Expert Advice

What went on in the week of consumer credit? So glad you asked. In addition to their regular contributions to the Credit.com blog, Credit.com’s credit and debt experts regularly offer their advice and commentary on the state of consumer finance to other media outlets.  For even more great advice and insight, we present to you the highlights from this week’s media appearances:

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Sign Up Here » Credit Card Bonuses, Drawbacks Await Consumers in 2012

Credit.com co-founder, Adam Levin shares the upcoming trends in credit with Tara Lynn Wagner from NY1. He explains that we’ll be seeing competitive sign-up deals and that credit will become more available, but often at a higher cost.

@NY1Headlines @taralynnwagner

Unbanked? Here Are 4 Secured Cards That Can Boost Your Credit Score

Credit Expert, Beverly Harzog talks the dos and don’ts of secured cards with Jeanine Skowronski from Main Street. Find out which cards may be best for you.

@TheStreet

12 ways to rebuild your credit

Debt guru Gerri Detweiler talks with Susan Tompor for The Herald about the dangers of debt-settlement companies who wait too long to pay large balances on major cards. Consumers beware!

@HeraldNet

This week on Talk Credit Radio: Friday January 27, 2012

Tune in to Talk Credit Radio this week with Credit.com’s personal finance expert Gerri Detweiler, live from 4-5 ET/1-2 PT. Ways to listen are listed below.

Here’s a quick quiz:

• True or False: There is a government program created by President Obama that requires credit card companies to work with you to pay off your debts.
• True or False: Debt settlement companies can no longer charge upfront fees and must wait to get paid until they settle debt.
• True or False: Creditors only negotiate with attorneys.
• True or False: You can negotiate with creditors yourself.
• True or False: You should choose a debt settlement plan that lets you pay off your debts over 36-48 months since the monthly payment will be lower.
• True or False: Debt settlement will hurt your credit ratings as badly as filing for bankruptcy.

Are you confident you know the correct answers? Tune into this week’s episode to find out, and to learn how to separate fact from fiction when it comes to negotiating debts.  If you can’t pay all your debts but want to avoid bankruptcy, you won’t want to miss this show! Guest Alex Viecco has more than twenty-seven years of financial services experience including 12 years of banking.  He has helped thousands of people become more financially sound. He is the co-founder of  New Era Debt Solutions.

Do You Have One of the Best Credit Cards in America? 

Also joining Gerri this week, Credit.com’s Beverly Harzog will reveal the best credit cards in America. How do the cards you carry stack up? Tune in and find out!

Tune in to Talk Credit Radio

Talk Credit Radio airs live on Friday between 4-5 pm ET/1-2 PT. (Note, starting February 4, 2012 the program will move to Saturdays 12-1 pm ET/9-10 am PT).

There are four ways to listen:

1. Listen live
2. Listen or download podcasts from iTunes
3. Listen to archived episodes at Credit.com
4. Download the TuneIn app to listen from your smartphone on WSRQ

Today’s Talk Credit Radio podcasts are sponsored by Credit.com, ArcLoan.com and CESI Debt Solutions.

A reader, Dylan, recently wrote in with a question for us. He has three credit cards and wants to know if it is better (results in higher points) to carry similar balances across all three cards or to carry a large balance on one of his cards and zero or very low balance on the other two cards. 

The exact answer depends on the balance and ratios dynamics on Dylan’s credit cards, as well as his overall credit profile.

[Related Article: 8 Credit Score Myths Debunked]

How you manage your overall level of credit debt is a very important component of your credit score—and how you manage your revolving credit (like your credit cards) is especially important as the score is heavily focused on revolving debt.  Generally speaking, credit scores focus on a consumer’s aggregate revolving utilization percentages or ratios—in other words, how much of their available credit is used.  This is determined by taking the sum of all of your credit card balances as reported on your credit report and dividing that by the sum of the total available credit reported on your credit cards.

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For example, your revolving utilization would be 50% if you have $5,000 in credit card balances and $10,000 in available credit on those credit cards.  The higher the ratio or utilization percentage the less points granted as research show that consumers who carry higher ratios of revolving debt are substantially more at risk of missed payments, compared to people who have lower utilization ratios.

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In addition to total or aggregated revolving utilization, the scores may also consider information such as the number of credit cards reported with a balance greater than $0 and/or the number of credit cards that each have a revolving utilization greater than “X” percent.  A consumer may receive less than optimal points if they have a higher number of credit cards with a balance being reported or may gain points if they have a higher number of credit cards with very low revolving utilization on each card.

By design, the scores are complex and evaluate revolving card usage in several ways to predict future credit risk.  When it comes to managing your revolving credit, the best advice is to make your payments on time and to keep your revolving balances low—this will help to increase your score over time.

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Image: Phil Hawksworth, via Flickr.com

A new social couponing plan is being launched by the nation’s largest lender as a means of incentivizing more use of both debit and credit cards.

Bank of America is currently testing a new program called BankAmeriDeals with its employees in North Carolina, South Carolina and Nevada, according to a report from The Associated Press. Currently, the bank has no timetable for rolling the plan out to consumers, but will soon extend it to its more than 275,000 employees nationwide to test it further.

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The plan works by examining stores where consumers have previously made regular purchases and then offering them deals on similar products when they meet certain buying thresholds, the report said. These deals will be offered when a credit or debit card holder logs into the institution’s account websites, and then they click a link to have the offer automatically tied to their account.

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But where the Bank of America program differentiates itself most significantly from those like Groupon or LivingSocial is in how the customer sees the benefits of enrollment, the report said. Instead of receiving the savings at the register, they are granted to the customer in the form of a lump-sum, cash-back reward once a month. The bank currently has no limit on the amount consumers can receive in this cash back promotion.

Most customers can expect to receive about 16 or 20 of these promotional offers per month from the bank, but those who tend to redeem them more often could see more, the report said. However, those who do not want to participate will be given the ability to opt out of the program.

The reason Bank of America is offering this type of program now is that the merchants who offer the deals are also the ones providing the cash back, essentially incentivizing use of the bank’s cards in exchange for the added business, the report said. Other financial institutions, such as Chase and Regions Bank, are also testing similar programs.

Banks have been looking for ways to boost card use since the federal debit card interchange fee limit was imposed in July 2011. It is believed that this regulation costs banks billions of dollars in lost revenues annually.

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More and more at GetOutOfDebt.org we are getting questions about how to get your student loans eliminated, forgiven, or discharged if you are in or served in the military.

It is absurdly ironic that members of the military can go into harm’s way, fight in combat and yet return home only to struggle to escape the invisible bondage of student loan debt.

However, there are some real options that can help you do this, but like the military, there are rules to follow and hoops to jump through.

