The top 3 pieces of financial advice — from the best way to auto-pay to a closer look at travel rewards
The best way to auto-pay
If the specter of screw-ups has scared you away from automatic billing, there's a way out, said Farnoosh Torabi at Yahoo. The odd mistake does happen with automatic-billing systems, but their punctuality protects your credit score. To get that advantage with low risk, "consider a two-step approach." Link monthly auto-payments to your credit card, then pay off the card's balance from funds in your checking account. "By paying with a credit card first, you give yourself an extra month or so to review the bill for errors." Some credit card services even scan your statements for fraud and billing mistakes, giving you less to worry about when it comes to settling those debts.
A closer look at travel rewards
Banks are beefing up their travel rewards, said AnnaMaria Andriotis at MarketWatch, but "there's a catch." Many card holders now need to spend more than before to rack up bonus points. For consumers who plan to charge thousands of dollars anyway, these cards can still be a great value. But "the rewards typically aren't worth it for those who carry a balance, since the interest they'll incur — ranging from roughly 10 to 24 percent — will likely wipe out what they earn in points or miles." Look for cards that don't have a minimum spending threshold. And if a card has an annual fee, make sure the rewards program "is generous enough that it outweighs the costs." Cards that offer cash back instead of points or miles can also be a better deal, because the reward is better correlated to how you spend your money.
House hunting 101
For young, first-time homebuyers looking for a deal, "the time might be ideal," said Rachel Louise Ensign in The Wall Street Journal. While home prices have started to recover, they're still low in many places — and so are interest rates. Renting, meanwhile, is getting more expensive. But before young people even tackle the hurdle of qualifying for a home loan under today's stricter standards, they should think carefully about whether buying is the right choice. "One of the most important things to consider is the amount of time you expect to stay in a home." Buying may not be a smart move for young professionals who will move around often for their careers, so consider whether you'll likely be staying long enough — usually about three years — to offset the down payment and closing costs.
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