A lot of us start the new year focusing on goals and any lifestyle changes we might want to make, like weight loss, traveling more, or spending more time with family, but it’s also a great time to review your finances to be sure you are on track for a successful year.

No matter what goals you set for yourself getting your finances in order should be one of them. Here are a few areas that you can look at and adjust if needed to start the year off on the right foot.

Check your Beneficiaries

Life insurance policies, retirement accounts, bank accounts, and brokerage accounts can all be left to a designated beneficiary. If you don’t choose beneficiaries for your assets, then the decision will be left to a court or financial institution. Don’t let that happen, you should choose where your assets will go so it is important to review each of your accounts to be sure they are up to date. A lot can change in a year, marriages, divorces, births, and deaths can all change how your assets will be distributed.

Review Credit Card Debt

If you are starting the year with credit card debt create a plan to pay it off. Credit card debt can carry a high interest rate, make it a top priority to pay off any debt with a high interest rate.

If you don’t pay your balance in full each month you are paying interest which is a huge waste of money. Use your credit card as a tool to build credit and earn rewards. Don’t put anything on your credit card that you cannot afford to pay in full each month. Choose a credit card that has no annual fee and offers reward points. Establish and contribute to an emergency fund for unexpected expenses instead of charging those to your credit card.

Consider transferring to a zero-interest credit card. You pay no interest for a promotional period, typically 15 to 21 months. Take that time to aggressively tackle the debt.

Create a Budget

If you don’t already have a budget setup, consider doing so. A budget allows you to create a plan and track where your money is going each month.

Setup an Emergency Fund

An emergency fund is money you have on hand to cover emergencies and unplanned expenses, having money in an emergency fund ensures that you will be prepared for a sudden expense, and you can handle those expenses more easily. Unemployment, illness, family emergencies and home and auto problems can happen without warning. Most financial experts recommend having enough money in an emergency account to cover 3-6 months of expenses. If you lose your job, you should have enough money in your emergency fund to cover your monthly bills. Having this money allows you to pay your bills while you are out of work without going into debt. Add up your monthly expenses and multiply that by the number of months (3-6) you want to save for. That number is the amount of money you want in your account.

Update Your Estate and Insurance Plans

If you don’t have an estate plan the new year is a good time to set it up, if you already have a plan in place review it and make any necessary changes and updates. The plan should consist of a Will/trust, Durable power of attorney, Beneficiary designations, Letter of intent, Healthcare power of attorney and Guardianship designations.

Review your insurance policies including life insurance, homeowners and rental insurance and auto insurance to make sure your adequately covered and any changes such as home improvements have been added to your policies. It is also a good time to shop around to be sure you are getting the best coverage at the most cost-effective price.

Make Saving Money a Priority

If you are not currently saving enough money review your budget and make it a priority to set aside a designated amount of money each month. Automatic contributions are an easy way to transfer money into your saving accounts. Any amount is better than nothing and when it is automated you don’t have to think about it. Also shop around to find the best savings account interest rates.

Consider putting more money into your retirement accounts as well. Just a small increase can add up over time. If you received a raise at work, you might put it toward retirement instead of increasing your spending.

If your employer offers a 401(k) match, be sure you contribute enough to get the full match since it’s basically free money. Also review where your money is being invested. Most experts recommend investing in a diverse portfolio to limit your risk while still achieving attractive returns.

Freeze Your Credit

A credit freeze, also known as a security freeze, is one of the best ways to prevent fraud and identity theft. When your credit is frozen it limits access to your credit reports unless you lift the freeze, or “thaw” your credit. Limiting access to your credit report makes it significantly harder for creditors and lenders to access your files, this prevents criminals from opening accounts in your name.

In 2018 the Economic Growth, Regulatory Relief and Consumer Protection Act, was passed which requires all credit freezes to be free of charge. A credit freeze will not impact your credit score.

The three major credit bureaus are Equifax, Experian and Transunion. Freeze your credit at each bureau. This can be done online, by phone or through the mail.

You will need to provide your full name, address, Social Security number, birth date and other personal information. You’ll be asked a few questions to verify your identity and then be asked to create a PIN.

Keep your PIN and other information they provide in a secure location, you will need this to access your account and manage the freeze.

You can temporarily or permanently unfreeze your credit online, by phone or by mail.