[Article: Feds: Mortgage Companies Still Violating Military Families' Rights]

Public Service Loan Forgiveness Program

One overlooked program is the Public Service Loan Forgiveness Program. Under this program members of the military that have been employed by the military or a qualifying public service job for the last ten years may have their federal student loans FULLY discharged.

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Public service qualifying occupations include:

• Emergency management,
• Military service,
• Public safety,
• Law enforcement,
• Public interest law services,
• Early childhood education (including licensed or regulated childcare, Head Start, and state-funded pre-kindergarten),
• Public service for individuals with disabilities and the elderly,
• Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations),
• Public education,
• Public library services, and
• School library or other school-based services.

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You need to be employed in these position at least full-time, which is considered to be at least 30 hours a week or what the employer considers to be full-time.

The benefit of this program is it allows you to discharge your debt after it has been consolidated for a low payment. You can use the online student loan consolidation calculator here.

The way the program works is that after making 120 monthly and on-time consolidated and reduced payments you remaining balance will be forgiven. – (Source: Public Student Loan Forgiveness Program Questions and Answers)

Not all student loans are eligible for consolidation. Private student loans are excluded. Loans that are eligible to be consolidated can be found here.

Direct Loan payments that qualify include:

• The Income Based Repayment (IBR) Plan;
• The Income Contingent Repayment (ICR) Plan;
• The Standard Repayment Plan, with a 10-year repayment period; and
• Any other Direct Loan repayment plan, but only payments that are at least equal to the monthly payment amount that would have been paid under the Standard Repayment Plan with a 10-year repayment period may be counted toward the required 120 monthly payments. (February 3, 2010)

And you may actually be able to have zero dollar loan payments count towards your required 120 payments. If you qualify for a zero monthly payment under the Income Based Repayment or Income Contingent Repayment programs then those payments, or lack thereof, will actually count. Pretty cool, huh?

For more information on this program read this publication by the U.S. Department of Education.

National Defense Student Loan Discharge

If you helped to pay for college with a National Defense Student Loan it may be partially discharged.

Recipients of a National Direct Student Loan and Perkins Loan may receive partial cancellation of their loan for their service in the United States Armed Forces if his/her military service was for a full year in a hostile fire/imminent danger pay area.

If you believe that you may qualify for cancellation of your loan(s) due to your military service as described above, you should send a copy of your DD214 (discharge form) and letter of explanation to the agency servicing your loan.

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Have More Tips and Information?

We want to continue to help and assist members of the military with information on dealing with student loans so please post any tips and information you can to help in the comments section, here.

This article was contributed by GetOutOfDebt.org, a site that provides free debt consolidation help and debt relief advice for people looking for answers. @GetOutOfDebtGuy

Source: Military Student Loan Forgiveness and Discharge Programs

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As you’re probably well aware, your credit score makes up a huge part of your ability to qualify for things like credit cards and other loans, but most people probably don’t know exactly how it’s calculated.

Your credit score is based on your borrowing history, but do you know what aspects are valued more than others? The formula is actually pretty easy to remember, and as long as you know what is expected of you to keep your credit score healthy, you’ll be in a better position to do so.

[Related Article: Rebuilding Credit in a Hurry - Is It Possible?]

Your payment history: 35 percent
This is the single biggest factor used to determine your credit score. If you pay all your bills on time and in full, you won’t have a problem. But miss a payment, your rating will take a serious hit.

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Your credit utilization: 30 percent
You might be wondering what “credit utilization” is, but it’s just a technical term for how much of your credit limit you’re using. The more you use, the worse this aspect of your score will be. Experts recommend keeping it close to 10 or 20 percent to get the most benefit. Don’t believe the myth about lenders wanting you to carry some amount of debt on your cards. The less you have, the better.

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Length of your credit history: 15 percent
The longer you’ve had your cards or other loans, the better off you’ll be. That’s why those who have very short borrowing histories have trouble getting approved, and why it’s not a good idea to close your old credit cards even when you pay off the balance and have no intention of using them regularly again.

How much new credit you have: 10 percent
Making a number of attempts to qualify for a new line of credit will ding your score, because lenders generally see new credit cards as a sign that you’re having problems with your cash flow. It typically takes between six and 12 months to clear a line of credit’s “new” status.

How many types of credit you have: 10 percent
The more kinds of credit you have in your name—like credit cards, student loans, auto loans, mortgages, etc.—the better off you’ll be as far as this aspect is concerned.

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During the recent national recession, millions of consumers across the country drastically changed their purchasing habits to avoid credit card use. But even as credit card use has regained popularity in recent months, it turns out many still prefer to use cash.

A recent study by Javelin Strategy and Research found that the vast majority of Americans are still using cash to make most of their smaller, everyday purchases, according to a report from the Huffington Post. In all, 79 percent of those surveyed said they’d used cash to make a purchase of this type in the last seven days, compared with just 65 percent combined who used either credit or debit cards.

[Article: Spiraling Credit Card Debt: What's Your First Step?]

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However, experts say that cash has always been fairly popular among consumers when it comes to making this type of purchase, and it should grow neither any more nor any less popular in the coming year, the report said. Instead, it’s expected that as the economy continues to recover and people are more comfortable dealing with debt again, credit cards will begin to trend upward.

“We will see consumers convert [back] to cash for smaller transactions and credit card use will increase this year,” David Albertazzi, a senior research analyst with the financial services research firm the Aite Groupe, told the site.

During the recession, credit cards became less popular and debit cards grew in popularity for small making purchases, the report said. But because banks have been introducing or testing new fee structures for debit card use, many consumers might have shied away from that method as well.

[Free Resource: Check your credit for free before applying for a credit card]

Consequently, banks are still looking for new ways to generate revenues, and one way they’re doing that is by offering more prepaid cards, the report said. These accounts have grown quite popular in recent years, especially among consumers who cannot afford to maintain other types of bank or credit card accounts. Now, some banks are even testing ATMs that dispense prepaid cards as well as cash.

Many consumers shied away from credit card use during the recession, causing balances to fall considerably even after it ended. But now positive signs in the economy may be making consumers more optimistic, and they have returned to using these accounts to finance purchases with greater regularity.

[Credit Cards: Research and compare prepaid credit cards at Credit.com]

In the past month, consumers who were searching for a new credit card on Yahoo! typed this phrase most often: “Capital One credit card.” Based on our review of Yahoo! Search data, they weren’t looking for a specific card from Capital One, they just wanted to see what cards from that bank were available. This tells me that consumers have a good feeling about Capital One. They might end up with a card from a different bank, but Capital One is where they start their search.

I’m not surprised, even though the issuer didn’t score that high on J.D. Powers 2011 Credit Card Satisfaction Survey. American Express was number one, followed by Discover, Barclaycard, and Chase. Capital One checked in at number seven.

