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On the whole, a low APR is a wonderful thing. Who doesn’t want to pay little to no interest for the money they borrow? But some deals are better than others, depending on your needs.

The problem comes quite simply down to balance transfer caps. You’re generally paying 3% for your balance transfer, and more and more often that amount is not capped. You may be adding an immediate 3% to your entire balance.

What this means is that if your current interest rate is pretty good, and you’re going to be carrying that balance for only a short time, you may lose money. On the other hand, if the 0% APR runs for a year or so, and you’re continuing to carry that balance, you’ll save money.

Just beware of whatever the promised interest rate is after that time, as well as what you’ll be paying on new purchases, assuming you’ll be using the card that way. You need low enough rates on these to be worth your while as well.

Obviously, if your credit card has had its APR raised way up for no good reason, it’s probably time to switch cards. So long as you have a good credit score you should be able to get a 0% APR card that offers better terms than you’re dealing with right now.

You need to read the card terms carefully as you choose one. Is that 0% for 12 months, or 0% for up to 12 months? There’s potentially a big difference between those two, depending on your credit score. How badly are you going to be pounded by late fees and higher interest rates if you are late with a payment?

If this is a card you intend to carry a balance on for a long time, compare the cost of the 0% APR card to that of a low interest rate card that you think you qualify for. It is possible that the low rate, if it stays low rate, may be the better long term deal.

No matter the credit card you apply for, read the terms and conditions carefully. If you have a tendency to be late on payments on occasion, this is more important to you than it is to the average user… who still really needs to know this stuff.

When you get down to it, not every credit card deal is right for every person. Watch out for terms that can make a card cost you more than you’d think at first glance, and think about how you’re going to use it. You should be your own best protection.

Marriage is quite the adventure. Everything you do suddenly impacts someone else, even more so than when you were dating. And this is particularly true of financial matters.

People can go back and forth about whether or not joint bank accounts are the best things for a couple. And there are good points on both sides. Joint accounts take care of the question of whose account pays for which bills, for example. But other people like to keep things separate, either because that’s just how they like to run things or because their spouse doesn’t have the same money spending or saving habits they do.

There are similar issues for credit cards.

A joint account can be a good idea, as either of you can use it and most purchases will probably be for both of you, but it can also have some bad points.

The Good Point

For the one with the lesser credit score, getting a card together is a chance to get better credit. The card will still need to be paid properly. But if you can both keep from making mistakes you can bring the lower score up over time.

The Bad Points

The flip side of someone with a good credit score getting credit with someone who has a lesser credit score is that if they continue to make mistakes your credit score can go down too. Any combined accounts will impact both of your scores.

This also means that if one of you starts having trouble with money or starts abusing credit, it’s going to impact both scores. While most people trust their spouse, things happen. It’s not always about being unreliable. Sometimes it’s just a bit of bad luck.

Many couples will be able to rely upon each other’s credit with no problems whatsoever. Whether or not you combine or get new joint accounts, the most important thing is to keep each person’s credit score in good shape.

Why?

Let’s assume you come to a time where you can buy a home. Odds are both of your names will be going on that mortgage. You’re buying a home together, after all. If one of you has a poor credit score you will both be stuck with a higher interest rate on your mortgage.

Remember that the only way your credit scores interact with each other is on your joint accounts. If you have trouble keeping up with a joint account, it will impact both scores. But if you keep all your credit accounts separate, problems for one will not mean problems for the other. The credit bureaus do not care if you’re married. Their only interest is how you treat your credit.

Weddings, on average, are expensive these days. Hugely so. Some would even say ridiculously so, with the average being somewhere around $28,000. That’s a lot of money for a one-day event.

Of course, to many the wedding is the most important day of their lives. They want the big party. The elegance. The amazing food. All of their friends and family in one place, celebrating their happiness. And there’s nothing wrong with that.

Unless, that is, you really can’t afford it. Going into huge debt for your wedding is a poor way to start a marriage. Driving your parents into debt for your huge wedding also isn’t so hot an idea.

