With less than 2 months till Christmas, its prime time to be writing up your Christmas gift list, doing some window-shopping, and scouring deals for Black Friday (3 weeks away!). But are you also getting your wallet ready for the holiday spending spirit? Budgeting and practicing within-your-means spending is going to be key to surviving through to New Years with your credit score intact and your finances out of debt.

Not to put a damper on the joy of the coming months, but realistically this holiday season could be a minefield of risks that could blindside your credit report and bank account. Racking up charges up to your credit limit could lower your score, extra fees on credit cards and the risk of overdraft charges on debit cards take chunks out of your savings, and just like with holiday pounds, you could gain debt faster than you can work it off. WiseBread posted an interesting blog about “frugality fatigue,” suggesting that after the recent years of tightened spending and penny-wise habits, people are looking to spend and return to the old ways of credit cards and overspending. An American Express survey of consumer attitudes found that 80% of consumers still intend to buy gifts this holiday season, with 36% planning to spend $100-$499, 28% to spend $500-$999, and a full 30% spending $1,000 or more.

Whether you plan to spend $100 or $1,000, the next two months of gift shopping, eating out, entertaining, and traveling could deplete your savings and hit your credit score harder than you are prepared for. Besides healthy credit and stable savings, there are many good reasons to be prudent with your holiday budget this year so you can start 2010 in good financial health. The following tips can help you save money and care for your credit without skimping on the holiday extravagance:

Protect your Credit

1. Plan ahead to minimize overspending – Before you even go to the mall or shop online, make a list of who you have to buy for and stick to it. It will help you stay on budget and on track, and minimize the possibility that you might start browsing and shopping for yourself. Also, remember as you shop not to overspend just because you might be charging credit. Rule of thumb: spend only what you can afford to pay off RIGHT NOW; shop like your credit card is a debit card and go straight home after shopping and pay off your credit card so you won’t be tempted to carry a balance and rack up interest charges.
2. Opt out of traditional credit cards – Pre-paid credit cards are a good alternative to credit cards because you don’t risk overspending on what you deposit, you can still build credit, and you won’t pay interest; the trade-off is you have to pay an annual fee. Or think about paying cash or using a secured card, both of which will not hurt your credit score.
3. Steer clear of store credit cards – Read the fine print of a store credit card or retail card and you may find that the membership benefits or special discounts you’d receive for opening the card isn’t worth the high interest rate and extra charges that comes with it. Store credit cards typically have a interest rate far higher—sometimes double the APR like Macy’s 23.99% APR or JC Penney’s 24% APR card—than a normal credit card. Also, store credit cards often stipulate that you must spend a certain amount through the year in order to qualify for discounts or benefits, have high late payment fees that increase with the balance, require a minimum purchase within a period of time to keep the benefits, and more. However, store credit cards are beneficial if you are sure to pay off your balance in full every month, that way you can get your 15% discount without risking paying a 25% interest rate. For information on specific cards pros and cons, check out Store Credit Cards: A Rip Off?

Shop smart, shop early

1. Save on shipping – More and more on-line retailers are extending offers of free shipping to get more customers clicking and buying. Look out for major retailers like Target, which launched its holiday free-shipping promotion on Nov 1, Walmart, which ships free to a nearby store, and more stores mentioned here to see where you can save. More tips:
   • Some online merchants time their free-shipping deals right before the week of Thanksgiving and Christmas to move inventory faster.
   • Websites like freeshipping.org and coupon sites like slickdeals.net and fatwallet.com list specific merchants with free or discounted shipping. Also, mark your calendar for Free Shipping Day, when participating merchants offer free shipping this Dec 17 and guaranteed delivery by Christmas Eve.
   • Amazon’s “Super Saver” shipping gives free shipping for most purchase orders over $25; if you are a few dollars short of $25, www.slickfillers.net lists items as low as $0.35 so you can fill in the few dollars or cents and get free shipping.
2. Get it while it’s hot and in stock – Ever heard of deal-of-the-day sites that only sell one product at a time, at a deeply discounted price, until it runs out and moves on to the next item? They are insanely popular all over the web and addictive to watch and track to see what the next item will be. Deal of the Day Tracker monitors most of these sites, which sell everything from discount duds to army knives and electronics, and shopping here could save tons of money on high-quality gifts and also practical items. Some sites, like Red Tag Crazy, can alert you via text message, e-mail, or instant message so you can know what is selling like hotcakes at 3 am.
3. Check your mail - Going through your junk or spam mail can pay off if you find some special offers from retailers’ emails. More and more retailers are sending customers special offers by e-mail or mail instead of mass advertisements of sales. Sign up for mailing lists or loyalty clubs at stores you want to spend at (for buying gifts for others, not for yourself!), and pay attention to email (you might have to wish out of your junk mail folder) that might hold big sales or coupon codes exclusive to customers on their mailing list.

