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An "expensive" 401(k) fee is around 2%, but most people have no idea what they're paying

Wed, 08/07/2019 - 3:06pm

  • Many people using an employer-sponsored 401(k) to save for retirement don't know how much they're paying in management fees, or what those fees are for.
  • There are two types of fees: those charged by the 401(k) provider, and those charged by the mutual funds or ETFs in the account. At the high end, those fees could cost you more than $150,000 in retirement.
  • Fees alone aren't reason enough to forgo a 401(k), but an account being charged 2% or more has relatively high fees, and that money might be better off elsewhere. 
  • Visit Business Insider's homepage for more stories.

A 401(k) is a tax-advantaged investment account with much higher annual contribution limit than an IRA, and if your employer offers to "match" — i.e. contribute to the account as you do, matching a percentage of your contributions — most people consider that free money.

This type of retirement account is among the most popular in the United States. At the end of 2018, 401(k) plans held an estimated $5.2 trillion in assets, about 19% of retirement savings in the US, according to the Investment Company Institute.

But some other statistics are a bit more startling. A survey from TD Ameritrade found that only 27% of people surveyed knew how much they were paying in 401(k) fees.

Fees alone aren't enough to make a 401(k) not worth it —  especially if you get an employer match — but fees can add up. 

If you don't know what you're paying, or if what you are paying is reasonable, read on to learn more about the typical 401(k) fees in the US and how you can minimize their impact on your retirement.

Average 401(k) fees in the United States: What to expect

Your 401(k) fees don't all come from one place. There are two general types of fees you will see in your account:

  • Fees charged directly by the 401(k) plan provider
  • Fees charged by the mutual funds and ETFs in your 401(k) account

While you will deal with some level of fund fees even outside of a 401(k), you have more freedom to choose your investments when you invest outside of an employer-sponsored plan. That said, there's no one-size-fits-all answer to whether an investor should use a 401(k) or not — that depends on factors like whether an employer offers a match for its plans, and what the fee structure looks like for 401(k) and non-401(k) investments alike.

Read More: Here's exactly how to figure out when you can retire

According to an analysis by BrightScope, large 401(k) plans with $100 million or more in assets typically charge less than 1% in annual fees. This is a generally competitive rate, and the biggest plans regularly charge under 0.50%.

As plans get smaller, fees go up. The BrightScope study found that small plans often charge between 1.5% and 2% per year, with many charging in excess of 2%.

While 2% may not sound like much, it adds up to a lot in the long run. If you have a $10,000 balance today and plan to add $5,000 per year to your 401(k) over the next 30 years, a 2% fee will cost you an estimated $153,218 over time, according to a calculator on investment website Blooom.


Account management fee

The biggest fee you'll see referred to as a "401(k) fee" is the plan management fee. Your fees are generally deducted automatically in a way that makes it feel like you are not paying any fees at all. But as we saw from the math above, even 2% can take a huge chunk from your retirement savings.

Fees around 0.50% are reasonable for a 401(k). Anything over 1% is getting into a territory that's more beneficial to the plan manager than the savers. 

Again, the fees are probably worthwhile if you get an employer match for your 401(k) contributions. If you can get 2%, 3%, or more of your pay added on just for saving for retirement, you should do it even if there are fees on your investments.

Mutual fund and ETF fees

When you're staring at the fees charged by your 401(k) account itself, it is easy to forget about the fees charged by each underlying investment. Hopefully, your 401(k) offers investments you can buy and sell with no load fees or transaction fees. But that doesn't mean the funds are free.

Most mutual funds charge an annual management fee reported as an expense ratio, or fee rate as a percent of assets. If you have $10,000 in a fund with a 1% expense ratio, you would pay $100 per year to have those funds managed.

Read More: Dual-income couples tend to make a major mistake that jeopardizes their retirement

Some funds charge additional marketing fees, so beware which funds you choose to invest in. Funds from Vanguard, Schwab, and Fidelity tend to charge less than 0.20% in fees. Other funds charge well over 1%. Every investor should know and understand where their money is going.

Rolling over your old accounts could save you fees

If you ever leave a job with high 401(k) fees, you could consider doing a rollover — move your savings from one account to another by calling your plan manager — when you leave to cut those fees to zero.

Or, if you have a string of old 401(k), 403(b), 457, or other retirement accounts at old employers, a good option is to merge and simplify. A 401(k) rollover allows you to merge the balances in a new Rollover IRA. This account offers the same tax advantages, but it is free from most brokerages and gives you the ability to invest in whatever you want.

Most 401(k) accounts, and most investment accounts of any kind, have some level of fees. This doesn't automatically mean they're too expensive or not worthwhile — it just means you'll need to read the fine print, and decide for yourself where you want to keep your money.

SEE ALSO: Here's exactly how to figure out when you can retire

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Arizona Iced Tea is pushing into legal cannabis. Here's how its partnership for pot-infused gummies and drinks came about.

Wed, 08/07/2019 - 2:34pm

  • Arizona Iced Tea is pushing into THC-infused beverages.
  • It's partnering with the Denver-based Dixie Brands, and will start with vape pens and gummies for the Colorado and California markets before moving into beverages.
  • As part of the agreement, Dixie will develop the THC-containing products and Arizona will provide the branding, "isolating" Arizona from THC, which is federally illegal. 
  • Sign up for Cultivated, our new cannabis newsletter.

The maker of Arizona Iced Tea just became latest consumer giant to push into the cannabis industry.

Arizona Beverage Company said on Wednesday said it was partnering with Denver-based cannabis company Dixie Brands to produce THC-infused vape pens, gummies, and drinks in states where the substance is legal for adult use, and eventually in Canada and Latin America. 

Dixie will produce the THC-infused products and sell them to dispensaries under the Arizona brand. The partnership also gives Arizona the option to buy a $10 million stake in Dixie. 

The iced tea maker follows Constellation Brands, which sells Corona beer and Svedka vodka, as well as Molson Coors, and Heineken, in gambling on the legalization of pot. Arizona, however, will be the first non-alcoholic consumer brand to specifically create THC products for the US market. 

Read more: CBD and hemp startups are using creative loopholes to skirt Facebook's ad ban. Here's how they're doing it.

Dixie Brands CEO Chuck Smith told Business Insider in a Wednesday morning interview that the licensing partnership came about gradually. As Arizona was looking around the cannabis space, the company "kept stumbling into us," Smith said. 

Around five months ago, Smith, along with senior members of Dixie's team, visited Arizona's office in Woodbury, New York, after an adviser to Arizona recommended the sit-down. That initial meeting, Smith said, kicked off a four-month diligence process where Arizona's team looked at all facets of Dixie's strategy and did their own research on the cannabis space by visiting dispensaries.

After a few more meetings, Arizona's team spent a day at Dixie's Denver office in June, where they signed the partnership.

"I couldn't be more proud of that — frankly humbled — with the fact that Don and his family are entrusting their brand to us to enter into this market," Smith said, referring to Arizona CEO Don Vultaggio. "I don't take that lightly. And I know they didn't take this decision lightly."

THC, the chief psychoactive component of the cannabis plant, is legal in 11 states for adult use but is still federally illegal, and can't be transported across state lines. That creates all sorts of regulatory complications — especially as many banks still won't serve cannabis clients — for established consumer companies that are looking to enter the space.

The structure of the partnership is what will allow Arizona to take on the new market, Smith said. Arizona will provide the branding, and access to its supply chain, while Dixie will work with the cannabis plant itself. 

Read more: Top VC firms know they can't ignore cannabis forever. Here's how they're making their first investments.

"We are certainly isolating them from any access to the THC side of this," Smith said. On top of that, Arizona is a privately-held company, meaning it can take bigger risks than companies that are bound by the strict rules of major US stock exchanges.

"The cannabis market is an important emerging category, and we've maintained our independence as a private business to be positioned to lead and seize generation-defining opportunities exactly like this one," Arizona CEO Vultaggio said in a statement announcing the partnership. 

Neither the NASDAQ or the NYSE allow listed companies to invest in, sell, or distribute THC-containing products in the US.

While the product line is still in its early stages, Smith said it's likely they'll start with gummies and vape pens, before moving into beverages. They'll first focus on the Colorado and California markets, where Dixie has a presence, before expanding to other states.

"I think this is a watershed moment for the industry," Smith said of the partnership. 

Join the conversation about this story »

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Facebook is suing 2 developers for allegedly hijacking people's phones to fraudulently click on ads (FB)

Tue, 08/06/2019 - 8:12pm

  • Facebook is accusing two app developers of using malware to hijack people's phones to fraudulently click on ads to make money.
  • The Californian tech giant announced on Tuesday that it has filed suit against LionMobi and Jedimobi.
  • Facebook did not say how many users it believes were impacted, or how much money it thinks the developers have made from the purported scheme.
  • Visit Business Insider's homepage for more stories

Facebook is suing two app developers, alleging that they engaged in a scheme to hijack people's phones with malware that could fraudulently click on ads to make money.

