As more criminals wake up to the advantages of cybercrime over old-fashioned bank robberies and brick-and-mortar burglaries, credit and debit card skimming is becoming increasingly common.

In particular, reports of ATM and gas station skimming are on the rise, according to BankInfoSecurity.com, and incidents are increasingly being perpetrated by organized crime rings. Most recently, 300 members of State Employees Credit Union in Raleigh, NC had money withdrawn from their accounts after their card information had been lifted by a hidden skimming device.

In another instance, a member of the Russian mob, worked for months at a gas station in California, during which time he installed skimming device, reports LA Weekly. The man then vanished, and so did money in thousands of bank accounts in Southern California. According to police estimates, the fraudster made off with more than $300,000 by using the stolen credit and debit card information.

Skimmers are easy and cheap to get; they sell for as little as $20 on eBay. Risks are much lower than when robbing a bank, and rewards potentially as lucrative. Fraudsters leave behind little physical evidence, so thieves are often difficult to trace. In short, for fraudsters, credit and debit card skimming is as near to a perfect crime as they come, and with law enforcers armed left with few options for tracking thieves, expect skimming to continue to escalate.

How exactly does skimming work? It’s a simple little three-step process:

1. Fraudsters attach an electronic device to a gas pump or an ATM machine. On ATMs, skimmers are often concealed in a bulky plastic piece attached to the ATM, carefully disguised to look as if it’s part of the ATM. On gas stations, the device is smaller and harder to detect.
2. When victims swipe their credit or debit card to pay for gas or get cash from the ATM, the skimmer records the information stored on the magnetic strip of the card, and transmits it electronically to fraudsters. In addition, a hidden camera may record the card PIN number as the cardholder types it in.
3. Fraudsters use the stolen debit or credit card information to either clone a new credit card or electronically transfer money from the victim’s bank account or credit card. Cardholders don’t have a clue that they have been defrauded, until of course, the credit card or debit card statement with the fraudulent charges arrives in the mail.

ATM machines and gas stations are not the only ones affected. Other popular targets for skimmers are restaurants and even retail stores, where the skimmers typically are attached by employees, without the owner’s knowledge.

Consumers are covered against fraudulent charges to their credit and debit cards, but restrictions apply. To protect yourself, follow these simple precautions:

• Use only ATMs that you are familiar with. Familiarize yourself with how the ATM looks, so you can detect irregularities, such as a strange-looking attachment to the ATM, which could hide a skimmer.
• At gas stations, never use pumps that are hidden from the attendant’s view, which are more likely to be targets for skimmers.
• If something doesn’t look right, go to another gas pump or ATM. Never use a card reader that appears to fit poorly.
• At gas stations, if possible pay with a credit card, which offers greater protection against fraudulent charges. If you use a debit card, choose the “credit” button instead of the “debit” button, so you don’t have to give out your PIN number.
• Whenever you type in your PIN number, make a habit of concealing your fingers in order to make it difficult for a hidden camera to capture your PIN number.
• Check your credit card and debit card accounts frequently for unauthorized charges, and contact your card issuer or bank immediately if you see any irregularities, even very small charges.

Credit card companies will cover fraudulent charges to your credit card if they are reported in a timely manner, typically within 60 days. But there are exceptions; most notably many credit card companies do not extend zero liability to ATM withdrawals, which involves knowledge of your PIN number.

The fraud protection on debit cards is even more limited; if you report within two days of discovering unauthorized charges (i.e. two days after receiving your statement), your maximum liability is $50. After two days, you could be held liable as much as $500. If you wait more than 60 days before reporting fraudulent debit card charges, you will no longer be covered at all.

Despite rising security efforts, internet credit card fraud remains a leading threat. According to experts, the cost of cyber crime to the global economy may soon reach $1 trillion in losses – and the cost to the U.S. alone is estimated at nearly $8 billion.

While government officials and law enforcers are working hard to make the cyberspace more secure for consumers and merchants alike, individual cardholders play the most important role of all in safeguarding their credit cards. Here is a list of things you can do to make your online experience safer.

1. Shop only reputable websites. When shopping online, deal only with reputable sites that display the security-enabled https:// pages. Also look for the security padlock at the bottom of the browser bar, which signifies that you are on an authenticated website.