[Article: The Best Balance Transfer Credit Card in America]

So why did they come out on top in searches? Here are five solid reasons why I think Capital One appeals to consumers:

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#1: No foreign transaction fees

Capital One was the first major issuer to remove foreign transaction fees from all of their cards. Since then, Discover has done this. Other major card issuers have also waived the fees from some of their top-tier cards.

But Capital One was the first to eliminate this fee. This is the kind of consumer-friendly move that sticks with people, especially if you travel frequently for pleasure or business.

#2: Memorable Commercials

Most recently, we’ve been treated to Jimmy Fallon talking to a baby about the Capital One Cash card. When Fallon asks the baby if it wants more cash back, the baby throws cereal at him. Okay, a celebrity plus a cute baby is memorable TV. A tiny food fight makes it even better.

Capital One also has run lots of ads featuring Alec Baldwin and the Capital One Venture Rewards Credit Card. We live in a celebrity-obsessed culture so it’s not surprising that celebs grab your attention when you see them in commercials.

And let’s not forget the “What’s in your wallet?” Vikings commercials, which were loaded with whimsy and humor. All of this makes Capital One look like they’re the Disney World of banks.

[Free Resource: Check your credit for free before applying for a credit card]

#3: The card details are easy to understand

I’ve often raved about the transparent and easy-to-read websites that Capital One provides for its cards. The “Rates & Disclosures” tab across the top is clearly marked and easy to find. The “Rewards” tab is also easy to find. The rewards program is straight-forward and doesn’t involve confusing tiers and caps. And you get the details laid out in bullet points.

There’s more detail in the fine print, of course, so make sure you read all the disclosure statements. But at least Capital One does a good job of giving you the important highlights in digestible doses.

#4: Costs are pretty low compared to other cards

If you have excellent credit, you have some great choices. There are Capital One cards that have zero, or fairly low, annual fees. And some have low starting APRs. The Capital One Venture Rewards Credit Card starts as low as an 11.9 percent (V) APR, which is very good for a generous travel rewards card. The Capital One Platinum Prestige Credit Card has an APR range that starts at 10.9 percent and it doesn’t have an annual fee.

Another consumer-friendly aspect of Capital One cards is the 25-day grace period. In comparison, some cards from major issuers only give you 21 days to pay before the interest clock starts ticking away.

But don’t think about getting a cash advance with these cards. You’re looking at a 24.9 percent (V) APR and you start paying interest immediately on a cash advance.

[Credit Cards: Research and compare no annual fee credit cards at Credit.com]

#5: Flexible and mostly generous rewards programs

With the Capital One Venture Rewards Card you get two miles per dollar spent on all purchases. You can redeem the miles to fly on any airline. Unless you’re loyal to one airline, this kind of flexibility is a great reward in itself. For those who prefer cash, there’s the Capital One Cash credit card. You get, effectively, 1.5 percent cash back on all purchases.

If you’re a small business owner, you’ve got some generous rewards cards to choose from with Capital One’s new Spark brand. I just reviewed the Capital One Spark Miles for Business and gave it a 5-star rating. You get two miles for every dollar spent on all of your purchases. If you travel frequently on business, you can rack up miles quickly and earn free flights. You can read my review here.

Even the Capital One No Hassle Cash Rewards Credit Card, which is targeted at consumers with fair credit, offers 2 percent cash back on groceries and gas purchases. Then, you get 1 percent on everything else. So even if you aren’t in the “excellent credit” club, Capital One has something to offer you.

Image: University of Salford, via Flickr.com

At publishing time, Capital One Cash, Capital One Venture Rewards Credit Card, Capital One Platinum Prestige Credit Card, Capital One Spark Miles for Business and Capital One No Hassle Cash Rewards Credit Card are offered on Credit.com product pages, and Credit.com may be compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment.

If you’re a homeowner who is struggling to keep up with a mortgage you can’t afford, or wondering whether to continue to stay and pay on a home that is deeply underwater, you may have seen another glimmer of hope in yesterday’s news about more proposals to address the housing crisis.

Early Wednesday, preliminary details of a proposed mortgage settlement between five big banks, state attorneys general and the Obama administration, all of whom have been negotiating for months now, were released.

Under the proposed settlement, five of the largest banks would allocate $25 billion (not all in cash) to be used to refinance or modify mortgages, as well as provide principal reduction for some homeowners. Some of the settlement funds would go to state foreclosure relief programs, and a portion would be used to provide restitution for homeowners who were the victims of abusive foreclosure tactics. Those homeowners would get checks averaging roughly $2000; no doubt amounting to insult after the injury they’ve gone through while losing their homes.

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The Center for Responsible Lending, an advocacy group that has been raising concerns about mortgage abuses since the beginning of the housing crisis, said the proposal wasn’t perfect but did “represent an important step forward in addressing foreclosure abuses” by putting an end to robo-signing and servicer abuses, and by promoting “more sustainable mortgage modifications.” Other activist groups are urging a postponement until further investigation.

No deal has been finalized.

[Related Article: Underwater On Your Home? Your Six Options]

The President’s Plan

Later that evening, President Obama raised the housing crisis in his State of the Union address. He made two proposals to help the market:

• The opportunity for “every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates.  No more red tape.  No more runaround from the banks. “
• Calling on the “Attorney General to create a special unit of federal prosecutors and leading state attorney[s] general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.” It will include expanded “investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.”

No specific details of the refinance proposal were released last night, but many are skeptical that the program will go far enough, or that Congress will approve additional measures to help homeowners. TheStreet.com says that analysts are already calling the plan “dead on arrival.” Even if the President is able to expand refinancing opportunities, the sobering fact is that some 11 million homeowners owe more than their homes are worth, and their average negative equity is $65,000, according to CoreLogic. By comparison, $25 billion is a drop in the bucket.

However, neither the initial details of the settlement, nor the President’s announcement, gave struggling homeowners any specific action they can take to try to get help now; any reason to believe that they will be eligible for help so they can keep their homes; or that the housing market will recover anytime soon. Instead, they’re left to keep hanging in there, hoping things might be different this time around.

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Why Can’t the Housing Crisis Be More Like the Banking Crisis?

If the government approached the housing crisis the way it did the banking crisis, things might be different, says former TARP General Inspector Neil Barofsky. In this video interview with the American Banker, he says, “They went all in. No cap on resources, tapping every available resource…trillions and trillions of dollars.” But “when it came to the housing market,” he says, “it just wasn’t there.” Comparing the help the banks received under TARP to what homeowners haven’t received, he pulls no punches: “they have a lot more sympathy toward the larger financial institutions, frankly, than to the homeowner on Main Street.”

Once again, the word to struggling homeowners is to sit tight. Hopefully, help is coming. But no word on what happens if it doesn’t.

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A reader asks some great questions about judgments. They give us the opportunity to talk about what judgments are and how they work.

I have fallen behind on some bills and one of the creditors told me that if I can’t pay, they will take me to court and get a judgment. Should I be worried about that? What is a judgment anyway? If I can’t pay, does it matter if they get a judgment?

