CREDIT CARD TERMS

When selecting a credit card, the following credit terms and conditions are important because they affect the total cost of credit:

"Annual Fee" A flat, yearly charge similar to a membership fee, usually $25 to $50 A flat, yearly charge similar to a membership fee, usually $25 to $50

"Annual Percentage Rate" The APR is the measure of the cost of credit expressed as a yearly rate. The APR is the measure of the cost of credit expressed as a yearly rate.

"Finance Charge" The dollar amount you pay to use credit, includes interest costs and all charges associated with the transaction. The dollar amount you pay to use credit, includes interest costs and all charges associated with the transaction.

"Grace Period or Free Period" The grace period is the number of days you have before a credit card company starts charging interest on new purchases. Not all credit cards have a grace period. The grace period is the number of days you have before a credit card company starts charging interest on new purchases. Not all credit cards have a grace period.

"Periodic Rate" The interest rate the card issuer applies to your outstanding account balance to figure the finance charge for each billing cycle. The interest rate the card issuer applies to your outstanding account balance to figure the finance charge for each billing cycle.

"Transaction Fees" Some credit card issuers charge a fee for a cash advance, a late payment or going over your credit limit. Sometimes there is a monthly fee if you did not use the card. Some credit card issuers charge a fee for a cash advance, a late payment or going over your credit limit. Sometimes there is a monthly fee if you did not use the card.

"Calculation of Finance Charges" It is very important to know how the interest rate is calculated to compare and select the best credit terms. The credit card issuer will use one of three methods. You can decide which method is best suited to your payment style. The method used can make a big difference in the total amount of money you pay in finance charges. This is especially important when the APR's are identical for several credit cards. There can be a significant difference in the total amount of finance charges depending on the balance computation method used. It is very important to know how the interest rate is calculated to compare and select the best credit terms. The credit card issuer will use one of three methods. You can decide which method is best suited to your payment style. The method used can make a big difference in the total amount of money you pay in finance charges. This is especially important when the APR's are identical for several credit cards. There can be a significant difference in the total amount of finance charges depending on the balance computation method used.

"Average Daily Balance Method" This is the most commonly used method. You are given credit for your payment from the day the credit card issuer receives it and the interest is calculated on the basis of the average amount owed during the previous month.

"Adjusted Balance Method" This method is the most beneficial to the consumer and produces the lowest finance charges. The balance is calculated by subtracting the payments and any refund credits from the balance you owe at the end of the previous billing period.

"Previous Balance Method" This is the most expensive method. The finance charge is calculated on the balance owed at the end of the previous billing cycle. Payments, credits and new purchases made in the current billing cycle are not included.

source: http://www.in.gov/dfi/education/choosecd.htm

EVALUATING CREDIT CARDS

When you evaluate various credit card options, consider the following factors as well:

• Compare the credit card interest rates. Look for a low interest rate card but remember the interest rate is not fixed so it can be adjusted either quarterly or by written notice by the bank or company. You may be able to negotiate with your bank for a lower interest rate.
  
• Compare how finance charges are calculated to help determine the total cost of credit.
  
• Look at all charges for each card. Some companies add other fees, such as late-payment fees if your payment arrives after the due date, or transaction fees every time you use the card. Grace periods vary as well. Companies generally start the grace period at the time the purchase is posted to your account. However with some cards, the grace period can start on the day of purchase.
  
• Decide what credit limit is appropriate for you. Determine the amount of money you can charge each month based on your income.
  
• The credit card you choose should be widely accepted to accommodate the majority of purchases you make. Fewer credit cards will make it is easier to keep track of your credit spending.
  
• Compare services and features, such as travel insurance, rebates, purchase protection plans, cash-back incentives or extended warranties. Evaluate these features in terms of the extra credit costs to you.
  
• Make sure the annual fees are reasonable. Not all credit cards require an annual fee. It is worth shopping around to get the lowest fee or no-fee, especially if you pay off your balance each month.