In a blog post on Tuesday, Facebook announced that it has filed suit against LionMobi and Jedimobi, app developers based in Hong Kong and Singapore respectively, with claims of "click injection" ad fraud.

The Silicon Valley tech giant claims the two companies launched malicious apps in the Google Play app store that once installed used users' phones to trick Facebook's advertising system into paying out cash to them by pretending to be "real" people clicking on online advertisements.

"The developers made apps available on the Google Play store to infect their users' phones with malware. The malware created fake user clicks on Facebook ads that appeared on the users' phones, giving the impression that the users had clicked on the ads," Facebook said in the blog post.

The companies "generated unearned payouts from Facebook for misrepresenting that a real person had clicked on the ads. The ads were part of Facebook's Audience Network. LionMobi also advertised its malicious apps on Facebook, in violation of our Advertising Policies," the blog post said. 

LionMobi's current apps in the Google Play app store include a battery tool and a phone "cleaner" app, while Jedimobi's offerings include a "Fat Burning Workout" and a calculator.

Facebook did not say how many users it believes were impacted, or how much money it thinks the developers have made from the purported scheme.

The two developers did not immediately respond to Business Insider's request for comment.

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Former top Twitter execs Dick Costolo and Adam Bain announce 01 Advisors, a new venture capital firm with at least $135 million to put into startups

Tue, 08/06/2019 - 6:33pm

Dick Costolo and Adam Bain, formerly the CEO and chief operating officer of Twitter, respectively, are getting the band back together.

The two former top Twitter executives are joining forces to launch a new venture capital firm called 01 Advisors, Axios first reported Tuesday. According to the firm's SEC filing also made public Tuesday, the team has already received $135 million in commitments from 31 backers for its first fund with hopes to raise an additional $65 million.

Since departing Twitter, both Costolo and Bain have been active angel investors in home rental startup Lyric, corporate travel site TripActions, and connected fitness startup Tonal, among others. It was not clear whether 01 Advisors will have a specific area or industry in which is hopes to inject its substantial capital resources.

Read More: 2 years after the founder of 500 Startups left amid sexual harassment allegations, 2 women are running the firm and setting a new bar in the male-dominated business

Axios also reported that former Twitter executive David Rivinus is also involved with 01 Advisors, but his role was not clarified. The fund will operate with equity beyond advisory shares, according to the Axios report, similar to how former New York Mayor Michael Bloomberg's Tusk Ventures is structured.

Neither Costolo nor Bain immediately responded to Business Insider's request for comment. 

SEE ALSO: This former Social Capital partner is betting that early-stage health tech startups have been misunderstood for too long, and she's joining CRV to change that

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One in 10 ultra-wealthy Hong Kong residents lost their millionaire status in 2018, and an expert says the extreme wealth loss highlights the volatility of their net worths

Tue, 08/06/2019 - 6:01pm

  • The net worths of Hong Kong's ultra-wealthy are more volatile than the net worths of their counterparts in any other region in the world, according to Capgemini's 2019 World Wealth Report.
  • One in 10 Hong Kong residents who began 2018 as high net worth individuals could no longer be considered as such by the year's end, according to Capgemini.
  • Hong Kong's wealthiest residents often enjoy the greatest profits when the markets are bullish, but experience the steepest losses during market routs, Capgemini's Deputy Head of the Global Financial Services Market Intelligence Strategic Analysis Group Chirag Thakral told Business Insider.
  • Visit Business Insider's homepage for more stories.

If you're a billionaire, Hong Kong is a risky place to call home.

At least, that is, for the stability of your net worth: In 2018, Hong Kong's high net worth population experienced the steepest drop in collective wealth of any region worldwide, according to French technology consulting firm Capgemini. The net worths of Hong Kong's wealthiest residents fell 13% in 2018, compared to the global average of 3%, according to Capgemini

In the twenty-third edition of its annual World Wealth Report, Capgemini examines how high net worth individuals manage their wealth. Defined as those with more than $1 million, Capgemini found that 2018 was the first time high net worth individuals (HNWIs) around the world experienced the first overall decline in their wealth in seven years.

In Hong Kong, one in 10 residents who began 2018 as HNWIs could no longer be considered as such by the year's end. Such losses are not atypical for Hong Kong's wealthy residents, who Capgemini describes as "consistently sensitive to equity market movements." Hong Kong's wealthiest often enjoy the greatest profits when the markets are bullish, but experience the steepest losses during market routs, Capgemini's Deputy Head of the Global Financial Services Market Intelligence Strategic Analysis Group Chirag Thakral told Business Insider.

Thakral chalks the decline in Hong Kong's wealth up to two main factors.

"The key reason for this time I would say obviously, the market capitalization was down around 12% and then the GDP growth was a decline rather than a growth, and then the real estate market is also cooling off in Hong Kong," Thakral said. "Those factors put together were the reasons which led to the overall Hong Kong equity market going down, which affected the Hong Kong billionaires — or the millionaires — this year."

Read more: There's only one part of the world where millionaires did not see their collective fortunes shrink in 2018: the Middle East

The losses weren't limited to Hong Kong, however. HNWIs across Asia at large performed worse than their counterparts in Europe, North America, and the Middle East in 2018, Capgemini reported. In 2018, the number of billionaires in each of what the research firm Wealth-X calls "the major Asia-Pacific billionaire countries" — China, India, Singapore, and Hong Kong — declined.

And last year was the worst year for Chinese stocks in a decade, ending the year 24% lower than it was at the close of 2017, according to CNBC. The budding trade war between the United States and China also decreased global demand for Asian goods, Wealth-X reported.

The only region in the world where the ultra-wealthy did not end 2018 worse off than they began it was the Middle East, Business Insider previously reported.

SEE ALSO: What the world's richest people look for when they choose their wealth managers

DON'T MISS: Wealth tax explainer: Why Elizabeth Warren and billionaires like George Soros alike are calling for a specialized tax on the ultra-wealthy

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How the hottest Corvettes and Mustangs compare — head-to-head (F, GM)

Tue, 08/06/2019 - 5:49pm

You could say that the classic Ford-Chevy muscle-car battle is between the Mustang and the Camaro — and you'd be right!

But as far as halo vehicles go, Ford has the Mustang and Chevy has the Corvette. Yes, the former has a back seat. But performance-wise, the Pony Car and the Vette match up, and both Ford and Chevy produce a variety of different versions.

(Chevy also just debuted its eighth-generation Corvette, with a mid-engine design that can take on Ford's very, very expensive GT supercar at a fraction of the price — $60,000 versus $400,000-plus.

Here's a quick rundown of what the Mustang and Corvette have to offer:

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The Mustang — Ford's iconic "Pony Car" — first hit the streets in 1965 and was an immediate smash.

We've come a long way, baby. The first 'Stangs had a 200-horsepower V8 engine. The latest Mustang is the Shelby GT500, making 760hp from its V8.

The Shelby GT350 is a track-oriented beast that makes 529 horsepower.

The "Bullitt" Mustang is a nod to the famous Steve McQueen movie. It cranks out 480 horsepower.

The Mustang GT's 5.0-liter V8 produces 460 horsepower.

The Mustang GT California Special carries over the same engine, but adds add rev-matching to the GT's six-speed manual transmission — and of course, the top can be dropped.

The "Performance Pack Level 2" adds race-track goodies to the GT, but the engine remains the 460hp V8.

Finally, the 2.3-liter, four-cylinder EcoBoost turbocharged motor on the entry level 'Stang makes 310 horsepower. I sampled it as a drop-top. There is no longer a V6 Mustang option!

The Corvette has been around a lot longer than the Mustang. The original roadster debuted in 1953.

The king of Corvette mountain is currently the 755-horsepower ZR1.

A notch down is the 605-horsepower Z06 — the Vette that finally put the car into supercar territory.

My personal favorite Vette is the Grand Sport, which extracts 460 horsepower from the V8 engine.

The Corvette Stingray also makes 460 horsepower, minus some of the Grand Sport's performance extras.

The Stingray also comes in a convertible version — and the automatic eight-speed transmission achieved a quicker 0-60mph time than the seven-speed manual. Both, however, break the four-second barrier.

Brace yourselves for the all-new eighth-generation Vette. The Stingray trim arrives for the 2020 model year with radical new mid-engine design and a 6.2-liter, V8 engine, making 495 horsepower.

The 8 best no-annual-fee credit cards to open in 2019

Tue, 08/06/2019 - 5:39pm

  • Depending on the rewards, perks, and benefits you'll get, it can be worth paying an annual fee for a credit card.
  • However, there are still great and rewarding no-annual-fee credit cards worth considering.
  • There are co-branded airline cards, cash-back options, and flexible rewards points-earning cards.
  • Here are a few of the best no-annual-fee credit cards of 2019, including our top choice: the Wells Fargo Propel American Express® Card.