What is a judgment?

The Encarta World Dictionary (North American edition) definitions include:

1. Legal verdict: the decision arrived at and pronounced by a court of law.

2. Obligation resulting from verdict: an obligation, e.g. a debt, that arises as a result of a court’s verdict, or a document setting out an obligation of this kind.

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Typically, when you are talking about a judgment related to a debt, you are describing a “money judgment” that states how much money you owe to the person who obtained the judgment against you.

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How does a creditor or collector get a judgment against you?

In order to get a judgment against you, the creditor or collector must take you to court. If you don’t respond, or if you lose, the court will issue a judgment in favor of the creditor or collector. The judgment will be filed with the court, and once that happens, it is public record. That means it will likely end up on your credit reports as a negative item.

How long can judgments appear on credit reports?

Unpaid, they can remain on your credit reports for seven years or the governing statute of limitations, whichever is longer. Once judgments are paid, they must be removed seven years after the date they were entered by the court.

How long can judgments be collected?

There is a specific time period for collecting judgments, and it varies by state. This “statute of limitations” is often 10-20 years long. In addition, in most states it can be renewed. For that reason alone, it’s best to try to avoid getting a judgment against you in the first place. And if it does happen, it’s best to try to resolve the debt.

[Infographic: What to do if a Debt Collector Calls]

Can interest accumulate on a judgment?

Yes. In most states, interest may be charged on a judgment, either at any rate spelled out in state law, or at the rate described in the contract you signed with the creditor. In addition, the judgment may include court costs, and attorney’s fees.

How are judgments collected?

One of the main reasons you want to try avoid getting a judgment against you is that creditors may have additional ways to collect once a judgment has been issued. Depending on your state’s laws, they may include going after your bank accounts or other property, or trying to garnish your wages.

But as the saying goes, “you can’t get blood from a stone.” As the National Consumer Law Center points out in its book, “Surviving Debt:”

Even if you lose a lawsuit, this does not mean you must repay the debt. If your family is in financial distress and cannot afford to repay its debts, a court judgment that you owe the money may not really change anything. If you do not have the money to pay, the court’s judgment that you owe the debt will not make payment anymore possible.

If you aren’t sure what a judgment creditor can do to collect from you, it’s a good idea to consult a bankruptcy attorney who can help you understand what may be at risk if you don’t pay. The attorney can explain what property you own is “exempt,” or safe from creditors. “Surviving Debt,” from the National Consumer Law Center is another good resource.

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Can I settle a judgment?

The answer to this question is often “yes.” Most judgment creditors know it is often difficult to collect judgments, especially if the debtor doesn’t have wages that can be garnished or assets they can go after. If you are able to get a lump sum of money from, say a relative, you may be able to offer that to the creditor to pay off the judgment. Just make sure you get any agreement in writing before you pay. Make sure the agreement spells out all the terms of the settlement, including the fact that you will not owe any more money after you make the agreed upon payment.

How can I avoid a judgment?

Another option is to settle the debt before it goes to court. The creditor may be willing to settle for part or all of the money you owe. Of course that only works if you can manage to pull together money to pay them. If you can, make sure you have a written agreement from them that states they will not pursue the debt in court if you make the payment as agreed. Then check with the court to make sure the matter has been dropped.

Anything else I should know about judgments?

A debt collector that threatens to get a judgment against you or to garnish your wages or seize your property may be making an illegal threat. Talk with a consumer law attorney to find out if that’s the case.

And just because you haven’t heard anything about a judgment in a while, that doesn’t mean you should assume it has gone away. It’s possible that the creditor could decide at a later time to try again to collect from you. Plus, an unpaid judgment may prevent you from buying a home or getting credit at a decent interest rate. So it’s a good idea to try to resolve the judgment, either by filing for bankruptcy or by paying off or settling the judgment when you are able to.

Reminder: This post is meant as educational information, not legal advice. Please consult an attorney for legal advice.

[Article: The Dos and Don'ts of Paying a Debt Collector]

Image: walknboston, via Flickr.com

This month seems expensive and I am looking for ways to save. I used $500 from my emergency savings to pay the deductible for my daughter’s December auto accident and that money was to be refunded by now. My insurance company is not returning emails or phone calls.  This is a major, highly rated company.  I sent my second email of concern to my agent tonight and told him that his company is not meeting my expectations.

I always have my W-2 from my employer by now.  For the past thirty-five years, my tax return would have been filed by mid-January.  No reasons offered for the delay—only a comment that W-2s are required by the end of the month. I will file the day I get my W-2, and hoping for a modest return which will help reduce debt.

[Related Articles: Read more posts by the Debt Diva]

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I have met my goal to reduce weekday lunch expenses by eating lunch at work at least 4 days a week in 2012.  I have not eaten out any week night, either. I do eat out on the weekends, but eliminating all week-day expenses is beyond my goal.  My weekend meals are with my daughter; her new job takes her out of the city during the weekdays so we spend the weekends catching up with one another and running errands. These meals are a connection to her.

I added a new goal: No debit card fees in 2012. I don’t have an excuse for incurring fees. I live in Iowa, one of the first states with ATM machines everywhere. I have two debit cards—one from my bank and one from my credit union. Both have multiple ATM locations I can use without a fee within blocks from my home and office. My credit union has a machine within 100 feet of my desk.  Hanging my head in shame!

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My daughter has dental insurance available to her at her new job.  I canceled her from my dental policy and will save almost $500 this year. She is getting a new cell phone; I will save nearly $1000 a year.

I am sending more money to emergency savings each month, so the small balance in my checking account keeps me alert.  It helps me spend conservatively—I actually had enough left in my checking account to pay my bi-annual auto insurance bill from my checking account rather than from my savings account where it had been budgeted. I am not yet comfortable seeing a low balance in my checking account, but we have not starved or failed to pay bills. It is just different; and that difference is going to allow me to retire without worry!

How have you achieved additional savings?

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Because of a private antitrust suit filed by several million businesses large and small against some of the nation’s biggest financial institutions, it’s believed that there could be a dramatic shift in the way companies pay to accept credit card transactions.

[Related: New Hampshire May Limit Credit Card Swipe Fees]

The suit, which is slated to go to trial later this year, was filed because merchants believe that Visa, MasterCard and the 13 of the biggest financial institutions in the country are keeping credit card interchange fees higher than they need to be, according to a report from CNBC. Some analysts say that, instead of letting the case go before a judge, it could mean as much as hundreds of billions of dollars in settlements. This could be preferable to banks because some now believe that the judge would institute a limit on the amount payment processors charge for accepting credit card transactions, one as low as 0.5 percent of a purchase’s total value.

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That’s even with the credit card transaction fee cap that’s in place in Australia, but still higher than the one allowed in the European Union, which stands at just 0.3 percent of the purchase value, the report said.