At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!

Personal finance management tools aren’t new; sites like Moneystrands and Quicken Online have been around for years. These sites specialize in helping stressed-out consumers and overwhelmed spenders keep track of their money. Now, credit card issuers are countering bad publicity by becoming more and more consumer friendly in their approach, offering personal finance management tools to help customers manage their finances by emphasizing budgeting and saving rather than just credit card-charging.

This happens to be good timing in light of the entire credit card industry under tough scrutiny by both the government and the public in the last few months due to the increased interest rates, credit limit reductions, fee hikes, and more changes issuers have been scrambling to put in place before the reforms of the CARD Act go into effect in February 2010.

These controversial actions taken by the credit card issuers hasn’t made for a very good image of big names like Chase and Wells Fargo in consumers’ eyes. Getting back on the consumers’ side means showing customers that big credit card companies aren’t just out to squeeze money out of them. These personal finance management services, plus ending some of the more controversial changes in their terms and practices, are the credit card companies’ olive branch to consumers.

Check out what kind of financial management tools your issuer offers. Even if you are not a cardholder, some of the following sites are open to all consumers:

1. American Express Money Manager Tool – As a free benefit for American Express cardholders, the newly-launched Money Manager Tool helps you stay on top of your finances by giving you a complete view of all your accounts, credit cards, and loans in detail and have a big picture view of your money management. You can link all of your personal financial accounts in one place, and customize graphs and budgets so you can monitor your spending and budgeting the way you want to. While very similar to other personal finance management websites, the Money Manager tool is different in that it is exclusive to AmEx customers and also allows users to consolidate rewards statements for frequent flyer and hotel points. If you want all the perks of a typical money management site plus extra credit-card specific features like tracking your travel rewards points, this is a benefit AmEx customers should take advantage of.
2. Wells Fargo Smarter Credit– This website is open to all consumers, and has learning tools, articles, tips, and information aimed at helping consumers establish/rebuild credit, reduce debt, get more credit, and manage and protect credit. This site is useful because you can pick out the tools and tips most relevant to you according to where you are on the credit learning curve. Aside from some helpful articles and budgeting sheets, there is an interactive money management tool called My Spending Report with Budget Watch to help you track every purchase and set monthly budget goals, exclusive to Wells Fargo customers.
3. Discover’s Spend Analyzer – Another newly-debuted personal finance tool that offers online tracking and spending of purchases for Discover customers. Using the standard model of money management websites, you get the run-of-the-mill features of categorizing spending, comparing spending patterns over time, and sorting transactions by detail so you can manage how you use your Discover Card. However, this online tool only tracks spending of your Discover card, and not all of your financial accounts. But, a unique feature is the “Paydown Planner”, which helps create a plan for reducing your Discover card’s balance and get you out of debt, which is one of the most effective tools a credit card-specific financial management service can offer.
4. Chase Blueprint – This is a personal finance tool tied straight to select Chase cards that allows customers to determine how they want to apply payments across their statement balance. Check out my review of Chase Blueprint to see how it works and see if it’s the right kind of money management helper for you.
5. Capital One MoneyWi$e – A partnership between Consumer Action, an advocacy group, and Capital One created this personal finance resource website that offers helpful tools and articles specific to your money goals, whether that is educating your teen on credit or learning how to build wealth. It has an interesting click-through format that features people’s stories as well as interactive activities. Worth checking out since its open to all consumers.
6. Citibank – Citibank’s website features a “Planning” section that encompasses many categories that the other issuers’ personal finance resources don’t cover, such as Retirement Planning and Investment Planning. Click on the type of “Planning” you want, and you’ll receive a comprehensive list of articles, strategies, as well as tools and calculators to help you plan towards your goals. While there is no interactive money management tool, the information and calculators provided are very useful because they give you specific strategies and tools unique to your goals. The site is better suited for addressing specific financial goals rather than overall money management.