Children are also vulnerable to identity theft see my article How To Freeze Your Childs Credit

Check your credit reports regularly. You can use sites like Credit Karma and Credit Sesame to view your credit scores.

You are entitled to a free copy of your credit reports at the three major credit bureaus, Equifax, Experian and Transunion. Go to AnnualCreditReport.com to request your reports.

If your current credit score is not up to par, consider taking steps to improve it. See my article How to Improve Your Credit Score

Most credit experts advise against closing credit cards, even if you’re not using them because canceling a credit card has the potential to reduce your credit score.

If you have a card that you have not used for a while the provider may notify you that due to inactivity the account may be cancelled. You might consider cancelling the card since you don’t use it but here’s why you might want to keep the card open.

Length of Credit History

The length of your credit history makes up 15% of your credit score. Showing long held accounts in good standing has a positive impact on your score. If you cancel a card, you lose that history.

Credit Utilization

Credit utilization ratio is how much debt you have in relation to your total available credit. It signifies how much credit you are using. Keeping the credit utilization ratio below 30% shows that you can effectively manage your debt. A utilization rate of 10% or less leads to the highest credit score.

If you have a limited number of credit cards and you cancel one of them it can have a negative impact on your credit utilization ratio because it reduces your total available credit, which can significantly increase the percentage of credit you are currently using on your other cards.

Payment History

Payment history makes up 35% of your credit score, having a long-standing card with a positive payment record is important. Even if you use the card infrequently it can still benefit you.

Keeping an old credit card open might be beneficial. Take the card out a few times a year to pay a bill or make a purchase and pay it off in full. Or use it for a recurring charge so that you don’t have to think about it.

There are situations where closing a card may be beneficial in the long run, while you might take a negative hit on your credit score it may be minor if you have a lot of available credit and limited debt.

• The card has an annual fee, closing the account will eliminate that expense.
• All credit cards come with a security risk, if your account details are stolen you will spend time reporting the crime and resolving the charges.
• Any open card can lead to debt if the account is not managed properly.
• If you want to simplify your finances having a limited number of credit cards can help you do that.
• The account was recently opened, canceling a newer card will most likely lead to a smaller drop in your credit score.
• If you have a joint credit card account and the relationship has dissolved maybe during a separation or divorce you want to close the account.

When you freeze your credit card it is done through your credit card issuer and is not related in any way to freezing your credit with the three major credit bureaus.

Consumers may freeze their credit card to prevent fraud or to stop themselves from spending. The provider may also freeze the card under certain circumstances.

One reason you might place a freeze is if you have misplaced your card, you can freeze it temporarily while you search.

If you cannot find the card or believe it was lost or stolen, you should contact your credit card provider immediately to cancel the card and get a replacement.

Most credit card companies allow you to freeze your card by phone, online or through their mobile app. Freezing can also be called locking by some companies so look for either of those terms when placing a freeze.

When the card is locked it generally prevents any new charges from taking place, however recurring payments and certain other transactions like credits to your account, refunds from returns, interest charges, fees and dispute adjustments will continue to be processed. You will still be responsible for making payments. To find out exactly what transactions will continue if you freeze your card contact your credit card provider.

Another reason you might freeze your credit card is to stop yourself from spending, without easy access to the card you may be less tempted to make a purchase. You could do this while you are paying off debt, so you don’t spend anymore until you have reached that goal.

Some lenders will allow customers to freeze specific types of payments, for example online payments, foreign transactions, contactless payments, and cash withdrawals. This can be useful if you are worried about those types of expenditures.

The provider may freeze the card themselves if they notice potentially fraudulent activity or if you have failed to make payments.

Once your card has been frozen you will need to contact the provider to remove the freeze. If you have frozen the card yourself, they will process your request. If the provider froze the card, the length of time before it is unfrozen depends on the circumstances that lead to the freeze. You would need to contact the provider for details.

Maintaining a good credit score is important, your credit score can determine your eligibility for loans and the rates you receive, utility services, insurance rates and more.

When you understand what elements go into determining your score you can take steps to protect your credit and maintain a good score.

What is Included in Determining Your Score

Payment History

Your payment history shows whether you’ve consistently made on time payments. This helps lenders determine the amount of risk involved when extending credit. This is the most important factor in determining your score.