Many people feel that paying an annual fee for a credit card is insane. Why should you pay to spend money?

I'll confess that I used to be in this camp. However, I've learned that, when a credit card offers the right mix of benefits, rewards, and perks, it can absolutely be worth paying a fee — that's because you'll get way more value from the card than you'll spend toward the fee. For example, I pay a total of $1,000 each year for two premium credit cards, but I get way more than that back

However, there are still good reasons to go for a no-annual-fee card, including cash-flow concerns, and to accompany a card that does have an annual fee. 

Here are the best no-annual-fee credit cards of 2019:
  • Wells Fargo Propel American Express Card: Best for cash-back bonus categories
  • Chase Freedom Unlimited: Best for pairing with the Chase Sapphire Preferred Card or Chase Sapphire Reserve
  • Blue Cash Everyday® Card from American Express: Best for cash back at US supermarkets
  • Chase Freedom: Best for 5% rotating quarterly bonus categories
  • Ink Business Cash Credit Card: Best for business spending categories
  • Citi Double Cash Card: Best for simplicity
  • Amex EveryDay® Credit Card from American Express: Best for earning Amex points
  • Airline cobranded cards: Best for American, Delta, or United loyalists

Keep in mind that we're focusing on the rewards and perks that make these cards great options, not things like interest rates and late fees, which can far outweigh the value of any rewards.

When you're working to earn credit card rewards, it's important to practice financial discipline, like paying your balances off in full each month, making payments on time, and not spending more than you can afford to pay back. Basically, treat your credit card like a debit card.

1. Wells Fargo Propel American Express Card

Welcome offer: 30,000 points, worth $300 (after spending $3,000 in the first three months)

This card from Wells Fargo has one of the more attractive rewards programs you'll find from a no-annual-fee card — at least, if you don't want to dive into the complicated world of multiple rewards programs and complex redemptions.

The card earns 3x points on all travel, dining, and streaming services (and 1x point on everything else). If that sounds familiar, it's because it's almost the same as the popular Chase Sapphire Reserve.

There are some key differences between the cards. The Propel lets you redeem points for 1¢ each toward cash back, merchandise, travel, and more, while the Sapphire Reserve offers a range of more valuable redemption options — it's easy to get at least 50% more value for Chase points. Plus, the Sapphire Reserve offers a number of premium perks that the Propel doesn't, like airport lounge access and a $300 annual travel credit travel delay insurance.

Of course, the Sapphire Reserve also comes with a $450 annual fee, while the Wells Fargo Propel doesn't have a fee. Between the new member offer, and the solid earning rate on popular spend categories, the Propel makes a decent option for those who don't travel often, or who aren't comfortable floating a large annual fee.

Click here to learn more about the Wells Fargo Propel card from our partner The Points Guy. 2. Chase Freedom Unlimited

Welcome offer: 3% cash back on all purchases in your first year up to $20,000 spent, then an unlimited 1.5% back on all purchases

The Chase Freedom Unlimited is one of the best available options for a no-annual-fee card — especially if there's a chance that you'll want to earn more valuable credit card rewards with a premium card later on.

That's because while Chase markets the card as "cash back," it actually earns Ultimate Rewards points that you can redeem for cash (1 point = 1¢). 

If you decide that you want maximize the value of those points by purchasing travel with a bonus through Chase, or transfer them to frequent flyer partners, you can open a card like the Chase Sapphire Preferred Card or the Sapphire Reserve, and pool your points from the two cards. The Freedom Unlimited earns 1.5% cash back (or 1.5 points per dollar spent) with an introductory offer of 3% (or 3 points per dollar) for the first $20,000 spent in your first year, so paired with a Sapphire Reserve, it's a great card to use for purchases that aren't made on travel expenses or dining.

Best of all, the card has no annual fee and often has 0% APR for the first 15 months on purchases and balance transfers. After that, there's a 17.24%-25.99% variable APR. If you have a major purchase ahead of you, that introductory offer can be useful.

The Chase Freedom Unlimited is a fantastic all-around card. However, to get the most value when it's time to spend your points, you need the Sapphire Reserve or Preferred card, too, so you can pool your points. Otherwise, points are only worth 1¢ each no matter how you use them, and they can't be transferred to airline or hotel partners.

Click here to learn more about the Chase Freedom Unlimited from our partner The Points Guy. 3. Blue Cash Everyday Card from American Express


Welcome offer: $150 statement credit (after spending $1,000 in the first three months)

The Blue Cash Everyday is a cash-back card, earning 3% cash back at US supermarkets on up to $6,000 each year — and 1% after that — 2% back at US gas stations and select department stores, and 1% cash back on everything else.

There's also a "Preferred" version of the Blue Cash Everyday — the Blue Cash Preferred® Card from American Express earns a bigger 6% back on the first $6,000 spent at US supermarkets (and 1% after), 6% back on select US streaming services, 3% back at US gas stations and on transit including taxis, rideshares, parking, and tolls, and 1% cash back on everything else. The higher earning rate on the Preferred makes it worth paying the annual fee — however, the Blue Cash Everyday is still a great option if you're opposed to that.

If you're looking to make a major purchase — like an appliance or an engagement ring — and pay it off over time, you can take advantage of the 0% intro APR on purchases and balance transfers for the first 15 months (after that, it reverts to a variable 15.24-26.24% APR). You'll earn cash back on the purchase, which you can put right toward paying it off.

4. Chase Freedom

Welcome offer: 15,000 points or $150 cash back (after spending $500 in the first three months)

The Chase Freedom works virtually the same way as the Freedom Unlimited, earning cash back in the form of Chase Ultimate Rewards points that you can either combine with another card, or redeem for cash or merchandise. 

The key difference is how it earns those rewards. Unlike the Freedom Unlimited — which earns 1.5% cash back (or 1.5 points per dollar spent), the regular Freedom earns 5% (or 5x) in one rotating category each quarter on up to $1,500 spent in that category. For example, Q1 of this year was any payments made through a mobile wallet like Apple Pay, while the current quarter includes purchases from gas stations and select streaming services.

Which Freedom-branded card is more rewarding for you depends on how you spend your money. Personally, I use both, but if I had to choose one, I'd stick with the Freedom Unlimited — the consistent earning rate above 1% would make up for the lack of quarterly bonuses. To each his or her own, though!

Click here to learn more about the Chase Freedom from our partner The Points Guy. 5. Chase Ink Business Cash Credit Card

Welcome offer: $500 (or 50,000 Ultimate Rewards points) after spending $3,000 in the first three months

The Ink Cash is another solid Chase entry, although this one is a business card — however, anyone with just about any kind of business can qualify, whether you have a brick-and-mortar space with employees, or you're a freelancer, or even someone with a small side gig.

Just like with the two Freedom cards, you can pool the "cash" you earn with points from a points-earning card, effectively converting your cash into (potentially) more valuable points. Alternatively, you can reap the rewards in the form of cash instead.

The Ink Cash earns 5% cash back (or 5x points) on the first $25,000 in combined purchases at office supply stores and on internet, cable, and phone services each card holder year. It earns 2% back (or 2x points) on the first $25,000 in purchases at gas stations and restaurants each year, and 1% (or 1x point) on everything else with no cap.

The card offers a 0% introductory APR on purchases for 12 months (with a variable 15.49-21.49% APR after), and has no annual fee.

Click here to learn more about the Chase Ink Business Cash from our partner The Points Guy. 6. Citi Double Cash Card

Welcome offer: None.

All in all, the Citi Double Cash is the simplest card on this list. It earns 2% cash back — 1% when you make a charge, and 1% when you pay it. Since, if you're looking for credit card rewards, you should be paying your balance off in full each month, you can just look at the full 2%.

There's one downside, though: the card doesn't have a sign-up bonus. That's significant, because the money you earn from a sign-up bonus can equal an entire year's worth of regular spending. Just look at the Wells Fargo Propel, above, which offers $300 worth of points. To get that much, you'd have to spend $15,000 on the Citi Double Cash.

While I would personally stick with a card that offered a generous sign-up bonus, there's no questioning the appeal of the Double Cash. With no categories to worry about, you're guaranteed among the highest consistent return rates of any cash back card — 2% across the board is nothing to sneeze at.

7. Amex EveryDay Credit Card from American Express

Welcome offer: 10,000 points (after spending $1,000 in the first three months)

American Express Membership Rewards is Amex's in-house rewards program, and the Amex EveryDay is the best no-fee card that earns them. These points can be redeemed for travel, merchandise, or more. However, the best option is to transfer them to a frequent flyer partner.

The EveryDay earns 2x points at US supermarkets (on up to $6,000 of purchases per year, then 1x after that) and at, and 1x on everything else. It also offers a 20% bonus on points earned in a billing period when you make 20 or more purchases during that period.

