve might cut rates in the near future.

The 30-year mortgage rate fell to 6.92%. The 15-year rate fell to 6.92% and the 30-year jumbo to 6.92%.

The 30-year fixed mortgages in this week’s survey had an average total of 0.28 discount and origination points. Discount points are a way for you to reduce your mortgage rate, while origination points are fees a lender charges to create, review and process your loan.

Monthly mortgage payment at today’s rates

The national median family income for 2024 is $97,800, according to the U.S. Department of Housing and Urban Development, and the median price of an existing home sold in May 2024 was $419,300, a record, according to the National Association of Realtors. Based on a 20% down payment and a 6.92% mortgage rate, the monthly payment of $2,214 amounts to 27% of the typical family’s monthly income.

Will mortgage rates go down?

In the simplest sense, the economy drives whether mortgage rates go up or down. Thirty-year mortgage rates tend to fall in recessions — but not always — and today the economy is anything but a downturn. The jobs market has been strong, and inflation, while lower compared to a few months ago, is still above the Federal Reserve’s 2% target.

The Fed is likely to cut rates this year, if only once, and optimism about a rate cut allowed mortgage rates to slip below 7%, says Michael Merritt, senior vice president at BOK Financial, a bank headquartered in Tulsa, Oklahoma.

“They’re not where consumers want them to be or where mortgage companies want them to be, but there is some relief there,” Merritt says.

To be clear, mortgage rates are not set directly by the Fed, but by investor appetite, particularly for 10-year Treasury bonds, the leading indicator for fixed mortgage prices. That can lead to intense rate swings — they soar on news of Fed hikes, then plummet in anticipation of a cut. Given the Fed doesn’t expect to cut rates as much this year as it initially predicted, mortgage rates are likely to dip rather than plunge.

Methodology

The Bankrate.com national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. Our rates differ from other national surveys, in particular Freddie Mac’s weekly published rates. Each week Freddie Mac surveys lenders on the rates and points based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80%. “Lenders surveyed each week are a mix of lender types — thrifts, credit unions, commercial banks and mortgage lending companies — is roughly proportional to the level of mortgage business that each type commands nationwide,” according to Freddie Mac.

(Visit Bankrate online at bankrate.com.)

©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.

By Anna Helhoski | NerdWallet

Despite the prevalence of TikTok videos and recent articles detailing stories of individual college graduates struggling to find good jobs, the data tells a different story.

After all, the overall labor market is stronger than it’s been in decades. And Zoomers who recently graduated from college are certainly better off, in most respects, than previous generations of new grads.

“If you’re a recent college grad, right now things aren’t booming with opportunities like they were a couple years ago,” says Nick Bunker, economic research director for North America at Indeed Hiring Lab. “But it’s still really a relatively solid labor market. And hopefully, fingers crossed, the market stays strong for a couple years. And that gives you more opportunity to find a job as opposed to hanging your hat for the first six months after you graduate.”

When you compare the labor markets faced by Zoomers with previous generations, recent college grads now are better off than their older counterparts: Zoomer grads are earning much higher salaries today than Gen X did in the mid-1990s. Inflation may eat away at Gen Z’s high wages, but it doesn’t touch the stagflation of the 1970s and 1980s that baby boomer college graduates encountered.

The short recession that Gen Z experienced at the start of the pandemic is certainly no Great Recession, which technically lasted less than two years, but was followed by several years of tepid economic growth. That period stymied recent millennial graduates during crucial early employment years and is likely to negatively impact their lifetime earnings.

“It’s not just the year that you graduate,” says Bunker. “Your first years out probably make the most difference because that’s when you’re getting your foot on the career ladder.”

Gen Z bounced back fast

Despite the fact that the oldest cohort of Zoomers — 2020 grads — entered a job market with the highest unemployment rate in the modern era, that recession lasted just two months. And what followed was one of the strongest economic bounce backs ever.

The nation’s unemployment rate has hovered between 3.4% and 4% since December 2021. The current rate, 4.1%, remains among the lowest in 50 years, which means Zoomer college graduates have strong prospects for getting jobs right out of school and moving up the career ladder.

Bunker says the job market has cooled compared with two years ago. There is far less competition among employers than in 2022, which means fewer opportunities, according to Bunker. But it’s not all that dramatic in the broader context.

“If we wind the clock a little bit more and compare to what we saw pre-pandemic, it’s around those levels,” Bunker says. He adds that when compared with previous cohorts of graduates, job opportunities are roughly in line with those enjoyed by millennials who completed college in the early 2000s.

