If you are lucky enough to have spare money then it is essential that you take some time out to sit down and thoroughly think through the best way to put that money to work for you and to keep yourself in financial control.  The New Year offers the best time of the year to do such a thing and allows you to set up your next 12 months of finances with focus and intention.

Save! Save! Save!

It is easy to get carried away with spare money left over and actually get spending it instead of saving it.  Especially at New Year!  Your intentions may be good but the temptation of January sales, New Year discounts and Winter bargains may be too much to fight against. Get any bargains that you may need but do not spend any additional money on items that you would not have purchased or be lured into “buy now pay later” schemes that you will regret later in the year.

Get The Very Best Interest Rate

When it comes to put savings aside make sure that you really shop around for the very best interest rate.  It is said that people are more loyal to their banks than they are to their partners because so few people switch their bank accounts.  The truth of the matter is that people aren’t necessarily loyal, just lazy.  It can seem a lot of hassle to open a new bank account but nowadays it can be done very quickly and easily online and can make you literally hundreds or even thousands of dollars in additional interest over your lifetime.  That has to be worth taking a few hours out to shop around.

Use Credit To Your Advantage

It may seem strange to advise you use credit when you already have cash, but used wisely credit can be your best friend.

The longer cash is in your bank account, the longer it is accruing interest which is effectively free money. Some credit cards will offer you several weeks before interest actually starts to be charged on the account.  This means that as long as you pay off your account each month you will not pay a penny in interest.  This makes it a preferential way of paying for items, especially more expensive items as it allows you to pay for an item but leave your money in the bank earning you more interest.   Then simply pay it off at the end of the month and you haven’t paid a penny of interest to the credit card company but you have earned a month of interest by leaving your money in the bank.  It’s a win-win situation, but you need to shop around.

You may even want to look into getting a credit card that has a cash back scheme that then actually pays you to use it.  Again, as long as you pay the balance back in time you won’t be charged any interest but you will have earned interest by leaving your money in the bank longer and then you will get an additional bonus in the form of cash back from the credit card company. 

Happy New Year

So, to really enjoy your New Year and make it more financially rewarding than ever, simply avoid the sales and discounts on anything other than the items you would need to have purchased anyway.  Then get yourself the very best interest-paying bank account you can find and then do everything you can to leave as much as you can in there as long as possible by using credit to your advantage.

It may be a case of your debts have simply spiralled out of control regardless of the Christmas expenditure.  If so, now is the best time to sit down and take stock of the situation in a bid to regain control of your finances.

Take A Time-Out

The first place to start in taking control of your debt is to put aside at least half a day to sit down and really sort through your finances.  Too many people try to juggle their finances with work and the kids and never really devote the right amount of time and focus to get things properly sorted and so the problem perpetuates or even gets worse.

Outgoings

It stands to reason that the more money you have going out, the less money you have to put towards paying off your debts.  Therefore, make a comprehensive list of all your outgoings down to the final cent.  This should include all the obvious things such as gas, electricity and mortgage payments but should also include other less obvious things, such as how much you are spending on lunch at work each day, your cable bill and newspaper subscriptions.

From this list you should then be able to identify outgoings that can be cut.  Then allocate this money towards paying off debts.

Pay Off The Highest Interest Debts First

If you have debts then it makes sense to pay them off as quickly as possible.  The quicker you pay them back, the less interest you will pay.  Therefore the best idea is to target the loan or credit card with the highest rate of interest first.  Pay the minimum payments on everything else and then pay as much extra as possible to the highest interest loan.  This should chip away that debt as quickly as possible.  When complete, move on to the second highest interest rate and so on.

Too many people try sharing the money out between all their cards equally, but this is actually the most inefficient way of doing things as it means you will be paying the higher rate interest loans and credit cards for longer and therefore racking up more cost.  Always focus on the most expensive form of lending first and get it eliminated as quickly as possible.

Get A Zero Percent Credit Card

Probably the best advice is to consolidate as much of your debt as possible on to a 0% credit card offer.  This will allow you to focus your payments, eliminate interest (at least temporarily) and get more of a grip on your borrowing.

One of the hardest things about debt is when you are faced with numerous different payments from different lenders relentlessly.  Consolidating this into one payment can be very beneficial.  Across the US you will see plenty of “debt consolidation” companies around offering to do this for you but they will make an additional charge, so why pay them when you can do it yourself and put that extra money towards paying your debt off quicker?!

A 0% credit card is a credit card that will allow you to transfer other debts onto a card that will charge you no interest for a certain period of time.  The period of zero interest is important as obviously the longer you can have no interest, the better.  Some cards offer this for as little as three months while some cards have been known to offer it for up to 18 months or even more!