The card also offers a 0% intro APR on purchases and balance transfers for the first 15 months, before switching to a variable 15.24-26.24% APR. If you have a big purchase coming up and want some time to pay it off, but don't want to pay interest fees, this is a great option.

Like most Amex cards, features a few travel and purchase protections, as well as access to the Amex Offers program.

While most people will be better off with a version of the card that has an annual fee, the EveryDay Preferred, the regular EveryDay is still a strong option — especially since there's no annual fee.

8. A no-annual-fee airline credit card

Welcome offer: Varies

You may be sensing a theme here, but most airline credit cards worth having have an annual fee — although many of them will waive it for the first year. Those cards tend to come with useful benefits for people who fly with the airline, like priority boarding or free checked bags. You can learn more about the best overall airline credit cards here.

However, if you're interested in earning frequent flyer miles with a particular airline through your spending, but don't care about those perks and want to avoid the fee, you have a couple of options. 

If you're a Delta flyer, you can go for the Blue SkyMiles card from Amex, which offers 2 Delta SkyMiles on every dollar spent with Delta and at US restaurants, and 1 mile per dollar on everything else. It also gets you a 20% discount — in the form of a statement credit — on Delta in-flight purchases like food or drinks. It offers 10,000 SkyMiles when you spend $500 on purchases in the first three months.

American loyalists have a new option, the recently-released AAdvantage MileUp card. This card offers 2x AAdvantage miles on every dollar spent at grocery stores and with American Airlines, and 1x mile on everything else. It also offers 10,000 AAdvantage miles and a $50 statement credit after spending $500 in the first three months.

United's no-annual-fee card doesn't earn miles, but instead offers cash back, called "TravelBank" cash, that can only be redeemed towards flights. You'll earn 2% TravelBank cash for every dollar spent with United, and 1.5% on other purchases. You'll also get 25% back on in-flight food and drink purchases. The card offers a sign-up bonus of $150 in TravelBank cash after you spend $1,000 in the first three months.

Click here to see the best current credit card sign-up offers.

SEE ALSO: I pay $1,000 in annual fees for the Chase Sapphire Reserve and the Amex Platinum — and as far as I’m concerned, the math checks out

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Match Group spikes 20% after its Tinder app adds 500,000 new users in the second quarter (MTCH)

Tue, 08/06/2019 - 5:14pm

  • Match Group skyrocketed as much as 20% in aftermarket trading Thursday after beating analyst estimates for second-quarter earnings and boosting its yearly revenue forecast.
  • Tinder drove much of the company's revenue growth by gaining more than 500,000 users over the three-month period, a 37% year-over-year improvement.
  • Match also announced an investment in Egypt-based dating app Harmonica, the next step in its plan for global expansion.
  • Watch Match Group trade live here.

Match Group soared as much as 20% in aftermarket trading on Thursday after its second-quarter earnings report showed a surge of more than 500,000 new Tinder users. The company also upgraded its full-year growth forecast.

The company — which runs OkCupid, Plenty of Fish and alongside Tinder — beat analyst estimates for both revenue and profits. The company didn't give specific figures for its updated yearly revenue guidance, but shifted its expectation to "high teens" from "mid teens."

Here are the key numbers:

Revenue: $498.0 million, versus the $489.2 million estimate

Earnings per share: $0.430, versus the $0.405 estimate

Average Tinder subscribers: 5.2 million, up 37% year-over-year 

Average revenue per user: $0.58, up 1.8% year-over-year

Tinder's massive second-quarter popularity served as the primary reason for the company's revenue boost, as it drove 46% direct revenue growth over the three-month period. Tinder now has more than 5.2 million average subscribers. The company's other online dating products saw more modest growth.

The company also announced an investment in Egypt-based dating app Harmonica, furthering its global expansion. Match has already acquired dating apps in Japan and hired consultants to configure its existing products to better fit different cultural preferences.

Match closed at $73.91 per share Thursday, up about 73% year-to-date.

Match Group has seven "buy" ratings, 13 "hold" ratings, and one "sell" rating from analysts, with a $70.12 consensus price target, according to Bloomberg data.

Now read more markets coverage from Markets Insider and Business Insider:

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How MoviePass went from a Hollywood disrupter to flat broke in 18 months

Tue, 08/06/2019 - 5:07pm

  • A four-month investigation by Business Insider chronicles the rise and fall of the movie-ticket-subscription startup MoviePass.
  • The $10-a-month price change done in August of 2017 helped MoviePass become a sensation, but it also led to the ousting of its founder Stacy Spikes — and the use of questionable tactics to keep the company afloat.
  • Visit Business Insider's homepage for more stories.


For a fleeting moment, MoviePass was the biggest disrupter in the movie business. 

The movie-ticket-subscription startup gobbled up millions of subscribers when it lowered its monthly subscription price from around $50 a month to $10. But in just 18 months, the company was an afterthought. 

A four-month investigation by Business Insider chronicles the rise and fall of MoviePass.

We start at its scrappy beginnings with founder Stacy Spikes, who, after getting no support from the major theaters for years, created from scratch a service that let anyone see any movie they wanted at any theater thanks to a pre-paid debit card. We continue the story as the company, starving for money, is taken over by Florida businessman Ted Farnsworth and his firm, Helios and Matheson Analytics. In August 2017, Farnsworth comes up with the idea of changing the price to $10 a month to see if the startup can become the Netflix of cinemas.

That price drop leads to the ousting of Spikes, who never believed in the $10-a-month plan working, and MoviePass burning through hundreds of millions of dollars to keep going. But MoviePass' new leadership has fun in the process, throwing events at Coachella in 2018 that bring out the likes of Dennis Rodman (who shows up in a MoviePass helicopter), and hiring Jerry Media to do the company's social media (the same Jerry Media that handled social media for the doomed Fyre Festival).

But when money gets really thin, MoviePass CEO Mitch Lowe and Farnsworth use questionable tactics to keep the company going, like blocking subscribers out of their accounts, according to multiple sources Business Insider spoke to for this story.

Subscribe to Business Insider Prime to read the definitive story of how MoviePass imploded and burned through hundreds of millions in the process.

SEE ALSO: Every movie The Rock has starred in, ranked by how much money they made at the US box office

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These 16 stocks are set to crush the market in August

Tue, 08/06/2019 - 5:06pm

  • Wedbush Securities published an update to its "Best Ideas List," which features the firm's top stock picks for the month of August. 
  • The firm's analysts picked their favorite stocks across the industries they cover, including software, technology, retail, and financial services, among other sectors. 
  • Here are 16 stocks poised to outperform the market in August, according to Wedbush. 
  • Visit the Markets Insider page for more stories.

Wedbush Securities recently released an update to its "Best Ideas List," which features a collection of the firm's top stock picks for the month of August. 

Wedbush analysts selected their favorite stocks within their coverage areas, and the list features companies across the software, technology, retail, and financial-services industries. 

Each pick is accompanied by a price target from the firm's analysts, and Markets Insider calculated an implied upside using that data. That represents the potential return from the current share prices to the forecasted price targets in the report.

Here are 16 companies that could dominate the market in August, according to Wedbush. They're listed in increasing order of expected upside from current levels. 

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16. Fidelity National Information Services

Ticker: FIS

Industry: Financial Services

Price: $129.70

Price target: $140

Implied upside: 7.94%

Source: Wedbush Equity Research


15. Ares Capital Corp

Ticker: ARCC

Industry: Financial Services

Price: $18.27

Price target: $20

Implied upside: 9.47%

Source: Wedbush Equity Research

14. Fifth Third Bancorp

Ticker: FITB

Industry: Banking

Price: $26.90

Price target: $32

Implied upside: 18.96%

Source: Wedbush Equity Research

13. Activision Blizzard

Ticker: ATVI

Industry: Video games

Price: $46.92

Price target: $56

Implied upside: 19.35%

Source: Wedbush Equity Research

12. Microsoft

Ticker: MSFT

Industry: Technology

Price: $133.44

Price target: $160

Implied upside: 19.90%

Source: Wedbush Equity Research

11. Tempur Sealy International

Ticker: TPX

Industry: Mattresses

Price: $75.57

Price target: $93

Implied upside: 23.06%

Source: Wedbush Equity Research


Ticker: WIX

Industry: Web development

Price: $142.91

Price target: $180

Implied upside: 25.95%

Source: Wedbush Equity Research

9. Pegasystems

Ticker: PEGA

Industry: Software

Price: $69.51

Price target: $90

Implied upside: 29.48%

Source: Wedbush Equity Research

8. Royal Caribbean Cruises

Ticker: RCL 

Industry: Cruise line

Price: $106.73

Price target: $140

Implied upside: 31.17%

Source: Wedbush Equity Research

7. PayPal

Ticker: PYPL

Industry: Payments

Price: $104.75

Price target: $140

Implied upside: 33.65%

Source: Wedbush Equity Research

6. Salesforce

Ticker: CRM

Industry: Software

Price: $142.43

Price target: $192

Implied upside: 34.80%

Source: Wedbush Equity Research

5. Electronic Arts

Ticker: EA

Industry: Video games

Price: $89.85

Price target: $122

Implied upside: 35.78%

Source: Wedbush Equity Research

4. Advance Auto Parts

Ticker: AAP

Industry: Auto-parts

Price: $143.97

Price target: $200

Implied upside: 38.92%

Source: Wedbush Equity Research

3. New Relic

Ticker: NEWR

Industry: Software

Price: $82.91

Price target: $124

Implied upside: 49.56%

Source: Wedbush Equity Research

2. The Children's Place

Ticker: PLCE

Industry: Retail

Price: $86.53

Price target: $130

Implied upside: 50.24%

Source: Wedbush Equity Research

1. Foot Locker

Ticker: FL

Industry: Retail

Price: $39.48

Price target: $64

Implied upside: 62.11%

Source: Wedbush Equity Research

Scammers are sending out fake IRS letters to taxpayers demanding money — here's how to spot a fraud