2. Never click on links in unsolicited emails. Phishing emails are getting more and more sophisticated. Common schemes are emails confirming a password change that you didn’t make to an account that you may or may not have. These are designed to make you panic, so you’ll click on the links in the email. Don’t! Instead, immediately delete the email, or if it is from a company you do business with, call the company for more information.

3. Don’t give out your personal information. Don’t respond to online solicitations for your credit card or personal information even if the request appears to come from your bank or credit card company.

4. Keep your antivirus and personal firewall software up to date. Fraudsters spin out new malware every day, and the only way to protect yourself is to keep your subscription to an antivirus program like Norton Utilities active, so it is automatically updated as new threats become known.

5. Watch out for spyware. Spyware programs can siphon off credit card numbers without your knowing while you are shopping online. To protect yourself, always keep an updated spyware program in addition to your computer virus protection.

6. Set your Windows Security Center for automatic updates. If you are a Windows User, make sure your Security Center is set for automatic updates. This will ensure that your computer automatically downloads security patches from Microsoft, which are issued frequently in response to new cyber threats.

7. Monitor credit card bills. Despite your best efforts, your credit card information could be compromised because of a security breech at retailer or a credit card processing company. For this reason, your last line of defense is to study your credit card statements carefully each month, even for small charges. If you discover any unauthorized transactions, report it to the credit card issuer immediately.

8. Review Your Credit Report Regularly. Monitor your credit report regularly to protect yourself against identity thieves opening accounts in your name. You can download a free copy of your credit report once a year at AnnualCreditReport.com. If you prefer to review your credit report more often, enroll in a credit monitoring service, which will automatically keep you updated on any changes to your report.

If you do fall victim to credit card theft, don’t panic. Consumers are generally not held liable for fraudulent charges. However, you’ll have to deal with the time-consuming and complicated task of reporting the theft, making sure charges get removed, and restore your credit and good name.

Immediately report the theft to the credit card issuer. Then immediately contact three major credit bureaus and ask them to place a fraud alert on your credit report, to help avoid further misuse of your credit card.

Equifax: (800) 525-6285;
Experian: (888) 397-3742; and
Trans Union: (800) 680-7289.

If you have bad credit and don’t qualify for a traditional credit card, one way to increase your credit score can be to take out a subprime credit card for people with bad credit. Also known as fee-harvester credit cards, subprime credit cards come with many pros and cons, however. The pro is that when used correctly, a bad credit credit card can help you improve your credit score. The con is that they start you out with a low credit limit and charge you high fees for the privilege.

Still, if you are looking to improve your credit score, a credit card for bad credit can be worth it as long as you use it with caution. Your main goal with a low-limit credit card should be not to get a line of credit, but to increase your credit rating and work your way up the credit ladder to a prime credit card as soon as possible. Here are five tips to help you climb that ladder as fast as possible:

1. Pay the balance off in full each month. Whether or not you have a prime credit card or a credit card for bad credit, this is the basic rule of all savvy credit card usage. It is the simplest rule, and it is also the hardest one to follow. All cardholders face the same challenge: it’s very easy to overspend when you have a credit card.

To avoid this tendency, treat your credit card like a debit or prepaid card. Determine how much you can pay off each month, and put that money aside in your checking or savings account before you even charge a dollar to your card.

In addition, keep a running total of your charges so you always know how much you have left to spend. This way, you won’t get caught off guard at the end of the month when you can’t pay your balance.

2. Don’t use the card for discretionary expenditures. Again to avoid temptation, use your credit card for recurring, non-discretionary expenditures, such as gas for your car, Internet service, or cell phone bill. Remember, you don’t have this credit card to enjoy access to credit, but only to build credit or increase your credit score as fast as possible.

3. Never charge more than 30% of the credit limit. How much you use of your available credit is an important part of your credit score. If you do occasionally carry a balance over from one month to another, make sure it stays below 30% of the total credit limit.

4. Pay early. Don’t wait until the last minute to pay your credit card bill each month. For best results, call your card issuer and get them to move your payment due date to 7-10 days after the day you get your paycheck. This makes it easier to remember when to pay your card and to pay early. If you get a paycheck twice a month, consider paying your credit card balance down each time you get your paycheck.

5. Put the card in a drawer. To err is human, and you’ll likely find that you are tempted to make charges to your card that you can’t pay off at the end of the month, particularly once your credit limit starts to increase This is the first step down the slippery slope to credit card debt, and it’s also a sure-fire way to undermine your efforts to increase your credit score. If you find this to be the case, leave your card in a drawer. Since you have to use the card to improve your credit score, instead use it for recurring bills that you can pay via the Internet.