If you manage to find a credit card with a good length of 0% interest then it will help you to regroup.  Interest payments are one of the biggest problems about paying off a debt as it means that the balance owed just never seems to shrink.  Putting everything on to a 0% credit card means that every penny you are paying towards your debt is then actually paying off the money you owe rather than just covering interest payments and charges.

Another bonus is that you will then only have one monthly payment rather than dozens of bills popping through the mail every week.  This again gives you a chance to catch up with everything.

Using a 0% credit card can be an effective way of getting control of your debts and making a serious dent in what you owe.

Make The Most Of It!

The most important thing to remember when consolidating your debts on to a zero percent credit card is that it is essential you make the most of the 0% special offer period.  Try not to slip into old habits with the extra money you have available – Make the cuts from your outgoings and allocate every single spare cent you have to paying off the debt as quickly as possible.

By focusing as much money as possible into payments on a 0% credit card, you will be able to make maximum impact in what you owe.  It may mean that you can pay off all your debt before the interest even kicks in, but worst case is that when the interest kicks back in you are only paying interest on a much smaller and more manageable amount.

Also, make sure that you do not use the 0% credit card to make additional purchases.  Some cards will only charge 0% interest on balance transfers and not new purchases.  If that is the case, by making new purchases on the card you are undoing any good work you have done in your repayments.

So, get a zero percent credit card, consolidate as much of your debt on to it as possible and then eliminate as many of your outgoings as possible.  Then focus all these savings on to clearing your debt as fast as possible.  Before you know it, you will be back in control of your finances and the New Year will look a lot brighter!

1. Get a prepaid credit card – Afraid your husband might go a little crazy with the credit cards buying you things for Christmas? Maybe your wife has no control when it comes to baby’s first Christmas? A prepaid credit card is the perfect solution. It will curb overspending, and they’ll be no worries about late fees.

2. Know your credit limit – Confirm your limit before you hit the stores, and avoid accidental over-limit spending which can wind up making your APR go significantly higher that it currently is.

3. Cash in on those reward points – Using rewards points is a great way to keep your money in your pocket and still make purchases.

4. Dig out the greenbacks – Although paying with cash isn’t a sign of the times, it’s a perfect way to keep your spending in check this Christmas season. Additionally, you’re less likely to engage in impulse spending when you’ve got to pay for the entire purchase right then and there.

5. Partner Programs – If your credit card issuer has a partner program, now would be the perfect time to cash in on the benefits you get from it. The discounts and bonuses of these programs can be substantial.

6. Online discounts – During the Christmas season many online retailers have significant discount offerings. 

7. Store cards; proceed with caution – Store cards may seem appealing, and a great way to save a little, but these cards normally charge higher interest rates, and if you don’t pay it off in the specified time you’re going to have to pay all that interest on your purchase.

8. Dig for the coupons – Retailers worldwide lure in consumers with all kinds of discounts. Be patient and look around for the best deals.

9. Stick to the traditional – This whole idea of using ipads, ipods and other expensive little gadgets as stocking stuffers is an ideal way to increase your spending. Stick to the traditional stocking stuffers and keep some of your money in your pocket.

10. Narrow your shopping list – Finally, take a good hard look at everyone on your Christmas list. Do you really need to purchase a gift for all of them or will a Christmas card do? You’re boss may be a great person, but does that warrant a gift?

A prepaid credit card is very much like a gift card; minus the fees, of course. You load the card with your own money. It’s sort of like putting down a security deposit on the card. Then, you make purchases with the prepaid credit card, and the money comes out of the security deposit (The preloaded money). Once you’ve used up the security deposit, the card is no longer usable. Hence, you can’t accidently put yourself into more debt.

The Advantages

• It’s a secure way to spend without taking on further financial obligations.

• You can have your payroll check loaded right onto the card if you so choose.

• Using the prepaid credit card eliminates the need to walk around with cash in your pocket.

• Because the card is already paid off (per say) there are no later fees to contend with.

• There are no credit checks to obtain one.

• It really doesn’t matter whether you have a job or not because the card is already paid off when you get it. (Some prepaid cards do require employment in order to get one)

The Disadvantages

• The interest rates on prepaid credit cards are usually higher
.
• You need to actually have the money to put down on the card before you can use it.

• There can be monthly maintenance fees.

• Many car rental agencies won’t accept prepaid credit cards.

• Over the limit fees can be exceptionally high when compared to traditional credit cards.

The big prepaid credit card myth.

Unfortunately, using a prepaid credit card will not have any effect on your credit profile. It’s simply not possible. These cards do not show anything about your ability to manage your money except that you had a chunk to put down on one when you got it.

It doesn’t reveal anything about your spending and repaying habits, and you won’t find any mention of them on your credit report. A secured credit card is the way to go if you’re trying to build/rebuild credit.

