For many of us, a major challenge each month is staying within our budget. Often times, a few bucks in our wallet disappear in the blink of any eye. From our morning latte to stopping off to buy a gallon of milk and a loaf of bread, our budget is blown in a heartbeat.

If you want to get a handle on your budget, the first thing you need to do is consider where your money is going. In order to accomplish this, you may keep a notebook in your purse or wallet and mark down every expense (which is annoying and time consuming to do), or you can simply start swapping out your cash purchases in lieu of your credit card.

A credit card does something cash cannot: it tracks every penny you spend and then sends you an itemized list of those expenses each and every month, in the form of a credit card statement. So, why not consider using your credit card to track your household’s monthly spending?

Here’s what to do:

• Get a credit card with a great rewards program. After all, why not add a little incentive to your spending each month by racking up rewards points in the process?
• Swap out all cash, check and debit card purchases with your credit card.
• Don’t consider this project to be a “free for all” in terms of spending, as this will not accomplish much of anything. Instead, shop as you normally would; simply pay by credit card instead.
• When your credit card bill arrives, pay it off in full, otherwise your rewards won’t mean much.
• Sit down, as a family, and review your last month’s spending. Separate the purchases into categories and consider areas in which you can cut back. Have you exceeded your monthly grocery budget? Have your clothing purchases caught up with you? Do you really need to go out to eat that many times each month? Use this statement as your wake-up call to make changes so you can, once again, gain control of your family budget.

Their excuse: they didn’t receive their credit card statement in the mail.

Sorry, but that excuse just won’t cut it in the eyes of your creditor.

Creditors don’t want to hear about lost credit card statements, payments that may have gotten lost in the mail, or nearly any other excuse (real or otherwise) that you may throw their way. You may have some leeway with your creditor the first time this happens, but don’t expect your creditor to be a sympathetic ear to your financial blunders. Take matters into your own hands and make sure the bills get paid.

Because of this, it is important to understand and take care of your monthly debt obligations. Here’s what you can do:

• Make a spreadsheet or other document that clearly marks all debts that require monthly payments, including the mailing address for the creditor, your account number and the due date each month. A spreadsheet will allow you to reference your monthly obligations, thereby ensuring you won’t overlook a payment.
• Set up electronic statements and forgo the paper statement. An electronic statement notification will be delivered, via your email, each month, and your statement will be available online and accessible using a username and password. The email notification may be just what you need to remind you of an upcoming credit card bill.
• Set up automatic payments, if desired. Automatic payments allow you to pay your credit card bill each and every month, at the same time, without a thought from you. If you have trouble remembering to pay your credit card bill (or any other bill, for that matter), automatic payments are definitely the way to go.

If you currently receive your credit card bill each month via a paper statement, you may be wondering if it is a good idea to take your credit card company up on their offer to provide you with electronic statements.

Here is a list of things you should know about going paperless with your credit card statements:

• Your credit card company may offer you a number of discounts and/or benefits for going paperless because eliminating the need to pay for paper and postage will ultimately save them time and money.
• If you want to access older statements, your credit card company may charge you for this. Having paper statements that you can file away and access at a moment’s notice may be more convenient if you need to review or access older statements.
• If you need a clear notification that your bill must be paid, you may be better suited to remain with a paper statement, as many people overlook the email notifications provided by their credit card company. If you receive a large volume of emails every day, or if you tend to forget about due bills, it may be best to stick to the paper variety.
• Electronic credit card statements usually have a feature that allows you to set up automatic payments, thereby eliminating the need to worry about making a monthly payment on time.
• Consider how diligent you would be regarding viewing your monthly statement in an electronic version. If you feel you would be more diligent if you had a bill in your hand each month to review for inaccuracies or fraud, then it may be best to keep receiving paper statements instead of their electronic counterparts.
• If you choose electronic statements, consider you will have to remember your user name and passwords. Forgetting these could mean a considerable inconvenience for you.
• Consider the rewards offered by the credit card company for going paperless. Many credit card companies offer a bump in rewards, or discounts on a variety of services, simply for signing up for electronic statements.

In addition to enjoying easier-to-read credit card statements, the credit card legislation may mean other positive changes for consumers like you.

Clearer Communication between Creditors and Consumers

Creditors must be more communicative when it comes to your credit card account. Any changes in your account must be addressed in writing, and you must be given ample time to either accept or reject these changes. For example, if your creditor raises your interest rate, you must be informed, in writing, at least 45 days in advance of the increase in interest. In addition, if you choose to reject the interest rate increase, you can cancel the card and pay off your remaining balance with your current interest rate.

Budgeting Made Easy

Another change the credit card legislation has brought about shows up on your credit card bill. Creditors are now required to show, in clear language, the amount of time it will take to pay off your credit card if you pay only the minimum payment and the amount of time it will take to pay off your credit card if you send in more money. This change will provide an easy-to-understand explanation of the effects of just paying the minimum balance on a card.