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The new cap fee, if it were to be imposed, would be a significant decline from the current rates charged by payment processors, which averages between 1.75 and 2 percent of a purchase price, the report said. And analysts say that a 75 percent drop in these interchange fees would cost many of the nation’s credit card lenders billions of dollars annually on top of the significant hit they already took when the federal government imposed a limit on debit card transaction fees. That limit stands at 21 cents per purchase, rather than the average of 44 cents when the charges were allowed to be based on a percentage of the transaction’s value.

That rule, part of the Durbin Amendment to the Dodd-Frank Act, is what banks say led them to charge higher credit card interchange fees as a means of making up lost revenues, the report said.

Interchange fees are often built into prices for all customers, not just those paying with a debit or credit card.  Retail industry representatives argue that businesses would be in a position to reduce prices if they were being charged less for accepting card purchases.

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The Stop Online Piracy Act, and its sister legislation in the Senate, the Protect Intellectual Property Act caused quite a stir in Silicon Valley, Hollywood and Washington. The two bills were intended to put a hard stop on theft of intellectual property on the Internet, by means that are controversial in terms of the First Amendment. Big players from the overlapping worlds of movies and music pushed for this bill. So did their high priced lobbyists. But SOPA and PIPA were ultimately shelved last week, and not just because there were formidable forces lined up against it. Google, Facebook, Yahoo, AOL and Twitter are just a few of the tech companies that opposed the bills, and they can certainly afford some pretty high priced lobbyists, too.

What also put a knife through the heart of SOPA and PIPA was the non-paid lobbyist community—a.k.a., the grassroots. The last few weeks, millions of people signed petitions in opposition of the bills. And sites like Wikipedia and Reddit went dark for 24 hours in protest.

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“What has happened in the last few weeks will permanently change the way citizens communicate with their government… This is a new day,” Sen. Ron Wyden (D-OR), told The Washington Post’s Greg Sargent. Wyden has been SOPA and PIPA’s chief opponent in the Senate.

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I don’t argue with the good intentions of the bills’ sponsors—online piracy of music, movies and the like is a serious problem that has existed and grown in direct proportion to the existence and growth of the Internet itself. But Silicon Valley folks argued that the proposed legislation would seriously curtail the operations of very popular websites, such as YouTube, even though the proprietors of those sites are not trying to steal anything themselves, and generally take steps to be certain that they don’t, in the language of the bills, “facilitate” online piracy.

Regardless of the fate that befalls either piece of legislation, the battle over online piracy is raging and will continue for quite some time. And the reason why the issue will remain top of mind is the same reason why the bills were beaten back: powerful interests lined up on both sides of the issue, and real people weighed in and let their voices be heard. I only hope that people keep talking because the truth of the matter is that SOPA and PIPA only scratch the surface of online piracy.

[Article: Collaborative Consumption, Trust and the Evolution of Credit]

But while we contemplate the gargantuan battle of the content vs. technology worlds, we must not forget an equally serious, actually even more serious example of online piracy.

While no numbers have been reliably developed to compare the two, I would make book that the most common and sinister piracy that goes on via the Internet involves database compromise and identity theft rather than theft of movies or music. According to the Identity Theft Research Center, 4,300,056 records containing sensitive consumer data were stolen in hacking incidents in 2011 alone, exposing those consumers to the risk of identity theft. The current proposed legislation doesn’t deal with identity theft, but of course, there are a number of laws on both federal and state books that do. Unfortunately, most aren’t tough enough and, in the case of the federal government, they are few and far between.

One of the complaints I have often heard from proponents of SOPA is not so much that existing law is inadequate, but rather that existing enforcement of that law is lacking. Doubtless, while SOPA (or Son of SOPA) provides new and potent enforcement weapons, the noise surrounding the recent battle will definitely step up enforcement activities under current law, something that is critical, especially if both bills die beneath the Capitol dome (which apparently one has). And given the fact that Congress has mastered the art of internecine squabbling and gridlock, nothing seems to be going anywhere fast in Washington, no matter how serious the problem.

If only identity theft were as buzz worthy; alas, (the recently departed) SOPA and PIPA are big news because of the power and prestige of those on both sides of the issue. That’s why the grassroots ultimately had to get involved.

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The victims of intellectual property piracy are generally large and powerful companies, with lobbyists in Washington and in every important state capital, with money to spend to help with enforcement or to technologically impede the theft of their property. On the other hand, the victims of identity theft are generally individuals with meager resources, both financial and political, to fight against the theft of their sensitive personal information, and the destruction of their financial lives, or even more dire consequences should they experience medical or criminal identity theft. Put simply, the victims of intellectual property theft are generally much wealthier and more powerful than the thieves, whereas in identity theft, the playing field is generally more tilted in favor of the bad guys.

It’s safe to say that if multibillion dollar companies need more legislation and better enforcement procedures to protect their property, individuals need all the help they can get to protect theirs. While there are many organizations that do their best to prevent identity theft, they cannot match the resources available to those who have large financial interests at stake, like the entertainment companies that have embraced SOPA. This is, after all, America, where money talks but big money shouts.

I hope that the senators and representatives who are hell-bent to kill or at least seriously maim the Consumer Financial Protection Bureau and other consumer-oriented federal regulatory agencies take note of the fact that consumers need all the help they can get to protect their identities.  Unfortunately, there are no lobbyists or media campaigns to shout at Congress, but perhaps a large chorus of smaller voices will make a lot of noise at the polls in November.

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Credit Cards. At times, it seems like we can’t live with them and we can’t live without them. It is a classic case of a love-hate relationship. We need the credit cards to help build our all-important credit history and subsidize our expenses when we just don’t have the cash. But people deeply resent the high interest rates and the traps lurking in the fine print. On that note, let’s start with the negatives.

7 Reasons to Hate Your Credit Card

By setting aside our emotions, we can identify and possibly avoid those disadvantages that cause us to hate our credit cards.

1. “YOU WANT ME TO PAY HOW MUCH IN INTEREST?!?!”

I have friends who’ve received credit card offers in the mail that have a starting interest rate of 35%. Even Shylock, the ruthless moneylender from Shakespeare’s Merchant of Venice, would think that was excessive. Never forget that credit card companies are a business not a charity. They exist to make money and their business model is based entirely upon the interest rates they charge. It has been reported that some internal communications from credit card companies sarcastically call customers who pay off their principal in short order as “deadbeats.” The longer the customer takes to pay off their credit card debt, the more interest they pay, the more money the company makes.

[Article: Four Easy Credit Card Resolutions for 2012]

2. “DID YOU NOT READ THE FINE PRINT?”

