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As credit crisis grows, be vigilant

Like most Americans, I am in debt. There are probably fewer of us out there who pay their bills in full each month than those that do. Kudos to those who are so good at handling their money and controlling their spending that they are able to pay their bills in full each month. I have a lot of respect for them.
Yet, for the rest of us, we have to be vigilant about where every penny of our money is going. Last week I wrote about savvy supermarket shopping. This week I wanted to point out some areas where I cut back, and where we can look to be sure we are not being taken advantage of.
I am far from being an expert on handling money. What I am, however, is sick and tired of borrowing from Peter to pay Paul, having a difficult time paying bills each month, and the never-ending fees charged by nearly every institution.
So, I have gone on a quest to lower my daily, weekly, monthly and yearly spending. What follows are some of the areas I have dug into and found where spending can be cut:
• Look at every credit card bill – each and every month. Make sure you know where every penny you spend is going. I admit I have been lax over the years and allowed ridiculous charges to accumulate on credit cards without being vigilant about checking into them. If you don’t know what a charge is for, question it. Most credit card companies have online access for their customers. American Express, for example, enables you to pull up each monthly statement and click on each individual charge to get a summation/explanation of what that charge is. If the charge still makes no sense, usually there is a phone number with that information and you can call the number to find out what the charge is for. I recently found a $20 charge on my American Express card that had been billed to me by a shopping discount club in Connecticut. I never subscribed to them and how they got my credit card number is still a mystery. Their bill was listed by an acronym I didn’t recognize, followed by numbers – this is another way companies disguise their charges – by billing you under an unrecognizable name. I called them and cancelled the subscription, though I could not get a reasonable explanation for how they got my credit card number in the first place, and American Express credited my account for every month the company had billed me.
• Know your credit rights. We all received the tiny printed agreements when we apply for credit or buy a service – most of us don’t read them. That’s how we get roped into paying fees for things we don’t want.
• Know what you signed up for and – again, keep watch on your bills. I had subscribed to Blockbuster online for several years, having signed up for the cheapest possible video-by-mail rental program, under $17. Somewhere along the line, my charges went up to $19.95, then $20.95 and capped out at over $21 before I took action. It was simple enough – I got onto my account online and cancelled the subscription after asking ourselves, did we really need the movies? Movies come out in DVD about three months after hitting the theaters, then three months later they’re on T.V., so we could wait until that time to view a movie. Once I cancelled my account, I found that Blockbuster, somewhere along the line, had upped my basic service to a premium one – without my consent. This also happened with my Web site. I agreed to a $19.95 per month charge for my Web site two years ago. One year ago the company was sold to another company and voila – my monthly charge was upped to $29.95, without my consent, and I was told I couldn’t cancel without 30 day’s notice by phone. They would accept no other way. This is not what I originally agreed to. Needless to say – do I really need the Web site right now? The answer is no and I have cancelled it.
• Negotiate credit card fees and finance charges. This can be done with some haggling. I have already accomplished this with a few of the credit card companies. It may become more difficult with the credit crisis in full swing, or it may become easier if the companies are encouraged by your eagerness to pay down your debt.
• Be very careful about putting your information on the Internet. I still don’t know how the aforementioned shoppers discount service got my American Express number. I found several months of charges by Netflix, an online video rental company, on one of my sister’s credit cards earlier this year. She only uses the Internet to occasionally purchase items from a very limited amount of businesses. Netflix could not identify how they obtained her number and merely cancelled her account and did refund the months she had been billed, though they could not identify how they got her credit card number in the first place.
• Use spyware, spam protection and anti-virus protection to keep your personal information personal. We can’t protect ourselves from all the prying eyes, but we can be vigilant about it. The Web site www.cnet.com, is a great place to find free downloads and reviews for spyware, spam protection and anti-virus programs. Don’t over-spend on this either – another mistake I have made in past years. When I regularly used a PC, I found AVG (Grisoft) to be the best for spyware and anti-virus protection, and they offer a free trial period.
• Make sure when you do purchase items online, that you are using a secure, encrypted site.
• Do you really need those magazine subscriptions? One trick I have found is that the magazine companies no sooner get your renewal for another year than they wait three months and begin soliciting you for another year’s renewal. Often in their marketing ploy, you are told that it is a “limited time offer” or “this is your last issue,” only to find that you still have about nine months to go on your subscription. Don’t be fooled by their savvy marketing tools. Look at the label on your magazine for a confirmation of when your subscription expires. Then don’t renew it until you get the best possible deal, or, if you can live without it – cancel it.
I recently began a list of everything I had cut back on from the video rentals to auto-ships on products we really could live without and unnecessary or unauthorized fees. In just two weeks, I have saved myself $1,765 a year and I’m not done searching for more ways to save. I have begun the “reduce the debt” challenge. If anyone out there has found innovative ways to reduce their debt and spending, please write us so we can share these ideas.

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