It’s hugely important that you start planning your wedding by figuring out a reasonable budget, taking into consideration what all contributors can reasonably afford to give. This will very much so vary by family. If you keep up with what you can do, you won’t be starting your lives off together arguing about the debts you’re creating.

One of the challenges to this is that so much of the wedding industry is priced higher than regular services. Just ask around about wedding cakes and compare what you can get regular cakes for. The difference can be significant. Wedding cakes are of course more ornate in most cases, and if they’re tiered they must be made to cope with the weight, but even so the prices can be astounding.

Do not sign on for anything for your wedding without comparing prices first. Sure you may have a dream location, a dream dress, etc., but if they make it so that you cannot stay within your budget there may be more options than you thought at first. And you also may discover that you love a cheaper option just as much as one that cost more.

Check your budget regularly as you do spend money. It’s all too easy for things to get out of hand, and suddenly you have to figure out how to fit the remaining items you want into the budget.

It is, of course, very common to put a lot of these expenses onto credit cards. That’s fine, just make sure that you have a plan for paying them back within a reasonable period. Credit cards are often just the easiest way to pay for things. But debt can be such a strain on a marriage, I really don’t recommend starting out with a lot of it.

Or loading a huge debt onto the bride’s parents. Not terribly fair to them, either.

The simple truth of the matter is that you can plan quite a beautiful wedding on a wide range of budgets. There are always places you can cut back on costs, often family members willing to help out with photography and such, and options all over the place. Don’t force yourself to spend more than is reasonable for your budget.

News reports now are full of the current credit crunch. Foreclosures are way, way up, and housing prices in some areas are dropping significantly. This is having an impact on all kinds of credit.

But for those of us with credit cards, this is a very good reminder of how carefully we should be using our credit. There’s a right and a wrong way to go about it.

If it hasn’t been a priority before or even if it has, do your best to get your debts paid down. This will give you more flexibility and make you look better if you need credit for something later. Falling home prices can mean good deals when things get a bit better, and if you can continue to manage your credit well, you may be in a good position to take advantage.

The short term impact for many has been that they have to cut spending because they don’t even have access to more credit so they can spend more. Many people have relied for years on credit to keep up lifestyles they couldn’t maintain any other way. It becomes important to spend only on essential items.

This is a time to learn about good spending habits, ones you should keep for a lifetime regardless of the economy. There are right and wrong reasons to use credit.

Good reasons include buying a house. Even if home prices drop significantly, most people would not be able to save enough to buy a home out of their savings. It would take an impractical number of years for most. Doesn’t mean you can’t, but most won’t have that kind of control.

Emergencies are another good reason to use credit. Sometimes there’s just no other way you can get through the situation.

And of course, you should use a little credit just to keep your credit score healthy. Using your credit card and paying it off monthly will help to show that you mean to have good credit.

The bad reasons are of course more fun.

There are the lifestyle reasons, such as keeping up on the latest technology. You NEED that big screen plasma or LCD television, right? The new cell phone even though the old one works? The treadmill you’ll use only as a place to hang your clothes?

Buying something fun isn’t necessarily a bad thing, but particularly now with the credit situation so poor, it’s best to not do so unless you can actually afford what you’re buying. A little extra thought can cut out quite a number of purchases.

Depending on who you ask, this may be an economic hiccup or it could be a much deeper downturn. There’s no way to know which it is yet, but it’s better to plan for the worse situation and be surprised by the better, than to assume the best and get slammed by the worst.

Paying 0% APR is a very nice thing when you have debts. Many people get offers for these credit cards regularly. Some even take advantage of them.

Just be careful that they don’t take advantage of you. There are a few tricks you should watch out for.

1. Balance Transfer Fees

These can add up quickly, but they’re the only way to get your balance on a regular credit card over to your new 0% offer. These are often around 3%, and many companies have removed the cap. This means that while once your maximum balance transfer fee would be perhaps $75, now it can be much higher. A $5000 balance transfer at 3% means you’d be paying about $150.

