When times are tough, it’s time to examine the choices you make about the financial resources you have available to you. Here are 5 tips to help you ride out the recession a little easier.

1. Compare rates for everything.

In a recession, you need to examine where your money is going. Get out your bills for services that you are paying for, including phone, cable, electricity, gas, and car insurance, and contact other companies for quotes. See if you are getting the best possible rates from the companies you are currently dealing with.

You will also want to consider the features you are currently paying for from your phone and cable providers and whether these are things you really need. If you don’t really need Call Display and other “extras,” cancel them. Paying for premium cable channels only makes sense if you are watching them regularly, and these can also be considered “frills” that you can do without.

2. Take your lunch to work with you.

Going out to eat at lunch time adds up in a hurry. If you were to track how much you are spending in restaurants during the work day for a month, the figure may surprise you. Not only is brown bagging your lunch cheaper, it’s a healthier choice, since you can choose foods that are higher in fiber and lower in fat than restaurant offerings. Bringing your own lunch also lets you avoid the large portions that many eateries are famous for giving their patrons.

3. Approach your employer about telecommuting.

If your job involves duties that can be done off site, prepare a pitch to your employer to allow you to work from home, at least part of the time. Start off by pointing out the benefits the employer will get from the arrangement, such as lower operating costs and higher productivity due to fewer interruptions. Ask if you can start working from home one day a week on a trial basis for a few months to see if the arrangement is working out well for both parties. Working from home means less time spent commuting to and from work, as well as lower fuel costs.

4. Drive your vehicle less often.

Consider taking public transit to and from work to save on the price of gas, as well as wear and tear on your vehicle. Another option is to arrange a car pool with people who work with or near you. When you reduce the number of miles you put on your vehicle each year, you may qualify for a reduction in your car insurance rates. Check with your insurance company or agent to find out whether you can get a discount.

5. Look at upgrading your skills through continuing your education.

If you are concerned about your current job or your prospects for finding another one if you get laid off, consider taking courses to further your education. You may want to focus on something related to your current position or start preparing for your next career move. Not being able to physically go to a classroom doesn’t have to be a barrier to getting the education you want. Many schools offer online courses that you can complete on your own schedule.

Budgeting your money is extremely important. You need to know what bills must be paid every month, when your bills are due, and where the money to pay the bills is coming from. Those that prefer to pay bills without the constraints of a budget run the risk of forgetting to pay a bill, paying a bill late, or running out of money before the bill is paid. Perhaps some of you might consider a late paid bill to be the creditor’s problems. But in reality, if you are late paying your bills you will be the one paying the price. Literally.

Credit cards companies are not flexible creditors. The terms of the credit card company that you agreed to when accepting the card include fees for late payments. Most late payment fees are $29 or more. The fee is added to the credit card balance and is subject to the same interest charge as your purchases. If you are close to the maximum limit on the card and the late payment fee pushes you over the limit, you will also be assessed an over the limit fee also. The over the limit fee then becomes part of the balance that interest is assessed on also.

Fees are not the only repercussions of paying your credit cards late. Most credit cards include a clause in their terms that allows the company to increase your interest rate if you make late payments. If you are under an introductory rate, it could take only one late payment to trigger the interest rate increase. Late payments are reported to the credit reporting agencies. The late payments will lower your credit score which allows other credit card companies to increase your interest rates also. Even the interest rates on any loans you may have could be increased.

The moral of this story is unmistakable. Make your credit card payments timely. Late payments to your credit card company results in serious financial repercussions. If you are having trouble making payments, imagine the difficulty you will have paying off the cards when the interest rates sky rocket. Let’s not forget the increased interest rates and additional assessments (fees) could result in an increase in the minimum payment due. If you cannot afford to pay your credit cards, then you cannot afford to pay your credit cards late. Always make your payments on time.

Learning to use a credit card wisely is the best financial lesson to be learned. A credit card can be your best fried in a financial crunch. Unexpected costs can unravel your monthly budget. Credit cards can help you finance those costs when necessary. But if you use a credit card as you would extra cash, you could find that your best friend has become your worst enemy.

The Golden Rule of credit cards is to pay off your entire balance every month. There are many sound reasons to follow this advice.

