September 21, 2006

(Consumer Recovery Network) - This week’s edition of Debt Bytes features a story submitted by a woman in my local area. She has come a long way in her understanding of debt and credit, the good, the bad, and the unbalanced.

She came to her understanding over time, as a result of research and her own experiences. One of the intentions of Consumer Recovery Network is to stream line a consumer’s ability to gather information so that they can compare and understand the options available to them.

The following was submitted to us by a Debt Bytes subscriber:

I will always remember my Mom scrambling at Christmas time, or more appropriately, Christmas Eve. She would drive herself crazy wondering what everyone wanted and where she could find it at the last minute. My sister and I were always, reluctantly, in toe. It never once occurred to Mother that she couldn't afford to buy all these gifts.

I was just a kid, so I didn't really care how she paid for any of these wonderful “things” - I just hoped I had something cool under the tree. She charged every perfume bottle, every book or CD, every toy. She would joke with the cashier, "Luckily, I don't have to worry about it until after the holidays!“ Logical? Maybe.

As it turns out, it wasn't so logical. I later learned she had 9 store credit cards that were either at or over their limits. She didn't have a glamorous or high-paying job, so she hoped for good tips. She'd bury herself in credit card debt at major intervals during the year. School shopping and Christmas were the two that I remember the most. It didn't leave her much of time to catch up before the next holiday or school clothes emergency.

I am now a parent and consumer myself and, not learning from my Mother’s sad experience, I had to fall into my own credit hole as a 20-something. I was literally right where she was, asking CCCS for help. To some extent, that was helpful, but my credit was shot. I had to start on my own, from scratch. It took me two full years to get my credit score back up to a “respectable number”. I must admit, though, dealing with the credit bureaus was more than just frustrating, it was downright maddening! It consumed a major percentage of my time, not to mention, probably many dollars in postage in those two years (“certified mail”). Anyway, I got through it. I now monitor my credit regularly and I recommend everyone monitor their credit reports, even if just for the sole purpose of learning how your score is affected, how often, and why. It’s pretty surprising!

I am now a 30-something who takes her credit very seriously. I don't buy what I can't afford. I DO have a few store cards and one major credit card, but I pay them all off monthly, which, in turn, saves me any interest rates and late fees those nasty little creditors may want to charge me with. It also keeps my credit report looking nice and shiny. I don’t need my credit and I think that’s the big point here. It’s not there to pay for my bills or vacations. It’s there to help me build my credit, so that if a major purchase, like a car or home comes up down the road, I’ll have something to bargain with – my great credit rating.

So, next time you check your mailbox and Capital One or Citibank has sent you an incredible "0% Interest" offer, do yourself a favor and show them 0% Interest!

Our goal is to assist consumers in considering how their options weigh up to their goals. The credit decisions we make today can have long range positive or negative affects. No matter where you are at financially, the more knowledge you have the better prepared you will be. Visit the resource section of our web site and begin or further your education today.

I would like to get your feedback on this or any previous debt bytes articles. CRN is always interested in your feedback, insights, and credit anecdotes.

Here are 7 ways you can fix and improve your credit score and obtain credit cards and/or loans at favorable rates.

1. Reduce your balance to limit ratio.

When a company is reviewing your credit, most of them will look at the amount of balances on your current accounts and compare that figure to the amount of total outstanding credit you have available.

EX. Total Balances = $10,000 and Total Avail. Credit = $20,000.

Now in this example your ratio would be at 50% which in most cases would be frowned upon by lenders. The ideal ration would be anything less than 30%

A good idea would be to pay off those low balance credit cards to get your balance to limit ratio under 30%

2. Cut back your credit card usage.

Even if you are the type of person who typically pays off your credit cards every month, it is a good idea to keep your balances below 30% of the available credit limit.

Even though you are paying off your credit cards monthly your balance is still reported to the credit bureaus.

One of the best ways to keep track is by using financial software like Quicken or Microsoft Money. Using these programs can help you stay below 30% of your available credit limits.