Credit Utilization

Credit utilization measures how much credit you are using compared to your total available credit. Lenders look at this number to find out how much you are relying on credit. The lower the number the better. Most financial experts recommend that you keep your utilization below 30% but 0% is ideal, you can accomplish this by paying your balances in full every month by the due date.

Credit Age

This is the length of your total credit history, having long-standing accounts is beneficial. This is one reason most financial experts recommend you keep old credit card accounts open even if you don’t use them often, another reason not to close old accounts is because it can temporarily lower your credit score.

New Accounts & Credit Checks

When you apply for a new line of credit your credit is pulled to determine your eligibility. There are hard and soft inquiries. Hard inquiries typically occur when a financial institution checks your credit when making a lending decision, for example when applying for a mortgage, loan or credit card, while one hard inquiry may not have a huge impact on your credit score having multiple hard inquiries close together can lower your score significantly. Soft inquiries are typically used for things like employment, rental housing, and pre-approved loan and credit card offers, they do not have a negative impact on your score.

Credit Mix

Credit mix is used in determining your credit score, having a good mix of credit with accounts that are in good standing is beneficial, this can include credit cards, home and auto loans, and personal loans. A diverse credit mix tells lenders that you have been able to manage different types of credit accounts responsibly over time.

What is Not Included in Determining Your Score

Employment History

Employment history can show up on your credit report, but it is not used to calculate your credit score. Although employment history and your time on the job can have an impact on determining your eligibility for lines of credit.

Interest Rates on Debt

The interest rates you are paying on debt are not a factor in determining your score and is not part of your credit report.

Bank Account Balance

Your bank account balance is not part of your credit report, nor does it impact your credit score.

Your Income

Your income and net worth are not part of your credit report.

Public Records (Except Bankruptcy)

In the past some public records may have shown up on your credit report but that is no longer true. Since the National Consumer Assistance Plan went into effect in 2017, public records must meet stringent requirements to appear on consumer credit reports, previously civil judgements and tax liens could be included on credit reports but they do not meet these new requirements, so they were removed. Bankruptcy is the only information from the public record that is included in your credit report.

Personal Information

Your credit report does include some personal information such as your name and any names you have used in the past, date of birth, current and past addresses, Social Security number, current and past phone numbers, employment history and credit and loan accounts. But these are not used to determine your credit score. US law prohibits credit scoring from considering your race, religion, national origin, sex, and marital status.

When you sign up for a credit card you agree to the rules imposed by the provider, and they are in it to make money. Late fees, interest rates, over-limit fees and annual fees can cost you money and have a negative impact on your credit score and credit reports. But you can avoid all of this by using your card wisely. Use your credit card as a tool to build credit and earn cash back and reward points.

Should You Have a Credit Card

Credit cards are an excellent financial tool if used properly, if not used properly they will have a negative impact on your credit and finances. Proper use means paying your bill in full and on time every time. If you cannot commit to that you should probably not be using a credit card.

Choose Your Card Carefully

Don’t sign up for every credit card you are offered, having one or two quality cards is enough. Look for a card with no annual fee, a low interest rate, rewards points and cash back that meet your needs and one that offers the most benefits which can include travel insurance protections, purchase protection, extended warranty, cellphone insurance and rental car insurance.

Pay On Time Every Time

With online access you can easily log in and view your account balance and statements, when your charges are posted make a payment, doing this allows you to keep up on payments without waiting until the end of the month when you may have a larger balance. You don’t have to wait for the due date you can pay as soon as charges post. This keeps your credit utilization low which can help to increase your credit score.

Stay Below the Limit

All credit cards have a credit limit, but that does not mean you should allow your balance to reach that limit. Most financial experts recommend keeping your credit utilization under 30% but the lower the better and a zero balance is the best, you can maintain a zero balance by paying off the full balance at the end of each billing cycle. Credit utilization is a major factor in determining your credit score.

Don’t Use Credit Cards to Buy Stuff You Can’t Afford

Imagine that your credit card is like cash, you cannot purchase something with cash unless you have enough money to pay for it, think of your credit card the same way. Credit card companies make money when people spend more than they can afford to pay. Overspending leads to poor credit which can impact more than just your credit score, you can be denied a loan or other forms of credit or pay higher rates on insurance if you have a low credit score. When you make a purchase and use your credit card to pay make sure you have enough cash on hand to pay the balance in full before the due date.