That’s not necessarily a bad thing. You just have to figure out if an immediate 3% is more than you’d be paying in interest over time. If you’re paying it down quickly enough, and your current interest rate is low enough, you may be better off leaving well enough alone.

Do your math before you move your balances around.

2. Time Limits and Regular APR

How long do you pay 0% for? If you’re not going to have the money paid off by then, once again you need to compare with what you would be paying.

If you get 0% APR with a 3% balance transfer fee and a 17% APR after the introductory period, take a look at what you’re paying now. If it’s the same or higher than the 18% of the new card, you definitely have a good deal. But let’s see what happens to $5000 over 2 years for a 10% interest rate versus the 0% going to 18%. Minimum payments, no new charges.

After 2 years at 10%, you would still owe $3,340.29, assuming you paid 2.5% of the outstanding balance each month.

It’s a bit trickier with the 0% card. You have to start by adding the 3% balance transfer fee, or $150 for a $5000 balance. Once again, making minimum payments only, that’s a balance of 3800.69 at the end of the first 12 months. At the end of the 2 year period, you would still owe $3,368.87… nearly $30 more than if you had stayed with the lower APR card you originally had.

Of course, you can greatly improve this situation by making higher payments. Pay $200 a month throughout, and the 0% APR card goes to $679.71 at the end of 2 years… almost paid off. The original card is also in good shape, at $812.54, but you’ve paid significantly more in interest.

So think about your payment habits beforehand.

3. Increasing Your Limit

This is one of those little things credit card companies do to try and get you to spend more money. They know that many people consider their credit card limit to be a part of their available money, and so an increased limit is a license to spend more.

Don’t.

Most 0% APR cards do that for balance transfers only, not purchases. While you’re paying down the transfer amount, the rest is steadily increasing. If this rate is higher than your old credit card had, you’re paying out more.

So just ignore that increased limit and do your best to keep your spending habits under control. This is not an easy thing for most people, but it’s probably the most important financial skill you can pick up.

The current credit crunch is a good reminder that too many people these days don’t really know how to handle their money. Even if you’re pretty good with your money the current economy can send you for quite a downward spiral.

It’s a tough time to set a good example.

But that makes it all the more important to set that good example for your kids. If you can teach them that even in bad times there are things they can do to use their credit wisely, they have a better chance of staying ahead of the game as adults.

That’s not to say teaching your kids to use credit wisely guarantees that they will do so, or that their lives won’t take a downward turn that ruins their credit despite careful use. Life is unpredictable. All you can do is give them the best tools you can.

The example should start early. Just talk to your kids about how you spend your money. Tell them why you aren’t going to buy everything they ask for. Help them to develop a general sense of what money is. Make them work for things as appropriate.

Most especially, don’t give them everything they ask for.

As they go into late high school or go to college, consider allowing a credit card. One. With a low limit, and it’s their responsibility to pay off the entire balance every month. Explain why you want them to do this.

Now, you don’t have to let your child have a credit card to help him or her learn about wise money management. You can have them learn to save up for every purchase. But I can tell you from my own college experience that there were times I needed a credit card – especially when it came to buying books.

If your child does have to carry the occasional balance, make sure you know why and encourage it to be paid off as soon as possible. Also have them track how much is being paid in interest; it’s a good education into how much more it makes things cost.

A credit card makes it easier to track spending. Take advantage of this and go over what was spent every month. It’s a great way to see how fast frivolous purchases add up. Saving receipts so that individual items can be reviewed really helps here.

By helping your child learn about money management and credit from early on, you can limit the pitfalls that may be hit later on. Having the knowledge of what credit can do to your finances and knowing the benefits of sticking to a budget are skills that can last a lifetime.

Credit cards are pretty much a way of life in the United States. Many people not only use them for most daily purchases, they carry balances from month to month on them It’s hard for most to picture life without them.