Read each contract carefully before you sign so that you understand all the costs and conditions. Shop for a credit card the same way you would shop for any good or service. Try to negotiate for the options and conditions you want at the lowest cost available.

source: http://www.in.gov/dfi/education/choosecd.htm

Save Money on Food

ou gotta eat. The trick is to satisfy the hunger without starving your wallet.

According to the U.S. Department of Labor, the average American family of four spends $8,513 per year on groceries -- that's $709 per month! And many of us blow our budgets further on restaurant meals.

We've got ten ways to save money on food, whether you're eating in or out.

Learn to Cook

Eating out is a huge budget buster.

Even seemingly inexpensive fast food can add up quickly. Cooking your own meals could save you a small fortune on restaurants and groceries (you'll buy fewer pricey frozen and prepared meals).

Plus, you could make dating cheaper -- who wouldn't be impressed by a cozy dinner?

Scour the Web for simple recipes to get your feet wet, or check out beginner cook books at your local bookstore.

Take Fewer Trips to the Grocery Store

Making bigger shopping trips less often will cut down on your impulse buys. In fact, almost half of all shoppers go to the store three or four times per week. Shoppers making a "quick trip" to the store usually purchase 54% more than they planned, according to a study published by the Marketing Science Institute.

If you go to the store three times a week and spend $10 on impulse buys each trip, that adds up to $120 extra per month. But if you go only once a week, you'll spend $40 per month on impulse buys. That saves you $80 per month, or $960 per year.

Break your Restaurant Routine
This may seem obvious, but we are creatures of habit and convenience. Make an effort to cut back a little, such as dining out once a week instead of three nights a week. With $20 meals, this simple act will trim your expenses by $160 a month.

Or, try something different –- and cheaper. Pick up a restaurant guide or a tour book of your city for budget-friendly suggestions. If you eat out three times a week, cutting just $5 from each meal ticket will save you $60 a month.

Bring Your Lunch to Work

Spending just $2 a day on a home-made lunch versus $6 a day on the sandwich shop next to the office will save you about $80 a month and $960 each year.

Grocery Shop With Focus
Another way to cut down on impulse buys is to shop with a list. Sketch out the week's meals and jot down the ingredients you'll need. Remember to factor in treats, snacks and lunches. Then stick to the list.

You might find it helpful to leave the kids at home so you're not tempted to give into pressure from crying children for an extra treat or toy that isn't on your list.

Buy Generic
You can almost always save money by choosing a no-name brand instead of a brand name. And you usually won't sacrifice much in quality on many items, from cereal to canned goods and frozen vegetables. Also, the savings on generic baby formula and prescription drugs can be huge.

You could save a few cents to a couple of dollars per item. And that adds up quickly each month.

Make Your Own Latte

That daily $4 cup of coffee is costing you $120 per month -- or more than $1,400 per year. Invest in a good-quality machine and make your own brew for much less.

Or kick the caffeine habit altogether and enjoy the health benefits along with the financial.

Use Coupons
You know about coupons for groceries. But don't overlook bargains for dining out.

For instance, at Restaurant.com you can get a $25 gift certificate to local restaurants for only $10. Use the coupon once a week, and you'll save $60 per month.

Or, before you dine out, hit the Web. At http://www.retailmenot.com/coupons/food, you can quickly find printable coupons and codes for dozens of eateries.

Time Your Meal
No, eating quickly won't make the bill smaller. Rather, consider eating out for lunch instead of dinner. That way, you can get lunch-menu prices for dinner-quality entrees.

Mind the Unit Price
Many grocery store tags will tell you how much an item costs per ounce, per pound or by some other unit of measure. Comparison-shop by unit price and save.

For example, a pack of 40 diapers at our local drug store cost $13, or 33 cents per diaper. A box of 144 diapers cost $35, or 24 cents per diaper. A difference of 9 cents may not seem like much, but when you change a diaper six to eight times each day, that amounts to a savings of $16 to $22 per month.

One caveat: Don't buy in bulk if you won't use it all -- otherwise, you wasted your money, no matter how good a deal it was.