If you follow these simple tips, you will be able to gradually improve your credit score and enjoy all the advantages of having good credit. Best of all, creating a discipline for managing credit wisely early on will help you avoid falling into a debt trap later on as you become eligible for a prime credit card and get access to higher and higher lines of credit.

Many people new to credit cards find their monthly statement confusing. The back of the statement is usually filled with fine print written in a 27th grade language-as some people like to put it. Just as bad, the statement itself contains lots of abbreviations and confusing terms, which most new card users don’t necessarily know the meaning of. In short, if you are confused, you’re not alone. To help make your life easier, here is a guide to reading your credit card statement.

The most important part of your credit card statement is the Finance Charges section; checking this out each month will give you most of the information you need. Here is an overview of the terms you need to understand to read the Finance Charges section of your credit card statement:

Annual Percentage Rate (APR). This is the interest rate you pay on balances that remain on your card beyond the grace period (see below). In essence, the APR tells you how much you can expect to pay your card issuer in exchange for credit.

Most credit cards feature different APRs for different types of charges. When you look at the Finance Charges section, you likely see a purchase APR, a balance transfer APR (sometimes listed as “promo”), and a cash advance APR.

APRs can and do fluctuate, so keep an eye on this number. Any increase in APR will result in larger monthly payments and higher interest costs.

If you have outstanding balances at different levels of interest, card issuers apply payments to the balance with the lowest interest first. This keeps balances with a high interest rate on the card the longest, earning credit card companies a nice handsome sum in interest charges. However, once the new credit card provisions step into effect in 2010, card issuers will be required to pay off the balance with the highest interest charges first.

Average Daily Balance. Because card balances fluctuate a lot, card issuers apply interest on a daily basis. To do this, they calculate the average daily balance by adding the balance on the card for each day of the billing cycle and then dividing it by the total number of days in the cycle.

Daily Periodic Rate. In order to charge interest on the daily balance, card issuers need to know what the annual percentage rate (the APR) breaks into on a daily basis. This is referred to as the daily periodic rate, and it is calculated by dividing the APR by the number of days in a year. In other words, if your purchase APR is 12%, the daily periodic rate would be 12/365 or 0.03288%.

Periodic Finance Charge. The periodic finance charge is your total finance charge for that billing cycle. Notice that a different periodic finance charge will be listed for each type of APR, i.e. purchase, balance transfer, or cash advance APR. In other words, to see what your total finance charges are for the statement cycle, you need to add them all together. Your card statement usually does this for you in the Account Summary section of the Finance Charges.

If you’re one of the millions of Americans who have received a letter warning of interest rate hikes on your credit cards, you may well have been tempted to reach for the scissors and cut up your plastic. But before you do, take a deep breath, and consider your options. While shredding your credit card may be emotionally satisfying, if you play your cards right, so to speak, you may be able to take the worst sting out of rate increases.

Despite recent efforts by Congress to accelerate the effective date of new curbs on credit card interest rate hikes, rates are likely continue to inch upwards. Credit card companies are raising rates in the face of a troubled economy and higher credit card defaults, which in some cases have almost doubled over the past eighteen months. And, while the new credit card law limits card issuers’ ability to jack up interest rates on existing balances, it won’t put an end to interest rate increases on future charges. Card issuers can’t raise rates the first year you have a new card, but after that, they just have to give you 45 days notice of rate increases.

So if your interest rate gets increased to exorbitant levels, what is your best course of action? Of course, if you never, ever carry a balance, the interest rate on the card doesn’t matter, as you’ll be paying off last month’s charges before the interest-free grace period expires. However, if you’re among the one out of every two Americans who regularly carry a balance, here are four steps to take to take the sting out of even the steepest rate increases.

1. Have back-up credit cards in place. Having more than one credit card these days isn’t just a convenience, it is a must, if you want to keep your options open. Not only could your interest rate go up, credit card companies have also been cutting back on credit limits. It’s important to have a credit cushion in place, should that nice $10,000 credit limit shrink to a measly $2,000.

If you already have several credit cards with available credit, you may already have all the back-up you need. If you don’t, apply for one or two new credit cards, so you will have a credit cushion available should the terms on one or more cards change in ways you don’t like.

