This Week In Your Wallet: Maximize Credit Card Rewards
Over the weekend, I did something I do very (very) rarely. I applied for a credit card. The Chase Sapphire Reserve card is relatively famous as far as credit cards go, mostly because of the 100,000 point signup bonus (which you can use to book $1,500 in travel if you do it through Chase, $1,000 any other way). I was holding off because, well, the card costs $450 a year, you have to spend $4,000 in the first few months to get the bonus and I don’t really need the card. But the issuers just announced that the deal is ending January 12 (March 12, if you apply through a Chase branch). Why? As Ron Lieber (who also got the card) wrote in The New York Times, the bonuses led to a $200 million to $300 million hit to Chase’s earnings.
Why is this news? A) Because if you were biding your time like I was, it’s time to pull the trigger. But also, B) Because other credit card companies might follow suit, and the decision to cut this card’s bonus in half means other cards won’t have as much pressure to compete using their own sizable bonuses. You can stay up to date on all things miles and points on blogs like The Points Guy and View From The Wing. Inthe meantime, to make sure you’re maximizing your opportunities to ramp up rewards, check your spending patterns and categories (on your card company’s website or using an app like Mint or Clarity Money), then run the results through CreditCardTuneUp.com. CNBC also weighed in on the card perks phenomenon, outlining a list of credit cards with signup bonuses worth $1,000 or more. Just note: If you’re not in the habit of paying off your cards in full and on time every single month, bonus cards aren’t for you. The amount you’ll pay in interest will likely quickly outweigh anything you net in premiums.
Planning For The Long-Term
And now we move from making money to spending it… Fidelity Investments estimates a 65-year-old couple will need $260,000 to pay for unreimbursed medical expenses. That doesn’t include long-term care, which I talked about on TODAY thismorning. It’s something seven in 10 people are likely to need, but most don’t seem to think they will, or they think Medicare will pay for it — which it won’t. So what’s the price tag? According to the Cost of Care survey from Genworth Financial, annual costs range from $46,000 to $92,000 depending on the type of care (at-home, nursing home, assisted living, adult day care) needed.
How do you pay for that? One way is with some form of insurance. The two most common options are traditional long-term care and hybrid life/long-term care. There are differences, however, between the two types of policies. With the former, premiums are lower (though they can go up over time), but you pay them for life. And if you don’t use the benefits, the amount you’ve put in is typically gone. The latter is essentially a life insurance policy where you can draw out the death benefit to pay for long term care. Premiums on hybrids are significantly higher, but if you don’t use the money, you’ll have something to leave to your heirs. There are more details, naturally (we’re talking about insurance). For more information on both, watch my segment here. But whichever you might choose, get a variety of quotes — and don’t wait too long, because coverage denials steadily increase from ages in the 50s and 60s onward.
Age 34: The Magic Number For Paying Off Your Education
Was your college education worth the cost? That’s a question only 50 percent of college alums in the U.S. would answer affirmatively, according to a 2015 Gallup-Purdue Index Report. Those non-believers may want to think again. According to a report from The College Board, it takes an average of 12 years to earn back the cost of a Bachelor’s degree — measured as tuition paid, plus wages lost from not being inthe workforce for four years. That means the average degree pays off by age 34. And then you keep earning more. Last year, college grads with full-time jobs earned a median of 67 percent more than high school grads — not including college grads who then pursued advanced degrees, reports CNBC. So keep this tidbit on hand next time you’re cursing your student loans, or share it with the disgruntled recent grad in your life to give them a little hope.
Have a great week,
Jean
