This blog has mentioned enough about changing credit card terms that canceling your credit card might seem like the easiest way to dodge recent hiked up interest rates, cut credit limits, and new fees. But before you take scissors to your MasterCard, read ahead on for what to consider before canceling your card :

1. Right off the bat: don’t cancel your credit card. Why? Depending on your total available credit, canceling your credit card can negatively impact your credit score. Also, make sure to never cancel you oldest credit card. It anchors your credit history, so canceling will shorten your credit history and heavily damage your credit score.
2. Instead, keep your cards active—just pay responsibly. The key to a good credit score is on-time payments and active use of your credit. If you just stop using your credit card all-together to avoid any late fees or charges, your issuer might close your card and consequently lower your credit score. Instead, use your credit cards to make small purchases on them that you pay off ON TIME and IN FULL every month. That way, you can show responsible credit use and avoid any interest charges or additional fees.
3. …except if you have an annual fee. The only exceptions to the “don’t close your credit card” rule is a card with an annual fee. If you don’t plan to use a credit card that has a steep annual fee, its probably worth it to close your card and just take the hit to your credit score rather than spending needlessly on an annual fee.
4. If your interest rate jumped or you have extra charges, negotiate. You can negotiate with your issuer to lower your interest rate or opt out of a fee. Some banks may also offer a promotional program to defer or get a good rate on your current balance. Cardholders with excellent credit scores and great payment history have a good shot at this because issuers are more likely to compromise with you rather than lose a good customer.
5. Don’t add any more credit cards! The danger in owning more credit cards is that the more access to credit you have, the more you are tempted to overspend credit without the funds to back it up. Stick to credit cards with low interest rates and no annual fee, and ignore the temptation to open a new credit card just for a rewards program, a retail discount, or that really cool t-shirt you just have to have.
6. Build up your credit score! Build your credit history and be mindful of your credit score. For example, paying down your credit card debt rather than closing it all together can actually help your credit score. Even if you don’t have the best credit card right now or are still in credit card debt, a better credit score down the road can qualify you for better credit cards with lower interest.

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!

SmartMoney suggests a surprisingly delicious indicator of global economic recovery: McDonald restaurants. The fast food chain reports that an increase in overseas store sales–from up-scale districts of Paris to emerging economies in developing countries–indicates global expansion is a sign of an improving global economy. While you can be the judge on whether or not orders of burgers with fries is the new barometer for global economic health, your credit score is still the status quo on gauging your own financial health. Check out tips on credit reports and personal finance news to keep your credit score from getting swallowed by recession.

Personal Finance News

• MSNBC explores 4 life-changing events that impact your finances.
• Best online bank: savings and checking accounts, brought to you by Money Blue Book.
• Frugal Dads suggest you consider a few things before you relocate to end unemployment.
• Kiplinger helps you avoid an empty piggybank this season with 10 ways to fatten your wallet on Black Friday.
• Travel hacking for noobs from Man vs Debt.
• Can you believe it? Mainstreet claims that retail therapy is cheaper than ever.

Credit Report & Credit Score News

• Cash Money Life points out the difference between credit score and credit report.
• Avoid the top credit card mistakes that hurt credit scores says WBZ.
• ABCNews gives you the credit score don’ts to keep your score from dropping.
• Confused about credit? The Clarion Online gives a good, simple overview of how to navigate the credit matrix.
• How to get credit cards with a 550 credit score– advice from Moneyblogger.

Saving money is a tricky business in our economic climate– credit is still tight, debts are high, and paychecks go straight to bills and necessary expenses with not much left over for a rainy day fund. This extra-big roundup has more than 50 ways to help you cut back on spending so you can start saving up more. Isnt’ it about time to start saving money for yourself and your future, now?

Personal Finance News

• Daily Finance makes a good point: Its the end of the recession as we know it. Why don’t we feel fine?
• Money Ning sets you straight with 3 easy steps to determine your financial priorities.
• How disposable is your money? asks Almost Frugal.
• Best way to invest $1,000 right now writes MSN Money.
• Want even more tips on investing? Read The Digerati Life blog, Where to invest extra cash and savings today.
• Gather Little By Little suggests 10 small ways to save money that make a big difference.
• 10 tricks for staying warm this winder without huge energy bills straight from The Simple Dollar.
• If you want to cut back on auto insurance, follow Saving to Invest’s 5 things to look for in getting low-cost auto insurance rates.
• Paying too much at the pump? SmartMoney suggests 5 ways to cut down on gas costs.
• 3 ways to save money on health insurance from CNNMoney.
• If you just can’t help it for the holidays, SmartMoney shows you how to splurge on a budget.
• Smart year-end tax moves to read before the new year! From Wall Street Journal.

