• Late fees – creditors must provide at least 21 days from the date the bill is mailed, for you to pay your bill. In addition, bills cannot be due on weekends or have adjusting due dates (the 17^th one month and the 18^th the next). 
• Over- limit fees – before you can make a purchase that exceeds your credit limit, you will have to “opt-in” and authorize receiving an over-limit fee. If you do not, the purchase will not go through. 
• Interest rates and interest calculations –
  • A creditor cannot increase your interest rates on your current balance due to clauses in agreements such as, “any time, any reason” or “universal default.” The ban also severely restricts retroactive rate increases due to late payment.
  • Interest on promotional rate credit cards must last for a minimum of six months.
  • Payments made that exceed the minimum payment due must be applied to the highest interest rate portion of accounts. So, if you have an account with an interest rate of 23.99% for cash advances and 14.99% for purchases, the excess amount must go to the cash advance balance.
  • The practice of calculating interest for the current month on the previous month’s balance is now prohibited. 
• Plain language and Clear Information –
  • Contract terms must be in written in clear language and disclosed in such a way that consumers can understand them and effectively manage their finances.
  • Information regarding how long it will take and how much it will cost the consumer to pay off an account, if they only pay the minimum due each month, must be shown on monthly statements.
  • The creditor must also show the payment and interest cost if the consumer were to pay the debt off in 36 months. 
• Other new rules –
  • Fees on subprime or low-limit credit cards are substantially reduced and regulated. Consumers can no longer be charged numerous fees on the credit card, just for opening the account.
  • Store cards and gift cards – the law limits inactivity fees on cards for the first 12 months it is open.  In addition, any fees for the cards must be clearly disclosed.

As always, it is up to us, the consumers, to carefully read the terms of any credit card we have or decide to open. The rules and regulations in the CARD Act are meant to provide consumers a clear and concise foundation to successfully navigate the world of credit and personal finance.

1. Your credit report. Visit annualcreditreport.com and request your free credit report from each one of the major credit reporting agencies; Experian, Equifax and TransUnion.
2. Analyze your auto insurance coverage to make sure you are getting the best deal and that you are adequately covered.
3. Check your savings and investment accounts. Make sure you are taking full advantage of employer matched savings programs and check the diversity of your investment portfolio. If you need help with investments, talk to a certified financial advisor.
4. Determine your net worth. Make a list of the value of all of your assets and the amount of your liabilities. Then subtract your liabilities from the assets. If the number is negative, you owe more than the value of your assets. If part of your debt is unsecured look for ways to reduce it or eliminate it as soon as possible. Every dollar that goes to repaying interest on unsecured debts, like credit cards, is a dollar you cannot use for securing your financial future, buying a home or meeting your personal financial goals. Certified Credit Counselors can help you determine your net worth and develop plans for managing your debt. Visit the Association for Independent Consumer Credit Counseling Agencies at www.aiccca.org to find a counselor.
5. Once you know the worth of your belongings and investments, determine the level of home or renters insurance you may need.
6. Finally, evaluate your need for life insurance.  MSN Money has a great calculator you can use to determine how much life insurance would be necessary if something happened to you.

The above is just a bare bones list of items you should evaluate on, at minimum, an annual basis. By reviewing these critical areas you will have the information you need to create a plan for your financial success!

Just like a food diet that helps you watch what you eat, a spending diet helps you manage what you spend. Last year a poll conducted by American Research Group showed that Americans planned on spending an average of $431 on Christmas gifts.  However, intentions are not the same as actions. In evaluating the difference between what people said they were going to spend and what they actually spent, Catherine Rampell, Economics Editor for the New York Times, said, “Consumers may say they’re going to spend less [this year], but they buckle when they actually hit the mall.”

So how can you make a reasonable shopping budget and stick to it? Below are some actions you can take on your spending diet which will make this holiday season more enjoyable and less expensive.

Get organized

First create your own budget and see how much money you have available to spend on holiday shopping. It may not be very much and that is okay. Having an enjoyable holiday season does not mean it has to be an expensive one. What do you enjoy about the holiday season? Visiting with friends and family, singing carols or holiday songs, enjoying a good meal? Some people spend an evening driving or walking around their neighborhood looking at the decorations. 

Make a list of everything you want to buy this season; decorations for all the upcoming holidays, gifts, costumes and special foods. Now review your list and find items where you may be able to cut back. If you plan on having a dinner party at your house, could you make it a potluck instead? Could your children make decorations rather than purchasing new ones from the store? Really evaluate whether or not the items in your list are necessary for enjoying the holidays.