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Ever notice that the bank’s credit card offers are in BIG BOLD letters. “GO ON VACATION,” “WRITE YOURSELF A CHECK,” “BUY A NEW WARDROBE,” and the like. You are so focused on the headlines that you don’t read the rest of the story. You may have to use an electron microscope to read it but at the bottom of the page are terms, conditions, restrictions and fees written in legal jargon that is all but incomprehensible to most people. Consumer advocate Elizabeth Warren colorfully refers to it as “word barf” and if you sign such an agreement, you may be giving the company license to raise your rate, charge you fees, sue you and perhaps take your first-born child.

3. “THIS ISN’T WHAT I PAID FOR”

You know those pre-approved credit offers you receive in the mail nearly everyday? Well, per reason # 2, the fine print often shows they are pre-approved in name only. The banks and credit card companies employ armies of lawyers and lobbyists to create loopholes that enable them to not give you the card you think you’re signing up for. The offer may say, “0% for six months, then 9.9% fixed, with no annual fee, and $5,000 credit limit.” Then you get the card and it’s “6.9% for 3 months, 29.99% variable, $50 annual fee and $400 credit limit.” Reading what you are signing and consulting reference materials to understand what you are agreeing to is the key to being “debt smart.”

4. “WHAT HAPPENED TO MY GREAT RATE?”

Credit cards and banks reserve the right to raise your rates for many reasons. One of my readers at DebtSmart.com told me that her bank raised her rate to 23% because she was late paying her bill. They are just waiting for any misstep and then, BAM, your best rate becomes your worst. After all, you agreed to it when you signed the contract with all that fine print.

5. “I CAN JUST DECLARE BANKRUPTCY AND SORT IT ALL OUT”

Here’s another good one. The banks have successfully lobbied Washington to change bankruptcy laws to make it more difficult to dissolve debts in bankruptcy. They want the consumer to be more responsible for repaying their debt! The banks want to have their cake and eat it, too. Who gave the consumer making $10,000 per year a $50,000 credit line? This is why the lobbyists pounce on even the most modest credit reform proposals.

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5. “LIES AND DECEIT!”

You think you’ve done due diligence by reading the fine print and doing the math at your kitchen table. But months later, you get whacked with a penalty that you knew nothing about. You call the customer service line and the person at the call center pulls up your account and spits back jargon to imply that you’re an idiot with no common sense. Their company sends you credit offers that say, “you can use all your available credit” and when you do they charge you a penalty. Late fees, over limit fees, annual fees, service fees—they are always coming up with new ways to separate you from your money. And the fees always to seem to increase, never decrease.  A $35 flat late fee. It does not cost the bank $35 when you are late. You may not have been late at all. The bank may have just credited your account late and charged you anyway. Banks make 47% of their revenue from fees! Don’t ever let a fee go. Call the bank and make them waive that fee, and if they don’t, punish them by taking your business elsewhere.

6. “YOU CAN’T STOP ME FROM GETTING A JOB OR HOME”

Yes, they can. If you have a problem with your credit card bank, they automatically report it on your credit history. Everyone looks at your credit history. Landlords review it to determine if they will rent to you, insurance companies look at it to decide what policy you will get and, in some cases, prospective employers use it to determine whether you will get the job you want.

What happens when the creditors make a clerical mistake that adversely impacts your credit report? A mistake that makes you appear terrible to potential employers and landlords? Not their problem. It’s your responsibility to find and correct their error.

7. “LET ME SPEAK TO YOUR SUPERVISOR”

People are busy going to work, shuttling their kids to and from school and doing household chores. We don’t always have time check in on our account or call the company if we have a question or concern. When we do, it takes forever to speak to a human. You have to navigate through a menu and key in your account information. Numbers, letters, symbols—all so that you can talk to one of their drones who start by asking you for all that information again. I typically get around this by hitting “0″ then the “#” keys. I get a reply, “We cannot recognize your account number so please be tortured again by reentering it now.” I keep hitting the “0″ and “#” keys until the automated recording system gives up and says, “Please hold while we transfer you to one of our new hires who probably cannot help you anyway.” It almost seems like they would rather not talk to me. But I thought my call and business was important to them.

[Credit Cards: Research and compare credit cards at Credit.com]

CONCLUSION

Credit card companies and banks are sharks. They care about one thing and one thing only—and that is attracting paying customers. The only way to fight back is to use the naturally existing competition amongst the banks to your advantage. They need our business so we need to reward the banks that are good to us and punish the ones that take advantage of us. Banks are a business like any other. Their job is to service you and me. If we don’t like the way they treat us, then it’s time to do business with another bank. This is not Coca-Cola. Don’t ever be “brand loyal” unless that bank has been “customer loyal”—meaning that they’ve always given you their best rates and service.

And now … 7 Reasons to Love Your Credit Card »

Image: RogueSun Media, via Flickr.com

7 Reasons to Love Your Credit Card

Whenever I do public speaking engagements, I can see the audience raise its collective eyebrows when I tell them that credit cards themselves are not bad. As with most aspects of finance—and life, for that matter—there are advantages and disadvantages. Here are some of those advantages that we often forget when we talk about the plastic friends in our wallets.

1. SAVING TIME AND MONEY

Credit card companies want you to continue using their product. Businesses, particularly small businesses, prefer it when you use a credit card because it is more secure and less of a hassle for them. Very often both credit card companies and businesses will provide rewards and incentives to encourage you to keep swiping your card at the register. These rewards do add up. Right now, I have $300 in Regal Cinema gift cards in my wallet because I used my credit card to pay regular bills like my cell phone. That’s about ten trips to the theater for two with popcorn and a drink.

[Credit Card Review: The Best Balance Transfer Credit Card in America]

2. PROTECTION FROM RIP-OFFS BY MERCHANTS

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When you buy something with your credit card, whether it is a magazine subscription or a home entertainment center, you are very protected. For example, if a merchant won’t give you a refund for a return, you can always contact your credit card provider or bank and dispute the charge. The bank will most likely decide in your favor and chargeback the merchant. The merchant would have to take you to court to fight further. If you paid cash instead of using your credit, the burden would shift to you and you would have to pursue the matter in court with the merchant, which takes time and money.

3. BUILD YOUR POSITIVE CREDIT HISTORY

A good credit history is not only advantageous, but essential to achieving financial success in today’s world. Banks, insurance companies, landlords and even prospective employers can and will look at your credit report and make a judgment about you and your character. It is vital that you do everything you can to make sure that judgment is a positive one. Having a credit card and using it wisely is the key to building a positive credit history. It will get you a positive history in less time and for less money than other forms of debt like student loans and home mortgages.

4. EMERGENCY MONEY

If your car breaks down late at night, you may not be able to get an ATM machine or your personal bank. However, by having a credit card you have instant access to the money you need in emergency situations. Even if you have some time to address your financial problems, credit cards are infinitely better than hawking your possessions, emergency mortgages, payday lenders or loan sharks. Though sometimes I have trouble telling those last two apart.