You receive VIP access to over 600 worldwide airport lounges plus the exclusive Rewards Program lets you redeem points for 1% cash back or for airfares on any airline with no blackouts or restrictions beginning at only 25,000 points for a ticket worth up to $500.

Zero liability gives you complete protection against unauthorized purchases made with the Black Card.

Other benefits include a warranty manager service on purchases, lost luggage reimbursement for up to $3,000 per trip when you purchase your ticket with the Black Card, trip interruption/cancellation insurance of up to $1,500, baggage delay insurance, auto rental collision damage waiver, worldwide travel accident insurance and roadside dispatch in the US and Canada.

All in all an impressive array of benefits for an impressive looking card.

To apply click here: Visa® Black Card

When you turn 18, however, you are immediately allowed to apply for a credit card – but should you? When is the best time to get your first credit card?

Get Your First Credit Card

Provided you have some way of making your payments, you should get your first credit card as soon as possible after you turn 18. While credit cards do run the risk of causing you to fall into debt, they also help you build up a credit history. That credit history will help you get lower interest loans, better interest rates, and have other benefits that may help you in the future.

The sooner you start to build your credit score, the better it is for your long term outlook. Someday you will also be buying a car or getting school loans and a good credit score can make the interest rates on all of those loans much lower.

Precautions

However, although it is a good idea to get your first credit card right away, there are several criteria you need to meet to make sure you do it safely, including:

• Have a Job – You need to have a way to pay your first credit card back. Just like credit cards can be used to build your credit, they can also be used to destroy it. You need to be able to be responsible from the beginning, because contrary to many internet myths, there is no way to start over with your credit score.
• Keep a Low Limit – You have the option of limiting your credit limit, and until you are working full time and have developed good budgeting and spending habits, it’s a good idea to try your best to keep your available credit line low, so that there is no temptation (or ability) to fall too deeply into debt.
• Try to Pay Your Entire Balance – When you are certain you can handle the financial responsibility of making monthly payments then you can keep a running balance. Until then, try your best to always pay your balance in full at the end of the month to avoid interest charges and missed payments.

It’s always a good idea to get your first credit card soon after turning 18, so you can start building your credit and making it easier for you to get low interest loans in the future. But you need to be absolutely sure you can handle a credit card responsibly. The best way to do that is to follow the advice above and learn more about how to manage a credit card before you start.

There are many reasons why you may want to change your credit card and replace an old card with a new, better credit card. Here are several reasons it may be a good time to change your credit card.

When to Change Credit Cards

• Raised/High Interest Rates

If you have or will have a high interest rate on your credit card, yet your current credit score is much higher than it was previously, it may be a good time to switch. Some people get credit cards when they have bad credit, only to build their credit later. Others have great credit, but the credit card company started to increase their interest. Either way, switching to a low interest card can be beneficial.

• New Bank

It’s not uncommon to have a credit card associated with your bank. If you switch banks, suddenly the card has lost its convenience value, and you may find that there are several better credit card options available. Bank credit cards tend to have the fewest options but the most convenience provided you are a member of their bank. If you’re switching banks, there are almost always better cards available.

• Using Rewards

It’s not uncommon to start out with a credit card that does not have a rewards system. Most beginner credit cards do not have a rewards system, and some credit cards offer a poor rewards system that doesn’t have much benefit to those that use their credit cards regularly. If you plan on using your credit card more often, it may be worthwhile to switch to a card that has rewards points.

• Consolidating Cards

If you have more than two credit cards, sometimes it’s a good idea to consolidate your balances onto one larger credit card. Holding on to two or fewer credit cards can be important for your credit score, safer, and makes it easier to pay back. For every credit card you have over two, it may be worthwhile to transfer all of the balances to a larger credit card with a lower interest rate.

Change Your Credit Card Only Once

Before you switch credit cards, always do your research. Make sure that whatever credit card you are going to use is one that you are going to hang onto for a while. Avoid a possible drop in your credit score by switching credit cards only when you have found one you truly like, with rewards options that will benefit you both in the short and long term.

How Do Credit Cards Get Stolen?

Not long ago, the only way you could take a credit card was if someone left it out in the open. Nowadays, however, credit card information is becoming much easier to not only steal, but also use. You can have your information stolen simply by having someone look at your card, write down the numbers, and use that information to buy things online. You can also have it stolen if a website you used gets hacked, or was run by someone that didn’t input the security codes correctly.

Whatever the method, stealing a credit card has become easier. Thankfully, a number of credit card companies have put safeguards in place so that your life will not be turned upside down by a stolen card.

After It Gets Stolen

These days, it is usually the credit card company – not the individual card owner – that is able to spot unwanted charges. Credit card companies use algorithms that help it decide if it is you that actually used the card. For example, if you used the card in Seattle, and then three hours later the card is used in India, the company knows that there is no mathematical way that the card could have been in two places at once.