2. Shop for low interest credit cards. Yes, Virginia, there still are low interest credit cards out there charging less than 15 percent interest. Some are issued by credit unions and some by banks with a business model based on low interest card offers; these are less likely to hike interest rates going forward.

It’s generally advisable to only apply for a new credit card once every six to twelve months, because your credit score takes a hit each time your credit report is pulled. However, if you’re not planning to apply for a mortgage or other type of loan within the next year, this is not so much of a concern, as your credit score will have time to bounce back. If you need to apply for more than one new credit card, you’re better off doing it in one sitting, so your credit score won’t have time to go down before you apply for the next card.

3. Call your credit card company. Once you have other options in place, call your credit card company. Ask them why they increased the interest rate on your credit card. Emphasize your good payment history, and tell them that you are considering cancelling the card and transferring your balance to another card. If you have other accounts or investments with the card issuer, let them know that your other business is at risk as well. If you are a good customer, the card issuer will likely be willing to work with you and lower the interest rate, rather than lose you as a customer. If you have a history of late payments, they may be less responsive. If the first customer service representative isn’t helpful, ask to speak with a customer retention specialist.

4. Phase out your high-interest credit card. If your credit card company does not offer to lower the interest back down to a level you’re comfortable with, you have two options. Under the new credit card law, you have the right to “opt out” of a higher interest rate or a new annual fee. The account will be closed, but you will be able to pay off the balance at the current interest rate. Cancelling credit cards can hurt your credit score, however, so this may not be your best option.

Alternatively, you can phase out the high-interest card by transferring the balance to a lower interest card. Don’t be tempted by 0% APR balance transfer offers that revert to a high-interest rate after a few months; these generally are not worth the steep 4-5% transfer fee. Unless you can find a balance transfer offer with a long-term low rate, you’re better off phasing out your high-interest balance in the following way: Charge everything you would normally pay for with cash or a check to the new, lower interest credit card(s); use the cash you save to pay down the balance on your old, high-interest credit card. (Just be sure to put the money aside to pay off that credit card balance each time you charge something to the new credit card, so you don’t inadvertently rake up new credit card debt.)

These simple measures will go a long way to take the worst sting out of rate hikes. It will take a little planning and research, but if it means avoiding paying interest to the tune of $20+ percent, the savings will be well worth it.

In today’s economic climate, lay-offs continue to swell the ranks of the unemployed, and those already unemployed face increasing competition for fewer jobs. If you have bad credit, you are particularly disadvantaged as about 40 percent of prospective employers are performing credit checks as part of checking out the background of job candidates.

If you have bad credit, it is still possible to secure a position, but you need to be a bit more proactive about how you go about applying for a job. Here are a few tips that can help people with poor credit overcome the stigma of bad credit when applying for a job:

1. Know which employers are more likely to require credit checks. Government organizations, both local and federal, carefully scrutinize applicants’ credit reports before making decisions. Likewise, non-profit groups and other businesses that work with or are tied to the government are more likely to check your credit history. If you’ve had significant financial troubles in recent times, you’ll have more luck applying elsewhere. Also, be aware that most financially-specialized companies, such as accounting agencies or brokerage firms, will investigate your credit history as well.

2. Know which companies are less likely to check your credit history. Many small or locally run businesses don’t have the time or the resources to screen applicants, and they may not have as many people contending for positions either. If they do check applicants’ credit reports, they will most likely target those applying for mid-level management and above.

3. Know which positions usually warrant a review. While some companies may not require credit checks for all new employees, people applying for positions which involves handling money in any way, shape, or form can expect to have their credit checked.

4. Be upfront about your credit history. If you have bad credit but still want to apply with a company that is likely to check your credit report, take steps to minimize the damage. Be the first to bring up the concern. If you address your bad credit before the prospective employer checks out your credit report, it shows that you are honest and proactive—two important character traits employers always look for. Employers are not as concerned about your past credit behavior as they are about your personal integrity. If you are able to demonstrate that your bad credit is not a sign of dishonesty or lack of integrity, but due to circumstances beyond your control, it will go a long way to counteract any bad impression that a poor credit history would otherwise create.

5. Explain how you are taking care of the situation. Describe the steps you are taking to deal with your debt. Also, if extenuating circumstances, such as medical expenses or long-term unemployment played a part in your financial troubles, let your prospective employer know. Many people understand that bad things happen to good people.