[Free Resource: Check your credit for free before applying for a credit card]

5. THEY ARE LOOKING TO MAKE YOU A DEAL

You can use the laws of supply and demand to your advantage here. There are a plethora of banks and credit lenders, but there are only a relatively few good customers for them to fight over. They are fighting with each other every day for our business, for your business. You will likely get better rates from your credit card bank than from a personal loan or auto loan. Right now I have four, count ‘em, four banks that are offering me 0% until near the end of this year. I will share in future posts exactly what I did to get there.

6. SECURITY & WARRANTY

If someone steals your debit card information they may be able to steal money from your accounts. If that happens, your checks will bounce and you’ll have to deal with each place you wrote a check to, plus the overdraft fees from your bank. You’ll have to fight to get your money back. If someone steals your credit card, then you call the credit card bank and tell them cancel the account and you wouldn’t be responsible for the charges that you didn’t make. The banks write it off as the cost of doing their business. They make allowance for it in their bottom line. Some credit cards will even extend the warranty of an item purchased with that card. It is becoming an increasingly common service they provide. Before you shell out to Dell or Gateway for a pricey warranty extension, contact your credit card companies to learn about these benefits so you know which card to use when you make the purchase

7. CUSTOMER SERVICE 24/7

Most credit card banks have representatives on call 24 hours a day, 7 days a week. You can deal with them at your convenience. If you pay your bills at 5 in the morning before you go to work and you have a question, you can talk to someone. Granted you may have to navigate a voice menu and endure elevator music for a few minutes before you speak to a human, but you will eventually speak to one.

So, there you have it: credit cards are not themselves inherently evil. Though there are definite disadvantages to having them, and recognizing—and navigating—them is key to becoming “debt smart.”

[Credit Cards: Research and compare cash back credit cards at Credit.com]

Image: 401K, via Flickr.com

If you have excellent credit, you’re probably getting a lot of offers for new credit cards these days, and even if you’re in the market for one, it can be hard to figure out what kind of offer is best for you.

The types of credit cards being offered to people who have top-notch credit ratings these days are very generous, and typically come with high rewards and relatively low interest rates as lenders increase their competition for the most creditworthy borrowers. And that basically means that you’ll be in a great position to start earning a significant number of rewards benefits even while keeping your balances relatively low.

[Credit Card Reviews: The Best Credit Cards in America: Airline Miles and Low Interest]

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Of course, if you qualify for these generous offers, you probably have great borrowing habits anyway. Therefore, adding better benefits would likely just help reduce the costs you face when dealing with your debt, particularly if you opt for cash back rewards rather than those that grant you rewards points which can be redeemed for products, or airline miles.

When looking into what type of rewards program works best for you, it’s important to weigh your current credit card spending habits. What do you buy with it? If it’s mainly essentials like groceries and gasoline, there are now a number of cards that will grant you more points for those purchases than for others. But if you use your card to finance your travel arrangements, choosing one that gives you bonus miles for doing so might be a better idea.

[Free Resource: Check your credit for free before applying for a credit card]

Another good idea when you’re looking for a beneficial rewards credit card is to keep things simple. Accepting a number of cards will likely just spread out your spending across a number of accounts, perhaps limiting what you earn back if you’re not careful, and certainly taking a small bite out of your otherwise sterling credit rating. Lenders typically view consumers opening a number of lines of credit within a short period of time to be a sign of financial distress.

And when handling these new credit card accounts, it’s always important to pay back as much as you can every month to maximize the amount you earn back and keep your debt levels manageable. There’s no reason such a card should lower your strong credit rating.

[Credit Cards: Research and compare rewards credit cards at Credit.com]

The fees charged to businesses for accepting credit card is often a point of contention between credit card payment processing companies and merchants, but a proposed law in the state of New Hampshire could spark even more debate about them.

A piece of legislation introduced in the New Hampshire House of Representatives, House Bill 1319, has drawn some attention for the way in which it would drastically alter the credit card landscape between businesses and payment processors. The law will limit the amount banks chartered within the state are able to charge businesses for processing credit card transactions to just 1 percent of the total purchase value.

[Article: Harzog: Capping Credit Card Swipe Fees Could Be Bad for Consumers]

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Currently there is no law governing the size of these interchange fees for credit card purchases at either the state or federal level, but many businesses pay costs that range from 0.67 percent of the transaction’s value to 4.76 percent, according to a report from the Nashua Telegraph. A spokesperson for MasterCard, the second-largest payment processor in the world, told the newspaper that the current average is somewhere around 1.75 percent.

The bill, introduced by Goffstown Republican John Hikel, is designed to give more cost certainty to merchants, and particularly small business owners, the report said. In most cases, these businesses don’t know the amount they’re paying on a given credit card transaction until they receive a bill. In addition, it should also help to buoy profit margins for certain types of companies that accept a large number of credit card transactions, such as grocers, which typically operate with margins as thin as 0.5 percent of a total purchase value.

[Free Resource: Check your credit for free before applying for a credit card]

If passed, the law would be applied in addition to federal limits on debit card transactions, which were put into place in July 2011 and cut the amount processing companies can charge for debit transactions to just 21 cents per purchase, regardless of its total size. That’s down from the pre-limit total of about 44 cents per purchase. However, it would only apply to banks chartered within the state itself, and there are just 18 of those in all. Six more are still small enough that the state fee cap would not apply to them.

Banks have already responded to the debit fee cap by increasing charges for certain types of accounts and other services that in the past had been free or very small.

[Credit Cards: Research and compare credit cards at Credit.com]

Credit card question: My credit card debt is out of control and I don’t know what to do. What should I do to get my life back?

Answer: I’ve gotten this question many times over the past few months. Many of you wrote to me after reading Confessions of a Former Credit card-a-holic, which was my own miserable debt story.

[Related Article: Confessions of a Former Credit Card-a-holic]

I’m so glad that some of you reached out to me. I do understand your pain and how awful debt feels. At the time I was in debt, I had few big expenses (like kids or a mortgage). So it worked for me to double and triple my minimum payments. But sometimes the cash flow isn’t there and you can’t take that approach, right?

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For those of you who feel totally overwhelmed, I decided to turn to my colleague,  Gerri Detweiler, who is Credit.com’s debt expert, for advice.

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As part of the Credit CARD Act of 2009, credit card statements now include a table that shows how much you have to pay monthly to pay off the debt in three years. “The first step is to look at your credit card statement and see if you can afford to pay that amount each month. If you stick to that amount, you can be debt-free in 36 months,” says Detweiler.

But what if you can’t make the payments? Detweiler suggests looking for a reputable credit counselor who can suggest options to help you get control of your debt. To find a list of approved agencies, check with the Department of Justice, which has a list of approved agencies by state. Or you can contact the National Foundation for Credit Counseling to find a reputable agency in your area.

