If you have a major purchase on the horizon — be it electronics, home furnishings, or a vehicle — now is the time to start considering your options to keep costs low and value high.

1. Know the best time to buy. July is when prices on home wares and furniture reach their annual lowest, as stores mark down goods to attract wedding gift-givers. Shop for a new car at the end of the model year for the best discounts — or at the end of the month, when salespeople are most motivated to make their quotas. A little research can mean big savings.
2. Mull it over. Take your time before you spend big to avoid buyer’s remorse. If your garage already looks like an REI, maybe you don’t need that paddleboard as much as you think you do.
3. Comparison shop to save on taxes. It was news to us that Amazon stocks the full range of laptops and other consumer electronics by all the major brands, from HP to Apple. That could mean more than $100 in savings if you buy online versus going to the mall, where you’d have to pay state sales taxes.
4. Put it on a rewards credit card (with caveats). Getting 1 or 2 percent cash back on a major purchase seems like a no-brainer — unless you’re expecting to carry a balance. Then the interest rate will exceed any rewards you’ve received. In that case, consider paying with cash or negotiating zero percent financing at the store you’re buying from.
5. Determine the value of a warranty. Back to cars again: The conventional wisdom says “always buy used,” because of the steep depreciation value on new cars. But when you buy a new automobile, you benefit from the full warranty — something you may pay a few extra thousand for when considering a certified used vehicle. Crunch your own numbers to see what it’s worth to you.

Student loans are intended to pay for your education, but I’ve known a few people who took liberties with exactly how they used that money. Here are some of the worst ways you can spend those checks:

1. Getting a degree in the arts or humanities. This is the sad truth: More than 23 percent of humanities students owe more than $30,000 in student loans, but hiring in that sector is down 40 percent since 2008. Make sure that you can find work that utilizes your degree, or else those student loans will be with you for a long, long time.
2. Paying your mortgage. Student loans include stipends to cover your living expenses, but renting is preferable to buying a house and using the student loan to pay your mortgage. If you plan on moving away from the area after school, houses tend to be poor short-term investments. Maintenance costs may pop up unexpectedly, leaving you short. And in general, it’s a bad idea to take on new debt to pay down old.
3. Funding your discretionary purchases. This one almost goes without saying, mostly because it’s illegal to misuse federal loans. Look into part-time work to buy clothes, dine out, or go on vacation. The reason is simple: Stafford loans carry an interest rate of up to 8.25 percent, and private loans can be even steeper. You’d be better off putting such purchases on a low-interest credit card or taking out a personal loan, rather than assuming more education debt than you need.
4. Paying off credit cards. Speaking of consumer debt, should you ever declare bankruptcy, credit-card debt would be forgiven but you’d on the hook for those student loans until death do you part. Don’t exchange unsecured debt for a loan that is with you for life.
5. Not learning how to budget. While you’re getting your degree, you’re also presented with a great opportunity to learn to budget your money on a fixed income. It is a valuable lesson that will serve you long after you leave the ivory tower.

To end on a happy note, congratulations to all the recent grads!

By now you know why a ship-shape credit score is in your best financial interests: It helps you qualify for the lowest interest rates on mortgages and other loans, saves you from having to put down a deposit on utilities, and it may even help you get a job.

What you may not know is how to add points to your FICO score, so here are a few tips to help you get the awesome perks that accompany great credit.

1. Always pay your bills on time. Payment history is the most important part of your credit score. Even one late payment can ding your score. If you have not been making payments on time, now is a good time to start. Get and stay current on your credit-card and utility bills.
2. Reduce your credit utilization ratio. Outstanding debt is the second-most important factor in calculating your credit score. You can figure out what your ratio is by dividing your outstanding balances by the amount of available credit you have; ideally, it should be under 20 percent. Lenders see high credit utilization as a red flag, and spending up to the credit limits on your plastic kills your score. To improve your score, don’t max out any of your cards and pay down the balances quickly.
3. Keep your oldest accounts open. The age of your credit history is another key component of your credit score; ideally, you want the average age of all your accounts to be at least 8 years. If you open too many new accounts in a short period of time, your score will drop. Likewise, closing an older account with a high credit limit could temporarily knock 50 points off your score. If you think you’ll be applying for a loan in the next year, be judicious about opening new accounts.
4. Maintain a good mix of credit. Showing responsibility for car notes, installment loans, and a mortgage in addition to revolving credit shows potential lenders that other banks have deemed you creditworthy. Some types of credit, like payday loans, are not factored into your credit score. This is a less important metric in your overall score, but consider it a reference for future loans.
5. Don’t sweat it if your score is over 750. While it might be personally satisfying to shoot for the moon and go for a perfect 850, once you’re in the “excellent” credit range you’re already qualifying for the best rates. At this stage, you can sit back and enjoy the rewards.

But if you’re saddled with a huge car payment, struggling to pay your rent or mortgage, or throwing money away on high-interest debt, then those savings don’t seem to matter as much to your bottom line.

In other words, if you can’t make ends meet month after month, clipping coupons isn’t going to be enough to bridge that gap.