Tue, 08/06/2019 - 5:02pm

  • The IRS has warned taxpayers about a scam in which letters are being mailed to taxpayers from a fake agency called the "Bureau of Tax Enforcement" demanding immediate payments. Some even mention the IRS.
  • A tax lawyer says any legitimate IRS letter or notice will have an official seal and a notice or letter number, among other distinguishing markers.
  • If you determine your letter or notice from the IRS is real, don't ignore it.
  • Visit Business Insider's homepage for more stories.

The IRS prefers to get in touch with taxpayers via snail mail, and scammers know it. 

The Internal Revenue Service is in the thick of correspondence season, reported tax lawyer Kelly Phillips Erb for Forbes. It's the period when the agency sends out letters, typically via the US Postal Service, requesting late payments and notifying taxpayers of errors on their returns.

But just because you receive a formal-looking piece of mail about your taxes doesn't mean you should take it as fact. The best way to ensure you don't end up a victim of fraud is to remain vigilant and skeptical, during and after tax season.

Earlier this summer, the IRS warned taxpayers about a popular scam in which fraudsters mail letters to taxpayers from a non-existent group called the "Bureau of Tax Enforcement" requesting immediate payments. Some letters even mention the IRS and may include factual tax information.


"That's scary for taxpayers because it feels legitimate, but keep in mind that some tax-related information, like liens that have been filed against taxpayers, may be available to the public," Phillips Erb wrote. "Don't be frightened into giving up cash or personal information just because a scammer knows one or two facts about you."

According to Phillips Erb, a real letter from the IRS will have a few distinguishing markers, such as an official IRS seal, a notice or letter number in the top right corner of the paper, information about your rights as a taxpayer, and a phone number to contact the IRS directly. Perhaps most telling, if the letter is asking for a gift card, cash, or check to be sent to any person or organization other than the US Treasury, it's fraudulent.

You can always confirm the validity of an IRS notice or letter by creating or logging into an existing account on the IRS website, or calling the agency directly. If you determine the letter or notice is legitimate and is requesting you either confirm a change, provide information, or make a payment, don't ignore it.

"The worst thing someone can do when an IRS notice comes is nothing," Nina Olson, a tax lawyer and the former National Taxpayer Advocate, recently told the Wall Street Journal. "Take it from me: If you get a letter, call the IRS. If the agency doesn't agree with you, find out your rights. If you don't act, they can ramp up enforcement."

You should always report IRS-related phishing attempts and fraud to the Treasury Inspector General at 800-366-4484 or

Join the conversation about this story »

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Disney slumps as earnings and sales miss expectations despite box-office hits

Tue, 08/06/2019 - 4:46pm

  • Disney reported third-quarter financial results after market close on Tuesday that missed analyst expectations for both revenue and profit. 
  • The conglomerate's movie studio reported revenue of $3.86 billion during the period, falling short of the $4.56 billion estimate from analysts. 
  • Shares of Disney fell 4% on the results. 
  • Watch Disney trade live.
  • Visit the Markets Insider homepage for more stories.

Disney's third-quarter results missed Wall Street's forecasts despite the media giant's movie studio breaking several box-office records this year. 

Here are the key numbers: 

  • Revenue: $20.25 billion, compared with $21.44 billion expected by analysts.
  • Earnings per share: $1.35, compared with $1.75 expected by analysts.
  • Net income: $1.45 billion, compared with $2.9 billion expected by analysts. 

"Our third-quarter results reflect our efforts to effectively integrate the 21st Century Fox assets to enhance and advance our strategic transformation," CEO Bob Iger said in a statement.

Shares of Disney fell 3.51%, or about $5, on the results. 

Disney's studio-entertainment division recorded revenue of $3.86 billion, as the company released several box-office hits during the quarter, including "The Lion King," "Aladdin," and "Avengers: Endgame." Analysts expected studio revenues to be $4.56 billion. 

Marvel's "Avengers: Endgame" rose to become the highest-grossing movie of all time, with more than $2.79 billion in worldwide ticket sales in July. Disney's box-office revenues also surpassed $8 billion for the year, breaking the record for total annual box-office sales for a movie studio. 

Amid the titles' successes, Disney recorded corporate expenses and restructuring charges linked to its integration with 21st Century Fox. 

Media networks generated $6.7 billion in revenue for the period, and Disney's parks, experiences, and products segment accounted for $6.57 billion in sales. Direct-to-consumer and international revenues came in at $3.85 billion, an increase of more than 100% from the same period last year. 

The results come a few months before Disney is expected to roll out Disney Plus, a streaming platform that will include movies from the Marvel, "Star Wars," and Pixar franchises, in addition to a variety of TV series from the company's vast content library. The service is expected to cost $6.99 per month and will include content from Disney's $71 billion acquisition of Fox. 

Disney was up 24.6% year to date through Tuesday's close. 

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Opioid distributors accused of fueling the national epidemic sink after offering a $10 billion settlement (ABC, MCK, CAH)

Tue, 08/06/2019 - 4:38pm

  • Opioid distributors McKesson, Cardinal Health and AmerisourceBergen tumbled more than 7% at their lows on Tuesday after a Bloomberg report said the companies offered $10 billion to settle claims that they fueled the nation's drug epidemic.
  • The offer was met with a $45 billion counter from the National Association of Attorneys General, according to Bloomberg.
  • Any settlement would take decades to be fully paid out, people familiar with the talks said.
  • Read more on Markets Insider.

Opioid distributors McKesson, Cardinal Health, and AmerisourceBergen all fell as much as 7% at their intraday lows on Tuesday after a Bloomberg report said their $10 billion settlement offer was met with a $45 billion counter from the National Association of Attorneys General.

The lawsuits claim the companies helped fuel the US drug epidemic, and the NAAG is officiating talks for more than 35 states. A settlement would be used to cover costs from opioid addiction and overdoses, Bloomberg reported.

The recent developments mark the first time such a settlement has been quantified by the three companies in two years of talks. It's not known whether the two sides can agree on a figure. The settlement — whether it more closely resembles the companies' proposal or the states' demands — would be paid out over decades, according to people familiar with the talks.

McKesson fell as much as 7.2% Tuesday while Cardinal Health stumbled as much as 7.6%. AmerisourceBergen dropped as much as 6.7%.

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The opioid distributors also face more than 2,000 lawsuits from US cities and counties related to the opioid epidemic, according to Bloomberg. A separate team of lawyers are handling those cases.

A worldwide settlement payment for all opioid distributors and manufacturers could cost as much as $55 billion, analysts at Nephron Research told Bloomberg. A Wells Fargo analyst estimated the final payment could come in at nearly $100 billion.

McKesson closed at $139 per share Tuesday. The company is up about 26% year-to-date.

Cardinal Health closed at $42.92 per share. The company is down about 4% year-to-date.

AmerisourceBergen closed at $84.11 per share. The company is up about 13% year-to-date.

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Stocks bounce back from their worst rout of the year after China stabilizes its currency

Tue, 08/06/2019 - 4:26pm

  • US stocks recovered on Tuesday from their worst day of 2019 after China's central bank moved to stabilize its currency overnight.
  • Major US indexes tanked on Monday after China retaliated against President Trump's new tariffs by allowing the value of the yuan to slip below 7 yuan-per-US dollar, a key psychological level. 
  • China raised the yuan's official reference point back above that threshold Tuesday, and said it has no intention of lowering the value of its currency in order to be competitive. 
  • Visit the Markets Insider homepage for more stories.

Stocks rebounded from their worst day of the year on Tuesday amid easing trade-war fears. The relief came after China's central bank took steps to bring its currency back above a key psychological threshold against the US dollar.

China let the value of the yuan slip below 7 yuan-per-US dollar on Monday, which sent major US indexes plunging as much as 3% on escalated trade-war fears. President Trump accused China of improperly influencing its currency, and the US Treasury Department officially declared China a currency manipulator on Tuesday. 