3. Know your limits.

In some cases, your credit card companies may not report your limits to the credit bureaus. This may cause a drop in your FICO score.

What happens is the credit bureaus will use your highest balance as an estimation of your credit limit. So if you spend between $3000 and $3500 on your card monthly then on the credit bureaus you will look like you are using more of your available credit limit than you really are.

In most cases, you can call your credit card companies and have them report your limits to the credit bureaus.

4. Use your older cards.

One of the most important factors in determining your FICO score is the length of time a card has been open. The older the account the better it will make your credit score look.

It is a good idea to use your older cards every few months just to make sure that the credit card companies continue to update your information with the credit bureaus.

5. Help from credit card company.

If for the most part, you have been a good customer, you can call your credit card company and ask them to remove 1 or 2 late payments from your history. Most of the time, this request has to be made in writing but it is definitely worth a shot. Your chances of success using this method increase the better your record with your lender.

If you have had more than just 1 or 2 late payments, then another option would be to request that your lender "re-age" your account. Typically, this is where you and your lender work out an agreement that if you make 12 or more consecutive payments on time, they will delete any previous late payments.

6. Disputing your old negative items.

So you had a disagreement with a company over a bill a few years ago, and it is still hurting your credit today. Disputing that bill as "not mine" is an option you could use to fix or improve your credit score. A lot of times, if the item is relatively small and old, the credit card companies won't bother to respond to the credit bureaus investigation. Most of the time, this will cause the item to be removed from your credit history.

I have seen success disputing negative items when a lender has merged with another company. The merger causes older debts to get "lost in the shuffle."

7. Concentrate on the important stuff.

There are certain aspects of your credit report that really affect your score. It is important to know what they are and to really focus your attention on these items to repair and improve your credit score.

Here is a short list of the item I suggest you focus on:

1. Negative items that are not yours (e.g. Late payments, charge-off, or collections)

2. Incorrectly reported credit limits

3. Anything not listed as "Current" or "Paid as Agreed". (e.g. Settled, paid derogatory, or paid charge-off)

4. Accounts that shouldn't be there due to a bankruptcy.

5. Derogatory items that are older than 7 years that should have dropped off. It would be 10 years if you have a bankruptcy.

You want to be careful with this one because as we discussed earlier. Having aged accounts actually improves your credit score, even if they are negative accounts. It is not possible to know the effect of closing an old negative account. You are kind of "rolling the dice" when you do it.

As you can see, these 7 ways will get you on your way to raising your credit score and lowering your interest rates.

Good credit is obtainable if you just hunker down and put your mind to it. Following the tips above will help you get out of the credit "dog house"

I recently saw on CNBC that a new credit bureau called VantageScore is trying to update and levelize the way that credit scores are tabulated for creditors. Their "leveled credit characteristics" across the three credit agencies, Equifax, Experian and TransUnion will try to ensure that any credit score differences for the same consumer are attributable to what is in each agency's database, not the scoring algorithm itself.

It is a little known fact that credit scores from the different credit bureaus can differ markedly in the score they give the consumer. Each may have different credit card and mortgage loan histories, and one or all of them could have erroneous or incomplete data that can affect the credit score. Most lenders will report to one or two, but not every one of the lenders report to them all. FairIssac, the developer of the original credit scoring system, has always been the "gold standard" of credit score numbers. VantageScore may change that.

VantageScore is unique as the first credit scoring model to be developed jointly by the national credit reporting agencies. That way, VantageScore can enjoy the expertise of industry specialists to lessen score variability and increase consistency in the consumer's credit score. This can eliminate confusion for you and your lender.

To start with, VantageScore uses a different score range than the FICO Score model. The VantageScore range is 501-990. Using multiple scorecard technology, VantageScore seeks to give the lenders superior risk prediction. This results in a stronger separation of good and bad performing accounts. The new scoring system returns more predictable scores on "thin-file" consumers, which are those with little credit history to score. So, even if you have limited credit history, lenders can use VantageScore to best assist you under varied circumstances.