Interest and Finance Charges: When you pay off your balance at the end of the month, you can avoid interest and financing charges. Isn’t it bad enough you had to pay the plumber to fix the toilet because your two year old flushed a rubber rat? Do you really want to pay interest on that?

Credit Score: High balances on revolving accounts like a credit card will lower your credit score. Your credit score determines the interest rates you receive on important loans like your mortgage and car loan.

Debt: According to the Federal Reserve, almost half of the households in the United States carry debt. Credit card debt only serves to increase your financial burden and worries. You end up with a monthly payment that depletes your liquid funds.

Learning to pay off your credit card every month may require some time to adjust. But once you get into this habit, you will find you are making more financially sound and responsible decisions. Instead of making unnecessary impulse purchases, you will begin to reserve your credit cards for important purchases and emergencies; since you are going to feel it in your pocket.

At Credit Card pundit we believe that credit cards can be great tools when used wisely. But we also know that they can lead to a lot of stress when used to buy things you can’t really afford.

Like almost everything, credit cards can be a blessing or a curse. A credit card can save you in a pinch, providing needed financing when your cash flow won’t cover a surprise expense. But relying on a credit card too often for everyday needs can turn a precarious financial situation into a dire crisis.

If you have trouble paying off your monthly credit card balance, and are carrying a debt over from month to month, here are some steps you can take to lessen your dependence.

1. Don’t carry your credit cards on your person.

It is easier to spend money you don’t really need to spend if you have the card on you. Impulse purchases are easier to talk yourself into when the card is readily available. But if you have to drive home to get the card, then return to the place of purchase, you have more of an opportunity to decide if the purchase is essential and worth the interest.

2. Do not use credit cards to pay your monthly bills.

If you don’t have the money to pay your monthly bills, you end up paying more money for the bill due to interest than if you had paid it directly. You will also increase the balance on your credit card which in turn increases your monthly payment. If your cash flow was tight before you paid the bill(s) with the credit card, you will further limit your available money with higher required minimum payments.

3. Always pay more than the minimum payment each month.

Your minimum payment will pay down the interest. But the principal doesn’t budge. If you only pay your minimum payment each month, you will never get out from under your credit card debt.

4. Do not use the cash advance option on your card.

Unless there is an emergency, do not use your credit cards for extra cash. The credit card companies usually charge fees for this benefit and make you pay interest on the cash, too.

5. Reserve your credit card for emergencies or large, necessary purchases.

If you are carrying too much debt, credit cards should not be used for trivial or pleasure purchases that you can’t really afford. If you are concerned with keeping yourself out of debt and bettering your financial picture, credit card purchases will not help you attain your goal.

Credit card companies offer a variety of perks for signing up to use their credit cards. Because the industry is so competitive, these rewards can be quite enticing.

When choosing the right credit card for your circumstance, it’s important to think clearly about which type of reward you will most benefit from. For that reason, we’ve put together a list of the top 10 reward credit card offers:

1. Gas & Fuel based rewards

With today’s rising gas prices, many people are drawn to credit cards that offer cash-back on gas and fuel purchases. If you drive a lot, this can be a great rewards card for you. Some gas credit cards offer up to 10% back. But you should also be careful. Many cards only offer cash back on gas, some even at just one type of station. All other purchases will get you either nothing or a low rate for all other purchases. Plus, these cards tend to have higher interest rates so you’ll never want to carry a balance.

2. Travel and Airline Miles based rewards

If you are a frequent traveler, you may find that the bang for your buck comes from an airline miles rewards card. Rather than cash-back, you earn credits that can be applied to certain flights (often limited to domestic flights). There are debates about whether the value of the credits earned for travel are as valuable as pure-cash back cards, but the ability to earn bonus miles for various transactions can make these a good card to have if you travel a lot.

3. Balance Transfer Offers

If you are carrying a high-interest balance on other credit cards, and need some interest free catch-up time to pay them off, consider choosing a good balance transfer offer. The best balance transfer offer I’ve ever seen have 1) waived the transfer fee of 3% and either 2) been 12 months for 0% interest or 3) 3.99% with no time limit other than minimum monthly payments.