The solution? Find ways to slash your biggest expenses first — before cutting back on smaller budgetary line items. Here are a few tips to get you started:

• Maximize your tax deductions throughout the year to avoid scrambling to remember them all when it’s time to file your annual return. Keep files on all your charitable donations, deductible interest on student loans, medical care, and other qualifying expenses.
• Aim to spend no more than 30 percent of your income on housing, whether that’s rent or mortgage (and don’t forget to factor in property tax and insurance). If you can spend less on housing and still live in a safe area, do it.
• A rule of thumb: If you have to take out a car loan you can’t pay back in under three years, you can’t afford your ride.
• Most savings accounts right now are paying around 1 percent APR in interest. If you have credit card balances or student loans to pay off, you’re likely paying more than 1 percent on that debt, so your emergency fund is actually costing you money in the long run. Make a dent in it today.

Forget fine-tuning — overhaul your budget to see the biggest savings.

For the most part, the new rules will just stop problems before they start – like cracking down on so-called “universal default,” which previously allowed lenders to raise your interest rates if you were late on an unrelated payment. So if you pay your gas bill late, you don’t have to worry about your Visa interest rate going up (though late payments will still affect your credit score which may change the rates you’re eligible for on your next credit card).

Some of the most visible changes will affect teens and college students. If you’re under 21, you’ll need one of your parents to co-sign your application for a new credit card, for instance. And you’re unlikely to see credit card sales reps offering free t-shirts in the student center – the new rules prohibit banks from soliciting new business within 1000 feet of a college campus.

If you carry a significant balance on your credit card, the new rules could be a big help. Before your bank can raise your interest rate, they’ll need to give you 45 days written notice. And if the increase is big, you now have the option of closing your card and paying off the balance at the current rate.

And for those of you who only make minimum payments, you’re going to reminded monthly of the cost of that mistake. Starting this month, expect to see a “Minimum Payment Explanation” laying out exactly how long it will take to pay off your balance. For example, a mere $2000 on a card with an 18% APR will take 15 years to pay off if you only chip in the minimum each month. We’ve told you this before, but now you’ve got no excuse! From our perspective, this kind of transparency is what gives the consumer power.

Last but not least, watch out for annual fees on cards that used to be free. All these restrictions mean less revenue for lenders, so you can expect them to try and make up for it with annual fees. Unless you are getting some really amazing benefits, it’s probably not worth paying a fee for a credit card. Remember, it always pays to shop around for credit cards, bank accounts, and everything else.

MasterCard and Visa each charge a 1 percent “processing fee” for international purchases, and American Express adds 2 percent. On top of that, the issuing bank is permitted to determine its own additional surcharge.

The sneaky fees have been going on for a few years now with most consumers unaware that they’re been gouged. In 2006, the New York Times first reported on the fees and experts advise consumers to know their credit cards’ policies on foreign purchases:

“Consumers will save a lot of money if they think about using the right card when traveling, and think about it in advance,” said Jennifer Openshaw, chief executive of Openshaw’s Family Financial Network and host of “Winning Advice with Jennifer Openshaw” on ABC Radio. “Using the wrong card can add close to 10 percent to the overall cost of a given purchase,” she said. “For example, your bank might charge you 3 percent for a purchase, and the merchant might charge 6 percent to convert the charge to dollars.”

ATMs are a handy way of getting cash out in the local currency (and saves you the hassle of travelers checks). While many banks will ding you there too with an “international cash withdrawal fee” averaging $5 per withdrawal, you’ll typically get the most favorable exchange rates.

Curious how your credit cards stack up? Bankrate.com compiled this chart that compares surcharge rates at 21 credit-card issuers.

Overall, 46.1 percent of American households reported holding debt on credit cards. But a look at who is holding that debt yields surprising results.

In the section that breaks down debt by income bracket (Page A40), the report shows a peak of debtors in the 60 to 80th percentile of income (with a median salary of $71,500), with 62.1 percent of households in this bracket carrying a credit-card balance — well above the average. The bracket with the lowest percentage of debtors was the 20th percentile and under (earning a median salary of $12,300 and a debt rate at 25.7 percent). In other words: the very poorest among us.

This trend may seem counterintuitive — you would expect the poorest people to be the most in debt, and those who make more than the average household to be better financially situated — but it actually makes perfect sense.

Debt peaks among households just above the median income level because these are the people most likely to live beyond their means to try to keep up with the Joneses. And those in the 20th percentile and under are the least likely to carry credit-card debt because they don’t qualify for as many credit options in the first place (and are unlikely to qualify in the future given the new, stricter lending standards).

As for the people in the top decile of income, they are, essentially, the Joneses. And as such should really work on shedding that debt — with a median salary of $206,900, a debt rate of 40.6 percent is still too high when they’re the ones most able to afford life’s luxuries.

I was recently reviewing the Survey of Consumer Finances, published earlier this year using data from 2007. I thought it was interesting that only 46.2 percent of American households reported having credit-card debt, since the common perception is that almost everyone is living well beyond their means. But what the survey results really reveal is that more than half of the country either doesn’t carry a credit card or pays off their balances every month.