At Credit Karma Blog, what goes around comes around… Are these services helpful to you as a customer, and do you want to see your credit card issuer reach out with more tools, advice, and help like this? Comment back– we’d love to hear your reactions!

Pre-Paid debit cards are the “Other Plastic”, an alternative to credit cards that won’t rack up interest charges, increase your debt, or give you that queasy feeling of buyer’s regret the next day. If you are unable to pay off your balance and with credit card interest rates sky-rocketing to nearly 30%, you’ll want to curb your credit use this holiday season. Think of pre-paid cards as plastic cash, which will prevent you from spending beyond your means and make you think twice when you splurge because splurging will deplete your money immediately, rather than be just a line item on a receipt to be paid off later.

Pre-paid credit cards are especially useful for people with poor credit or no credit history who can’t get approved for a typical credit card. It’s a credit-healthy way to spend responsibly while building positive credit history and a better credit score. It’s simple: you pre-load the card with money, spend as you wish, and you have no bills to pay at the end of the month. You still get the perks of the convenience of a credit card, while avoiding unnecessary fees and finance charges. Best of all, you can still build a positive credit history (but always check with your issuer if they report to the credit bureaus). Your pre-paid card will be your training wheels to help you get the hang of credit without the risk of incurring debt or defaulting on payments. This is also a smart option for younger consumers affected by the upcoming CARD act provisions .

The pre-paid trend isn’t just limited to credit cards; these other pre-paid products can help you monitor your spending and still get what you want:

• Pre-paid cell phones have been around for awhile, and are still the no-hassle alternative to a contract phone. You pay for the minutes you want and load up more when needed; the only catch is that you might run out of minutes sooner than you think. You don’t even have to worry about a credit check, which some carriers do when you sign up for phone. One of Credit Karma’s favorite deals is the T-Mobile’s FlexPay for BlackBerrry Curve 8900.
• Gift cards are the “more personal than cash, less hassle than a present” staple at birthdays. You might have thought these were on the wane, but PlasticJungle.com has revived the gift card marketplace by allowing consumers to trade, sell, buy unused gift cards so you can buy stuff at places where you actually shop. It’s a better answer to retail therapy that won’t max out your credit or damage your score.
• Pre-pay your college tuition? Believe it. Some programs, most notably the Florida Prepaid College Plan in Florida and the Independent 529 Plan for 270 private universities nationwide, are urging parents to consider prepaid college tuition plans to secure their children’s future at a more affordable rate today. How much you can save depends on how soon you start saving, and with the inflating cost of higher education, locking in your costs at today’s tuition prices will save you potentially thousands. Keep in mind that these prepaid plans does not account for books, food, transportation, and lab fees that can add up to nearly half the cost of the entire college price tag.

Bottom-line?
Pre-paid is a good way to go if you are prone to overspending or need to get you back on track to good credit . With credit still tight in the marketplace but consumers showing a growing appetite for spending, I wouldn’t be surprised to see a lot more gift cards being swiped at the register or showing up under the Christmas tree this year.

Choosing the right credit card can be daunting when credit card applications bombard you with unfamiliar terms like variable default rate, cash advance transaction fee, and more APRs than you can imagine. Shopping for your next credit card starts with identifying your spending habits and how often you plan to use your credit card. Are you looking to earn rewards, for an emergency card, or an everyday-use card? Then check out the terms and conditions, especially the ones that affect your particular credit usage. Knowing your credit card and your specific needs before you sign on the dotted line can help you hone in on the key terms that will benefit or cost you.