The People's Bank of China quickly moved to raise the yuan's reference point above the key level and said it wouldn't lower the value of its currency in order to be competitive, which sparked a rally in US stocks that recouped some losses from Monday's sell-off.

Here's a look at the major indexes as of 4 p.m. close: 

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The president also suggested in a tweet on Tuesday that the US could remain locked in a trade war with China into 2020 after the country abandoned its agreement to purchase more American farm products. 

"Our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do," Trump wrote in his tweet. "And I'll do it again next year if necessary!"

Within the S&P 500, these were the largest gainers:

And the largest decliners:

Take-Two Interactive climbed 8% on Tuesday after reporting stronger-than-expected second quarter earnings that were boosted by the continued popularity of the Grand Theft Auto franchise. The game developer rebounded from a dip in video game stocks brought on President Trump comments which linked violent video games to mass shootings. 

Shares of Aurora Cannabis jumped as much as 16% after the weed producer announced it expects revenue in the fourth quarter of 2019 to be between C$100 million and C$107 million, compared to C$19.1 million last year. 

The S&P 500's tech index, which took the biggest hit on Monday due to big tech company's exposure to China, rose 1.6%. The financials sector followed with gains of 1.5%. Energy posted the only losses, dropping 0.1%.

Join the conversation about this story »

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Amex Blue Cash Preferred card review: Earning 6% back at the supermarket is a no-brainer

Tue, 08/06/2019 - 3:49pm

  • The Blue Cash Preferred® Card from American Express offers a shocking 6% back on your first $6,000 spent at US supermarkets each year (then 1%) and on select US streaming services, plus 3% back at US gas stations and on transit including rideshares, taxis, tolls, trains, and more.
  • Redeem your points for statement credits, gift cards, or merchandise.
  • The card charges a $95 annual fee, but you can easily earn over $600 in rewards your first year.

While it's fun to splurge now and again, most people spend the bulk of their money in the most boring ways possible. We pay our mortgage or rent payments, put gas in the car, and cover the high costs of raising kids and healthcare. Oh, and we put food on the table — lots and lots of food.

But, what if you could earn some cash back on all those grocery bills? What if you could earn a lot of cash back?

The Blue Cash Preferred Card from American Express offers exactly that — 6% back on your first $6,000 in supermarket spending each year. The card does come with a $95 annual fee, but we feel the fee is well worth it.

In this post, we'll explain all the reasons why.

Amex Blue Cash Preferred card details

Annual fee: $95

Welcome bonus: $250 statement credit after you spend $1,000 in the first three months

Cash-back earning: 6% back on select US streaming subscriptions, 6% back at US supermarkets on up to $6,000 per year (then 1% back), 3% back at US gas stations and on transit including taxis, rideshares, parking, tolls, trains, buses, and more, and 1% back on everything else

Foreign transaction fee: 2.7%

Who is the Amex Blue Cash Preferred for?

Before we dive into the gritty details, it's important to understand what the Amex Blue Cash Preferred is, and what it isn't.

By and large, the Amex Blue Cash Preferred is a straight-up cash-back credit card that doesn't offer a lot of ways to redeem your rewards. You can cash in your points for statement credits, and you do have the option to redeem for gift cards (starting at $25) or merchandise. On the flip side, you can't redeem your points for travel like you could if you had an American Express card that earns Membership Rewards points. You also cannot transfer your points to airline or hotel partners.

If you only want cash back though, the Blue Cash Preferred is a star. Not only do you earn 6% back on your first $6,000 spent in US supermarkets each year (then 1%), but you also earn 3% back at US gas stations.

Plus, in 2019 Amex added a new 6% cash-back category: select US streaming services including Hulu, Netflix, and Spotify. You'll earn 6% back on these streaming services with no cap, and you'll also now earn an uncapped 3% back on transit, which includes everything from Lyft and Uber to train fares, tolls, and subways.

You'll earn an additional 1% back on all other purchases as well, which is pretty standard for cash-back credit cards.

You can also earn a welcome bonus of $250 if you use your card for $1,000 in purchases within the first three months.

That's a lot of cash back for sure, but you will have to pay a $95 annual fee that is not waived the first year.

Earn $600+ in rewards: Here's how

While there are oodles of cash-back credit cards without an annual fee, this card is still well worth it due to the astronomical rewards you can earn if you take full advantage. But, how much can you earn? Here's a good example:

Imagine you are the average family who spends a lot more than $6,000 per year (or $500 per month) at the supermarket. In fact, you spend $10,000 per year at Kroger or Whole Foods.

With the Amex Blue Cash Preferred, you would earn $360 in cash back on the first $6,000 you spent and another $40 back earning 1% beyond the $6,000 cap.

That's $400 already in the bank, but don't forget that you also earned a $250 welcome bonus provided you used your card for $1,000 in purchases within three months of account opening. You're now up to $650. Now imagine you spend another $100 per month at US gas stations. At 3% back, that's another $36.

At this point, you're already up to $686 in rewards the first year — and that's if you didn't use your Amex Blue Cash Preferred to pay for eligible US streaming services and transit expenses, no to mention regular spending and bills.

This is why the $95 annual fee is no big deal — especially the first year.

If you maximize the 6% back at US supermarkets, you'll get $360 in rewards every year at a bare minimum. That's more than enough to make up for the annual fee — and a lot more than you'd earn with a standard 1% cash-back credit card.

What to watch out for

The annual fee is the biggest downside you'll face with this card, but it's not the only one.

Don't forget that you'll eventually pay interest on all your charges if you don't pay your balance in full each month. The Amex Blue Cash Preferred does offer 12 months with 0% APR on purchases and balance transfers requested within 60 days of account opening, but your rate will reset between 14.99% and 25.99% after that.

You don't have to be a genius to know that paying up to 25.99% APR to earn 6% back isn't smart. If you plan to carry a balance for the long haul, you would be much better off with a card that offers a lower ongoing rate.

Also note that late payments and returned payments come with a $39 fee. If you make late payments on your credit card, you can also get whacked with a penalty APR of 29.99%. Ouch!

The bottom line

The Amex Blue Cash Preferred is a genius cash-back card for consumers who spend a lot of money at US supermarkets, and who use one or more streaming services that are eligible for 6% cash back. However, this card works best for people who are debt-free and able to pay their balances in full every month.

If this describes you, you should absolutely consider the Amex Blue Cash Preferred and all it has to offer — despite its annual fee. Paying $95 for the card every year may not be ideal, but you'll be hard-pressed to find any other card that offers 6% back at US supermarkets on your first $6,000 in spending each year (then 1%).

Of course, there are plenty of other cash-back credit cards to consider. If you're tired of spending money on boring bills without any return, check out the best rewards and travel cards and all they have to offer. While few cards offer returns as high as 6% in popular categories like supermarket spend, the perfect rewards card is different for everyone.

Click here to learn about the Amex Blue Cash Preferred from our partner The Points Guy

DON'T MISS: The best American Express cards

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The past 4 Fed chairs teamed up for an op-ed warning against political meddling amid pressure from Trump to cut rates further

Tue, 08/06/2019 - 2:28pm

  • Four former leaders of the central bank have made a point to warn against the risks of politicized monetary policy.  
  • The warning appeared to be a rebuke of efforts by President Donald Trump and his administration to drive interest rates lower.
  • The move came after more than a year of unprecedented pressure on the independent Federal Reserve. 
  • Visit Markets Insider for more stories.

After more than a year of unprecedented White House pressure on the independent Federal Reserve, former leaders of the central bank have made a point to warn against the risks of politicized monetary policy.  

The most powerful central bank in the world "must act independently and in the best interests of the economy, free of short-term political pressures and, in particular, without the threat of removal or demotion of Fed leaders for political reasons," Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen wrote in an op-ed published Monday in the Wall Street Journal. The four economists collectively served as chairpersons for the Fed across four decades and six presidents. 

The warning appeared to be a rebuke of efforts by President Donald Trump and his administration to drive interest rates lower. Bloomberg reported in June that the White House this year looked into demoting the current chairman of the central bank, Jerome Powell, months after Trump discussed firing him. The White House did not respond to an email requesting comment. 

"Even the perception that monetary-policy decisions are politically motivated, or influenced by threats that policy makers won't be able to serve out their terms of office, can undermine public confidence that the central bank is acting in the best interest of the economy," the op-ed said. "That can lead to unstable financial markets and worse economic outcomes."

They stressed that governors, including the chair and vice chairs, can only be removed for cause and not for policy differences with political leaders. Such provisions and fixed terms — 14 years for board members and four years for leadership roles — were created to ward off political pressure.

Read more: Trump just tapped former economic adviser Judy Shelton for a Federal Reserve seat. She's a fierce critic of the central bank who sees a gray area on its independence from the administration.