Credit Reports & Credit Scores News

• Tips from Liz Weston on how teenagers can build credit.
• Consumer credit falls for 8th month reports CNNmoney.com.
• Your credit score can affect how to get the best deal on a new car; read ahead at SmartMoney.
• Ever wondered why aren’t credit scores free? Walletpop has the answer.
• NBC Bay Area makes credit health as easy as 1, 2, 3, 4.

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!

Headlines are unanimous: when it comes to the recession, we are… confused. “Recession over? Sure doesn’t feel like it“, scoffs MSNBC, while The Wall Street Journal breathes a sigh of relief thanks to “A Recovery At Last.” Skepticism and optimism on both sides of the media circus are pulling the public back and forth.

But how does the average consumer– YOU –feel about the state of our economy? Does it feel like we’re finally steering clear of recession, or are the signs of recovery everyone has been talking about been passing you by? Throw in your two cents and comment back on what you think!

Personal Finance News

• CNN Money gives some tips on free cash for your business.
• Here’s a fun (and useful!) post from The Simple Dollar: 14 ways a notebook in your pocket can save you money.
• Find your financial style — and its pitfalls, writes The Wall Street Journal.
• Moolanomy offers advice on what to do with a financial windfall.
• Need help teaching your kids about personal finance? Check out The Chicago Tribune’s Financial games: it can pay to play.
• 11 ways to save money on groceries blogs My Dollar Plan.

Credit Reports & Credit Scores News

• The San Francisco Chronicle clears up confusion on credit scores.
• What is in a credit report? asks Business Finance.
• Let’s end confusion over free credit reports writes The Dallas News.
• Financial Money Investment helps you understand where credit scores come from.
• MSN Money finds out how your credit score will affect your auto insurance in the article, “Bad credit is worse than bad driving“.
• How to improve your credit score tips from KCCI 9 News Channel.

Did you know that the U.S is about to hit its credit limit? Apparently we might be running into the government’s self-imposed $12.1 trillion dollar debt ceiling as soon as November if U.S Treasury sales keep up. Makes your current credit problems not too bad after all, huh? While Uncle Sam isn’t setting the best example right now, the following bloggers and journalists are the savvy people who can keep you on track with your financial know-how with this week’s best personal finance and credit blogs, articles, and advice.

Personal Finance News

• WiseBread shares 5 online tools to help you land a job.
• Best things to buy in the fall recommended by Generation X Finance.
• Wall Street Journal shows you how to barter for the services you need.
• 3 steps to financially preparing for disaster brought to you by Debtkid.
• Money Saving Mom blogs on stretching your dollars online with coupons and cashback.

Credit Report & Credit Score News

• Enough practice- make your credit score perfect! exclaims Doughroller.
• NewsChannel 5 reports on what to know about pre-employment credit checks.
• One simple way parents with good credit can help children build theirs from the Los Angeles Times.
• How to protect credit if canceling card, writes Press Democrat.
• Free From Broke highlights your credit score as another case for emergency savings.
• Reuters answers the question, what can consumers do to raise their credit scores?

If you own a credit card or read this blog regularly, you should be familiar with the restrictions and fees credit card companies have been imposing on cardholders in recent months. Cardholders have been complaining about jacked-up interest rates, sudden fees, lowered credit lines, closed accounts, and unfair penalties. These changes to the terms on your user agreements for credit cards may not necessarily be due to your poor credit management or late payments; another reason is that banks have been trying to increase the profitability of consumer accounts before the reforms of the Credit Cardholders’ Bill of Rights take effect in February 2010.

With the credit crunch and rising consumer defaults, banks are doing what they need to do to stay in business. Consumers need to look out for the fine print on any notice of changes to your credit card from your issuer, like the one that Bank of America customers received, and see what you can do to protect your credit and your credit score.

ATM surcharge and fees

The Cost: As high as $5 per transaction. Every time you go to use another bank’s ATM for quick cash, you are likely to get slapped with increased fees from both ends of the transaction—the ATM’s bank and your own bank. You have to pay an average surcharge of $2.22 to use another Bank’s ATM, up nearly 13% since last year according to Bankrate.com. Then there is the fee your own bank will charge you for using another bank’s ATM, which has risen to an average of $1.46 from last year’s $1.25.

How to Avoid it: You can only plan ahead and be prepared with cash, or you can switch banks. If you want to stick to your bank, the best way to avoid this fee is to estimate how much cash you need for the day and withdraw what you need from your own bank’s branch so won’t be desperate for cash and tempted to use any ATM. If you’re sick of surcharges and fees, opt for an online bank, such as ING Direct, Bank of the Internet, NetBank, and First Internet Bank, that will reimburse ATM surcharges up to amount per month. Charles Schwab Bank and E-Trade off unlimited rebates for ATM surcharges.

