Anticipated earnings

Q. What are “anticipated” earnings? — A.C., Madison, Indiana

A. Publicly traded companies in the U.S. issue three quarterly earnings reports each year, followed by an annual report at the end of their fourth quarter. Investors anticipate these reports, as they inform us about the health of the company and its progress.

Wall Street analysts often issue estimates of these earnings before they’re released. These are commonly called “anticipated” earnings. Analyst estimates frequently incorporate guidance from the company itself, though. And because a company’s stock can fall if the earnings report fails to meet expectations, some companies tend to lowball their projections, increasing the odds that they’ll exceed them.

We don’t pay much attention to analyst estimates, preferring to see actual results when they’re posted. Also, long-term investors should care more how a company will perform over the coming years than what analysts predict will happen in the next few months.

Q. What does it mean to “ladder” certificates of deposit? — S.F., Fayetteville, North Carolina

A. Laddering is a financial strategy in which you invest in installments that pay off on different dates and have different interest rates.

For example, if you wanted to invest $12,000, you might park $4,000 in a CD that matures in one year, spend another $4,000 on one that takes two years and put a final $4,000 in one with a three-year term. (Longer-term CDs often provide higher interest rates, but these days, shorter-term CDs are paying more.)

By laddering, you won’t have all your money locked at a certain rate for years, and you can keep reinvesting as each CD matures. Laddering can be an especially good strategy when interest rates are expected to rise. These days, though, rate drops seem more likely.

Balance transfer tips

If you’re burdened with a lot of credit card debt, it’s best to pay it off as soon as you can. One strategy that can help is using a balance transfer card — shifting a big balance owed from your current card to another one that charges little or no interest for a certain initial period. This can help you consolidate debts, simplify bill payment and potentially save on interest paid.

Before performing a balance transfer, look closely at the terms of any card you’re considering. Two cards might offer 0% interest, but one might offer it for 12 months while the other offers the low rate for 21 months.

It’s best to stop or slow your charging on credit cards until your big balances are paid off, but if you must charge expenses on your balance transfer card, you’ll want to avoid incurring more interest.

Examine each contender’s regular interest rates, too, because any debt you haven’t paid off once introductory periods end will be subject to those rates. Some generally good balance transfer cards recently had rates ranging from around 17% to 30%. Even small differences in interest charged can make a big difference over years — though, ideally, you’ll want to pay off your debt before the initial 0% rate expires.

Also, check to see whether a balance transfer card you’re considering charges a fee on the amount you’re transferring. Some cards charge no fee, while others may charge a flat fee or a certain percentage. A 3% fee on a transfer of, say, $20,000, will cost you $600. That may be annoying, but if the card is otherwise excellent and will save you much more than $600 in interest payments, it could be worth it.

Finally, note that many of the best balance transfer cards are only available to those with solid credit scores. So aim to keep yours as high as you can.