6. Show how qualified you are for the position. Your credit history doesn’t really reflect on your ability to perform well on the job. By giving a strong interview and illustrating how perfectly your strengths line up with job requirements, you may be able to convince a potential employer to look past poor credit.

7. Use networking and recommendations to your advantage. A vote of confidence from a reliable source can score you a job that otherwise may be out of reach. Personal recommendations are likely to sway an employer’s opinion and can compensate for a dissuasive credit history.

With the economy in a slump, there never has been a better time to take a close look at your credit card debt. Credit card debt is generally the most expensive type of debt to carry and, it’s the most risky. Being highly leveraged with credit card debt amounts to flirting with financial disaster. As far too many consumers have discovered, all it takes to push you over the edge is for a card issuer to increase the interest rate and/or monthly minimum payment due, and you might no longer be able pay your monthly credit card bills.

How do you get the extra money to pay down your credit card debt? The most effective way is to look for ways to reduce your recurring expenditures, or preferably, eliminate them completely. This generally involves making some lifestyle changes to cut back on your fixed monthly costs.

There are two ways to reduce recurring expenditures: One is to stop paying for things you don’t really need. The other is to stop paying for things you think you need, but actually, really don’t need. The first extraction is relatively painless; the second, well, let’s face it, will need a shot or two of novocaine.

5 Painless Ways to Zap Credit Card Debt

Most people are being robbed by recurring credit card charges for services they don’t really need, but which they have gotten used to or have forgotten to cancel. To make sure you’re not one of them, here are some things to look for.

1. Monthly Subscriptions—Do you have magazines lying around the house, which you never find the time to read? Book club subscriptions you don’t need? Online subscriptions you signed up for months ago and rarely ever use? Zapping monthly subscriptions can easily free up $50-100 a month, or more.

2. Memberships to Health Clubs—For people with credit card debt, a monthly membership fee to a healthy club is a luxury they can’t afford. Walking is free; exercise DVDs and online fitness downloads offer great variety and can be used over and over.

3. Credit Card Late Fees. Can you hear that Ca-Ching! sound? That’s credit card companies raking in late fees to the tune of billions of dollars a year. If you think that late fees amount to little more than bad planning on your part, think again. That $39 fee quickly runs into hundreds of dollars each year.

4. Credit Monitoring and Reporting—Services offering a free copy of your credit report and daily credit monitoring might sound like a great idea. However, when that seven-day free trial turns into a $14.95 monthly subscription fee, you’re paying almost $180 a year for a service few people will ever need. Instead, get a free copy of your credit report once a year at www.annualcreditreport.com. If you feel a desire to check your credit report more often, you can purchase a copy from one of the three major credit bureaus for less than what you pay for one month of credit monitoring service.

5. Cut Your Utility Bills. Saving on utilities can free up a surprising amount of money to help pay down your debt. The simple act of turning off lights and other electrical devices when not in use can cut your electric bill by as much as 10-30%. Most electronic devices burn up electricity even when they are in stand-by mode. This includes computers, TVs, DVD players, printers, modems, and satellite dishes. Instead of simply turning them off, unplug them from the outlet when not in use. Other ways to cut your utility bills is to turn the temperature of your hot water heater down; take shorter showers; and install a programmable thermostat to regulate the heating in your house.

5 Really Painful (But Effective) Ways to Cut Your Credit Card Debt

If you really want to pay down your credit card debt quickly, let’s face it, you’re going to have to make some sacrifices. As often in life, the things that create the greatest discomfort in the short run, can end up conferring the greatest benefits in the long run. And so it is with credit card debt. If you cut back on some of your largest recurring expenditures, you will free up money to pay down your debt much more quickly.

This will, inevitably, be a painful affair. Most of us have gotten so used to our creature comforts that we think we cannot live without them. However, if you’re really struggling with credit card debt or other types of debt, the consequences of defaulting on the debt will be much more painful than foregoing some of the comforts you currently take for granted. Plus, you don’t have to cut back forever! Once your finances are back under control and you have wiped out your debt, you will have money left over to scale your lifestyle back up. So take a deep breath, relax, and sit back. Here goes.