Monitor Your Credit

Check your credit reports and your credit score regularly. You are entitled to a free copy of your credit reports with all three major credit bureaus, Equifax, Transunion and Experian. Go to https://www.annualcreditreport.com/ to request your free copies.

You can check your credit score by logging into your bank account, most banks post your score, your credit card provider may also offer access to your credit score, and you can use sites like Credit Karma and Credit Sesame to monitor your score.

Freeze your credit with all three agencies. Freezing your credit is one of the best ways to protect yourself against financial and identity theft.

A credit freeze, also known as a security freeze, is one of the best ways to prevent fraud and identity theft. When your credit is frozen it limits access to your credit reports unless you lift the freeze, or “thaw” your credit. Limiting access to your credit report makes it significantly harder for creditors and lenders to access your files, this prevents criminals from opening accounts in your name.

In 2018 the Economic Growth, Regulatory Relief and Consumer Protection Act, was passed which requires all credit freezes to be free of charge. A credit freeze will not impact your credit score.

The three major credit bureaus are Equifax, Experian and Transunion. Freeze your credit at each bureau. This can be done online, by phone or through the mail.

You will need to provide your full name, address, Social Security number, birth date and other personal information. You’ll be asked a few questions to verify your identity and then be asked to create a PIN.

Keep your PIN and other information they provide in a secure location, you will need this to access your account and manage the freeze.

Equifax

Experian

Transunion

You can temporarily or permanently unfreeze your credit online, by phone or by mail.

Children are also vulnerable to identity theft see my article How To Freeze Your Childs Credit

Check your credit reports regularly. You can use sites like Credit Karma and Credit Sesame to view your credit scores.

You are entitled to a free copy of your credit reports at the three major credit bureaus, Equifax, Experian and Transunion. Go to AnnualCreditReport.com to request your reports.

Credit cards when used properly are a safe way to pay. Use your credit card as a tool to build credit and earn rewards and cash back. Pay your balance in full each month to avoid interest charges and consider making payments twice a month, twice monthly payments improve your card’s “utilization rate,” a key factor in determining your credit score. Using your card safely is important to prevent your card or card number from being stolen and used by criminals. Identity theft is at an all time high so using a secure payment method is important.

Here are some tips on how to keep your credit card safe.

• Monitor your card and make payments online. Choose a strong password for your online account and setup multifactor authentication.
• Sign up for paperless billing so that you are not receiving a statement in the mail. Mail theft is a real problem, and anything sent through the mail can be stolen which can lead to identity theft.
• Setup account alerts so that you are notified when transactions are made which can alert you to unauthorized activity on your card.
• Consider using a digital wallet or payment app. Your credit card information is stored in the encrypted app. These apps allow for contactless payments, removing the need to carry your physical card.
• Make a copy of your credit card, front and back. If it is ever lost or stolen, you will need that information to report the loss and cancel your card.
• Freeze your credit with the three major credit bureaus, Equifax, Transunion, and Experian. Freezing your credit is one of the best ways to protect yourself against fraud and identity theft. Get copies of your credit reports regularly and check them for errors which can indicate identity theft.
• Don’t share your credit card number with others, never include your credit card information in an email or text message.
• Watch out for skimmers, criminals use these to steal credit card information. They are hidden on ATMs, gas pumps and in other locations, always look for signs of tampering before inserting your card.
• If you are providing your credit card information over the phone, make sure you are in a secure location where no one can hear the call.
• Don’t save your credit card information on websites.
• When shopping or making a payment online be sure the site is secure, the web address should begin with https and display a padlock symbol which indicates the site is encrypted. When you are finished on a website always log out.
• Never use public Wi-Fi to shop or log into email or financial accounts. Data sent over public Wi-Fi can be stolen by hackers.
• Consider using an RFID-blocking purse or wallet, criminals use RFID card readers to steal credit card information. RFID-blocking wallets and purses block them from scanning your cards.
• If your card is lost or stolen contact your credit card company right away to cancel the card and prevent it from being used to make fraudulent purchases.
• If you notice any unauthorized charges on your statement notify your credit card company immediately.
• Consider getting a credit card strictly for online purchases, use a card that has a lower credit limit, if your card is lost or stolen and used for fraudulent purchases your losses are minimized due to the lower credit limit, your primary card details remain safe, and you can immediately cancel your card without disturbing other transactions linked to your primary card. And having an additional card can help lower your credit utilization ratio (CUR). This is the proportion of used credit compared to the total available credit. Lower CUR on each card will help to improve your credit score.