Just to reinforce: if you are currently paying a high-rate, you’ll effectively make the most money not from a rewards card, but from a low-interest balance transfer.

4. Shopping Cash Back

These cards are for heavy shoppers and can get you up to 20% cash back on purchases made at select stores. The obvious limitation to these cards is that they force you to shop at specific retailers. But if you are ok with that, or already shop at these stores a lot, then you can get some serious cash back rewards.

5. 0% Purchase Offers

If you’re going to be making some major purchases in the coming months, but want to stretch out the payments interest free, then you might consider a 0% purchase offer. While not actually earning you cash back rewards of any kind, this kind of card can save you money on interest (and if you’re really smart, you’ll invest the money in short term investments like CDs, money market funds, etc.)

APR or Annual Percentage Rate is the true interest rate you’re paying, on an annual basis, on your credit card contract or financial agreement.  This include hidden costs and fees. Knowing the APR should allow you to compare rates among lenders.

The APR includes:

• All fees
• Insurance
• Interest

Once you know the yearly amount of your interest and fees combined, you can do a comprehensive comparison. If you have good credit, you’ll most likely get a credit card with the lowest APR. If you’re applying for a credit card and you’ve never had one before, expect to pay a higher APR. Still, with all the numbers in one tidy APR figure, you’ll have an easier time finding the best rate.

If you’re looking to purchase a house or car, your lender will probably want to look into your credit rating to make sure you’re not a risk.  Your credit rating details your spending habits, but more important, it tells about your payment habits. It should go without saying someone who pays off debts in a timely manner will have a higher credit rating than one who doesn’t always meet his obligations.

While a credit rating is a good indicator of who is a good candidate for a loan, if an applicant has no credit history at all, and therefore no credit rating ,he may also have problems applying for a loan – even if he’s never been in debt his life.

To get a credit history the best thing to do is to apply for a low interest credit card. Use it to make purchases and pay off your balance right away. Soon, you’ll have an excellent credit history, an excellent credit rating and all will be well when you apply for a loan.

Keep in mind that using a credit card to live beyond your means is the best way to ruin your credit history, so use it wisely and responsibly.

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Owning credit cards is a responsibility. They’re a convenience, not something to get you the good things in life you can’t afford. With this in mind, one should always enter into credit card ownership with knowledge and a sense of obligation. Here are some of the top credit card mistakes.

1. Only paying the minimum – If you have credit card debt and only pay off the minimum, you’re getting caught up in a viscous cycle. The credit card companies will love you though, as you only pay off a small part and they keep adding on the interest. Perhaps you’ll pay it off in a few years, perhaps not at all.

2. Giving a credit card an irresponsible teen – Bottom line? If you can’t trust a kid to save money you probably can’t trust him to be responsible around a credit card. Before giving your son or daughter plastic, ask yourself if you really trust them to pay their bill and not get carried away with the spending.

3. Using a credit card to buy what you can’t afford – See here’s the thing about credit cards. They’re not for you to use to buy a gaming system or big screen television – unless you have the money to pay for those things. Credit cards are so you don’t have to carry around a lot of cash or to use in the event of an emergency. A $3,000 television set you won’t pay off for 17 years isn’t exactly something you MUST have.

4. Having too many cards – Isn’t it convenient? You max out one card so you just use another. What happens when you max out a dozen cards, what will you do? Pay only the minimum on each? You’ll never get out of debt that way.  Having only a couple or a few credit cards is much better than signing up for every card out there. Having all those credit cards will butt you in the butt when you’re looking to take out a mortgage or car loan, so choose wisely. Having only a two or three major cards (Visa, MasterCard, American Express) is best.

5. Buying a credit card because you like the commercial or celebrity endorsement - This is probably self explanatory but getting yourself an American Express card because Jerry Seinfeld has one is just dumb. Take the time to research the best credit card for your needs – it shouldn’t have anything to do with celebrity endorsements.

6. Not shopping around for the best interest rates – If you pay off your entire balance every month (like yours truly, ahem) the interest rates might not be such a big thing to you, but this should be one of your most important considerations when choosing a credit card. Not all credit cards are alike, do yourself a favor and research the best credit card for your needs with the lowest interest rates.