1. Cable TV. Yes, we feel your pain. After all, cable is like the holy cow of American households. However, if you carry high credit card debt, you don’t have the money for cable. Just because you can charge it, doesn’t mean you can afford it. So, take a deep breath, and get rid of that $80-100 monthly charge. That money will go a long way towards paying down your debt each month. Once the debt is paid off, you can always reevaluate whether or not to get cable again, unless, of course, you decide that having a cable subscription is not a life or death matter after all.

2. Dump your cell phone. It’s hard to imagine that less than ten years ago we all got along just fine without a cell phone. But in fact, we did. So, take a break from the mobile; or cut your subscription to the most basic, enroll in Friends and Family programs, and talk mainly on free minutes.

3. Get a Cheaper Car. So what if your car doesn’t look like it’s straight off the assembly line. There are plenty of reliable, low-maintenance, ten-year old cars around, costing you a fraction in monthly costs.

4. Start Cooking. Okay, so you don’t have to become a Julia Childs, but cooking your own meals instead of eating out isn’t just healthy for your wallet, it’s good for your body as well. And while you’re at it, junk those expensive, unhealthy habits. Stop smoking; scrap the junk food, avoid sinking money down the drain guzzling soda pop or expensive lattes. It’s a great way to tighten the belt, so to speak, and free up money to pay off your credit card debt.

5. Take a Shopping Break. With the exception of groceries, put a moratorium on spending for six months. Most of us have plenty of stuff, much more than we need. Avoid going shopping for six months; postpone major purchases; avoid purchasing new clothing (unless it’s for your kids); pass up on gadgets, thingamajigs, and irresistible sales offers; shun the mall. At the end of six months, make a list of the things you absolutely do need, and purchase those. Rinse and repeat. If you keep taking six-months shopping breaks; you’ll be surprised how quickly you can wipe off that debt.

Let’s face it, radically changing your spending habits in this way won’t be pleasurable. However, treat it like an experiment in reevaluating priorities and trying out some new lifestyle habits. At the end, you may find that you haven’t just succeeded in wiping out your credit card debt, your old habits may have been replaced by some new hobbies and interests in the process. Good luck!

Credit card companies rake in more than $15 billion a year from fees alone, including late fees, over-the-limit fees, cash advance fees, and so on. That’s before the interest charged on Americans’ almost $1 trillion in revolving credit card debt, which earns interest at rates ranging from around 8.99% to a sweet 32.99% APR.

Paying interest on credit card debt over a short period of time makes some sense if you simply need a short-term bridge loan—at least you’re paying interest in exchange for a service. However, most of us end up paying for credit card “services,” which we don’t get any benefit from.

Is your credit card leaking money from your wallet? Here are three common leaks and how to fix them:

1. Frequent ATM Withdrawals. According to industry estimates, the average credit card holder withdraws money from ATMs four times each month with an average of $250 in monthly withdrawals.

ATM withdrawals have three strikes against them. First, if you don’t withdraw from your own bank, ATM transaction fees at $1.50 to $3 a pop can add up to $72 to $144 a year. Second, ATM withdrawals using credit cards are treated as a cash advance, so you’ll pay a 3% cash advance fee—in our example amounting to $7.50 a month, or around $80 a year on top of the ATM fee.

To top it off, the APR charged on cash advances is generally much higher than the purchase APR, often at around 21.99%. Credit card companies apply payments to the balances with the lowest APR first, so if you carry a balance over from month to month, the cash advance balance will stay on your account earning high interest charges until the entire balance is paid off. Over a year, the added interest costs could end up costing you several hundred dollars more in interest charges each year, depending on how much cash you take out.

Adding it all up, those ATM withdrawals can easily make $300-500 leak out of your wallet every year. However, it happens in such small increments that you won’t have a clue.

How to Fix: Withdraw the exact amount of cash you’ll need each week from your bank. Only take out cash advances in emergency situations.

2. Late Fees and Over-the Limit Fees

It’s an easy slip-up. Put that credit card payment in the mail a day too late or draw your card too close to the limit and, wham!, you’re slapped with a punitive late fee or over-the-limit fee to the tune of $29 or higher. Repeat that mistake several times a year, and it quickly adds up.

How to Fix: Sign up for an online account with your credit card company, if you don’t already have one. With an online account, you can pay your credit card bill online, so that payments are applied to your account the same day they are submitted. In addition, you can check your credit card transactions online regularly, so you always know what the balance is.

3. Paying Annual Fees on Credit Cards

Annual fees are almost a thing of the past, but some frequent flier or “high-end” credit cards with added services still charge annual fees ranging from $39 to a whopping $450.