Copyrighted, Kiplinger Washington Editors, Inc.

SAVE MONEY ON UTILITIES

Here are 15 quick, cheap and easy ways to cut your electricity, heat and water use while also cutting your expenses by hundreds of dollars.

Keeping your home comfortable year round can put the squeeze on your budget. Consumers spend 6% to 12% of their income on utilities, according to the U.S. Department of Energy.

We have 15 quick, cheap and easy ways to cut your electricity, heat and water use while also cutting your expenses by hundreds of dollars.

TAKE A FLIER ON FLUORESCENTS
Compact fluorescent bulbs represent one of the brightest ideas for cooling your electric bill. (Not every CFL produces a warm, candlelight glow. To achieve that effect, look for one with a Kelvin temperature of 2,600 to 3,000.)

Don't let the price of CFLs -- as much as $7 each -- turn you off. The lights not only last ten times longer than incandescents but also save up to $60 in electricity per light over their lifetime.

VANQUISH THE VAMPIRES
Appliances that include a clock or operate by a remote, as well as chargers, are sucking electricity even when you're not using them. Of the total energy used to run home electronics, 40% is consumed when the appliances are turned off. The obvious way to pull the plug on so-called energy vampires is to do just that -- pull the plug.

Or buy a device to do it for you, such as a Smart Power Strip ($31 to $44, at www.smarthomeusa.com), which will stop drawing electricity when the gadgets are off, and pay for itself within a few months.

INSULATE YOUR WATER HEATER
Is your coffee mug more insulated than your water heater? The newest electric water heaters have plenty of insulation. But if you have one built before 2004, wrap it in an insulating jacket such as a Thermwell blanket ($20; Amazon.com). You'll save 10% -- about $30 -- annually on your water-heating bill.

SERVICE THE FURNACE
Have your furnace tuned every two years, and you'll save about 10% on your heating bills.

TURN DOWN THE HEAT
For every degree you lower your home's temperature during the heating season, subtract 5% from your bill, according to the Alliance to Save Energy.

An Energy Star programmable thermostat ($70 at www.livingincomfort.com) saves more than twice its price within a year and will adjust the temperature automatically for you when you're away or asleep.

SET THE WASHER TO COLD
Use cold water to wash your clothes and save 50% of the energy you would otherwise use for hot water.

Set your dryer on the moisture sensor, not the timer, and cut energy use by 15%.

STOP DRAFTS
As your father would say, don't heat or cool the great outdoors. Put weatherstrip around the frames of your front and back doors and save about $30 per year in energy costs.

LOWER YOUR WATER TEMPERATURE
Set your water heater at 120 degrees Fahrenheit. If your heater does not have a temperature gauge, dial down until the water feels hot, not scalding.

(Before going too low, make sure your dishwasher has a booster heater, which gets the temperature back to 140 degrees, necessary for proper cleaning.)

USE TIMERS ON LIGHTS
Install occupancy sensors or timers on lights in areas you use only occasionally and for exterior lights, which tend to get left on during the day.

The devices start at $25 per switch at www.homecontrols.com. Anyone with basic wiring skills can install them.

GO LOW-FLOW
With a few twists of the wrist, you can save 25% to 60% of the water it takes and 50% of the energy necessary to shower and shampoo you and your family. Install a low-flow shower head, which restricts the water output to no more than 2.5 gallons per minute. The shower heads generally run $10 to $20 a pop (some utility companies give them away) and screw into existing fittings.

Older shower heads send as many as 5.5 gallons per minute down the drain. The new fixtures go as low as 1.5 gpm, saving 7,300 gallons and $30 to $100 a year over their 2.5-gpm counterparts.

PLUG THE LEAKS
A leaky faucet wastes as much as 2,700 gallons in a year -- if it doesn't drive you crazy first. So fix it already.

Test the toilet for leaks, too. Put a drop of food coloring in the toilet tank. If the color shows up in the bowl, your tank is leaking, and you're wasting up to 200 gallons of water a day.