[Featured Products: Compare credit score, report, and monitoring plans at Credit.com]

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Many consumers are eager to use credit cards to help make the purchases in their day-to-day lives a little easier to afford. But if you have bad credit, you probably know that this isn’t always possible.

During the recession, many lenders significantly tightened their standards for who they would grant credit cards to, but even as those requirements are becoming broader, it’s not always easy for some people to obtain a new credit card. Fortunately, there are options they may be able to tap to both make payments easier to handle and simultaneously reestablish their credit standing.

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A good option is a secured credit card, which is line of credit that’s set up by making a one-time payment to a lender. That payment will establish the credit limit on your new card, and experts recommend that it shouldn’t exceed more than a few hundred dollars. After all, the purpose of this card is to reestablish your credit, so you’ll want to keep your limit low enough that you’ll be able to pay it off in full every month.

[Free Resource: Check your credit for free before applying for a credit card]

Once you have this card, you should use it sparingly, so that you can properly reestablish your history of making on-time payments while simultaneously keeping your debt utilization ratio—meaning the amount you’re borrowing versus what your total limits are—relatively low. Despite a popular myth, lenders want you owing as little as possible, so keeping your balance close to zero is a great idea when you’re trying to build your credit.

Once you’ve had your secured credit card for a few months, and have been using it responsibly, begin exploring your other options. Secured cards, because they carry lower limits and typically higher-than-average interest rates, should be viewed as credit card training wheels. Finding a new card with a slightly higher limit and more affordable rate will help you boost your spending power once you’re comfortable with using credit again, but should still help to prevent you from running up too much debt.

As always, when looking for any type of line of credit, you should be careful to review a number of options, rather than signing up for the first one you find, to make sure you’re getting the best possible deal.

[Credit Cards: Research and compare secured credit cards at Credit.com]

Love is grand!  But when a couple says “I Do,” they could get more than they bargained for if they do not go into their marriage with their eyes wide open regarding the state of each another’s finances. For example, my wife and I married later in life, owing a combined total of $179,000 in secured and unsecured debt. Needless to say, most arguments during the early years of our marriage revolved around money. (This all happened before I became an advisor and got a bit more savvy about money matters.) Thankfully, although it was not always easy, we were able to work through our money issues and pay off our debt while still putting money in the bank.

Many married couples are not so lucky. In fact, conflict over credit and debt is a leading cause of divorce. Therefore, I always advise couples who are about to marry to become familiar with one another’s credit histories and scores, to be up front with one another about the kinds and amounts of debt they owe, and to spend time talking about their philosophies when it comes to using credit, saving, and spending. If their philosophies differ, I urge them to reach an understanding before their marriage about when they will use credit, how much debt they feel comfortable with, how much they will save each month, and so on. I understand that this recommendation is not romantic, but couples that talk about the state of their respective finances and about their money values and priorities before they marry are more likely to live happily ever after than couples who don’t.

[Article: Battling Debt: From Big Challenges Come Big Changes]

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Here are some of the specific things I recommend you and your future spouse do before you walk down the aisle:

• Establish short- and long-term financial goals for your marriage. Your short-term goals may include building up your savings and paying down your unsecured debt. Your long-term goals may include purchasing a home, starting a family and building a retirement fund.

• If either of you has a lot of unsecured debt, like credit card debt, develop a plan for paying it off together as a couple, even though the only person legally obligated to pay it is the one who took on the debt.  The sooner you get rid of the debt, the closer you will be to achieving your financial goals. This advice applies especially to high interest credit cards and retail charge cards.

• Develop a household budget. A budget is an essential money management tool. Review it together at the end of each month to compare what you actually did with your money to what your budget says you would do. If you went off course, figure out why and what to do.

• Agree to minimize your use of unsecured debt, like bank cards and retail store cards. It’s best if you both promise never to charge more than you can pay off in full before interest starts to accrue. The exception would be if you have an unexpected emergency and using credit is the only way you can pay for it. If that happens, you should resolve not to charge anything more until you’ve paid off the balance.

• Don’t trade all of your individual credit for joint credit. Marriage does not obligate you to have joint credit only and in fact it’s best for each of you to have some separate credit. However, when you are ready to purchase a big-ticket item like a home, you will both probably want to be on the note (and you may both need to be in order to qualify for a mortgage).

• If you each have separate credit card accounts, don’t hide your spending from your spouse or increase the spending limit on a card without talking about it first. Financial secrets are almost always found out eventually and once they are, they can destroy a marriage.

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Bottom-line, as a married couple, share responsibility for your finances, manage your debt responsibly, and communicate openly and often about your financial needs and wants. Following this advice will help keep you out of financial danger and increase the likelihood that your marriage will succeed.

Oh, one final word of advice. If you are going to pay for all or a part of your wedding or reception, do not go into debt to do it!  Accumulating debt for this reason sets the stage for irresponsible borrowing in the future. I’m not trying to be a killjoy, but only spend what you can afford.  In the end, your wedding is about you and your future spouse and the people who come to witness your marriage, not about an elaborate location, expensive trappings or a sumptuous meal at the reception. If you cannot afford the wedding you want without going into debt, then delay your marriage until you have saved enough to pay cash for it—or rethink your vision and scale back.  The same is true regarding your honeymoon. The last thing you need when you are starting your marriage is a pile of unpaid debt.

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If you fly regularly, you’ve probably been looking for a credit card that will allow you to earn additional bonuses when you use it to book travel arrangements. But because each type of account is different, there are a lot of factors you may want to consider before committing to one.

An airline miles credit card can be extremely beneficial if you’re already using a standard card to pay for travel costs, as it will essentially grant you free points for money you would have spent anyway. So how do you know which is right for you?

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Not all bonus rewards offers are created equal, so it’s important to review a number of them to get a toe in the water and test the current climate. These days, lots of miles credit cards come with a significant amount of bonus miles that are granted to you just for signing up, and many are doubling that amount when borrowers reach certain spending thresholds within the first few months the account is open.

While you should absolutely factor that type of offer into your overall decision, it might not be the best idea to base it solely on the amount of bonus miles you’re getting, particularly if you plan to use the card regularly. Often, cards that come with the most generous sign-up bonus offers will also come with higher interest rates or annual fees, so if you regularly carry a credit card balance from one month to the next or generally don’t do enough spending on the card to recoup the amount you’re paying in fees, that card might not be right for you.

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In addition, you might also want to explore the tie-ins a particular card has. For example, many also reward purchases made at affiliated hotel or rental car chains, and as such, if there is one brand you prefer over others, you may be able to benefit from a card that will reward those purchases more.

And of course, when looking for a new credit card, you should always work to determine how it will affect all aspects of your finances. Finding the offer with the right terms and conditions for your financial situation is of great importance when you’re trying to use your card responsibly.

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