Pointing to strains from slower growth abroad and Trump's escalating trade wars, the policy-setting Federal Open Market Committee cut interest rates by a quarter percentage point last week to a target range of between 2% and 2.25%

Attacks on the Fed have become increasingly bold and frequent in recent months. Seeking to juice the economy ahead of the 2020 elections, Trump advisers have echoed the president's calls for lower interest rates. 

"The Federal Reserve before the end of the year has to lower interest rates by at least another 75 basis points or 100 basis points to bring interest rates here in America in line with the rest of the world," White House trade adviser Peter Navarro told Fox News on Tuesday

The president has separately sought to place political allies at the top of the central bank. His most recent nominations for governors include the former Trump campaign adviser Judy Shelton, an outspoken proponent of lower interest rates and unorthodox economic policy.

"When the current chair's four-year term ends, the president will have the opportunity to reappoint him or choose someone new," the op-ed continued. "We hope that when that decision is made, the choice will be based on the prospective nominee's competence and integrity, not on political allegiance or activism."

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SEE ALSO: After series of dramatic escalations, Trump suggests the trade war with China could last until 2020

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Top VC firms know they can't ignore cannabis forever. Here's how they're making their first investments.

Tue, 08/06/2019 - 2:27pm

  • The Sand Hill Road set is cautiously opening their doors to the booming cannabis industry by investing in cannabis-related technology, but they aren't touching pure marijuana brands yet. 
  • A venture firm's relationship with its investors, known as limited partners, often holds them back from making marijuana investments. 
  • Institutional VCs have been reticent regarding cannabis because LPs often have "vice clauses"  banning investing in firearms, gambling, tobacco, and alcohol. 
  • Sign up for Cultivated, our new cannabis newsletter.

When Luke Anderson and Jake Bullock were trying to raise money for their THC-infused beverage startup, Cann, they found it easy to land meetings with top VCs but hard to get checks signed.

"We were spending lots of time educating VCs about the cannabis world," said Anderson, but none would commit any capital as THC is federally illegal in the US. Still, many of the VCs they met with were impressed with the founders and told them to reach out to angel investors who would be able to invest. 

Some of those meetings even led to VC partners investing their own money in Cann's $1.5 million seed round outside of their funds, including Rob Stavis of the $5 billion Bessemer Venture Partners, as well as partners at The Capital Group, and Viking Global Investors.

Those types of angel investors — partners at VC funds who may look at cannabis deals but are unable to commit their fund's capital — are "a lot of what's propping up the industry right now," Bullock, one of Cann's founders, said.

Read more: Top cannabis investors reveal where they're placing bets, but say there's 'pain to come' in the crowded CBD space

But that may be changing, particularly as VC funds grow more comfortable with cannabis-adjacent investments. After long being frozen out of the burgeoning industry, the world's largest venture capital funds are slowly testing the waters with smaller deals to capture a piece of what some Wall Street analysts say could be a $194 billion global industry in the next decade. 

Even though they often have restrictions that smaller investors don't, venture capital firms already have poured close to $1.6 billion into cannabis industry startups as of July 19, up from under $1.2 billion in all of 2018, according to the data provider PitchBook. That's up from just $16 million in 2013, as Colorado became the first state to open its doors to the commercial cannabis industry.

Most institutional VCs still draw a hard line between cannabis tech companies, like software platforms for dispensaries, and branded products that "touch the plant" —  or sell and distribute THC — venture investors told Business Insider.

CBD startups, however, are quickly becoming seen as fair game as the Food and Drug Administration works to develop rules around the newly-legal industry. 

The Sand Hill Road set's reluctance to invest in cannabis brands stems from the investors in the firms, known as limited partners (LPs), according to venture capitalists, cannabis entrepreneurs, and lawyers Business Insider spoke to for this story.

Limited partners, vice clauses, and the cannabis problem 

Limited partners in big VC funds are often institutions like pensions, endowments, or sovereign wealth funds. They manage billions of dollars and are bound by strict rules around where they can put their money and how those funds are accounted for.

They're the type of investors who are unwilling to take risks on a brand-new industry in a muddy legal climate. These LPs often include what are known as "vice clauses" in their agreements with venture funds that prevent the funds from investing in industries like alcohol, tobacco, firearms, and gambling.

While these "vice clauses" don't always include cannabis startups in the written documents outright, the prohibition is implied, Alan Patricof, the founder of Greycroft Partners, told Business Insider in an interview.

LPs are mostly skittish about companies that actually cultivate and distribute products containing THC since it is a federally controlled substance, Patricof said. 

But they are slowly getting more comfortable with consumer CBD startups — the substance can be derived from hemp, which was legalized federally last year — as well as ancillary tech and marketing companies that don't touch the plant at all.

Read more: CBD and hemp startups are using creative loopholes to skirt Facebook's ad ban. Here's how they're doing it.

"I've always been a person who likes to deal with the picks and shovels of a new industry," said Patricof, who has some 50 years of venture capital experience. "If I had been around in the gold mining days, I probably would have been selling picks and shovels."

According to Patricof, most of the cannabis-related deals that have crossed Greycroft's radar, while interesting, didn't fit the firm's model — looking for the next billion-dollar "unicorn."

If he really "pushed hard enough" Patricof said he could get exclusions from his LP agreements to do a cannabis deal, "but we haven't done that yet because of the extreme valuations."

Indeed, getting in on the ground floor of the next big thing could be getting trickier as overall interest ticks up and valuations soar. Vape startup Pax, for example, closed a $420 million fundraising round which valued the company at $1.7 billion in April.

Pax landed funding from Tiger Global Management's venture capital side, and Tiger has also invested in a number of cannabis tech startups, including Green Bits, a compliance software startup for marijuana dispensaries.

DCM Ventures, a $4 billion Silicon Valley firm, invested in pot delivery startup Eaze's $65 million Series C round last November, and held a CannaTech conference in May. 

But Greycroft isn't ruling anything out when it comes to cannabis. "We've seen that in many industries where reality hits, and you get another bite of the apple," Patricof said.

And Greycroft has already gone the CBD route — it invested in a $3.3 million seed round for Prima, a CBD startup started by the founder of Honest Company, in February.

'If a VC is doing less well, then they need to not piss off their LPs'

While institutional VCs slowly get acquainted with the industry, a number of sector-specific players like Altitude Investment Management and Tuatara Capital Partners have raised hundreds of millions from a mix of private investors and family offices — who are freer to invest in cannabis than institutions — to chase after cannabis deals. 

Smaller, early-stage VC funds, like New York City-based Tusk Ventures and Lerer Hippeau, are getting in on the action as well.

Tusk Ventures participated in the pot delivery startup Eaze's Series B back in 2016, and touts its work in the cannabis industry on its website.

"The reason why we're able to do it, is because we are a smaller fund and we don't have pension funds as investors," Bradley Tusk, the firm's founder, told Business Insider in an interview in February.

But Tusk said that it's also about leverage. When a VC is performing well, the fund's LPs are probably going to be more willing to accommodate cannabis deals.

"If a VC is doing less well, then they need to not piss off their LPs at all costs," Tusk said. "Which means they're not going to say, can we please have permission to bend the rules on this?"

To Andrea Hippeau, a principal at the early-stage fund Lerer Hippeau, getting in on the ground floor of the cannabis industry was too good of an opportunity to pass up.

"I think we've had a real advantage being one of the first institutional VC firms that have gotten involved in cannabis," Hippeau said. "We really saw a once-in-a-decade or more opportunity where a whole new billion-dollar-plus market was being created."

Read more: A top venture investor that's backed companies like Bird and TheRealReal explains why CBD is primed to explode

Lerer Hippeau has so far invested in LeafLink, a tech platform for cannabis dispensaries, Vangst, a recruiting platform, and Herb, a cannabis media company.

What separates Lerer Hippeau from other early-stage venture capital funds, according to Hippeau, is that her fund's LP agreements don't contain any vice clauses — by design — so they aren't excluded from cannabis deals. 

Hippeau, for her part, had to make sure her LPs were comfortable with even cannabis-adjacent deals.

"Before we started investing in cannabis, even in ancillary tech, we gave a heads up to our LPs and made sure that there were not any kind of major objections because those relationships are obviously very important to us," said Hippeau.

She said they had to have follow-up conversations with the fund's investors to make sure they were comfortable with the investments and to specify that they were investing in cannabis tech, and not the plant directly.

While Lerer Hippeau has so far shied away from "plant-touching" investments, Hippeau said those are coming when they raise their next fund, now that their investors have gotten more comfortable with the complex regulations around the industry.

"When we raise our next fund, there will be a stipulation in there that we will be planning on investing directly into cannabis companies so that there won't be any gray area there," said Hippeau. And she thinks that will soon extend across the VC world.

"I do think as you see new funds going out to raise, you'll see them writing carve-outs for cannabis into the documents," Hippeau said.

