It’s time for New Year’s resolutions: Along with promises to yourself about cutting out the reality TV and hitting the gym more often, there are also some financial goals you should set for 2012. Specifically, there are some goals you should set regarding your credit cards, credit card spending and outstanding balances. Yes, looking at your statements in January after weeks of holiday-fueled spending might make you wince, but take a deep breath and start 2012 with these credit card New Year’s resolutions.1. Transfer a balance. Credit card companies are aggressive with their offers of 0% teaser rates for transferred balances. It’s not uncommon to see no-interest offered for 12 months or even longer, and a couple of issuers have even begun waiving the typical 3% balance transfer fee. If your credit is otherwise good but you’re paying off a balance at a high interest rate, apply for one of these cards. The caveat is that these cards can come with higher standard rates; arrange — and rearrange, if necessary — your budget so you can pay that balance off before the 0% promotional period expires. Finally, resist the urge to begin charging again on the card from which you just transferred the balance.
2. Pay off a balance. If you’re currently revolving balances from month to month, commit to paying one off entirely over the course of 2012. Experts have differing opinions on whether it’s better to target the card with the highest interest rate or the smallest balance. Basically, whichever will motivate you to keep chipping away at that accumulated debt is the best way for you. Don’t close the card after the outstanding debt is paid off, though, since this hurts your utilization ratio. The exception here is if you know you won’t be able to resist the temptation, in which case, cancel away.
3. Ditch superfluous monthly charges. Give your statement a close look. Are you paying for a membership, subscription or other service that you never (or hardly ever) use? Contact the merchant and cancel it. Depending on when in your billing cycle you make that move, it may take another statement before the charges stop. Give it a month and check back to make sure your cancellation has been applied.
4. Ask for a credit limit increase. If you have an account in good standing, this is an easy way to boost your credit utilization ratio without having to open a new account. Opening a new account lowers the average age of your accounts, which pulls down your credit score a little bit. The inquiry from the lender also has a slight impact on your score. For both these reasons, boosting the limit on an existing account is a better way to go. It helps if the card is one you use frequently and if you have a strategy planned out when you call customer service. Be specific: Tell them why you’d like the increase and how much more you expect to charge as a result.
5. Make sure your cards fit your needs. Take a look at your primary card or cards and ask yourself: Do you use the perks? Cash in any points or miles you earn on a regular basis? Your lifestyle changes over the years. Maybe an airline card with lots of frequent-flier miles and upgrades to first class was a good fit before, but maybe you’d be better off now getting a card that helps you save toward a child’s college tuition. If the card’s offerings no longer mesh with your needs, make a list of what you would like in a card and start shopping around for a new one.