The criteria that VantageScore uses and the weights attributed to each are:

Payment History 32%
Have you consistently paid your accounts in a timely manner?

Utilization 23%
How much of the total credit available to you are you currently using?

Balances 16%
What is the total of your current and delinquent account balances?

Depth of Credit 13%
How long is your credit history and do you have a healthy mix of credit types?

Recent Credit 10%
How many recently opened credit accounts and credit inquiries do you have?

Available Credit 7%
What is the total amount of credit you have access to?

So in conclusion, VantageScore will have significant benefits to the credit consumer because it is consistent, using identical scoring algorithms and leveled credit characteristics across all three national credit reporting companies. It is accurate, because knowledge of the data ensures the most accurate scoring algorithm. And, it is easy to understand and apply, having a score range of 501-990 with higher scores representing a lower likelihood of risk.

No one wants to give you a credit card anymore. You are maxed out, what can you do? Here are a couple of options and we are going to have a look at them. One is a debit card, the other is a secured credit card.

Most people have heard of debit cards, they work like a mobile bank teller. You go to the store and it is time to pay so you pull out a card similar to a credit card and swipe it threw the machine. Enter your security code and the bank mystically transfers money from your account to the stores’. The key words are transfers money, if there is no money in your account nothing happens. It is similar to using cash, you have to have it to spend it.

The benefits of debit cards are you cannot spend more than you have in the account. There is some security to the debit card, if it is stolen you can cancel the card and get a new one. There have been numerous reports of “fake” debit machines at all kinds of stores. This is where a person working at the company brings in their own machine, when you swipe the machine it records your account info on the card and your security code. This gives them access to your account and normally they will empty it as soon as possible. The only defense against this is look at the machine, is there anything strange about it. If you are unsure ask to speak to a manager or use cash. Also check your monthly bank statements for any transactions you did not do and report that right away.

Some other downsides are you can spend all the money you have in your account. Debit cards only stop you when the money is all gone. For some of us that can be too soon in the month. For those of us with a flair for spending I still recommend using cash or the next type of card, a secured credit card.

A secured credit card is like a pre-paid phone card, except you can use it anywhere a credit card is accepted. It looks like a normal credit card but there is a value either recorded onto the card or the account the card is associated with. These are great for people who overspend because when the money is spent the card no longer works until you “recharge” the account.

One of the common downsides to these cards is there can be service fees galore to them. A small fee to set it up, re-charge it, statements and on and on. For some people who cannot use cash for everything I think they are the way to go. Shop around for the best deal and only put small amounts of money in this account to force you to watch your spending.

The credit score was invented about 40 years ago by Fair Isaac Corporation. A FICO reference on your credit report alludes to that score. It is considered the standard in the financial services industry and is used by all three of the major credit bureaus. FICO scores consider a wide range of information on your credit report, primarily your credit history, your payment history, the number of credit accounts you have and how much you owe.

Personal and Sensitive Information

However, Personal information is not considered or included in your credit score. You can rest assured that sensitive information is protected by law and that by no means is included within your credit score calculation or your credit report for that matter. Data that is not considered includes many personal information protected by several statutes.

Race, religion, national origin, sexual orientation or marital status is not part of the credit score formula. It is against the law in the United States to consider any of this information in credit scoring. Including information on receipts of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act is also illegal.

Your age is not considered in a FICO score nor is your salary, occupation, job title, employer, and employment date or employment history. Although lenders consider this information, it is not included in your credit score where you personal life is not an issue. Some of this information may be included however in your credit report but will not be used to calculate your credit score.

Financial Information Left Aside

The interest rate being charged on a particular credit card or account or Child/family support obligations or rental agreements won’t be included in your credit score either. All this information can be requested by a lender when you apply for a loan of a significant amount but won’t be part of your credit score as only basic items are components of the credit score formula.