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Goldman Sachs predicts the Fed will do something thought unthinkable just a month ago

Tue, 08/06/2019 - 1:28pm

  • Goldman Sachs now expects the Fed to cut rates twice in the fall, just days after Fed Chair Jerome Powell's July comments dashed investor optimism around a prolonged easing cycle.
  • The firm's analysts see a 75% chance for a 25-basis-point cut in September and a 50% chance for a same-size cut in October.
  • The likelihood of the US-China trade war extending past the 2020 election will spur additional cuts, the Goldman analysts said in the note.
  • Visit the Markets Insider homepage for more stories.

Goldman Sachs now expects the Fed to cut rates twice in the fall, an unexpected move after Fed Chair Jerome Powell dented investor optimism around a prolonged easing cycle during his July 31 press conference.

July's adjustment to a 2% rate from 2.25% marked the first interest-rate cut since the 2008 financial crisis. After that 25-basis-point lowering — and following Powell's comments — expectations of further easing at the September Federal Open Market Committee meeting dropped to 63%, according to a Bloomberg survey.

However, amid a recent escalation in the US-China trade war, that probability has moved back to 100%.

Even before the Fed's initial cut, there was debate over whether a second cut would be necessary later in 2019. The prospect of two additional cuts was seen as a highly unlikely scenario.

Goldman analysts said they expected that the US-China conflict would continue past the 2020 presidential election and that Powell would continue to slash the interest rate accordingly.

"In light of growing trade policy risks, market expectations for much deeper rate cuts, and an increase in global risk related to the possibility of a no-deal Brexit, we now expect a third 25-basis-point rate cut in October, for a total of 75 basis point of cuts," Goldman analysts said in the Tuesday note.

The analysts see a 75% chance of a 25-basis-point cut in September and a 50% chance for a similar cut in October. They also said there was a 15% chance of a 50-basis-point cut in September, as well as a 40% chance of the Fed not taking action in October.

"By the December meeting, we think inflation numbers running at roughly 2% will lead the Fed to stop cutting," Goldman added.

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Stocks fell on July 31 after Powell's announcement called the quarter-percentage-point cut a "mid-cycle adjustment," signaling no plans for future adjustments. He later amended his statement, saying there's a chance for further easing if economic uncertainty continues.

The trade war intensified on Monday when China allowed its currency to breach a psychologically critical level, signaling it's ready for the trade war to continue. The US Treasury Department declared the nation a currency manipulator later that day, the first time the US has made such a statement since 1994.

President Donald Trump suggested on Twitter Tuesday that the trade war may continue into 2020.

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Travelers were stranded halfway around the world when Australian airline Qantas cancelled multiple flights to the US

Mon, 08/05/2019 - 11:40pm

  • Hundreds of passengers were stranded in Australia and the US after Australian airline Qantas cancelled four consecutive flights between Los Angeles and Melbourne.
  • The airline cited several separate mechanical problems as the cause.
  • Among the stranded passengers were more than 170 boy and girl scouts heading home from the World Scout Jamboree.
  • Qantas uses 484-seat Airbus A380 aircraft to operate the flights between Melbourne and Los Angeles. The use of the high capacity planes on the route — and the potential number of stranded travelers — complicated efforts to rebook and reroute passengers.
  • Visit Business Insider's homepage for more stories.

Hundreds of Australians and Americans were left stranded in the wrong countries after Australian airline Qantas cancelled multiple flights between Melbourne and Los Angeles due to myriad mechanical issues.

Between Saturday, August 3, and Monday, August 5, Los Angeles time, at least four flights between the two cities — two from Melbourne to Los Angeles, and two going the other way — had been cancelled. 

The flight from Los Angeles to Melbourne — QF94 — was cancelled on Saturday and Sunday evening, according to data from FlightStats. The flight is normally scheduled to depart at 10:40 p.m. PT. The previous night's flight arrived nearly 14 hours late.

The Melbourne to Los Angeles flight — QF93 — was cancelled on Monday, August 5, and Tuesday, August 6, according to FlightRadar24. The latter flight was scheduled to arrive in Los Angeles on Tuesday morning, due to the international date line.

Read more: Video shows the terrifying moment a British Airways flight filled with smoke while approaching its destination

The flights are typically flown on an Airbus A380, which has the largest capacity of any passenger airplane. Qantas can seat up to 484 passengers in its configuration on the plane.

Katie Quirk was among the hundreds of Australian passengers stuck in Los Angeles, along with her husband Tom and their 18-month-old daughter Madeline. They was rebooked onto Sunday night's flight after their Saturday flight was cancelled — and then left in the dark after the second flight was called off. They were eventually booked onto a flight departing Monday night and transiting through Sydney, which they were told by Facebook message from the airline.

"We found out the Sunday night flight was cancelled at 2 a.m. after a three-and-a-half hour delay," Quirk told Business Insider. "It took another hour or so for our bags to be taken off the plane. We didn't get back to the hotel until after 4 a.m."

Throughout the delay, Madeline managed to sleep on the terminal floor, despite construction noise and bright lights, Quirk said.

@Qantas My 18 month old is currently asleep on the terminal floor because our pleading request for lounge access was denied. No refreshment vouchers have been offered to any passengers. I’m absolutely appalled. As a long-time frequent flyer, I expected SO MUCH better from Qantas

— Katie Caroline (@KatieCaroline1) August 5, 2019

While the delays were an obvious inconvenience, Quirk said that she and other passengers were frustrated by a lack of communication from the airline — both during the delays, and surrounding the process to be rebooked on different flights.

"People understand safety comes first, and obviously we don't want to get on a plane that is experiencing mechanical issues," she said, "but I think it is also important in that situation for people to feel like they are being listened to and understood and that there is genuine sympathy and empathy offered regarding the circumstances."

Also among the stranded passengers were more than 170 boy scouts traveling from the World Scout Jamboree in Charlotte, North Carolina, according to the Herald Sun.

"Qantas haven't told us anything," Peter Lyon, whose 15-year-old son was stranded in Los Angeles, told the Herald Sun. "I'm pretty grumpy, I'm not the only one."

Qantas told Business Insider that it was working to reaccomodate passengers on later flights, including other Qantas flights with connections.

"Passengers were transferred onto tonight's QF 94 while others will be flown out tomorrow night." a spokesperson said. "Passengers have been put on other Qantas flights, but we expect to have everyone on their way on tonight's flight and tomorrow's."

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The US government says ditching its controversial $5 billion settlement with Facebook could result in a 'far worse' deal for consumers (FB)

Mon, 08/05/2019 - 8:04pm

  • The US government is warning that attempting to change the $5 billion FTC settlement with Facebook could result in a far worse deal.
  • Critics have savaged the settlement, arguing it is ineffectual, and non-profit EPIC has sought to get involved in the legal process.
  • US attorneys counter that there's no guarantee that the ultimate outcome of this could produce better results than the FTC managed.
  • Visit Business Insider's homepage for more stories.

The US government has a warning for critics of the Federal Trade Commission's $5 billion settlement with Facebook over privacy issues: Don't be so sure a better outcome is possible.

The FTC recently reached a multi-billion dollar settlement with the Californian social media giant over alleged violations of a 2011 consent order concerning its handling of users' data. It's a record-breaking fine — but critics have argued that it is ultimately ineffectual, amounting to only a fraction of Facebook's annual profits, and it's not accompanied by any more fundamental structural changes to the company's business model.

The Electronic Privacy Information Center (EPIC), a privacy-focused non-profit organization, is one such critic. It filed a motion to intervene in the case, arguing the settlement "is not adequate, reasonable, or appropriate" — and now US government lawyers are hitting back.

In a court filing on Monday, US attorneys argue that EPIC is seeking "to intervene to place itself in the government's shoes because it wishes the Stipulated Order were different." They argue that EPIC doesn't have proper grounds to get involved in the case, and also make an interesting argument as to the risks of any such meddling from third parties.

"Contending that '[t]he proposed settlement fails to safeguard the interests of Facebook users' ... EPIC presumably wants the Court to reject the proposed settlement in favor of some other penalty against Facebook that would—in EPIC's opinion—safeguard Facebook users' interests," the filing reads.

"But it is pure conjecture that rejecting the proposed settlement would lead to a different or better outcome that would 'safeguard the interests of Facebook users' in the manner EPIC's prefers. Indeed, rejecting the settlement could yield multiple other outcomes in litigation or later settlement far worse for consumers."

In other words, the US government is arguing: If the settlement went to court the ultimate outcome might be significantly worse for ordinary consumers than it is now.

To be sure, there's always a risk when you choose to litigate a matter in court. But it's worth noting that the settlement the FTC ultimately struck with Facebook is markedly weaker than options that were at one point being considered. The FTC explored the possibility of fining Facebook tens of billions of dollars, and holding CEO Mark Zuckerberg personally accountable, but that did not ultimately happen.

Got a tip? Contact this reporter via encrypted messaging app Signal at +1 (650) 636-6268 using a non-work phone, email at, Telegram or WeChat at robaeprice, or Twitter DM at @robaeprice. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

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