But do you really need them?

Well, no, not really need as such. But most people love having them and the advantages they get from having one or more credit cards.

The Advantages of Credit Cards

Convenience is a big factor for many people. Carrying cash and/or writing checks for purchases just isn’t as easy as swiping your credit card. And if you lose your card, you’re generally not held responsible for the purchases made by someone else. You hardly ever get lost cash returned to you.

They’re also a great way to track your monthly spending. Your credit card statement shows each and every purchase you make with it. That can be pretty handy when you’re wondering where your money is going.

Depending on the card you have, you may get other benefits as well, such as cash back or rewards points. If you’re doing this right these can be a very nice benefit for spending the money you’d be spending anyhow.

If you shop online, a credit card is almost a must. Online shopping without one is considerably less convenient. Many online stores have prices you would have a great deal of trouble beating locally, and often you can only find certain things online to begin with.

A credit card is also one of the simplest ways to maintain an active credit history. If you want to make a major purchase someday, such as a house or a car, having a solid credit history makes a big difference in what loans will cost you.

The Disadvantages of Credit Cards

That’s not to say credit cards are all good. Perhaps the biggest disadvantage is how easy it is to fall into the debt traps. Many people end up paying quite a bit in interest because the money they spend on their credit card just isn’t quite real to them. Overspending quickly becomes debts you will need to pay, and money spent on interest payments.

The interest rate can be quite the disadvantage, especially if you slip up and make a late payment. Not just on your credit card in many cases. If the card issuer finds out you messed up elsewhere you may also be subject to significantly higher interest rates. And of course paying interest means your purchases are costing you more than they appeared to at first.

Even a rewards card can have disadvantages if you aren’t using it right. Many carry higher interest rates, so that those who carry balances really are not getting more for their money. It’s an important factor to consider.

Those who are good with their money in all forms can avoid all these traps, however. If you can keep it paid off and don’t select a card with an annual fee, they’re wonderful tools. But if you tend to have money troubles, carrying a credit card can be little more than a trap.

I know a lot of people who carry a rather large amount of debt, yet they claim to be frugal. And they are… with small things. They try not to eat out a lot, keep driving that same old paid off car, and watch what they spend on groceries.

But where they go wrong is with the technology.

A lot of people get into debt because they want the latest and greatest technology. This has become particularly prevalent in areas such as home theater, cell phones, video gaming systems and MP3 players. Even people who don’t have a lot of money too often have the latest gadgets in these areas.

And it means they carry quite a bit of debt.

Having nice things is wonderful, but as a rule if it’s making you go into debt you need to rethink your money strategies. For example:

* Do you really need a big screen television, or can you keep using your old one until either it dies or you have the money saved up for the big screen. Try to avoid putting it on credit.

This is particularly challenging for people right now, with the upcoming switch to digital broadcasting that will make some televisions require additional equipment to receive signals. Many would rather just upgrade the whole set. But if you don’t have the money for a new set, be financially smart and start saving. There’s still time, and there are coupons from the government for the equipment to adapt your old TV.

* Video games and movies get expensive fast if you buy them. But if you’re buying several a month, consider a Netflix, Blockbuster or GameFly subscription. Just think how often you really watch even your favorite movies, or how many games you really need to have available to play at any one time. If you’re spending more than the cost of a monthly subscription to one of these services on purchases, they can probably save you money and give you a greater variety.

* Think before you upgrade. People love to upgrade cell phones, MP3 players and such because they want all the new features? How much do you really need those features? Can it wait another year or two?

My own cell phone is 3 years old. It doesn’t take pictures, although it does have a color screen. I’ve never downloaded a ringtone or texted anyone. Sure, some of those features would be nice, but do they matter on my budget? No.

Learning to be frugal even in these areas can be a huge help to your overall financial picture. It takes some self control, and you have to remember that having the latest technology is really not that important. Just think of the money you could save so that you have a cushion in case of a lost job, an illness or other circumstance. Spread out your frugality to cover all the ways you spend your money, while still enjoying your life.