Requests for your credit report are not considered. The score does not count requests you have made for your credit report to check it for errors. It also does not count requests made by lenders to make you a pre-approved credit offer. Any request by a lender for you to review your account with them, called an administrative inquiry, is not included. Requests coming from employers are not counted either

Obtaining an annual free credit report can keep you on top of your credit and allows you to check if there are any errors on your credit report. By receiving a credit report annually you can keep one step ahead in making sure there are no problems with your credit score.

There are three big firms that are nationally operated which you can receive an annual free credit report The “big three” are: Equifax, TRW, and Trans Union Corporation. You can contact any of these credit bureaus to receive an annual free credit report. You can also check your local agencies as well but they generally charge a fee for this service.

The free credit reports will not automatically be sent out to you as the consumers need to request getting a report one of the following ways. You can go to www.annualcreditreport.com and obtain a credit report. This is the only authorized source for credit reports where customers can access their information online. This service is free of charge. You can also call 877-322-8228 to receive a free credit report. The last thing you can do is fill out completely the form on the back of the Annual Credit Report Request brochure and then mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281. Make sure that you go through the centralized agency as by obtaining your report from other agencies you will not receive an annual free credit report but you will be charged for their credit services.

It does not take much time or effort to receive an annual free credit report. It is an important document as it could have ramifications to your employment, loan applications, and benefits. Considering the service is free there is no reason not to check up on your credit score to see if it can be improved or there are errors which need to be addressed. Checking on your credit should be an annual ritual as it is more important to know the status of your credit that the score that it holds

It started out innocent enough; Pricilla had refinanced her mortgage many times in the past. First, when she bought her small two bedroom one bath bungalow in an up-trending neighborhood, with a local sponsored low down payment program. As a single woman it was a challenge with her income level at the time. It was an excellent value with an extremely motivated seller offering many seller incentives such as paying for all her closing costs and prepaids. Three years later, with a new promotion and higher pay, Pricilla decided to add an additional bedroom, bath and a pool. This was a special program, which refinanced the first mortgage and escrowed sufficient monies to put on the addition and add the pool all in one new loan. As it mimicked a construction/perm type loan which carries a little more risk and a higher interest rate in this case. After five years with current interest rates below what Pricilla was paying on her construction/perm type home improvement loan she decided to shop for a loan. Pricilla had always utilized the same mortgage broker who worked so hard to get her credit straightened out and position her to buy with the special subsidized program on her original purchase of the bungalow. Now married, with three young children, Pricilla never forgot the incredible lengths which Emily, the mortgage broker, had taken to get her into the house. Emily had kept in touch though out the years and Pricilla was quick to pass along many referrals of friends and family to Emily who had always done an outstanding job of getting a good market rate and reasonable closing costs. Many of the referrals had challenged credit and Emily systematically worked to get them on track and over a few months time were able to buy their own home. Pricilla and Emily had become friends and shared many family experiences over their time from the first meeting. Emily had acted as a matchmaker resulting in Pricilla marrying her husband. In Pricilla’s mind, Emily was more than a mortgage broker, she was indeed a close friend.