Annual Fees

The Cost: Anywhere from $29-99. Bank of America announced last week that they plan to tack on a $29 to $99 annual fee to an undisclosed amount of its credit accounts starting in February. If cardholders don’t voice too much of a protest, other banks may follow in BofA’s steps very soon.

How to Avoid it: BofA calls the annual fees an “experiment”, so complaining might get some results. If you have an excellent credit score in the mid 700s range, you are in luck. You can try and negotiate with your issuer and even mention that you will take your business elsewhere; chances are they will want to keep a reliable customer like you. If you have poor credit, you can close your account to dodge the fee, but your already-low credit score will take a hit. If the account happens to be your oldest credit card, you might want to consider paying the fee because your credit score will take a big drop with closing your oldest credit line.

Reduced Limits

The Cost: None, but you will have lowered credit limits and a potentially lowered credit score. About 20% of U.S cardholders between October 2008 and April 2009 saw their credit card limits slashed involuntarily, and in some cases, their accounts arbitrarily closed, according to a FICO study. However, 73% of the cardholders complained that they were penalized with no apparent credit problem. Lowered credit limits means higher credit utilization (a ratio of your current credit balances against your total available limits) which unfortunately also means an average of a 20 point drop on a credit score; that could be the difference between being approved or not approved for a loan.

How to Avoid it: You can fight back, or at least make the most of it. Try calling your bank and asking to have your credit limit increased, especially if you are in good credit standing. Otherwise, you can minimize the damage to your credit score by lowering your credit utilization accordingly and paying down your balances. Make sure you don’t go over your new credit limit or maintain a high credit utilization rate—your funds and credit score will shrink.

Overdraft fees

The Cost: As high as $35 per overdraft. If you make several purchases on an overdrawn account in a single day, banks often charge more for repeat overdrafts. That means that you don’t just pay an increased fee on overdrafts—you’d pay it several times over in a single day. Some issuers, including JPMorgan, Wells Fargo, and Bank of America, are planning to reform overdraft fees following criticism from Congress over the exorbitant practices.

How to Avoid it: Monitor spending on your debit card or stick to using a credit card. When you do get overdraft charges, especially if it was multiple charges in a short amount of time, call your issuer and try and pare it down to a single fee–sometimes issuers will do 4 overdraft fees in a single day while the customer doesn’t even realize they overdrew on their account. Avoid using this by using a credit card so you can’t overdraw your account–however, make sure you pay off your balance in full each month and don’t exceed your credit limit or else you’ll be paying fees all over again.

Interest rate hike

The Cost: As high as a 29.99% interest rate hike. Issuers have been squeezing in interest rate hikes for the last few months and will continue to do so in the upcoming months to profit as much from consumer accounts before the credit card reform legislation sets in. Rates rose by 20% just in early 2009, which is already taking a big financial toll on consumers who rely heavily on credit cards or with outstanding balances.

How to Avoid it: If you have good credit, try calling your issuer to have the interest rate dropped. Doing a balance transfer to another credit card with a lower interest rate is another option to ease your payment charges; make sure you don’t get hit with a transfer fee on the new card. However, the best, long-term way to avoid getting burned with these ever-increasing rates is to pay off the debt you have and to hold back on spending so you don’t carry a balance from month to month.

If you want to know more specifically the changes on credit cards each issuer is taking, check out Credit Card Changes by Issuer and Date for a good list of the fees that you might be unaware you are being charged. As banks look for ways to make a profit on plastic while they still can, these fees and hikes might be a red flag to ease up on your credit usage to avoid unnecessary charges all together.

In this sunny mortgage climate, you might be wondering if you should join the recent frenzy of home refinancing. If you are interested in locking in a lower interest rate, reducing your monthly payment, shortening the term of the mortgage, or switching from a risky variable-rate loan to a secure fixed-rate loan, refinancing might be a good move for you.

But, there are many considerations to take before you jump in the bandwagon with other homeowners. You have to first qualify to refinance your home, pay for upfront costs, and if you are underwater on your mortgage, then you’re out of luck. Also, it will take a few years before you actually start saving money on your new mortgage. While refinancing is a great option, here are a few questions to ask yourself before you take the refinance plunge.

