- Make your monthly credit card payment on time. The $30-35 you save by not being charged a late fee each month on one card would save you most of the money you need for $500 in emergency savings.
- Use debit and credit cards prudently. To minimize interest charges, try to limit credit card purchases to those you can pay off in full at the end of the month. If you use a debit card, don't rely on an overdraft feature to spend money you don't have. With either approach, you'll have more money available for emergency savings.
- Use only the ATMs of your bank or credit union. Using the ATM of another financial institution once a week could well cost you $3 a withdrawal, or more than $150 over the course of a year.
- Request a reduction in the interest rate on your credit cards. As with home equity loans, credit card companies sometimes are willing to reduce the interest rate. It can’t hurt to ask. If your credit card company won’t help you, switch to a low interest credit card or a one of several 0% APR credit cards.
- Remove your credit card numbers from your online accounts: It’s easy to spend online when you have your card information stored in an account – just click and buy. The best way to break this habit is to simply delete your card from the account. That way, when you’re tempted to spend, you’ll be forced to spend the time to dig out your card – and really think about why you’re spending this money.
- Hide your credit cards: If you are tempted to purchase something because a credit card is in easy reach in your wallet then; Take your credit cards and put them in a safe place in your home. If you argue that you need it for “emergencies,” just be sure to keep a small amount of cash hidden in your wallet for these emergencies. Don’t keep plastic on you until you have the willpower to not use it even when you’re sorely tempted.
- Reduce credit card debt by $1,000. That $1,000 debt reduction will probably save you $150-200 a year, and much more if you're paying penalty rates of 20-30%. Better yet become credit card debt free!
Next week we will cover loans, mortgages cash advances