Pricilla and her husband Bob, in a falling interest climate, had decided to refinance. They automatically called Emily to discuss some mortgage options. Emily demonstrated scenarios to a lower rate while paying off some credit cards and reducing the monthly expenditures by some $400 per month. Not wanting to extend the term of the loan, Emily suggested that by mirroring the current loan term the mortgage would pay off the mortgage in the exact same period. The Good Faith Estimate, Truth In Lending and all the other disclosures were signed including the Borrower’s Authorization allowing Emily to pull Pricilla and Bob’s credit with the three credit reporting agencies. Emily had collected two years worth of W-2s, three months bank statements with all pages and all accounts together with a month’s worth of pay stubs showing year to date earnings for each. Emily knew that with the good possibility of an automatic underwriter approval that she may not need all the collected information, but did want to disturb them for additional information when she could just get it on the first visit. In addition, Emily, collected a copy of the new sealed survey when the addition was constructed, a copy of the original owner’s title policy, a copy of the current note and mortgage with the most recent mortgage statements showing balance, account numbers and phone numbers for payoff balances. Emily also took copies of the credit card statements representing the additional debt that would be paid off at closing. Emily returned to the office and entered the information in the computer to obtain an automatic underwriting approval. Emily already figured with Pricilla and Bob’s debt to income and on time mortgage pay history that it would go right through. It did. The approval came back ACCEPT PLUS. The findings came back with the credit report that had been pulled during the process. Per agreement, Emily proceeded to lock the loan per the Good Faith Estimate and application. There would be a full 30 days to close this loan. The financial markets were beginning to waffle again and rates may shoot back up, but this loan was now locked guaranteeing the offered rate per conditions. Emily called Pricilla and Bob with the good news. Emily set up a time for the appraisal to do an interior inspection with the borrowers paying for the appraisal at the door. Things were coming together nice and neat.

When you go check your mail how many credit cards are there in the box? Most people get a credit card offer in the mail every week; one credit card company or another is trying to get you to get their card. Before you make your choice of cards, you may want to check a few things to make sure you are getting a good card.

One thing you will need to look at is bank in which the card comes from. If you like to travel you will want a card that is accepted all over the world. You don't want to be on vacation and find out that your card is not accepted. You will want to check and see where your card is accepted, as some are more widely accepted than others, if you do not travel much this will not be as big of a concern for you.

Next you will want to look at interest rates. If you are a person who pays their card off at the end of every month this will not be as big of a concern to you. If you pay the full balance you will not get charged any interest. For those that cannot pay the whole balance every month, you will want to know what your interest rate is. The lower your rate is the better. The less money you have to waste on interest the better off you will be. Make sure you read all the information about the interest rate. Usually you start out with one interest rate, and if you make late payments they will up your interest rate. You will want to know what the default rate will be on your card just in case they try to do this. Make sure you read the fine print to make sure you know everything you need to know.

Another thing you will want to check is if there is an annual fee. Some cards will charge you a fee every year just for having your card. Other cards may only charge you an annual fee if you don't have a certain balance, or a balance for a certain amount of time. Other cards will not charge you an annual fee at all. Make sure you look into this too before you choose your card.

For several years now, one of the most sought after features on a credit card has been a long 0% balance transfer deal, almost to the exclusion of any other feature except maybe the headline interest rate of the card. More recently though, balance transfers have become less popular, not least because of the introduction of transfer handling fees, and there's now a new feature that more and more customers are considering to be of higher importance, namely cashback.

According to recent research, over a fifth of us now use a card that offers cashback or a rewards scheme, and the number has recently overtaken that of balance transfer users for the first time. So why has a seemingly simple feature such as cashback displaced the once mighty balance transfer deal in our priorities?

Credit cards have always suffered from the perception that they are expensive to use, with high interest charges and penalty fees - a reputation, it has to be said, that isn't altogether undeserved. Cashback cards give us the opportunity to turn that on its head, and actually come out on top financially by using our cards for everyday purchases.

For every purchase you make, a cashback card will effectively give you a refund of a small percentage of the purchase price. In the early days of cashback, this percentage was so small it was hardly worth considering - a 0.25% rebate was virtually worthless to most people with moderate spending habits. These days however, the figures are much more attractive, with a 3% rate not uncommon as an introductory offer. This kind of rebate is definitely worth having, and if you use your cashback card for all of your day to day shopping, the numbers can mount up surprisingly quickly.

What's more, if you use your card purely as a convenient payment method and not as a means of borrowing, and repay your full balance every month, then you'll avoid paying any interest fees or charges. This means that the money you 'earn' through cashback is totally free money - you're being paid simply to buy your usual shopping with a card rather than with cash.

Sounds good? Well, it's not hard to see why this kind of card has increased in popularity, but there are a couple of points to think about before applying for an account.