Whether you catch it or your bank catches it, the cards are usually cancelled. A new card with a new number and expiration date will be sent to your address. It may take a few weeks, so you will likely be without a card for a short period of time.

During that time, the lender will monitor any pending and completed payments to see if any are likely committed by the same credit card thief. According to the Fair Credit Billing Act, you can never be charged any more than $50 total for a stolen credit card, and you cannot be charged at all if the charges occur after the card was reported stolen.

You may be asked to sign paperwork that claims that you were not the one to make those charges, even if the bank already knows it wasn’t you. This is to prevent abuse, where credit card customers claim a stolen card simply to get out of making payments. Afterwards, monitor your account to make sure no other charges come up in the future. Remember, some companies do not even enter in credit card charges until a full week after the card was used, or longer.

Keeping Your Card Safe

There is little you can do to catch the thief that stole your card. The best thing for managing your finances is to simply do your best to keep you card safe at all times. Only use your card at reputable websites, and monitor your credit constantly to ensure it isn’t being used elsewhere.

Credit companies take that number and decide on loan amounts, credit lines, and interest rates depending on where you rate. When your credit score is higher, your interest rate will be lower, because companies want to entice you to use their services. When your credit score is lower, your interest rate will be higher, because credit companies want to be reimbursed for the risk they have in taking you on as a borrower.

Understanding Credit Scores

Reading your credit score accurately is important, especially when you are considering a credit card or a loan. By understanding what your credit score means, you will be able to:

• Know if you need to improve it, so you can take the necessary steps.
• Make sure they are accurate based on what you know about your credit history.
• Ensure that you are getting the right type of rate for your score.

For example, if you have a great credit score, but are offered a high interest loan, you may be able to find a better rate elsewhere. Or if you have a great credit history but a poor credit score, it may mean there are some inaccuracies in your data.

Reading Your Credit Score

Credit scores range between 300 and 850. Only 2% of the population has a credit score under 500, however, so you can expect your score to usually range between 500 and 850. Each creditor decides independently what it believes to be a truly “good” or “bad” credit score, so, for example, a 650 for one company may be better than a 650 for another. However, you can generally figure out how good your credit score is based on the following chart:

• 760 – 850: Great credit score, low risk.
• 700 – 759: Very good credit score, mild risk.
• 660 – 699: Good credit score, some risk.
• 620 – 659: Average credit score, average risk.
• 580 – 619: Poor credit score, above average risk.
• 300 – 579: Bad credit score, high risk.

Again, these numbers are not truly exact. Each company decides what they really consider a low risk and a high risk. In addition, the three major credit reporting bureaus may all have different scores, so what your score “is” to the company you’re applying with may depend on the bureau they use to judge your credit risk.

Still, the above table represents an easy, rough guide to how to read your credit score. The key thing to understand is that the higher your score, the easier it will be for you to get a low interest loan or credit card, so even if your score is in the 700’s, you should always be working to try to improve your score so that you qualify for any loan you may need in the future.

Managing your finances correctly should always be part of your long term plan. Here are five common personal finance mistakes that you need to avoid if you hope to experience less financial stress in the future.

Personal Finance Mistakes

• Signing Up For Store Credit Cards

You hear it in almost every clothing store. “Would you like to sign up for an in store card and save $10?” The answer should be no. In store credit cards are still credit cards. They have interest rates that can easily cause you to pay more over the long term than you saved by signing up for the card, and store credit cards will negatively affect your credit score, which will have you paying more for loans and credit cards in the future.

• Not Putting Money Into Savings

The problem with budgeting is not that people can’t keep within their budget – it’s that you can’t assume that you can keep within your budget 100% of the time. If your car breaks down or you get sick or something you need breaks, your monthly budget won’t cover it. You need to consistently build your savings so that any unforeseen problems can be easily paid for without plunging you further into debt.

• Massive Credit Card Spending

Credit cards are a great tool, but they are only a great tool when you use them correctly. Lots of people get a credit card and decide that they can use it even when they don’t have the money to pay it back, as though suddenly they have more cash than they did previously. Credit cards are not extra money. They are simply a better tool to help you manage your finances when you need them.

• Payday Loans

Payday loans can be a bad decision. The interest rate on your loan is substantial, and once you’ve taken one loan you almost always need to take another. Payday loans build upon themselves and make it very difficult to plan your long term finances.

• No Shared Financial Planning

Not everyone’s finances belong to one person. When you’re married, you and your partner need to plan your finances together. Every dollar one partner spends affects how much money the other partner has, so if you are not planning your finances together, you are going to make mistakes.

Take Your Money Seriously

Managing your personal finances is important. Making good financial decisions is the key to living well and staying out of debt. It’s not about how much money you have – it’s about what you do with it. Try your best to avoid these common financial mistakes and you will see your quality of life improve dramatically.