Money

Tips for Better Credit Card Use in 2012

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By Beverly Blair Harzog

I used to be highly skeptical of New Year’s resolutions. Mainly because I used to create such spectacularly hard-to-reach goals that I never made it past the second week of January before breaking one of them. But once I started making resolutions that were more realistic and had easy, reachable goals, I had some success.

So here are four easy credit card resolutions that are within reach. Nothing too fancy or complicated. Just vow to follow these tips and you’re on your way to a debt-free 2012.

Resolution #1: Take advantage of balance transfer offers

If you’re in credit card debt and you have excellent credit, you’re in luck. Many cards are offering zero percent introductory APRs on balance transfers. Right now, the intro periods range from six months to 21 months.

]And a few cards, namely the Slate from Chase – Limited Time: No Balance Transfer Fee and the Discover More Card – $0 Balance Transfer Fee!, have waived the fee (usually 3 to 5 percent) that accompanies balance transfers. Your goal is to pay off your balance (or at least make a major dent in it) before the interest-free period ends.

Resolution #2: If you transfer a balance to a zero percent intro APR credit card, don’t make any purchases with the new card

I don’t care if your new card has the best rewards in the world. Don’t use the card for purchases until you’ve paid off the debt you transferred. Even if the new card has a zero percent intro APR on purchases, don’t buy anything.

Remember, your goal is to pay off the credit card debt. Throw all your extra money at the debt. Don’t waste it on new stuff. Take advantage of this opportunity to free yourself from credit card debt. Trust me, it will feel great when you succeed!

Resolution #3: Check your credit reports

You get three free credit reports every year at AnnualCreditReport.com. You want to stay on top of your credit life this year. That means looking at your reports from the three major credit bureaus: Equifax, TransUnion and Experian. You want to look at your reports to make sure there are no errors or fraudulent purchases.

If there are errors on your reports, you might be paying a higher interest rate on credit cards or loans than you otherwise would be. So be aware of what’s listed in these reports. I suggest getting one from each bureau every four months. That way, you get a glimpse of what’s happening throughout the year.

I also recommend getting your FICO score at myFICO.com so you know exactly where you stand. It’s around $19.95 to get your score. This is the score that most lenders will look at. Instead of buying your score several times throughout the year, though, you can use Credit.com’s free Credit Report Card. This tool allows you to see a snapshot of your credit reports as well as credit scores.

Resolution #4: Track your spending

Research shows that we tend to spend more with credit cards. There’s a disconnect between using your credit card and feeling the pain of cash leaving your wallet. The easiest way to stay out of debt if you’re using credit cards for purchases is to track your spending. There are some top-notch free money management tools online to help you do this.

I use Mint.com and I get email alerts when I’m approaching my limits on a specific card or in a category, such as dining (my personal Achilles’ heel). Even if you have cash flow issues due to hard times, you can still use a free money management tool like Mint to help you minimize the chances of sinking further into debt.

 

[Free Resource: Check your credit for free before applying for a credit card]
[Credit Cards: Research and compare credit cards at Credit.com]