The main problem is that most of the time, you'll only receive your cashback once a year, either by check or refund to your account. This is fine for most people, but the cashback offer will be dependent on you sticking to the credit agreement. If, even accidentally, you make a late payment then you'll have broken the terms of your agreement and will lose all the rebate you've been building up. Keeping up to date with your repayments is therefore even more essential than normal with a cashback card.

With technology booming, the internet and how easy it is for companies to network into databases such as the "credit reporting" databases, more and more companies are able to find out more information about you quicker. This is also helping them get a more accurate view of you.

Insurance companies are no different, they are now reviewing your credit scores as a way to determine how "trustworthy" and "responsible" you really are. For years now, they have been giving "good student" discounts to students. They assume that good grades reflect on the level of responsibility of the student.

Why would it be any different with adults and their credit scores? Research has firmly proven that those with poor credit reports are less responsible across the board and more likely to be a risk to insurance companies.

However, many critics are still arguing that the two have nothing to do with one another and that the practice is completely illegal.

You can basically think about it as that you are now also getting an "insurance credit score" that takes your financial credit score, your accident history, your age, your demographics and other matters into account and then assigns you with a number. They key factor here is that now your financial position is going to begin impacting the quotes that insurance companies give you or whether they accept you at all or not.

The defense of an insurance company?

Studies have clearly shown that most of those who do poorly in credit scores are the most likely to have to make an insurance claim. In other words, how someone is handling their financial affairs can reflect their habits in other areas of their life as well.

However, the major critics of this are arguing that this system is skewed to work against low income households. The argument is that these people are not necessarily "less responsible" but just less capable due to lower incomes. However, whether this should reflect on their level of personal responsibility, that is being argued as unethical and maybe even illegal.

Credit card spending can be hard to keep track off if you are not disciplined, but it is important to monitor your spending in order to stop yourself getting into huge debt. If you are having trouble keeping tracking of what you spend on your credit cards, then here are some useful tips to help you control your spending.

Take stock and stop spending

Before you do anything, you should stop spending on your credit card and look at the situation you are currently in. Whether you have virtually no balance or a large debt, it is important to see exactly how much you have spent. This is the first step to managing your spending.

Make notes on your spending

Once you know what the situation is, start using your credit card as you normally do and monitor your spending. Take notes every time you spend money on your credit card, and look at how much you spend and what you spend it on. By dividing what you spend into categories you can see the areas that you are spending the most money, and where you can cut back on your spending.

Transfer balances

If you have a number of credit cards, then transfer the balances onto the lowest interest cards if possible. This will reduce the amount that you are paying in interest on your balances.

Get rid of cards

Once you have paid off some of your balances, then you can get rid of some of the cards that you have. You should make sure that you have only one or two credit cards, as this will help you to more easily keep track of spending.

Create a budget

Create a budget for yourself that you can stick to. If you look at how much you earn each month, and the subtract all the essential bills and spending from that, you will see how much money you have left to spend on extra things. Make sure that you stick to this budget, as it will help you to spend wisely and not get into debt.

Bank online

Banking online can really help you to keep track of your credit card spending. You can easily check your balance at any time of the day or night, and can instantly see what you have spent daily. Also, you can transfer your bank statements into an accounts program to better help you manage your money.

Your credit score is a mathematical calculation done by the credit bureaus to determine your credit worthiness. A high credit score means you are a good credit risk; a low score means a lender will only lend to you if they charge you a high interest rate, or if you provide outside security, such as a car or a house.

A good credit score is important, because the better your score, the easier and cheaper it is to borrow. Even a one percent reduction in the interest rate on a mortgage can save you thousands of dollars in interest payments over the life of the mortgage.

How do you establish a good credit score? Follow these steps.

First, pay all of your bills on time. Never pay your hydro, phone or rent late, because that may significantly lower your credit score.

Second, if you are starting with bad or no credit, apply for a secured credit card. Since you are, in effect, prepaying for your purchases by putting up a security deposit, it is relatively easy to qualify for a secured credit card, and it is a good way to build towards a good credit score.