FILL 'ER UP
Run full loads of clothes and dishes. Most of the energy used by dishwashers is to heat a set amount of water, so running smaller loads wastes both energy and water.

Air dry dishes for added energy savings.

TAKE CARE WITH YARD CARE
Water your outdoor plants in the early morning, before the sun can burn off moisture. And take care not to over-water. Before starting your sprinkler, step on the grass. If the blades spring back, hold off on watering for a day or two. The average lawn needs only one hour of watering a week.

Also, raise your mower blades to the 3-inch setting. Shaggy grass holds moisture longer, requiring less watering.

BE A DRIP
For gardens, consider installing a drip irrigation system, which maintains moisture in the soil. Drip irrigation can reduce water loss by 50% to 60% when compared with hand-watering or sprinkler systems.

A drip system consists of a tube or hose with holes or emitters along it. It uses a timer to deliver water to plants. By maintaining the moisture level of the soil, less water is lost to the sun and the wind.

RETROFIT YOUR FAUCETS
Consider faucet aerators -- doohickeys that screw into your faucet threading and cut the water flow from 3 to 4 gallons per minute to as little as a half-gallon. As their name suggests, aerators blend water and air, reducing the flow without sacrificing pressure. At 50 cents to $3 apiece, the devices are some of the cheapest green gadgets available.

Aerators come in a range of flow rates. A faucet that flows at 1 gpm gets is fine for the bathroom faucet. But for a little more oomph in the kitchen, use an aerator with a flow rate of at least 2 gpm.

Copyrighted, Kiplinger Washington Editors, Inc.

SAVE MONEY ON TRANSPORTATION

The average cost of owning and driving a car 15,000 miles a year is $7,830 according to AAA. SUVs are even more costly, at $9,990 per year. That includes all costs of ownership, such as gas, insurance, maintenance, registration, taxes depreciation, financing and more. Yikes.

No doubt getting around can be a huge budget buster. Here are ten tips to help cut your costs:

BUY A USED CAR

Because cars lose most of their value in the first few years, buying used allows you to drive a vehicle you probably couldn't afford brand new.

Recent used models -- those that are less than five years old -- can be a real value because you get a nearly new car still in fine working order for a fraction of the new-car price. And you'll pay less for collision insurance and taxes, too.

BUY A SIPPER, NOT A GUZZLER

You don't need a hybrid vehicle to save money on gas -- higher purchase prices can cancel out any savings. But a regular car with good gas mileage could save you hundreds of dollars a year on fuel.

Drive 1,200 miles per month in a car that averages 18 miles per gallon, and you'll spend $187 per month (at $2.80 per gallon). Drive a car that averages 25 miles per gallon, and you'll spend $134 per month -- a savings of $53 per month, or $636 per year.

RE-SHOP YOUR CAR INSURANCE

Using a comparison site like InsWeb.com can help you determine if you've got the best deal. Rates vary widely from insurer to insurer. Your savings could equal hundreds of dollars.

Shopping around is especially important for young adults because their rates could drop as they approach age 25 or older, build a credit rating, start a career and get married. Insurers reward customers who are responsible.

DROP COLLISION & COMPREHENSIVE COVERAGE

If you drive a beater -- say, one worth less than $2,000 -- you'll probably pay more to insure it than you would ever collect on a claim. Dropping that part of your coverage can reduce your premium by one-third.

RAISE YOUR DEDUCTIBLE

Upping your out-of-pocket outlay from $250 to $1,000 on any car can save you 15% or more on your car insurance.

But make sure you have enough cash in an emergency savings account to cover your deductible so you won't have to rely on costly credit cards to bail you out.

JOIN POLICIES

When shopping around for auto insurance, check first with the company that provides your renters or homeowners insurance. You could snag up to 15% off for a multiple-line policy.

SHOP AROUND FOR GAS

Gas prices can vary as much as 20% within only a few blocks, according to GasBuddy.com, a price-monitoring site. So hop online to find the best deal in your neighborhood or along your commute route.

