5 Credit Card Resolutions for the New Year

Here comes a new year! As with any new year, 2012 offers you the chance to improve your situation, no matter what that situation is. We can all improve, and we can all adopt practices that make our finances better. One of the best ways to improve your finances is to reform your credit card practices.
While it might take time to work through some of your credit card issues, you can still resolve to make improvements and set money goals that will work for you. As you get ready for a brand new year, here are 5 credit card resolutions to consider:

1. Plan Your Spending

Plan your spending based on your budget. Whether you pay with a credit card, debit card or cash, you should have a plan for your spending, and stay within your budget. Remember: A credit card shouldn't be an excuse to spend extra money. Stick to a spending plan, and you won't end up charging too much to your credit card.

2. Don't Charge More than You can Afford

Your credit card doesn't represent "your" money. In fact, it's someone else's money. When you use a credit card, you are borrowing. This means that it's easy to buy more than you can actually afford. However, if you want to better manage your credit cards, you need rein in your spending. Be very clear about what you can afford, and limit your spending on your credit card to what you can actually afford.

3. Pay Off Your Charges Each Month

If you do use your credit card, pay off your charges each month. There's nothing wrong with using a credit card -- as long as you don't carry a balance. Once you start carrying a balance, you run into trouble. The interest charges you pay can be problematic for your finances. Make a new year's resolution to pay off your charges each month, and you will pay much less in interest.

4. Pay Down Your Existing Credit Card Debt

Now is a great time to resolve to pay down existing credit card debt. Make a plan to reduce what you owe. You might have to pay off your credit card debt a little bit at a time in order to reach your goals. Examine your financial situation, and be honest about your debt. Create a plan to eliminate it over time. The important thing is to get started, and stick with your debt reduction plan. Work to become free of credit card debt, and you will be in a much better financial place.

5. Use Credit Card Rewards to Your Advantage

Many people already have their credit card situation under control. If this is the case, you can set a goal to use your credit card to best advantage. There are a number of great rewards credit cards that you can use to enjoy discounts, free merchandise, low cost travel and even cash back. Create a budget, and then use your credit card for all your purchases -- adding up rewards points and then redeeming them later. A credit card can be a tool; resolve in 2012 to take full advantage of it.