Third, check your credit report regularly. Errors happen, and if your credit report has inaccurate information, your credit score will be harmed, even though it is not your fault. Experts recommend that you check your credit report at least once each year, and before every major purchase.

If your credit score is not good, consider asking a trusted family member or friend to co-sign a loan for you (but be sure you can pay it back, or else your co-signor is liable for all of the payments).

Finally, do some research. There are lots of great resources on the web, so do some research for more ways to work towards a good credit score.

Bernard Johnson has many years experience advising people on how to get a good credit score. He has written many articles on your credit score and how to work towards a good credit score, even if you are starting out with an average credit score

The holiday shopping season is a much-anticipated time of year for both the retail industry and consumers. For the retail industry, the largest percentage of their sales are earned during the holidays by consumers who have failed to plan and are easily lured to make impulse purchases for shiny new gadgets. Consumers on the other hand make a dash for the mall, credit card in hand, in search of a thrill from the fancy decorations and Christmas music, the sale signs, and the crowds. At the end of the day, or shall I say in January after things have calmed down, consumers are weeping because of their huge credit card bills wondering where all the money went and retailers are laughing all the way to the bank or the board room. While, its not such a bad thing for the retail industry, how can we as consumers make sure that we are not weeping but celebrating along with the industry? It is simple. We can develop a plan and a budget, which includes shopping year round for gifts and doing some comparison-shopping.

Christmas comes the same time every year. We have approximately 12 months to develop a plan and to execute it if we desire to save money and keep our credit card balances low. Why wait until December 1 or Black Friday to begin our Christmas shopping? For the adults and even some of the children on our list we can shop for gifts year round. Why not begin in January or early February when the winter clearance begins for many retailers? Or stock up on the latest toys and gadgets at significant savings on the day after Christmas. To avoid the long lines the day after the holiday, shop online where the deals have proven to be just as good. Some merchants even offer free shipping. Be on the look out for online coupon codes and free shipping offers.

Your plan should also consist of making a list, which includes the names of all the family members, and friends that you need to purchase something for along with a gift or two that is representative of them and your relationship. Then you should develop a total budget using the highest price item of the two that you listed and make the conscious decision to adhere to that bottom line. After you’ve done this, prepare to do some comparison-shopping, which you can do from the comfort of your own home. The thing about comparison-shopping is that you must give your self enough time; this is not for procrastinators. Check the Internet sites of competing retailers to see who has the best price and check the weekly advertisements too. This way you know what you want and where to get it before you leave home, which will reduce the number of impulse purchases you make and reduce the temptation to pick up things along the way.

Don't become trapped in credit card debt year after year during the holiday season. Make a decision to develop a plan and follow it. Decide early on who you want to purchase gifts for and select the ideal gift. Then develop a budget that you can adhere to that will cover the expense of all these gifts. Finally, allow yourself enough time to do some comparison-shopping. Watch for sales cycles and weekly advertisements from those same merchants. Then make up your mind to be done or at least 95% complete with your holiday shopping before December 1st. By having a plan and make a concerted effort to stick with it, you can ensure that you will be rejoicing at all the money you saved in January because you made the decision to stop letting retailers control your credit card spending.

According to statistics in a recent survey, less than half of those who apply for a credit card shop around at all. They either accept the credit card offered by their bank or another organization, or they fall prey to a credit card advert that lands in their post box. Is that any way to find the best credit card deal?

The question is rhetorical, obviously - but what's not rhetorical is the need to do a bit of homework before you apply for a credit card. The wrong choice can cost you thousands of pounds over the course of a few years.

Some wrong choices jump right out at you. If you can qualify for a low interest credit card, you'd be a plumb fool to apply for one with an APR of 34%. Keeping your eye on the average typical interest rates can help you avoid applying for credit cards that offer outrageously high interest rates.