Gen Z’s unemployment outlier

Even with all of the positive aspects of the current labor market, there’s still a unique trend among recent Gen Z graduates that earlier generations haven’t faced: an unemployment rate that’s higher than overall unemployment.

It’s a particular quirk seen when you parse unemployment data among recent graduates over the past 30 years. The unemployment rate as of March 2024 for recent graduates was 4.7% — a full percentage point higher than the overall unemployment rate at that time, 3.7%.

This is an unusual development. Before 2018, the unemployment rate among recent grads was almost always lower than overall unemployment, due to strong employer demand for highly educated workers.

The reversal is likely because there’s been a surge in demand for non-college-educated service workers since the pandemic.

Underemployment is still high among recent grads

Labor data shows that underemployment — the rate of those with college degrees who are working jobs that don’t require degrees — has always been higher among recent graduates compared with all bachelor’s degree holders.

“They go ahead and get that college degree and then they can’t get on a career track that uses that education,” says Elise Gould, senior economist at the Economic Policy Institute (EPI), a nonpartisan think tank.

It doesn’t help that certain job sectors have become more crowded. Majoring in computer science, for example, doesn’t guarantee a job anymore as tech companies pull back from hiring.

Underemployment among computer science majors is higher than those who study health-related programs, education or engineering, according to a February 2024 report by The Burning Glass Institute, a labor market analytics firm, and Strada Education Foundation. But fewer computer science majors are underemployed when compared with those who study social sciences, psychology, humanities and business management.

As of March 2024, some 40% of recent graduates are working in jobs that don’t require a degree versus 33% of all college graduates, according to data from the Federal Reserve Bank of New York.

Salaries for recent grads have spiked

Gen Z college graduates can expect higher-than-ever salaries when they enter the job market: The typical recent college graduate with a four-year degree can anticipate a salary of around $62,609, according to an analysis of employer job postings and third-party data sources by ZipRecruiter, a job posting site. That roughly matches the Federal Reserve Bank of New York’s finding of $60,000 as the median annual wage for a recent graduate with a bachelor’s degree.

As the chart below shows, current median salaries are above those held by earlier generations of newly minted graduates when adjusted for inflation.

Even though salaries are at a peak for recent grads, the latest cohort might not be earning what they expect: A survey released by Real Estate Witch, a housing market research and review site, found 2023 graduates expected to make around $85,000 at their first job and the minimum salary they said they would accept is around $73,000. However, Real Estate Witch found that the average starting salary for a recent grad is about $56,000.

“If you’re a young person graduating now, maybe the differential between what you expected and what reality is, is quite large,” says Bunker.

It’s also possible that wage growth for young new hires may have plateaued as the momentum in the overall labor market that was pushing wages higher has now slowed, says Liv Wang, senior data scientist at ADP Research Institute, which measures workforce data. “If we look at ages from 23 to 26 — that includes a lot of recent grads — and the median hourly base pay for them is like $17, and that per-hour has been little changed since June 2022,” says Wang, citing recent ADP data.

Still, as Gould points out, young workers are disproportionately lower-wage workers — even if they have a college degree.

Gen Z grads do face economic and employment uncertainty

Today’s college graduates heading into the workforce aren’t free from economic challenges. They’re dealing with elevated inflation that eats away at their wages. And when you earn less — as most young workers do — higher costs take a bigger bite. In recent years, the cost of housing has skyrocketed, especially for renters, while health insurance and car ownership have both grown more expensive. And, Gould says, like generations before, young workers fresh out of college who have student loan debt will carry an additional burden.

Salaries, overall, may be higher than ever, but it varies based on your degree. And there are still persistent gender and racial inequities to earnings, Gould points out.

But once again, the data shows it is still a pretty good time to be a college graduate and, in general, to have a degree.

It still pays to get a college degree

Those with college degrees remain more likely to be employed than workers in the same age group, ages 22 to 27, according to an analysis of U.S. Census Bureau data from the Federal Reserve Bank of New York. Even an associate degree or professional certificate can give young workers a leg up, as many areas of the country are facing a shortage of middle-skills labor.

In March 2024 the unemployment rate for recent college grads — those ages 22 to 27 — was 4.7% compared with 6.2% for all young workers in the same age group.

Anna Helhoski writes for NerdWallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

The article Actually, the Job Market Isn’t So Bad for Gen Z College Grads originally appeared on NerdWallet.