REWARDS SEEKER - If you are itching for your next vacation, a rewards credit card can get you on a flight to Hawaii sooner. Just make sure you read all the rules and restrictions of the rewards program to make sure your credit usage will qualify you for the flight mileage or travel packages that you want.

• Know what kind of rewards you can get to make sure you are able to redeem enough to make the card worth it for you. If you are a frequent flyer or stay at top-of-the-line hotels, then you can potentially earn lots of rewards from your card. The Starwood Preferred Guest Credit Card is a great choice for jetsetters because it offers one of the best hotel loyalty and airline miles program with the least restrictions. But, in order to take advantage of a bonus 15,000 points on your Starwood card, you would have to spend the equivalent of $15,000 within 6 months to get 3 free nights in selected hotels. If you can hit this spending threshold without going bankrupt, then this is the right kind of card for you.
• Look at the APR for purchases at the bottom of the application because rewards card tend to have higher variable APRs than other cards (you are getting hotel stays and airline flights out of it after all). A rewards card works best for people who don’t carry a monthly credit card balance, or else you might end up paying for the rewards you accumulate many times over in steep interest charges.
• Also, look out for an annual fee; you’ll get the most out of a rewards card by using it regularly enough to benefit from the rewards program that fee pays for.

FOR EMERGENCIES ONLY – You want a credit card handy to back you up for when you have a financial emergency or want to buy a big ticket item. For the times you need credit quick, watch out for any extra APRs or fees that could make you pay extra for credit card features you won’t be using often.

• Cash Advance APR is an important interest rate to check out on the application, especially if you’ll be tempted to use your credit card to withdraw cash often. The rate is often high for most cards and usually upwards of 20% or more, which means even a small $50 cash advance can rack up a $10 fee.
• If you want to use your credit card as a backup to your checking account for the times you overdraw your funds, check out the Overdraft Advance APR, which also tends to be upwards of 20%. Depending on the increments your credit will deposit into your checking, anywhere from $20 to $200, relying on your credit card to keep replenishing your debit can cost you fees and interest.
• Finally, be sure to pay off your balance so you won’t get stuck paying high interest on your occasional purchases. If you only use your card for emergencies or big ticket items, a 0% APR credit card like the Citi Platinum Select Card gives you a 0% APR for the first 6 months, which is like getting an interest-free loan on your balance.

EVERYDAY PLASTIC ADDICT- Your credit card is your best friend, and it goes everywhere with you and pays for everything. For regular plastic users like you, a cash back credit card will give you the most benefits from daily charges.

• Be responsible with frequent credit use and make sure you don’t spend more than you can afford to pay back. One glance at the default APR, which is often double the original APR at around 30% or more, will tell you how much you’ll be paying in interest if you don’t pay your monthly balance on-time and in full.
• Since you may be using this card more than your other credit cards, you might want to think about doing a balance transfer, which will transfer the balances of other cards to one card so you can pay off the balances more efficiently and at a potentially lower APR. Read the fine print on balance transfer APR plus an extra transaction fee for balance transfers. If your card has a lower APR and a 0% balance transfer APR, you can pay off the balance of other cards at a lower interest plus you don’t have to pay extra interest on the transfer.
• Finally, know your credit limit and make sure you don’t end up paying an over-the-credit-limit fee, also covered in the fine print, for all of your regular or impulse purchases that rack up.
• Credit card-addicted users like you benefit the most from a cash back credit card like the Chase Freedom Credit Card, which gives you $50 back on your first purchase and will let you earn more money as you spend. Most cash back credit cards offer around 1% cash back earning power on every purchase, plus a higher rate for everyday purchases, such as Chase’s 3% cash back in rotating categories like department stores, home improvement, and gas.

One last note on the fine print: Despite what the Pricing and Terms page will tell you about the rates, fees, and costs that you should know before you complete your credit card application, these conditions are subject to change according to the issuer and the Prime Rate. Check out the Credit Cardholder’s Bill of Rights for your rights as a cardholder and the new regulations, like a 45 day advance notice on interest hikes, that keep issuers in check.

