Social Security checks grow

Q. Are Social Security benefits increasing again in 2024? — H.G., Ashland, Kentucky

A.

They are, indeed. Social Security benefits are adjusted for inflation via cost-of-living adjustments (“COLAs”) and are increased in most years. The increase for 2024 is 3.2% — close to the long-term average annual rate of inflation. Inflation has sometimes been high, which is why the 2023 increase was a hefty 8.7%, on the heels of 2022’s 5.9% bump. The nine increases before that were all less than 3%, with a 0% increase for 2016.

Q. Does a company’s management want its stock price to be high? — V.N., Honolulu

A.

Typically, it does.

But a stock’s price trending higher doesn’t mean that the company collects more income that way. The company received money for the shares when they were first issued, perhaps via an initial public offering — or

IPO — or a later additional stock offering. Afterward, the shares trade in the open market between investors who buy and sell them. (It’s a bit like a collectible card company making money by selling cards — after which the cards’ values rise and fall depending on what buyers and sellers think they’re worth.)

Still, a high stock price can be useful for a company. If it wants to buy another company with stock instead of cash, for example, it will need fewer shares to do so. And if it wants to raise money by issuing more shares, it will get more dollars per share. Employees who have stock options (including top executives) will also want a high stock price.

In contrast, a lower stock price means a lower total market value, making a company more vulnerable to being pursued by a would-be acquirer.

Credit card mistakes

Credit cards are big business: As of last year, Americans had more than 570 million credit card accounts in total. But credit cards can help or hurt you, depending on how you use them. Here are some mistakes to avoid.

Try not to carry a balance on your card. The average credit card interest rate was recently well over 20%. If you’re carrying, say, $30,000 in debt and you’re being charged 20%, you’re facing annual payments of around $6,000 for the interest alone. Fail to pay all that interest, and your balance will grow. Credit card debt can easily spiral into financial disaster.

If you can’t avoid carrying a balance, be sure to pay more than the minimum due on your bill. Paying only the minimum will drag out the repayment of your debt and result in much more interest paid to your lender. Aim to pay the full balance due every month, and if you can’t, pay as much as you can. As soon as you’re free of high-interest-rate debt, you can start working toward goals such as saving for a down payment on a home or saving for retirement.

Also, don’t do things that can hurt your credit score because you’ll want as high a score as possible when you’d like to borrow money for a home, a car or something else. Late payments are a big no-no, as they’ll likely bring down your score. Fully 35% of a FICO credit score is tied to your payment history.

Another 30% is tied to how much of your available credit you’re using. Lenders don’t like to see you maxing out your credit limit when they’re thinking of lending you more money, so aim to owe less than 50% of your credit limit; better would be 30% — or even 0%.

Credit cards can be a terrific financial convenience, and you can even profit from them if you carry some well-chosen cards offering rewards or cash back.