Forgotten CC benefits, Sneaky mortgage rates, & Pedaling across the USA 🚴‍♀️

June 28, 2022

Good morning, sunshines! What a glorious day ☀️.

Last week I was w̶a̶s̶t̶i̶n̶g̶ ̶t̶i̶m̶e̶ ̶o̶n̶ browsing Twitter and came across a mega post of Quotes To Live By. There were almost 1000 quotes posted by users, and here’s one of my favs from the list…

“Pedal Over Pedal” — When I rode my bicycle across the USA, close friends & family would always ask, “How are you going to do that?” I would always answer “pedal over pedal”.  Focus on the immediate task at hand. Just that one pedal stroke, then the next, and the next… @marcgaskins 🙏

Something to think about as we cross into to the second half of 2022… Building wealth is a grind. A multi-decade journey. The people around you might think financial freedom is impossible or throw in the towel when things get tough.

But not you. YOU will keep going and keep grinding.

Pedal over pedal. Dollar over dollar. 👊


TO DO

Action of the week: Forgotten CC Benefits 💳

Besides points and cash back, many credit cards offer a handful of secondary features that people sometimes forget about.

This week, take a few minutes to check the secondary features of your cards. Here are some common features you might have access to:

  • Travel perks: Roadside assistance, supplemental rental car insurance, trip insurance, TSA pre-check reimbursement, lost or damaged luggage coverage 🧳
  • Shopping perks: Extended warranties, purchase protection, theft/damage insurance, extended free returns 🛍
  • Extra stuff: Free trial memberships or subscriptions, free credit monitoring tools, promotions or credits to retail partners, transaction fee waivers 🙋‍♀️

Not all cards offer all these things. But it doesn’t hurt to check what’s available to you, and take full advantage, eh?

**in case you’re wondering, here’s the list of credit cards we have in our wallets right now, and why we like them!**


HOME BUYING

Pop quiz, hotshot… 🏠

Which would you prefer…

a) Buying a house for $600,000 with a 5% mortgage rate…

OR

b) Buying a house for $500,000 with a 7% mortgage rate?

It’s a bit of a trick question, given the many variables that come with home buying. But, let’s look at some simple math comparing these options if you financed the entire purchase…

First thing to notice is the monthly payment amount. Even though the Option B house is $100,000 cheaper, the payments are $106 more expensive each month.

Next check out the total lifetime cost of the loan, as well as how much interest is paid compared to the principal balance.

For those of you who just bought a house recently, you might be thinking “oh no, maybe I bought at the top of the market…?”. Well, as you can see, even if your house value goes down a bit later this year or next, you could have still possibly gotten a great deal given low interest rates when you bought vs. now.

And for those of you “waiting for the real estate market to drop” before buying… keep in mind there’s more to the math than just a cheap purchase price. Interest rates have a big effect on your overall cost, even if you buy at a discount.

In any case: The beauty of home buying is that the original loan is rarely kept for 30 years. Opportunities to refinance, withdraw capital, or pay down the mortgage early will present themselves in the future. Don’t let mortgage math and home prices intimidate you — home buying is a loooong term game.

More resources:


AUTO

Maintenance Costs Over Time… 🚘

Consumer Reports dropped this cool article last week, revealing the average maintenance costs for 5 year old cars vs. 10 year old cars.

Maintenance costs are something people typically overestimate, especially with older vehicles. Here are the breakdowns by manufacturer 👇👇👇

Thoughts and takeaways:

  • Not surprisingly, 10y/o cars need more maintenance than 5y/o cars. But, depending on the brand, it’s not really a huge amount more compared to the higher purchase price of a newer car. (Eg. the difference between a 5y/o Mazda and and 10y/o is only $100/year in maintenance) 👩‍🔧
  • Older cars can also have cheaper insurance and registration costs… In some cases this could fully negate the additional maintenance costs.
  • Low maintenance costs go hand in hand with long term reliability. In fact, Cadillac, Toyota & Mazda hold 6 of the top 10 positions of CR’s most reliable vehicles report.
  • It’s interesting to observe that the more expensive car brands also cost more to repair on average. (Paying more for features, not reliability) 

How does your car stack up on the list?

Whatever you drive or plan to buy in the future, remember to factor in secondary costs into your purchases. It can save you a TON.


ICYMI

In the world of money news…

CC Debt 💳
The average interest rate for credit cards just topped 20%! 🤯 If you’ve got any lingering cc debt, NOW is the time to prioritize paying it off. If you need help, free counseling, or have multiple debts to consolidate, we highly recommend you talk to MMI (a non-profit org that helps people create a plan and pay off debt quickly)

Saving 🤑
For you savers out there, CIT Bank just raised their HYSA interest rates, as well as their No-Penalty CD rates. You can earn 1.2% or 1.25% respectively within these FDIC insured accounts. Sweet!

Gas Tax Holiday ⛽️
The government is considering a 3 month “gas tax holiday” where they will waive federal taxes on gas for 3 months (for producers, not consumers). It’s not clear how much this would actually save people, but don’t get your hopes up cause it’s probably somewhere in the $0.14 to $0.18 per gallon range only. 😓

Retirement 🌴
For any of y’all planning to retire this year, check out these 5 moves to help retire in a bear market. Re-evaluating your spending and delaying big purchases is a good idea (actually, that’s kind of smart advice for anyone worried about money right now, retiring or not)

Housing 🏡
Let’s all move to Pittsburgh!… According to Bankrate’s latest report it’s ranked #1 on the Top 10 Best Cities for First-Time Homebuyers list. This study takes into account affordability, safety, employment and health. Here are the others 👇👇👇


COMMUNITY

Touring Chick-fil-A Headquarters 🐓

Massive thanks to listener Matt Cavano for inviting us to tour the Chick-fil-A HQ last week in Atlanta! 🙏 

And while we were there we were spotted by Aly Wolf who joined us for a pic. Nice to meet you, Aly! It’s great to see and chat with listeners in real life 🤗


Thanks for reading and have an awesome rest of the week!

Best friends out 🍻

PS. Anyone watch the new Snowflake Mountain series on Netflix? Seems like there’s a new “Matt and Joel” duo out there and I’m wondering if they’re as cool as their names sound.


 

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* Advertiser Disclosure: How to Money has partnered with CardRatings for our coverage of credit card products. How to Money and CardRatings may receive a commission from card issuers.
* User Generated Content Disclosure: Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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