MoneyStrands, a personal money management website, teams up with Savings.com, an online coupon destination, to bring the first personalized coupon recommendation feature of its kind to consumers through an online personal finance tool. MoneyStrands’ new partnership with Savings.com unites the two golden rules of good personal finance: money management and smart savings. Like peanut butter and jelly, the two just go hand-in-hand, and MoneyStrand’s new coupon recommendation widget provides users with saving opportunities for the items on their weekly shopping list, proving that frugal spending can be part of your daily financial tune-up.

Users get their coupon recommendations in the Special Offers widget under the “Just For Me” tab on MoneyStrands. The coupons are uniquely picked for consumers by filtering the best deals from Savings.com according to their particular spending habits as tracked by MoneyStrands. Often, your coupons will cater to your highest spending categories, so you can save the most on areas where you spend the most. As an added bonus, you get to see what Savings.com’s community of deal-hunters voted on as the best deals so you can identify which coupons other consumers found most valuable.

The old tradition of coupon-cutting has evolved into this trendy new way to click-to-save, and this feature could put MoneyStrands ahead of other personal finance tools like Quicken or Mint. Mint offers a similar feature that suggests personal finance products like credit cards or CDs, but you have to fill out a profile to get product suggestions while MoneyStrand’s platform presents you the coupons most relevant to your everyday shopping patterns every time you log in. The recommendations change as your spending habits change and there are never any forms to update. Now when you go to see your finances at a glance, you can see how to budget with what you have and save on what you shop for most.

There is a new trend developing due to the sagging housing economy where a homeowner who is underwater with their home, acquires a new bargain priced home and then walks away from the overvalued property. This practice, known as “Buying and Bailing,” has been a hot topic for homeowners looking for an escape route from paying a mortgage on a home that has lost significant value.

It sounds too good to be true; mortgage rates are still very low and you’ll be able to get a great deal on a home which is more affordable than your current home. More real estate and mortgage brokers are becoming familiar with the ins and outs of these transactions and are more than willing to coach you through this type of endeavor. However, accomplishing this in reality is difficult, you will need to be able to afford a new down payment as well as support both loans in order to qualify for the loan on the second home. Some consumers have set up a short sale, put the home in a spouse’s name or told the bank that they plan on renting out the first home as work around to help qualify for the second loan.

This type of exit strategy will only work in markets where the home values have dropped considerably. At first glance this may appear as a miracle from above, but consumers need to understand the repercussions of a buy and bail. Specifically, their credit score will be battered once they start missing mortgage payments which will ultimately end in foreclosure. Once they have a foreclosure on their credit report they won’t be able to get a Fannie Mae loan for up to four years. Additionally, anything requiring a credit check like insurance, new credit cards, employment screening will present your past misdeeds and likely affect pricing of other financial products or even cost you a job.

No one really knows how much this will affect consumers’ credit as this is the first time homeowners have made this type of risky and possibly illegal maneuver. One thing is for sure, consumers attempting a buy and bail will always have a looming uncertainty around if a lender or worse the police may come after them. At minimum, lenders can put a lien on the new property; as well as sue for fraud if you misrepresented yourself on your loan application. Many are rolling the dice that most lenders are severely understaffed and hoping their situation may get lost in the shuffle and never be addressed.

Predictably, lenders are calling this practice unethical, deceptive and fraudulent. They are quickly looking at ways to close this loophole to reduce future risks in their portfolios. For many it’s comical to hear the lenders call something “deceptive” when only a few years ago, they were creating variable rate mortgages with complex minimum payments and negative amortization, as well as 100% financing programs that contributed to the housing collapse. Regardless, lenders are now adopting stricter underwriting conditions when evaluating new purchase loans for borrowers with existing home mortgages including producing an executed lease agreement or requiring documented income to verify the consumer will be able to support both mortgages. Both of these are precautions to help weed out Buy and Bailer’s before they take ownership of that second property.