1. How’s your credit score? If your overall credit score is low, you can forget about refinancing right away. Lenders have raised the bar on the type of homeowners they approve, so if your credit score isn’t at least 740, you probably won’t be approved. If your credit score isn’t ready for refinancing, take a few months to raise your score by improving your credit history through on-time payments and polishing up your credit report by checking for errors and inaccuracies that ding your score. Just cross your fingers that mortgage rates will remain at a record low a few months down the road when your credit score is stellar and you are ready to refinance.
2. Do you qualify? Another factor when applying to refinance your loan is your loan-to-value ratio, or LTV ratio, in which you divide the loan amount of your current mortgage by the value amount. You need an 80% LTV ratio to qualify for the best refinancing rates, which can be a feat considering decreasing property values have dropped many homes below their original purchase price. Look on some websites such as Zillow or do some research at your local Registry of Deeds to get a range of what houses are selling for in your area. If you owe way more than your house is now worth, forget refinancing—it’s not going to happen.
3. Will you save $$ or not?This is the most obvious question—refinance your home if it’s worth it. If it won’t save you a significant amount of money in the long run, then don’t bother. The old rule of thumb was that if you can recoup the cost of your refinance in a year, then it’s worth it; however, that doesn’t take into account closing costs and other factors that make your refinance tab add up. Refinancing your home is taking out a new mortgage on your home, so you will be paying all the same closing costs, such as application fee, origination fee, appraisal fee, etc., as you did when you first purchased your home. These closing costs are added to your loan. Also keep in mind that lenders structure mortgages so that borrowers pay off interest charges for the first few years, and after that, monthly payments then go towards paying off the principal debt owed. So if you’ve been paying your current mortgage for the last 10 years, you may have already paid off the interest and are now paying off your principal debt. If you were to refinance now, you would have to start over with paying the interest, closing costs, and potentially a longer term on your new loan. Consider whether or not the short term gain of paying less on a monthly basis with a new loan is worth the long term effect of paying more interest from refinancing. Calculate your possible savings from refinancing to gauge if the refinance will be worth the savings.

If you’ve answered all these questions and found yourself itching to refinance your home, now is the best time to trade in your old mortgage for a new, improved loan in this (limited time) golden era of record-low mortgage rates.

If you’ve read your morning newspaper yet, you’ll see that the Dow’s still moving and shaking above the 10,000 mark. Now some are calling it good buzz for our economy, and others say its just a whole lot of steam. Wake up to your current financial situation in the midst of this economic turning point with some more financial food for thought.

Personal Finance

• Have you heard that bartering has become more popular amid recession? The Chicago Tribune reports.
• 10 surprising things you can turn into cash, suggests My Dollar Plan.
• MarketWatch wonders whether frugality is forever, and how that will affect our economy.
• Generation X Finance blogs on four fiscally-fit financial roadblocks.
• Learn how to save money on your household bills from Money Ning.
• Interested in how to get a loan to start a business? Kiplinger has some answers.
• Get some tips from Moolanomy’s, “Fall cleaning for you and your financials!“.
• Bible Money Matters blogs on what to do about out of control spending.

Credit Report & Credit Scores

• Underlining ‘free’ in ‘free credit report’; written by The Washington Post.
• Money Under 30 suggests eight steps to achieve credit nirvana.
• Getting a cell phone? Mind that other number: your credit score @ CreditCards.com.
• The Consumerist shares some legal uses of your credit report.
• Did you know that reduced limits could affect credit scores? The San Francisco Chronicle reports.

Lawmakers recently drafted a measure that would move up the second stage of the Credit Cardholder’s Bill of Rights Act from February 2010 up to December 2009. While the first stage of the Act went into effect in August, legislators in Capitol Hill, like knights in shining armor, are lobbying to speed up implementation of the rest of the Act’s regulations due to consumer outcry against the flurry of fees, interest rate hikes, and customer cancellations that issuers have been implementing in reaction to the impending credit card reforms.

Money Watch reports that since the passage of the CARD Act in May 2009, the nation’s largest credit card issuers have increased interest rates by 20%, slashed the credit limit of nearly one in five cardholders, arbitrarily closed accounts and canceled cards, and changed the terms and agreements of cardholders without advanced notification.

While lawmakers and outraged cardholders see these actions as issuers’ way of recouping losses from the price-gouging practices the CARD Act will soon end, issuers and banks are complaining that moving the date up to December 2009 is an impossible deadline to incorporate the sweeping reforms into their day to day operations.

The remaining provisions that would be affected by this change in timing are some of the largest protections for consumers, including:

• Fair allocation of payments, in which credit card companies must apply payment above the minimum payment to balances with the highest interest rate first. Fair allocation of payments helps consumers apply their payments to their most expensive debt.
• No more universal default or double-cycle billing
• Greater transparency of credit card agreements, which must be posted online; also, issuers must disclose the amount of interest a cardholder will have to pay and how long it will take if only minimum monthly payments are made.
• All rules that apply to cardholders under 21, which includes a need for a co-signer or proof of ability to repay credit extended in order to receive a credit card, a ban on tangible gifts offered by credit issuers on campus, and full disclosure of any “affinity agreements” between issuers and colleges.