Credit cards offer consumers protection against unauthorized charges. The Fair Credit Billing Act protects consumers and limits their liability to $50 for fraudulent, unauthorized purchases so paying with a credit card is a safe option.

Consumers file disputes for numerous reasons, including defective merchandise, orders that were never delivered, botched or unfinished home repair jobs, shoddy car repairs, difficulty cancelling streaming subscriptions or other services, undisclosed service fees, billing errors, etc.

Disputes are also filed for unauthorized, fraudulent charges that you do not recognize and did not authorize which can happen when your credit card is lost or stolen or when you still have your physical card, but the credit card information has been stolen and used without your consent.

Gather Paperwork

Prior to filing a dispute gather documentation to back up your claim, receipts, email messages, invoices, statements, contracts and other relevant information.

Start with the Merchant

If you are disputing a purchase you made start with the seller. Most offer exchanges and refunds. When you purchase an item check the return policy before buying. If you cannot return an item for a full refund you might want to reconsider the purchase. Most merchants want to resolve disputes because chargebacks represent a substantial revenue loss. Don’t file a dispute with your credit card company until you have first tried to resolve the issue with the seller.

Act Quickly

You have a limited time window to dispute a charge, review your credit card statements monthly or more often, you can log into your account online and see what charges are pending even before receiving your statement. If you spot a fraudulent charge, contact your credit card provider immediately.

When reviewing your credit card statement if you find a charge you don’t recognize review the details. Often a company name appearing on the statement may not look familiar but upon further investigation you may find it is legitimate. This can happen when a business bills you under the name of its parent company. If you are unsure log into your account online, most providers show more detailed information such as a more descriptive name, phone number or website for the merchant. You can also do a search in your browser for the name as it appears on your statement which will often reveal the full vendor’s name. Take time to verify the information before filing a dispute, too many false dispute charges can lead to credit card termination. Sign up for account alerts that will notify you when any transaction has taken place.

How to Dispute Billing Errors

Most card issuers allow you to file a dispute online, by phone or by writing a letter. File the dispute within 60 days of receiving the statement with the error.

Though many disputes are filed online or by phone, you may be required to send a dispute letter to explain the situation. When sending a letter include the transaction details including date, location, merchant and the amount being disputed. Include the reason for the dispute and any steps you have taken with the merchant to resolve the issue.

Along with the letter provide proof through the documentation you have gathered. Keep copies of all correspondence and details related to the dispute. Send the letter using certified mail so you have verification the letter was received.

According to the Federal Trade Commission “Within 30 days of getting your complaint, the issuer must acknowledge it in writing, unless the problem has been resolved. Within 90 days of getting your complaint, the issuer must resolve the dispute. While the issuer is investigating your complaint, you can withhold payment on the disputed amount and any finance and related charges. But you’re expected to pay any part of the bill not in question, including finance charges on the undisputed amount.”

Final Thoughts:

Any unexpected or unrecognized charge on your credit card should be investigated promptly. If you need to file a credit card dispute, you have 60 days from when the charge appears on your credit card statement.

Your first course of action for an incorrect charge on your account should be to contact the merchant who will often resolve the issue to avoid a chargeback. If that fails, or you believe fraud was involved, contact your credit card issuer. Most have zero liability for fraud.

Whether you’re traveling for work or pleasure you should take steps to protect yourself financially before and during your trip.

According to the Federal Trade Commission (FTC) they received over 55,000 reports of travel fraud in 2023. A survey by McAfee, the security software company, found one in three travelers have been scammed—and a third of them lost $1,000 or more.

Notify Financial Institution and Credit Card Providers

Before you leave for your trip notify your bank and credit card providers that you will be traveling, especially if you will be traveling internationally. Credit card companies watch for fraud and if they notice unusual activity on your credit card, they can deny a transaction, when you give them advanced notice they can put a travel alert on your card. They can also make you aware of any foreign transaction fees or ATM withdrawal charges you may incur.