Buying and Bailing may be a way out for those who have the means to pull off such a complicated transaction and simply get lucky that lenders are understaffed and unable to properly follow up, but it requires a perfect storm of having the funds on hand, adequate employment/income to satisfy the underwriting, and a family member or spouse that can assist in securing the second home by being the primary applicant. Realistically, while this option does provide a viable, albeit difficult escape route for some, it’s very questionable of its legal and the long term ramifications are unknown at best.

Picking a website to help you manage your bank accounts, credit cards, monthly budget, and track your weekly splurges of DVDs and steak dinners can get pretty personal—even Freud would agree that the way you save and spend your money can point to the kind of person you are. If you like multi-tasking and keeping busy, it wouldn’t be surprising that the way you handle your finances often looks like a juggling act; or if you lead a simple and carefree lifestyle, your money may be set on autopilot.

Whatever personality type you are, A, B, or Z, every consumer can use the following personal finance management sites—all for free!—to get their accounts and spending under control before debt drives you to the madhouse.

Complicated Spender: You are a jack-of-all-trades and you thrive under the pressure of juggling multiple bills, lots of credit lines, and an overall complex financial life. Truth be told, you like being in control, so managing your money down to the nitty-gritty details is your ideal take on personal finance. Mint and Quicken Online are comprehensive money management tools that allow you to go in-depth with your finances, categorize and organize credits and debits exactly the way you want, and create detailed budgets for your financial plan.

• Mint’s award-winning site is known for its helpful graphs and tables that track your spending by self-described categories, your net worth over time, your debts, assets, and much more. Mint’s service emphasizes a budgeting tool that shows your projected savings over a certain period of time so you can see how much you’ll save just by sticking to your budget. That tiny carrot on the end of the stick may be enough to push you forward and help you kick your latte addiction for good.
• Quicken is not as fancy-looking as Mint, but it definitely gets the job done with straight-to-the-point navigation and layout. Its innovative feature, My Wallet, helps consumers keep track of cash transactions in addition to credit card and banking transactions. Plus, set up customized email or text message alerts for when upcoming bills are due for the accounts you added, if you are nearing your budget limits, and if your Checking account goes below a certain amount.

The Minimalist: You like simplicity in life, so why should your money management be any different? For easy-to-use personal finance management, Rudder and Moneystrands are two no-fuss, no-hassle tools that emphasize user-friendly options and customization so you can tailor your money management experience to fit your needs, without the extra bells and whistles.

• Rudder boils it down to 3 steps: set up your accounts, set up your bills, and calculate what is left over. By predicting your future cash flow this way, you can figure out how to stay ahead of debt and in a state of healthy finances. Rudder enables you to design and arrange your dashboard with various financial widgets to monitor your finances the way you want it and in one simple glance.
• Moneystrands combines Rudder’s customizability with similar budgeting tools, graphs, and tables as Mint to streamline financial organizing options into an easier-to-use dashboard. With a clean Web 2.0 look and modular accounts and information, this site stands out because while it offers almost as much as Mint and Quicken, you have the choice to personalize the site and pare it down to just the options that you want.

Good Neighbor: You want to be part of a larger community that lets you share your experiences, advice, and questions with other users. If you want to get in touch with real people, not just calculators, graphics, and financial analysts, then Wesabe and Geezeo might be the right personal management tools for you. With interesting features to keep you connected with your community, you never have to feel alone when dealing with your finances.

• Geezeo is like the Twitter of personal finance management sites, with the usual features you’ll find on Mint or Rudder plus an added community forum that functions like group therapy. The Confession box is just the kind of creative outlet needed from a financial service, where you confess up anonymously to those times you’ve stray from your financial goals. Here’s a recent confession from a Geezeo user: “I love clothes too much!!! I’m broke, but at least I look cute :-/”.
• Wesabe encourages like-minded Wesabeans to discuss, ask questions, give advice, and share stories through Wesabe Groups. You can seek out other people who share the same goals and need help in the same areas as you, such as the “Spend Smarter” group, “Frugal Foodies” group, “Buying a House” group, or even the aptly named “Don’t Panic” group. Who knew you could have fun meeting new people while ranting about debt or raving about your latest cost-cutting tip?