7. Not shopping around for the best perks – Perks shouldn’t be at the top of your list of reasons for choosing a credit card, but they certainly help. Getting gas, cash back or frequent flyer mileage, in addition to a low interest rates, should help seal the deal.

8. Cashing those cash advance checks – No, no and again no. Shred those cash advance checks as soon as you receive them and don’t ever be tempted to sign. This will only put you deeper into debt. Moreover, they come at a heavy price, often with higher interest rates and fees.

9. Not reading all the fine print – Think you found the best card with the lowest interest rate? Read the fine print again. Does the rate skyrocket after the first few months or a year? Choose the card offering you the best lifetime deal, not the most immediate gratification.

10. Signing up for a credit card because of the free bottle of soda – Do you have representatives at your local mall offering a free 2 liter bottle of soda or dollar store watch just for applying for one of their credit cards? Don’t do it. Ask yourself why the credit card company needs to give out goods in exchange for your application. These spur of the moment sign ups don’t allow you much time to research and compare either. Never sign up for a credit card on a whim.

Image: newscom

Most Americans over the age of 18 have at least two credit cards each. From cashback rewards to single monthly payments, credit cards can be handy for sure.

However, they can also be trouble, especially for those who don’t take the time to educate themselves as to how to use credit cards smartly.

Even so, there are some people who simply cannot get credit cards because of bad credit or other reason. For those who can’t use credit cards, or those who don’t want credit cards, there are ways to get along without. Behold:

10 Tips for Getting Along Without Credit Cards

1. Live within your means – Really it can’t get any simpler than that. If you don’t want to buy on credit, and don’t want to get into debt, don’t spend more than you already have.

2. Pay in full – If you wish to make a major purchase take the money you would have used to pay your credit card bill each month and save it in the bank until you have enough to pay the item in cash, in full.

3. Don’t spend away raises – If you get a raise at work, pretend you didn’t. Take the extra money and put it away to save for wanted items and your future.

4. Trim the fat - Cut down on things you don’t need. Look over your grocery and other bills and see where you can trim the fat.

5. Count to 10, or maybe 7 – When you want to buy something that’s not a necessity stop. Wait a week and see if you still want or need it.

6. Comparison shop. Before making a major purchase, or any purchase, look around for the best bargain for the money. That may mean buying a more expensive product if it works more.Buy smart not cheap.

7. Save your spare change. Roll it up and bring it to the bank. I deposited almost $1,500 in change last year.

8. Use direct deposit. You have more of a chance of saving money when it’s deposited directly into your bank account than if you cashed a pay check or deposited it on your own.

9. Use a debit card if you don’t want to carry cash. This way your paying the item in full, with no interest. Anything requiring a credit card deposit, hotels, airlines, etc., can be paid using debit cards.

10. Create a monthly budget. Make sure all bills, utilities, groceries, mortgages and other household expenses are covered. Put a set amount into the bank. Anything left over is extra and can be put towards additional purchases.

Keep in mind…

When you don’t have credit or credit cards, life can be difficult. You’ll have trouble buying a house or car, and it might even be a problem when getting on a college financial aid program. It’s admirable to want to live without debt. Your best recourse is to get a low interest credit card and use it once or twice a year, paying it off immediately upon receiving the bill.

We all want to be debt free, but many times we need a credit card just to be able to get life’s necessities.

Image: stock.xchnge

My wife and I have a shared phobia.

… Credit Card statements.

Now you are probably either thinking “What the -” or sitting there hugging yourself, nodding in agreement.

It’s not so much the statement itself, rather the feelings it triggers and what it represents.

As you know, some people are good at handling their finances and others are, well, like my wife and I. It doesn’t help that we are scared to death of anything related to the topic.

Once in debt, forever fearful.

So how do we cope with it?

Our solution is simple but takes effort, planning and determination.

Make sure your cards are set to pay off in full and set realistic credit limits. If you pay it off in full each month, automatically, then you will only ever see “Paid” rather than that scary “where are we going to find the money to pay this off” feeling or worse “we will be paying this off the rest of our lives”. With a reasonable limit you will never spend what you can’t afford to pay back.

With this two point combination we have managed to see credit cards as a tool and not something to be feared, well, most of the time.