Other perks of the new credit card legislation include:

• Any payment you send in goes toward the balance with the highest interest rate. This is particularly helpful if you have purchases from different promotional periods.
• Creditors cannot raise your interest rate during the first year of having an account (unless you default on the credit card’s terms and conditions).
• Double cycle billing will be eliminated, preventing creditors from calculating finance charges from the previous, as well as current, billing cycles.
• Creditors are under strict rules regarding granting credit cards to consumers under the age of 21, thereby protecting many college-age students from obtaining credit and possibly destroying their credit score at a young age.

If you notice charges on your credit card that don’t belong to you, here’s what you need to do:

• Carefully review your credit card bill to make sure that the charges are correct. Often times, the name listed on the credit card bill may not look familiar because it is the name of the parent company of the business.
• If you have any doubts about the purchase, immediately contact your credit card company to confirm the charges. The credit card company can also provide you with more information regarding the charge, thereby allowing you to confirm whether the charge is yours or not.
• If the amount of the credit card purchase is in question, pull out your receipts and go back to the retailer to clear up the charges. If you get nowhere with the retailer, immediately contact your credit card company, who will then dispute the charges on your behalf.
• If you find an error or unauthorized charge on your credit card, don’t wait to set the record straight. Most credit card companies will give you just 60 days to file a credit card dispute; any longer than that and you can be sure you will end up paying the debt, whether it’s yours or not.
• Always, always, always make it a point to check your credit report, at least on an annual basis. Often times the things we don’t see have the biggest impact on our credit score. In other words, don’t let mistakes on your credit report wreak havoc on your credit score. If you notice any errors or discrepancies on your credit report, immediately contact the proper credit reporting agency so that you can file a dispute and have the matter resolved.

Paying Your Tax Debt

Some people have the cash or utilize a checkbook and get pay the bill promptly. Others struggle to make payments and then there are those who pay their tax debt with their credit card. Is this really a good idea? For some people, it might be the best way to pay. For others, it is questionable. Before you whip out that 0plastic and tell the IRS to “just put it on my card,” you need to think carefully about what this could wind  up meaning to you.

Using Credit

There is no doubt that your tax debts have to be paid. Federal and State governments, as well as some local governments, want their share of the money. It may not always seem fair, but it is how this country works and how much of the government revenue is generated. If you can prepare in advance to pay a large tax debt either by cash, check or money order, you are probably better off. It’s not always a bad idea to pay by credit, but there is a lot to take into consideration before you do.

Small Debts

If you only owe the government a small amount of money, a credit card might be a good choice for payment. The government gets their money; you have simply transferred the debt, keeping the tax officials at bay.

If you know you have the income and the ability to continue paying the credit card bill, including the interest and fees you are going to wrack up with this new debt, then a credit card is a good way to go. However, paying by taxes by credit card can be very risky for those who do not have the money to pay the bill. Getting the government off your back could land you in even more debt, hurting your credit score and you pocketbook.

Alternatives

If you need time to pay, think about not using the credit card. Credit cards add on fess and interest, therefore, you wind up paying more over time. With the government, you can often make a payment plan that will not incur the rate of interest seen on a credit card bill. If you have high tax debt that you know you can not pay off in full, even over time, do yourself a favor and consult a tax attorney. many of these can often help you to settle your tax debts for much less than you owe, relieving the burden on your mind and your finances.

Money in the Bank

If you don’t have the money in the bank to write a check or make a cash withdrawal to cover your purchase, can you expect to pay off the balance on your credit card? The answer could be yes or no. It all depends on your particular financial situation. This does not mean you should not make the purchase with your credit card. You simply need to consider if the purchase will be worth the added fess and interest or if it would be better to just pay cash.

Minor Purchases

Try and make the interest rates worth it. Don’t run out and buy something on credit that will only cost you a few dollars. You could wind  up paying double. Save your plastic for the bigger purchases and make the interest worth the money you will have to pay.

Can You Afford It?

This is not so much about your bank balance as it is asking yourself if you can really afford to use that plastic. If you’re struggling to pay your basic living expense, you probably need to put the card aside an not use it until things get better for you financially. Sure, you might have a minimal credit card bill to pay every month, however, you won’t be racking up the charges, fees and interest.

When times are tough, that credit card can seem even more enticing than ever; almost like a lifeline. However, credit cards were never intended to pay your living expenses for you. Using them when you do not have the money to pay can only add to your stress and debt. Remember, a credit card does not entitle you to a freebie. You are still responsible for payment. It’s simply a way to get something now and pay later or over time. Finding yourself unable to pay at the end of the month could lead to not having that card, or any credit card at all, in the future, and could seriously damage your credit score.