A 20-cent difference on 60 gallons of gas per month adds up to $12 per month or $144 per year.

USE A GAS REBATE CREDIT CARD

If you frequent the pump, soften the financial sting with a credit card that'll give you cash back for filling up.

For example, the Discover Open Road card gives you 5% cash back on gas and auto maintenance charges. So if you spend $200 a month on gas and maintenance, you get $10 back -- or $120 each year.

HOP ON THE BUS, GUS

Public transportation can save you a bundle on commuting costs because you won't have to spend money on a parking space, gas and auto maintenance. Plus, you can probably get a lower insurance rate for driving less.

Ask if your employer will pick up part of the tab for your public transportation costs. If not, suggest the company look into the matter -- it could qualify for a tax break.

CAR POOL

Two heads are better than one when it comes to commuting. Sharing the ride -- and expense -- with another person heading your way can cut your gas costs in half.

Copyrighted, Kiplinger Washington Editors, Inc.

Save Money on Phone, Internet & TV

Talk is anything but cheap, not to mention Internet and cable TV. Try these ten tips to hand up on high costs.

Anyone paying the bills in their household knows that talk is anything but cheap. Cell phones and land lines can cost a pretty penny. Add your bills for Internet service and cable TV, and your telecom costs can quickly go through the roof.

BUNDLE UP
Bunch your services and save some green. For about $100 a month, you can get cable or satellite TV, local and long-distance telephone service, plus high-speed Internet service. This is often cheaper than it would cost for each service separately.

In addition to paying just one bill, you have just one company to call if you have a technical or billing issue. See Save a Bundle on Telecom Services to learn more.

RETHINK YOUR PHONE COMPANY
Save on your long-distance bill and chat via computer with free software from Skype.com. You won't pay a dime for any call to another Skype user. You can call non-users' landlines, too, for about $3 a month. Sure beats the $15 to $25 fee for a typical no-frills land line.

Or consider other low-cost Internet phone services such as Vonage. It comes with more perks such as voice-mail, caller ID and call waiting and costs $25 per month for free unlimited local and long-distance calls.

PRE-PAY YOUR CELL PHONE
The average wireless-phone user spends about $60 a month, including taxes and fees. If you talk for 200 or fewer minutes per month, you may save by switching to a prepaid plan charging 25 cents a minute or less.

Prepaid plans generally charge 10 cents to 60 cents a minute, and compatible phones cost as little as $20. Compare plans at www.myrateplan.com.

CUT THE CORD
If you have a good cell-phone plan that you use almost exclusively, get rid of the dead weight on your finances and drop your land line. You could reclaim $20 to $50 or more each month.

EVALUATE YOUR CABLE USE
Do you really need all those cable channels? Take a look at what you're paying for and what your family is actually using. Then trim accordingly. Dropping your premium channels, for example, is a good way to start saving.

You may even find you don't watch TV enough to justify the cost of your cable service. Consider dropping cable entirely and watching your favorite shows online or on DVD –- or reading a book.

HANG UP ON PHONE EXTRAS
Do you really need caller ID? Call waiting? Voice mail? Internet service on your cell phone?

Drop one or all of the extras and shave $5 to $50 off your bill each month.

GET A CALLING CARD
This is a great way to keep phone costs under control when you've got a roommate. That way, you're sure to only pay for the long-distance calls you personally make. No more billing disputes. Calling cards may also save you money over the long-distance plan offered by your phone company.

At Costco, for example, you can buy a Verizon phone card with 700 pre-paid minutes for $20. That's 2.9 cents per minute.

NEGOTIATE A LOWER RATE
With cutthroat competition among phone, cable and Internet providers, you can probably haggle your way to a better deal on your service.

Many of the best offers are for new customers, but that shouldn’t stop you from asking for the same deal, or at least one better than what you’re getting. You could always threaten to take your business elsewhere.

Copyrighted, Kiplinger Washington Editors, Inc.