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.

You’ve been dreaming about it for years and you finally have the funds to make it come true—buying your first brand new car. But it’s going to take a couple steps of financial planning before you retire your old clunker from college and sit in the driver’s seat of your perfect car. Use this easy guide to the car-buying process so you know how to prepare, what to expect, and best of all, know how to get a fair deal on the car of your dreams.

First stop, the Internet: The more information you can gather before you get to the dealer, the more informed you’ll be when you purchase your fancy new car. Focus on educating yourself in three areas: how much you can afford, what vehicle you want with which options, and what a fair price range would be.

How much you can afford will depend on what car and what kind of loan you can get. Since you can’t estimate what kind of APR a lender will offer based on your credit score, you can at least check out car loan APR trends to help you discern what a reasonable rate would be. Also, calculate the monthly loan payments that is within your budget so you know what you are comfortable paying month-to-month.

Research online what kind of car options are available to you so you know what to look for when you get to the dealer and can expect how much it will cost. Go to TrueCar and select the make and model of your car and check off the options you want, down to the color and tinted windows. TrueCar will provide local data on the average price consumers are actually paying for your exact car, so you know the reasonable and accurate price to negotiate with once you get into the gauntlet with the dealer.

Second stop, the car dealership: You’ve got all the information you need, and now it’s time to go to the dealership and drive off with your car. The typical car-buying process goes like this: you’ll take the car you want on a test drive to be sure it’s what you want, put your TrueCar price report to work haggling with the salesman over what you think is a fair deal, the dealer will run your credit report and use your credit score to determine what financing options are available to you, you’ll haggle more over pricing, and then the final blow—you either sign the paperwork and drive away, or you walk away. Be warned, the dealer will still try and sell you warranty packages and car accessories right up until you drive off the lot.

Third stop, the comfort of your driveway: Congratulations! Not only have you navigated the chaotic process of buying a new car, but you made it home safely in your dream car. Now it’s all about maintenance and proper upkeep. Don’t forget to get car insurance on your vehicle right away, change the oil every 3000 miles, get a car wash every now and then, and pay your loan payments on-time, and you’ll avoid any speed bumps along the ever-winding road of car-owning freedom.

If you’re in the market for a new car, TrueCar will help you drive off the lot knowing just what kind of deal you got. TrueCar aims to make the car purchasing process honest, transparent, and fair by providing consumers recent, local data of new car sales specific to the make, model, trim, and option of any vehicle. Before, haggling for hours over the price of a new car was a rite of passage every consumer had to go through. Now, by knowing the average price other consumers paid for a specific car, you can arm yourself with the tools you need to get a better deal on any new car purchase simply by being an informed, empowered consumer.

TrueCar makes understanding the negotiation process between car dealer and customer super simple. They develop a Price Report for the particular vehicle you want by aggregating data from many different sources of how much car buyers in your particular geographic area actually paid for the exact car with the same options you are looking for at the dealerships. The Price Report is a simple straight-forward graphic with data that helps new car shoppers quickly ballpark a good price, a great price, and the average price paid for a specific car. It also details the mark-up on all option packages as well as the actual dealer cost, factory invoice, and the sticker price many car salesmen try to hold buyers too. TrueCar also shows you the average price paid over the last six months for the vehicle. This is especially nice, since incentives and government programs like Cash for Clunkers can shift negotiation power quickly.

How do you use this data to negotiate a better price? Print out the Price Report and take it with you when you go shopping for that perfect car. While the car salesperson may pace back and forth to their manager to settle the price, you can remain steady in your offer price as you have a TrueCar Price Report in hand. Now, if you find yourself at the dealer wanting a different color, or a couple more add-ons, don’t worry; you can call TrueCar and they will email you an updated Price Report to your iPhone or Blackberry.

One thing TrueCar can’t help you with though—new car financing. Make sure you have a strong credit score in hand when you head to the dealership. Also, do your research and know what financing offers are available to you from the dealers as well as APRs you can get from going direct to Capital One Auto Finance or Up2Drive. In addition to financing, check with your auto insurance company regarding insurance coverage costs for that car you’ve been eyeing. You need to be able to afford much more than just the new car.

New car shopping has always been one of those events you never walk away feeling good about: you are suddenly worried you gave in too much or left wondering if you really did get a good deal like the salesperson kept telling you. TrueCar helps set a fair and transparent price for new cars in the market everyday so you can get your new set of keys worry-free.

Bringing a sense of Zen to your life requires patience, balance—and good credit. At least that’s the idea behind newly launched zendough, an online financial service that seeks to bring a “holistic approach” to credit management to help consumers attain happy financial enlightenment. From affecting your approval for a loan to your mental stress over debt, credit is truly the foundation of your financial health and is definitely worth meditating on. Zendough re-imagines credit reports as the way to steer consumers towards better overall financial management.

After signing up for a free trial (zendough is otherwise $14.95 a month), the simple menu of My Zendough immediately brings me a little peace of mind. “The Six Principles” –payment history, credit balances, recent credit, utilization, depth of credit, available credit—that affect my credit score are simply organized and easy to follow in order to illuminate my credit report and credit history. With zendough, that’s just the start of your new financial path.

Other highlights of zendough include:

• Zendough calculates your Vantage credit score based off of credit reports from all three major credit bureaus. You can even view a side-by-side comparison of your credit report from each bureau to check for any inaccuracies that could be affecting your credit score. Zendough can also help you dispute any errors that you find with any bureau’s report right from the service.
• The summary of all your credit lines, including balances and payment of each account, also comes with a debt-to-income ratio calculator so you can graph the difference between your monthly income and how much you pay for your debts. Remember, you want to achieve a low debt-to-income ratio because it shows lenders your ability to repay debts.
• Worried about Identity Theft? Zendough has you covered with an assessment of your Identity Risk and Identity Restoration Services, which comes with a personalized zendough Case Manager to work with you, should the worst happen. Zendough members are covered up to $25,000 in case of identity theft.
• One of my favorite parts about zendough is the My Path feature, which helps you realize your long-term financial goals with the help of tips and resources to boost your credit preparedness. I can choose from aspirations like “Start a Family” or “Save For College”, and zendough gives me a to-do list and some encouraging tips to help me stay on My Path to a healthy credit future.

While zendough is a great way to plan for your financial future, it is only a guide and a way to provide you the opportunity to take more control of your credit. You are still your own credit master here, but zendough can be there as your spiritual and financial guide to reaching credit nirvana.