Consider Travel Insurance

Travel insurance can provide protection for unexpected events such as trip cancellations, medical emergencies, baggage loss or delay, or missed connections and flight delays.

Have a Travel Budget

Don’t take on debt to finance a trip, if you are planning a vacation start a vacation savings account well in advance, then take the trip once it is fully funded. Before leaving for your trip create a travel budget. Research the destination so you have a good idea of travel costs like lodging, entertainment, food and transportation. Avoid purchasing souvenirs and other unnecessary items so that you stay within your budget.

Guard Your Possessions

Before leaving for your trip make photo and digital copies of all the items in your wallet and the travel documents you are taking along, including your ID and passport, Visa, credit cards, airline tickets and hotel and transportation rental information. Streamline your wallet and purse so that you are only carrying what is necessary and limit the amount of cash you carry. You might also setup a digital wallet or payment app on your phone so that you don’t have to carry cash or your credit cards.

Avoid Using Public Wi-Fi

See my article Risks of Using Public Wi-Fi Public Wi-Fi offers a convenient way to connect but with that convenience comes the danger of having your personal and confidential information stolen. These networks are not only convenient for you but also for hackers. Hackers can setup a hotspot in a public area and name it something that makes users think they are connecting to the businesses public Wi-Fi hotspot. They often use the same SSID (the name of the network) as the business. When you use a fraudulent connection, you run the risk of having your financial and personal information stolen.

Secure Your Electronics

Secure your smartphone, laptop and other electronics with a passcode or biometric authentication. Turn on find my device so that you can locate it if it comes up missing.

Don’t Use Public Charging Stations

Criminals have figured out ways to use public USB ports to infect connected devices with monitoring software and other malware. Once a criminal has access to a device, they can steal personal and financial information. Public charging stations can be found in places like airports, hotels, shopping centers, restaurants, gyms, and other public venues. If you must use public charging stations get a USB data blocker which blocks the ability to transfer data while still allowing it to charge.

Don’t Leave Valuables in Your Hotel Room

Do not leave cash, debit or credit cards, passports, or other valuable items in your hotel room when you are out.

Use Credit Cards

Federal law limits consumers liability for credit card fraud to $50. If you’re the victim of fraud, it’s likely that you will have no out-of-pocket responsibility at all, most major issuers have zero liability policies. According to the Federal Fair Credit Billing Act, if your physical card is stolen and used for fraudulent charges your issuer can hold you responsible for up to $50. however, if you report the card stolen before any fraudulent charges are made, you have zero liability. If your card number is stolen but you still have the card you are not held responsible for any charges.

Setup Account Alerts

Setup account alerts with all your financial institutions, account alerts notify you when activity takes place on your accounts. If your cards are compromised and used for an unauthorized transaction you will know about it. If you get a notification about a transaction you don’t recognize, immediately notify the issuer.

Freeze Your Credit

Freezing your credit is one of the most important safety precautions you can take to prevent identity theft. When your credit is frozen no one can access your credit or open accounts in your name. Your credit should be frozen at all times, not just when you travel. If you need to apply for credit, you can temporarily lift the freeze. You can freeze your credit online with the three major credit bureaus, Equifax, Experian and TransUnion. It can also be done by phone or by mail.

Use Antitheft Bags & Clothing

Don’t carry expensive purses or bags with you when you travel, purchase antitheft bags and clothing so that you are more protected against thieves. Antitheft bags and clothing are often made out of slash resistant material making them very hard to cut through, they also have RFID-blocking technology that prevents thieves from scanning your credit cards, passport, and other valuable items and some have lockable zippers and secret compartments, the bags are also designed to cross your body or otherwise attach to your body making them harder to steal.

Secure Your Luggage

Stolen and lost luggage can ruin a trip. You don’t want to arrive at your destination without your belongings.

If possible, pack everything in one carry-on bag. See my article How to Pack Everything in One Carry-on Bag If you carry your bag with you, it will not get lost.

Attach Apple Air Tags, Samsung Smart Tags or another type of tracker to your luggage and valuables. You can easily track your belongings if you become separated from them. Many airlines offer luggage tracking through their mobile app. Download the app before leaving for your trip.

Attach travel locks to your luggage and bags and use them to secure your belongings at the airport, in your room and at restaurants and other venues.