What the experts say
Lower credit-card fees
“Annual credit-card fees aren’t set in stone,” said AnnaMaria Andriotis in The Wall Street Journal. More than 80 percent of people who asked their card company for a break on their annual fees got one, according to a new survey from CreditCards.com. Most of those who asked got their fee waived entirely. Fierce competition between credit-card issuers means companies are doing whatever it takes to hold on to customers. But that doesn’t mean your card issuer is guaranteed to bend. “Those who have the best luck tend to be those who are on time with their payments and threaten to stop using the card or to close it if the fee isn’t waived.” Other terms are usually negotiable as well. Nearly 70 percent of borrowers who asked for a lower interest rate got it.
Roth IRAs are inheritance friendly
If you’re already planning to leave a traditional IRA to an heir, it might make sense to convert it to a Roth IRA now, said Rachel Sheedy in Kiplinger.com. That’s “because the Roth can grow tax-free not only over your lifetime, but your heir’s lifetime too.” In a recent analysis, Vanguard found that if a 65-year-old converts a $100,000 traditional IRA to a Roth, the heir’s inheritance in 20 years “could be worth more than $21,000 extra,” compared with what a traditional IRA would have been. One big advantage is that the original Roth owner do esn’t have to take required minimum distributions. And because the tax on the inheritance is prepaid, the heir can take tax-free required distributions and reinvest that money as he or she sees fit. Meanwhile, “the money still sitting in the inherited Roth continues to grow tax-free” over the heir’s own lifetime.
Building Junior’s credit score
“Handing over your credit card to your teenager might not seem like a good idea. But it might actually be a smart financial move,” said Kathryn Vasel in CNN.com. Parents who have good credit can help children start building their own strong credit history by adding them as authorized users. On-time payments, a good credit utilization ratio, and a long credit history “are likely to have a positive impact on an authorized user’s credit score.” It can also be an opportunity to talk about proper credit use. Parents should set strict rules about how much their child can spend, and who will pick up the tab. “Keep in mind that parents don’t have to hand over the card at all” for their kid to reap credit benefits.