The Bottom Line

Only use your credit card for bigger purchases and only when you know  for sure that you have the finances to back it up. If you’re in a bad boat financially, put it away until things are looking up. For those who really only intended to have a credit card for emergencies, remember to keep it that way. A nice new dress does not qualify as an emergency. Hide the card so you are not apt to use until you need it.

By putting these simple tips into practice, you will find yourself thinking more consciously about your budget and spending habits, curbing your debt and easing your financial burdens.

In fact, it looks as if credit management among consumers will continue to improve for 2010. Although unemployment continues to remain an obstacle for many consumers, credit card delinquencies will continue to decline in 2010, according to TransUnion.

Although many analysts predict that the rate of credit card delinquencies will slow down during the upcoming year, they will nevertheless decline, which is a good sign for creditors everywhere.

TransUnion expects 90-day credit card delinquencies to drop off nearly 1.04 percent by the end of 2010. Most of these credit card delinquencies will be seen through MasterCard and Visa. In contrast, the third quarter of 2009 saw a decrease of 1.1 percent in 90-day credit card delinquencies.

Delinquencies peaked to their highest rate in the third quarter of 2006, to 1.42 percent. TransUnion used statistics from nearly 27 million individual consumer credit reports. Also included in the study were mortgage rate delinquencies: since 2006, mortgage delinquency rates climbed to an average of 50 percent a year, to nearly 1.96 percent in the last quarter of 2006.

It is important to realize, however, that credit card delinquencies won’t really begin to see solid improvements until jobless rates begin to decline.

The Importance of Timely Payments

The decline in credit card delinquencies comes at a time when good credit is king. Paying your credit card bill on time, each and every month, can mean the difference between being able to secure other types of credit or being stuck without any chance of financing.

In order to be certain that your credit card company receives your timely credit card payment, considering signing up for an online bill payment system, either through your bank or credit card company website. It may also help to set up automatic monthly payments, if necessary, to eliminate the chance of missing a monthly payment.

The certainty of being able to secure credit is only accomplished by maintaining an excellent credit score; and to do that, you need to always pay your credit card bills – as well as any other monthly obligation or bill – on time, every month.

Many of us, in the midst of financial despair, may choose to ignore the creditor phone calls and letters; but this simply doesn’t solve anything. Instead, face the problem head-on and figure out what you can do today to get out credit card debt tomorrow.

• Sit down and make a budget. Not just a general budget, but a detailed budget that accounts for every penny going in and out of your household each month. Examine your monthly expenses and look for ways to cut back.

You may want to consider abandoning your land line if you have a great cell phone plan; you may want to drop your expanded cable television package for its basic counterpart; or you may want to make an effort to cut down on your grocery bill every month by clipping coupons and shopping sales. The bottom line is that most everyone can find an extra $50, $100 or more in their budget if they just take the time to re-examine their spending.

• If you’ve lost your job, make immediate, drastic cuts in your lifestyle. Don’t wait until you are behind on all your payments to start making changes. Immediately cut out all unnecessary expenditures and live lean until you can find another job and regain your financial footing.
• If you’re simply in over your head in credit card debt, and can’t seem to find a solution, you may want to consider contacting a non-profit, credit counseling service. These agencies can help you find ways to meet your financial obligations without getting bogged down by late payments and over-the-limit fees.
• If you find yourself struggling to make your minimum payment, you may be able to negotiate a lower, monthly payment with your creditor. Always remember that it never hurts to ask. Many creditors, aware of the financial problems of so many Americans, understand that it is in their best interest to help consumers find a solution to their credit card debt.

If you have a concern with your credit card company, it is best to avoid contacting them in hopes of a screaming match. Yelling and complaining will get you nowhere fast, so it is important to prepare yourself and ask the right questions to your credit card dilemma.

The following steps will help you resolve a conflict with your creditor:

• Your first point of contact will no doubt be a customer service representative. Explain your issue and speak slowly, clearly and remain courteous. Keep all of the necessary information close at hand so that you can refer to a particular bill or transaction.
• Keep a pen and a piece of paper nearby, as well, so you can jot down appropriate notes. Remember to write down the time and date of your call; remember to also ask for the name of the representative.
• If you feel as if the customer service representative cannot handle your problem or if you feel as if you are simply getting nowhere with a resolution then you have the right to ask to speak to a supervisor. However, remain courteous during the entire phone call.
• If you get nowhere by calling the credit card company, make your case in writing. Include all of the information from your phone call(s) and send the letter certified mail so that you have proof that the credit card company received your letter. If you don’t receive a response from the creditor within a few weeks, you can follow up with a phone call or be prepared to take other actions.
• File a complaint with the Better Business Bureau, the National Credit Union Administration, the Federal Reserve or the Federal Deposit Insurance Corporation.
• Make sure you follow the above chain of command when attempting to resolve a conflict, as you may need this information if you need to take the issue further.