Give these sites a shot— it’s completely free and costs you nothing, but you can gain so much in improving your finances. Do something as simple as signing up with any of these sites and making it your homepage so you can check up on how healthy your money management is every time you log-on on the internet. Seeing the budget you set out at the beginning of the month each and every morning will remind you to keep your spending in check. You’ll know before you hit the mall that you are already $25 over budget this month, and that cutting out your daily Starbucks fix has saved you $54.00 so far. Little actions like these can build and grow to become good financial habits that will make your credit report a little healthier and your credit score a little happier. It’s the least you can do for yourself, your wallet, and your mental health.

In August, the average American had $6,775 in credit card debt–this does not have to be you. Living with debt should not be a necessary evil in your life and whether you are $80 or $8000 in debt, right now is the time to face your debt and take control.

Start taking steps to understand where you are spending, building a budget you can stick too, and determining the best way to pay down your current debt. Here are 6 simple steps to put you on the path to debt-free living.

1. If your credit card bills are full of weekend shopping sprees and you find yourself eating out every night, you may already know where the overspending is happening in your life. The first step to dealing with debt is to identify areas where you are overspending that are not spending priorities—for example, rent and utility bills are a must, whereas an expensive cup of coffee every morning is not. Take notice of even the small, unnecessary expenses– they will add up very quickly.
2. Once you see where your spending potholes are, create a personal budget and be proactive in mapping your way to a healthy financial future. Figure out how much bills and taxes take out of your monthly income, and develop a responsible spending plan from what you have left over. Estimate any other additional monthly expenses like grocery bills and transportation, add a savings cushion for any emergencies, and apply remaining cash to pay down debts. Free online budgeting tools like Mint, Geezeo, and Wesabe can help you organize your budget.
3. Remember to stick to your budget. Keeping track of your actual spending over the month will help you see where you are veering off-course of your spending plan, and keep a close eye on the areas you identified in Step 1 to keep yourself from falling into old spending habits.
4. Limit credit usage so you can free up more money to pay off your debts. Keep ATM visits as infrequent as possible, stop spending on impulse and unnecessary purchases, and avoid late night online shopping all-together. Use your credit card for only small purchases you plan to pay-off in full each month. Or, consider credit card alternatives like debit cards, secured cards, pre-paid cards, or simply sticking to cash so you don’t add on credit debt.
5. While you are moving forward with your monthly budget, you should be managing your past debt too. Talk to your creditors to try and lower monthly payments and possibly look into debt consolidation to pay off your debt faster. Credit counseling is an option if you feel overwhelmed about dealing with debt on your own, and only consider bankruptcy as a last resort to unmanageable debt.
6. Now that you’ve freed up some funds and on your way to paying off your debts in full, its time to repair any damage from the past and put your new healthy credit habits to building your credit history. Reducing your debt, paying credit card bills on-time, and staying low on your credit utilization will help turn your new, positive credit history into a healthy and happy credit score and credit report.

General Motors just launched their 60-day Satisfaction Guarantee that offers a full purchase-price refund to eligible buyers of new GM vehicles until November 30, 2009. As part of GM’s larger “May the Best Car Win” campaign to stand out against the competition, the 60-day Satisfaction Guarantee is GM’s big push to gain back consumer confidence in the company name. GM is betting on their new car line-up and are willing to put cars being returned at risk to move cars off the lots, hopefully for good.

According to ConsumerReports.org, buyers are less likely to consider buying a GM car now than a year ago because of the company’s current economic standing and unappealing product offerings. The 60-day Guarantee aims to improve GM’s image problem while also moving inventory off the lots. GM reportedly expects less than 3% of vehicles to be returned under the Guarantee

If you do decide to buy, returning your vehicle may not be easy as there is lots of fine print. Here’s a quick list straight from GM:

• The Eligible Vehicle must be a new 2009 or 2010 model.
• You have purchased an Eligible Vehicle and taken Delivery between September 14, 2009 and November 30, 2009.
• You must be able to deliver to the Participating Dealership a clean and unencumbered title to the Eligible Vehicle, which title has remained in your name since the Delivery Date of the Eligible Vehicle.
• You must be an individual natural person who is the title owner of the Eligible Vehicle. Businesses, corporations and partnerships do not qualify.
• Your Eligible Vehicle’s odometer must not have more than 4,000 miles since the Delivery Date.
• Your Eligible Vehicle must have been registered and insured in the Buyer’s name since the Delivery Date.
• Your Eligible Vehicle must have no more than $200 of damage as determined by GM or GM’s agent. Such damage may include, without limitation, internal or external scratches, scrapes, dents, odors, rips, burns, etc.
• Your Eligible Vehicle may not be leased.
• Your Eligible Vehicle must have been returned to a Participating Dealership where you purchased it, in the same working order as it was on the Delivery Date.
• Your Eligible Vehicle must not have incurred damage or non-warranted repairs in excess of $200, regardless of whether such damage has been repaired.
• Your Eligible Vehicle must not have been subject to any liens or other security interests other than a lien for the original financing used to purchase the Eligible Vehicle.
• A minimum of thirty (30) days must have passed since the Delivery Date of Your Eligible Vehicle.
• Only one Eligible Vehicle may be returned per household.
• Your Eligible Vehicle must pass a purchase inspection conducted by GM or GM’s agent.

While this might be a good incentive to basically test-drive anything from a pick-up truck to a Corvette for a month, don’t get too carried away with all the excitement. Make sure the Satisfaction Guarantee isn’t the main reason you choose GM, and that you still negotiate for a fair price. Make sure it is the car that is right for you, and not just right for you right now.

Credit cards’ days may be numbered. Consumers are switching to debit cards, pre-paid cards, secured credit cards, and online cash payment and dumping the old “Charge it” routine. Households trimmed a record $21.6 billion off the amount they owe in credit card debt and other consumer loans in July. Many consumers are frustrated with credit line reductions, rising fees, and tightening lending standards. Consumers under 21 years old will soon be unable to get a credit card without a co-signer or proof of their ability to repay. Whatever the reason, swapping credit out and cash/card alternatives in is a turn many consumers are making. Consider these options if you’re ready to do some debt-free spending:

Debit Card

So maybe you aren’t exactly freeing yourself from plastic, but you are certainly reducing your risk of incurring debt by removing your use of credit. With a debit card, every purchase you make withdraws directly and immediately from your checking account. If you can avoid overdraft charges and usage fees, then a debit card is a quick and convenient extension of your cash-on-hand that will save you from a credit card’s interest fees.

Secured Credit Card

A secured credit card is very similar to a credit card, except that it requires a security deposit from the cardholder which is used as cash collateral against any defaulted payments, and it also does not require a good credit score for approval. Secured cards are especially popular with consumers trying to build or rebuild credit because it allows cardholders to demonstrate good credit use even if they have little to no credit history or poor credit history. As a safeguard, secured cards typically have low credit limits to help stop consumers from falling back into significant credit card debt. We recommend the Public Saving Visa secured credit card. It has no annual fee and reports your credit activity to credit bureaus so you can build your credit history over time.

Pre-Paid Card

With a pre-paid card, you deposit money directly into an account and you make charges on the card until the account runs out of money. Pre-paid cards are a convenient way for young people to learn to keep themselves on budget as well as for people who may not have a bank account but want the freedom of using a card instead of relying on cash. While pre-paid cards do come with fees, AccountNow’s card offers the convenience of cash and the opportunity to build your credit in a pre-paid card.

Online Cash Payment

Online cash payment, like eBillme, is a convenient alternative for online shopping that pays through your checking account. You avoid interest rates, identity theft, and overspending since your purchases can only be bought with your own available funds (no more online impulse buys!). But, just like with pre-paid and debit, eBillme can’t help you to build your credit report or teach you how to use credit responsibly.

There are many benefits to switching from credit to cash, and ultimately, if you need some training wheels for credit use or want to kick your credit habit all-together, definitely consider the credit-free path of secured cards, debit cards, pre-paid cards, and online secure cash payment solutions.