Want to join that club? Here’s what you have to do:

1. “Snowball” your debt. Transfer balances from high-interest cards to a low-interest card and then focus your efforts on paying it off. This will save you the headache of tracking multiple balances at once.
2. Double your minimum payment. If your card has an 18 percent interest rate and you pay the minimum $100 per month, it will take more than 10 years to pay off a balance of $3,000, racking up more than $2,000 in interest in the meantime. Double your payment and you’ll be debt-free in half the time while paying only $754 in interest, according to this calculator.
3. Repay debt with money from savings. Don’t touch your retirement accounts — the stiff penalties make it not worth it — but it’s a good idea to cash out your short-term savings to reduce your debt burden. You may want to keep some cash liquid for emergencies, but it’s highly unlikely you’re earning more in interest than you’re paying to the credit-card bank every month. Using savings to pay down debt is like getting an instant return on your money of 12 or 18 percent (or whatever your APR is).
4. Don’t take out a secured loan. The difference between a secured loan and an unsecured loan is whether you have to put up collateral to sign for it. Credit cards are unsecured debt, so taking out a secured loan — like against your home equity or car — is just about the riskiest thing you can do. If you fail to pay your credit cards, your credit score will tank, but if you fail to pay a secured debt, you’ll lose your house or mode of transportation. Don’t chance it.
5. Stop using your credit cards. It may seem obvious but many people fall into the trap of continuing to use their plastic while trying to pay down their balances. Think of it as financially treading water: It’s impossible to get ahead this way.

These topics are on the minds of many Americans as they balance their gift lists with their bank accounts during the Christmas season. But buyers beware – those good sales that stores offer through their brand-name credit cards could leave your credit score hurting in the New Year.

You may be tempted this season to give in to the plea from that persistent sales clerk at one of the big retailers — “Are you sure you don’t want to save 15 percent today?” — and open up a couple of store-brand credit cards. […]

But before you start filling out the application, there are some things you need to know. If you carry a balance on store-brand cards, known in the industry as private-label cards, or if you miss a payment on your no-interest purchase, you can end up wiping out those initial savings, and then some. And when you open a new credit card, your credit score can suffer, too.

Store cards typically have less strict credit requirements than other major issuers, so signing up for one of these cards could help build credit. However, companies compensate for less strict credit requirement through higher interest rates, and there’s a large risk to your credit score if you miss a few payments.

Since most store cards have higher rates than most general-purpose cards, you do not want to fall behind. And if you do, you can do major damage to your credit score. Those with a FICO score of 780 — the scale ranges from 300 to 850 — who are 30 days or more overdue can lose 90 to 100 points from their scores […]

While main factors like “payment history” and “outstanding debt” comprise a majority of your credit score, remember that opening up new credit cards still accounts for approximately 10 percent of your credit score. This is why one of our credit score improvement tips is to slow down on opening new credit cards.

Everyone loves a good deal, especially over the holidays, but check the fine print – and your bank account – to make sure it’s actually a good deal you can afford.

While $1,000 may seem like a genuine chunk of change, in reality it’s not hard to save up that much with a little discipline. You’d save that much by giving up your daily $4 latte for eight months, or by forgoing your $100-a-month premium cable package for less than a year. But the real question is, what’s the best use for that money?

If your first thought is “shopping spree” or “ski vacation,” we offer the following alternatives:

1. Pad your emergency fund or retirement account. The first tip is also the most obvious — if you don’t have a savings account with at least six months of expenses (enough to cover stuff you wouldn’t want want to go without, like your mortgage or rent, utilities, health insurance premiums, and groceries), you probably know you should. Otherwise in the case of job loss, you’ll have to dip into your 401(k), which you know enough not to do. But having even $1,000 in the bank will go a long way toward paying those unanticipated bills, like emergency vet care or car trouble.
2. Open a high-yield savings account. Let’s go back to that idea of a ski vacation for a minute. By opening a money market account with an online bank, you’ll likely find better interest rates than if you were to sock that money away in a brick-and-mortar bank due to decreased overhead. That means you’ll reach your short-term goals faster, like taking that trip or buying a new car. You can find the best rates by browsing banks at Bankrate.com.
3. Pay down your credit cards. OK, we admit that this is the most boring option. But since you’re unlikely to find a no-risk savings account that offers a higher interest rate than what you’re paying on your balances, putting it toward any consumer debt is like an instant return on your money.
4. Invest in an index fund. If you’ve got the emergency fund and the consumer debt under control, then maybe now is the time to get into investing. Take a baby step toward making real money in the stock market by putting that money in a low-cost index fund. It tracks the overall state of the stock market, which makes it an ideal long-term investment.
5. Treat yourself. Do you have check marks next to all of the above? Congratulations — you’ve put yourself in great financial shape. Make sure you remember what you’re saving all this money for anyway and indulge a little.

And in the spirit of the holiday, take a minute this week to give thanks for your good fortune.