There’s been a lot of talk lately about where the economy is going. Short version for many people would be along the lines of “in the tank”.

That is, things are getting rather rough for a lot of people. Foreclosures, companies downsizing, debts out of control. It’s getting to be a rough time for a lot of families.

I should know. My own husband was just downsized. My income alone isn’t enough to support our family, although I’m working to change that. It’d be nice, you know?

When you have debts added to a sudden decrease in your family’s income, you have to do some fast thinking. You don’t want things to get more out of control than they already are. You also want to lose as little as possible.

And you’d better believe that you want to avoid bankruptcy. Sometimes that may feel like the easiest solution, but it’s not as easy as it once was, and the long term impact on your credit is serious.

The issue people are most aware of right now is what is going on with housing and people’s mortgages. The government has been talking bailout because so many people signed on to mortgages that they really shouldn’t have, and the impact is now showing in a big way. Foreclosures are way, way up.

But whether your money problems are due to miscalculating what you could afford in a mortgage, the sudden loss of a job or some other reason, you need to act fast to minimize the damage.

Your first step should be to look at what you can afford right now. If your mortgage is now out of your range, what are you going to do about it?

With housing prices dropping, this is a tough one indeed. Some people owe more on their mortgages than their homes are now worth.

The ideal, of course, is to start bringing in enough money to be able to afford everything. Finding a second job may be your best way to cope with mortgage problems. This is not an easy step to take, since it greatly limits your free time and family time. But if it’s better than the alternatives I strongly recommend thinking about what you could do.

Of course, if your money problems relate more to being laid off, you are probably already hunting just to get that one new job you need. I really like something a friend told me once about job hunting. She said that movie stars and baseball players had agents, and she wanted the same advantage when she needed a job.

In other words, get help in your job hunt. It may cost some money that you don’t feel you have (and don’t spend more than you can afford!), but if it pays off in a better paying job, that’s an investment. You should at the very least network and be unashamed to tell everyone you know that you’re hunting for a new job. It really can help.

Cutting back is another good plan. Anything you can spend less money on means you have more to put towards debts and mortgages. This can mean living without cable television or internet access for a time. It can mean dropping the cell phone if you’re not trapped by a contract, or your land line phone if you can get by with just your cell phone. And of course there are many other areas you can cut back on, such as eating out.

You should also be willing to talk to your creditors before the problems become obvious. The sooner you can work things out, the better. You may be able to get lower rates on credit cards, do the occasional lower payment, and avoid paying late fees.

Bigger steps to take depend greatly on your family’s situation. Some may be able to get by on a single car rather than having two. With gas prices the way they are right now, even arranging regular carpools with coworkers who live in your area can be quite a help.

At times like this, you need to focus on keeping things from getting completely out of control. A financial downturn doesn’t have to be a complete catastrophe.

An increasingly common trend is for parents to get credit cards for their teenagers. But the big question is, “Is this a good idea?”

Maybe. It really depends on your goals, expectations and how your teen will use it.

The teen years are filled with pressure. It may well be harder for a teen to control his or her spending than it would be for you. Just think of all the things they ask you for. Can you trust them to not go on an uncontrolled spending splurge with a credit card?

I absolutely wouldn’t recommend giving a teen who isn’t holding down a steady job a credit card. How are they to pay it back? You do not want to do this for them, as you’ll be setting them up for poor spending habits later in life.

If you give your teen a credit card, it should be accompanied by a long talk about what you expect to happen. What are the rules for using the credit card? Is it for emergencies only? Are you going to remind them about payments or do they need to remember on their own?

Teens are lucky in that there are many credit cards for students out there. They may or may not need you to cosign. And certainly having a credit card can teach them early on how to be responsible for one. The only problem is that if they mess it up, they get a poor credit rating right out of the gate. It’s quite a risk.

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