It’s two days before the New Year and many of us are busy coming up with resolutions we can break during the first week.  However, with all the chaos in the financial world, many of us will be setting our sights on fixing household finances.

With that in mind, Smart Credit Choices has an easy New Year’s resolution that you can accomplish in a few minutes.  That resolution is to pay no credit card interest in 2009.

For credit card abusers, this may seem like a difficult task.  However, all one needs is a new credit card that offers a 0% interest rate for a year to actually follow through on this resolution.

To get started, gather up all your credit card statements.  Take a look at the interest rates and add up the balances.  Chances are, this is not a fun thing to do.  However, once you’ve assessed your credit card debt situation, fixing the problem is easy. 

First, pick out a card that offers a 0% APR on purchases and balance transfers for a full year (you can find one of these in the 0% APR credit card section of this website.)  Once you’ve found a card, complete the online application, input your current balances and set up transfers and click submit application. 

Voila!  If approved, you can expect to save at least $100, if not substantially more, for every $1000 you transferred from your high rate card to a 0% interest card.  For example, if you had $5000 in credit card debt at a 14% interest rate, you’ll save yourself about $600 in interest this year.  Not so bad.  And by doing this today, you won’t give yourself enough time to break the resolution.

We at Smart Credit Choices wish you the best for 2009 and hope this little resolution can help you save a lot of money next year. 

To find the 0% credit card that will save you the most in 2009, simply visit the credit card comparison section of our website by clicking here.

During 2008, credit card companies have gone out of their way to make life difficult for consumers.  They’ve cut off business credit, lowered consumer credit lines, raised interest rates and made it more difficult for even the best consumers to obtain 0% interest rates.

Of the bountiful gifts our beloved credit card companies have bestowed upon us this year, the nastiest is the raising of interest rates on current customers, often for no apparent reason.  The method by which credit card companies are notifying consumers of interest rate increases is the mail, a tactic that is helping to pad their bottom lines. 

The reason this tactic has proven so effective lay in the fact that we have all become accustomed to tossing credit card mail in the garbage (I personally prefer to shred it).  However, regardless of a person’s preferred method of destruction, the standard response to most credit card mail is to dispose of it.  Bank’s know this, and they are using it to their advantage by sending out updated disclosures and credit card terms to consumers.

These updated disclosures often include notices to consumers that they have two options:  close your credit card account and pay off your balance at the current rate OR do nothing and accept a higher interest rate.  Unfortunately, many consumers are accidentally doing nothing because they don’t even bother to review these notices.

The cost of this oversight can be tremendous.  A recent visitor wrote in and informed me his interest rate had been increased to 23.99%.  And he’d never once been late on a payment.  Horror stories like this have become all too common.  Please don’t let this happen to you.  If you get a notice in the mail, read it and respond.  In the long run, this could save you hundreds of dollars in interest.  If its already too late and your credit card company has raised your rate, take advantage of a 0% APR balance transfer as soon as you can.  This will not only save you money on the higher rate, but also, on the rate you would have paid before.

By all means, however, read and respond to any mail from your bank, especially if it is labeled a NOTICE or mentions a CHANGE IN YOUR AGREEMENT.  This is big red flag.

If you have friends or family you think might benefit from this information, be sure to share it with them.  It may be the best gift they get all season.

Credit card companies have been putting the screws to consumers all year long, but no action to date strikes me as more atrocious than Chase’s recent increase in minimum monthly payments on certain consumers.  Industry-wide, the average minimum monthly payment due ranges from about 1.5% to 2%.  However, Chase has raised the credit card payments for some consumers to 5% of their outstanding balance.

Just how serious is this move?  Let’s say a person owes $8,000 on a chase credit card.  At the previous 2% payment rate, that person would be paying about $160 a month.  When the minimum monthly payment is bumped to 5%, that person’s monthly expense increases to $400!

With many of us barely scraping by, there is little room in our budgets for extra spending.  And for those struggling with job losses or skyrocketing adjustable rate mortgages, a 150% increase in their monthly credit card payment can be the straw that breaks the camel’s back.

Unfortunately, consumers are left with few options to fight back.  Many credit card companies have made it tougher to get new credit cards to transfer balances to.  And if a person falls behind on credit card payments, their rates on a Chase credit card could increase to nearly 30%, the current default rate.

Despite the obvious difficulties this situation poses for those affected, the only real options are to either pay your credit card in full or seek out a 0% balance transfer credit card from another company.  The worst thing a person can do is fall behind on payments.  This will not only cause interest rates to skyrocket, but it will also severely damage credit scores.

This move by Chase is shameful and counterproductive.  Hopefully, it costs them business in the long run to make up for the pain it is causing consumers in the short term.

A recent visitor to our site was outraged when her credit limit was cut nearly 90% by American Express.  So angered was this visitor that she no longer wanted to do business with the company and planned on cancelling her credit card.  Many others have probably felt the same way when, for no apparent reason, their credit card company suddenly slashes their credit limit.  However, this is not necessarily the best way to get revenge.  In fact, it can ultimately make matters worse.