Impulse spending

Leave your credit cards at home and pay cash when you go shopping. Credit cards make it easier to spend more than you budgeted. According to research conducted by Dunn and Bradstreet, people spend, “on average, 12 – 18% more when making a purchase with a credit card as opposed to cash.” When the cash is gone you are done shopping.

Stick to your list. If you have trouble saying no to sales or “good buys”, avoid going to the store without a list or a reminder of what you know you can afford. If only certain stores cause temptation, try to avoid those completely.  Finally, take a notebook with you when you shop. Jot down the items you purchase and the amount of money you have spent. This will help you stay within the limits of your holiday budget.

Reduce the obligations

If you typically purchase gifts for extended family and friends, think about ways to change that tradition. Talk to them about limits on spending, drawing names, simply exchanging cards, or having a get-together instead. Chances are they would like to reduce their spending as well and would appreciate the suggestions.   

Be realistic

Many people feel the need to spend a lot of money on gifts for their children in order to show them that they love them. Others worry that telling kids there is a limit to the amount of money spent on gifts or that they need to scale back the holidays will cause the child to worry about the family’s financial situation. In reality, parents are a child’s primary financial teacher and holidays are a perfect opportunity for learning about budgeting.  However, rather than explaining that they’ll receive less gifts this year due to money constraints, let them know that you’d like to have a simpler holiday. Emphasize being together as a family and creating new, fun memories.  Perhaps spend an evening together baking holiday treats as gifts for friends and neighbors.

Finally, remember, you do not have to accept every invitation to a party, or buy the biggest and the best gift to show someone you care about them. Just like eating a well balanced meal will keep you healthy, a well balanced budget will keep you in solid financial shape.

There is not one perfect way to get out of debt – every person’s financial situation is different. If you’re struggling to make your minimum payments each month, getting late fees, over-the-limit fees, or even collection calls, you need to get help to prioritize your obligations and to determine the best options available to you.

If you are ready to tackle your debt on your own, use these steps as a guide;

1. If you’re in a hole, the first step is to stop digging. Cut up the credit cards, stop using them, put them away; whatever you need to do to not charge on them.
2. Make cutbacks where you can on the necessities; buy store brands instead of name brands, use coupons, brown bag your lunch, etc.
3. Stop non-essential spending wherever possible; movies, eating out, coffee, etc.
4. Start an emergency fund by opening a savings account and aim for at least $500. If possible set up regular automatic deposits. Why? If unexpected expenses come up and you don’t have an emergency fund, you will skip your debt payments to pay for the unexpected expenses. The emergency fund protects you and your debt payments.
5. Acknowledge your debt by listing it out and make your repayment plan. Use our Debt Spreadsheet.
6. Keep a monthly budget. Use our Budget Worksheet.
7. Make paying bills on time a habit. Late payments on any bill can be very costly. If you have a hard time getting bills paid on time set up reminders on your calendar or online banking may be a good option – check with your bank.
8. Grow your income. Another great way to get out of debt faster is to make more money. Look for ways you can make money on the side, or ask for a raise, or look for a higher paying job. See our tips on Possible Ways to Increase Income.
9. Track your progress on your Debt Spreadsheet. Update it every payday (or however often you pay bills) so that you can see your shrinking debt amount. It may be a ways off, but it’s within sight!
10. Have fun! Celebrate your accomplishments! Make it an adventure. It is very empowering to take back control of your spending and finances.

Below is some advice on how to plan for these situations:

Emergencies: If you stop and think about it, how many of your current credit card charges were actually for emergencies? Rather than continue to pay interest and fees for the privilege of having and using a credit card, start saving to build up a cash reserve. Use your debit card or look into online banking to pay bills and make normal monthly purchases. Put 10% of your pay into a savings account. If an emergency arises, try to use your savings rather than increasing the balance on your credit card.

Traveling: If your debit card has a Visa or MasterCard logo, you can typically use it to reserve a hotel room, a car or purchase airline tickets. The key is planning; take the time to determine how much your vacation is going to cost and begin setting aside money specifically for that purpose. Also, make sure you have enough funds in your account to cover the hold (the amount the hotel or car rental business charges you to guarantee the reservation).

When you are traveling, use traveler’s checks (considered the same as cash, but protected against loss and theft) or your debit card. Just be sure to track where you are spending money so you stay within your limits.

Training yourself to live without credit cards can be difficult, but the rewards are great. Rather than paying interest and fees to someone else, the money you earn is your own.

To learn more ways to save money and live without depending on your credit cards, visit http://www.myfinancialgoals.org/ or call a certified credit counselor at 1-888-282-5899.