Rewards credit cards or frequent flier cards with an annual fee make sense only if you charge enough to more than earn back the annual fee in rewards. The value of rewards (including frequent flier miles) is often estimated to be, on average, the equivalent of about 1% cash back. So, for a card with for example a $90 annual fee, you’d have to charge $9,000 on the card just to earn back the annual fee.

How to fix: Credit cards with annual fees are dinosaurs of the past. If you’re holding on to a credit card with an annual fee, just because you’ve had the card for a long time and have gotten used to it, save yourself some money and look for a better credit card deal.

There are many other ways that credit cards will cost you more than they need to. For example, paying only the minimum monthly payments is one of the most expensive credit card habits, which could cost you thousands of dollars over time. However, unlike interest charges on credit card debt, most credit card fees are entirely avoidable.

Imagine how nice it would be to have a financial advisor at your fingertips, a kind of personal Jeeves to keep track of expenditures, help make ends meet, and, particularly, rein in credit card spending. Well, a new breed of Web 2.0 financial management sites aims to be just that, and best of all, most of them are completely free.

Best described as a kind of “Quicken meets Facebook,” web-based personal finance applications like Geezeo.com and Wesabe.com combine personal finance software and social networking forums, and throw in quite a few additional innovative services and tools. Here are some of the functions and benefits afforded by this new generation of websites.

1. Keep track of expenditures. One of the great secrets to controlling expenses in general and credit card spending in particular is to keep track of your expenditures. If you know where your money goes, you’ll also know how much money is left to spend. It’s that simple. But let’s face it, bookkeeping is tedious and time-consuming—it’s just one of those things most of us never get around to.

One advantage of personal finance sites is that they put expense tracking on automatic. Once the information for your accounts has been entered, including credit cards, checking or savings accounts, all transactions are automatically updated, enabling you to stay on top of expenditures in real time. By tagging expenses by category, users have an instant overview of how much they’ve spent in different areas, such as clothing, transportation, or food. When a transaction has been tagged once, the website itself assigns categories to future transactions from the same vendor, making expense tracking almost automatic.

2. Set financial goals. Want to reduce your credit card debt by $1,000 over the next three months? Pay off student loans faster? Or save up for that dream vacation in Hawaii? Most websites have a goal-setting feature, which lets users specify their financial goals. Once the goals are set up, users are directed to discussion forums or they automatically receive tips from other users about how to meet those goals.

3. Create a budget and stick to it. One of the great strengths of personal finance sites is that they can help users create a budget around their goals and determine how much they can spend in each area and still meet those goals. Users can set budgeting goals for how much they want to spend on, for example, food, transportation, clothing, entertainment, and coffee/snacks.

Tempted to get that new dress on sale? Log in to your account (you can even use a mobile device) to see how much you’ve already spent on clothing and how much over or under budget you are for that area of spending. So yes, sure, you can charge that dress to your credit card. But then again, that means that the Hawaii vacation will have to wait until next year. Hmm, now, is that dress really worth it?

4. Save money. Wondering how to cut back on expenses and free up some extra cash? Some personal finance websites come with cool little add-ons that will look through your regular expenditures and alert you to items you may not really need. Wesabe.com, for example, features a “Cutback Tool,” which looks over your transactions and picks up monthly charges for subscriptions you may want to reevaluate or bank fees that quietly add up without your realizing it.

5. Get a little help from your friends. Whatever financial issues you’re dealing with, be it credit card debt or increasing cost-of-living expenses, one thing is for sure: There are millions of other people out there who are struggling with similar issues. A major strength of many of the new breed of Web 2.0 finance sites is that you can exchange advice with other users and learn from their experiences.

For starters, browse online forums for savings advice, other people’s experience with changing credit card practices, tips for the best deals on auto insurance, and so on. Exchange experiences and advice with other users who have similar goals or are struggling with the same financial issues as you. See what goals other people are setting, choose the same goals, and track your progress compared to other users.

In short, investing half an hour in getting yourself set up on a financial management site might be well worth the time. Whether you want help getting rid of credit card debt, saving for college for your kids, or simply are tired of looking at an empty checking account at the end of the month wondering where all your money went, personal finance sites offer an easy way to take charge of your finances and make better financial decisions.

Also see: 3 Cool Credit Card Management Tools