As the credit crunch has intensified, many credit card companies have sharply lowered credit limits on some consumers while raising interest rates on others.  Neither of these tactics makes for happy customers.  However, fighting back against your credit card company by closing your credit cards can do much more harm than good.

Having lower credit limits poses more than the obvious problems.  What few know is that credit usage plays a critical role in the calculation of credit scores, and thus, in the way other creditors view you.  The key issue here is the percent of available credit being used. 

If, for example, you had a $2,700 balance on a credit card with a $10,000 limit, your credit report would show that you are using less than 30% of your available credit.  However, if your credit limit were to be cut to $3,000, you would now be using 90% of your available credit.  To a bank, this is a red flag.  It makes it appear as if you are maxed out.  And in uncertain times such as these, lending money to maxed out consumers is not a high priority to banks.

The effects of a credit limit decrease can increase the cost of borrowing for auto, student, and even home loans.  And should you want to take advantage of a 0% balance transfer to help pay down your debt, credit card companies may be less likely to offer you one.

The worst thing a person can do, especially one who has a low balance relative to their credit limit, is to cancel their credit card to spite the issuing bank.  Keep the card open; just don’t give them your business.  Additionally, here are a few other steps you can take to lessen the blow of a credit limit decrease:

• Pay down your credit card debt:  Although this is easier said than done, if you have cash available, use it to reduce the percent of available credit you are utilizing.  Not only will this save you money on interest, it will help improve your credit score.
• Get a new credit card, FAST:  It can take a few weeks for a change in your credit limit to get reported to the credit bureaus.  During that time, your credit score will reflect your old usage of available credit.  By acting quickly, you can get approved for a new card and use that card to transfer balances.  (Note:  You can apply online for 0% credit cards on our main site.)
• Negotiate with your credit card company:  You may want to practice this on a brick wall first, just to get used to the response.  Initially, it may be hard to get your credit card company to change their mind.  In fact, it may be impossible.  However, by paying down your debt and proving to the company that you are in good financial shape, you may be able to get your limit increased.  Just don’t expect results overnight.  It may take a few months to get them to consider your request.

When a credit card company cuts your credit limit, they are not only limiting your ability to spend, but also, limiting your ability to borrow from others.  Taking quick, decisive steps is the best move to make.  One of those steps shouldn’t be cutting up your credit card.  If anything, getting a new credit card quickly may be the best thing you can do to limit the damage to your credit score and help you maintain a healthy credit score.

For additional information on current credit card offers, please visit our site to review, compare, and apply online.  We list detailed information on close to 100 credit cards as well as links to online applications.

Additionally, if you have any insights you think would be helpful to others, please leave a comment so others can learn from your experience.

Let’s face it.  Credit card companies have lower approval ratings than the current president.  They are the people who charge us absurd fees and sometimes astronomical interest rates.  However, they also provided a necessary evil for many consumers, not to mention a multitude of ways to save money.  Yes, I said it.  Credit card companies do help people save money.

How?  For starters, the 0% introductory rates on purchases and especially balance transfers have helped keep a lot of money in savvy consumers pockets.  And for those who pay their credit cards in full every month, cashback and other rewards credit cards actually earn consumers money. 

However, it is easy to be unsympathetic to credit card companies, if not downright pleased to read about their troubles.  Unfortunately, what we all dislike about credit card companies will ultimately hurt everyone with plastic in their wallet.

Yesterday, Fitch Ratings predicted credit card losses could hit new highs in 2009 (see http://www.reuters.com/article/companyNews/idUKTRE4AB0DG20081112?symbol=DFS.N).  If, and to what extent, these losses occur will have a tremendous impact on the wallets of all credit card users.  Here are just a few examples of how losses at credit card companies can impact your life:

1.)  The End of the 0% Era:  Over the past five years, getting a 0% APR credit card has not been a difficult task.  However, these days of “free money” may disappear faster than Lehman Brothers.  In particular, the 0% balance transfer has helped countless consumers save hundreds, if not thousands of dollars a year on interest.  Without this refinancing safety net, many consumers will find it harder to get out of debt.

2.)  The Return of the Annual Fee:  Presently, the majority of credit cards charge no annual fees.  Those that do are generally tied to rewards programs that offer benefits such as frequent flyer rewards.  However, consumers who pay these fees do so out of choice, not necessity.  Soon, choosing to have an annual fee may not be an option.

3.)  Higher Fees & Interest Rates:  You think late and over the limit fees are high now?  In a year, we may be fondly remembering the days of the $29 late fee.  And interest rates?  How does 22% sound?  Many consumers with above average credit may find themselves unable to get better rates.

Of course, the scenarios above are all hypothetical.  The recession could be less severe than expected.  Banks may satisfy their hunger for money with our taxpayer funds.  Or, in what I consider a best case scenario, money will start growing on trees.

Unfortunately, there is little evidence to support any of these options, although I did receive an email about a money growing tree in Nigeria.  All I had to do was wire $10,000 to a numbered bank account to get the map.  I’ll let you all know how my money tree search goes, but in the meantime, the best we can do is hunker down, take advantage of 0% interest rates while they exist, and a shed a collective tear for credit card companies, before they make us cry with higher fees, absurd interest rates, and credit limits that won’t cover dinner for four at the Olive Garden.