Other times, though, it's not so easy to recognize which credit cards to avoid. As often as not, it's a matter of using a perfectly good credit card for the wrong purpose. Low interest balance transfer cards are a good example. Most people are drawn to low interest balance transfer cards because of the low APR on transferred balances. They usually carry a higher rate of interest on new charges to your card. They also usually apply your payments to the balance transfer first. That means that until your transferred balance is paid off in full, any new purchases that you put on the card will sit and accumulate interest - on which you'll pay interest.

Bottom line: avoid using a balance transfer credit card to make purchases.

Store credit cards offer some of the highest interest rates of all types of lending. Those high APRs are often hidden behind a special offer - pay for your purchase on a store credit card and get no interest for three months, or until the end of the year. Be careful to read all the fine print on those offers. It's not unusual for the no interest to be contingent upon having the balance paid in full by the end of the interest free period. If it's not, you could find yourself whacked with the entire interest from the date of purchase. Other things that may invalidate a no interest store card offer include late payment, going over-limit or missing a payment.

Bottom line: Avoid using a store credit card unless you use it for a special promotion - and abide by all of the stated terms.

If you make it a practice to research credit cards before you apply for one, you'll be able to spot which credit cards to avoid on your own. Moneyeverything.com makes it easy to compare credit cards and find the best credit card - and the ones to avoid.

There's been a lot of press lately about the demise of balance transfer credit cards. The reports of their death, to use an old quote, have been greatly exaggerated. Balance transfer credit cards have changed considerably, but they're far from gone and not likely to be going anywhere anytime soon. If you've been considering cutting your interest payments by transferring the balances on your high interest credit cards to one with a special balance transfer deal, here's what's going on in the world of balance transfer credit cards.

For years, credit card companies were able to build their business by enticing new customers from the ranks of those who'd never held plastic before. But with the numbers of credit cards in circulation rising and the average Brit carrying four different cards in his or her wallet, they've had to get competitive with each other. Thus was born the marketing tactic of offering 0% interest for any balance transferred from a competitor's credit card to a new card.

Those 0% balance transfer deals were greeted enthusiastically by the public – a bit more enthusiastically than the issuers of those cards expected. They missed a vital point in their calculations – customers who switch cards for a better rate of interest have already given up brand loyalty in the interest of getting the best deal. When the 0% interest ran out, they simply moved their remaining balances to another card. To counter that, the big credit card companies started modifying their offers with restrictions designed to keep people from jumping from card to card following the best rate

Debt consolidation is a term you'll hear often in the adverts for loans - especially home loans. The idea is to take out a loan large enough to pay off your credit cards and other loans, then pay off the loan at a lower interest rate than you were paying on the credit cards. It's a logical leap - except for one thing. It works even better if you use the lowest interest rate loan available - 0% balance transfer credit cards.

0% balance transfer cards were the product of a competitive marketplace - the credit card marketplace. After years of growth in the credit card market, the providers found themselves in the position of having to entice customers from each other in order to keep on growing their market share. In order to do that, they came up with several schemes to make their credit cards more attractive than those of their competitors. Balance transfer credit cards are specifically designed to get you to shift your existing balance from one credit card company to another by offering you a better deal. And while 0% balance transfer credit cards are a bit more scarce than they were two years ago, they do still exist - and they've been joined by other low interest balance transfer credit cards schemes.

The Benefits of Credit Card Consolidation with Balance Transfer Credit Cards There are a number of benefits to taking advantage of a balance transfer scheme to get control of your credit card debt.

1. Low (or no) interest slows down the mounting of your debt. If you've been carrying half a dozen balances on higher interest credit cards, chances are your minimum monthly payment doesn't even nibble at your outstanding balance. That's because credit card interest rates are designed to KEEP you in debt, not get you out of it. By moving all of your high interest balances onto one low interest card, you can attack it more directly and keep it from spiraling completely out of control.

2. One monthly payment makes it easier to make the payment on time. Instead of remembering half a dozen different payment due dates, you only have ONE. No more worries about missing or late payments because one of your credit cards fell off the radar