Here are some ways to prevent yourself from being turned away at the counter, if you’re avoiding overdraft fees.

Keep in mind your available balance. Don’t think of your account as all of the money in it, but more of what is there that can be used – those are two separate amounts. Even then, you should keep track of your available balance every month and use your account accordingly.

Link your accounts. You can link a savings account to your checking account, so that you have a controlled overdraft fund of sorts. However, do remember that there are processing fees (about $10 per transaction), and that it’s better to have another, true savings account, just to be sure.

Apply for a credit line. If your rating is okay, then this is a viable idea – your bank will extend you a loan to cover for insufficient funds, and with competitive interest rates.

Keep a cash reserve. It’s best to keep a reserve of at least a hundred dollars when calculating the usable amount of money in your account. That way, if you do make a mistake in our tallying, you at least have an overdraft fund of sorts.

Cut the cards. Finally, you can survive on cash alone, and perhaps a basic ATM card. This way, your resources are limited to the cash you really have on hand. You will have less debt, but this is definitely a hard road to adapt to.

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It’s estimated that up to $123 million in unclaimed tax refund checks have been returned to the IRS, for the simple reason that they could not be delivered to the proper people in a given address. In some cases, the handwriting on the tax forms was illegible and caused the checks to be mailed to the wrong places.

The average amount for these checks is about $1,100, and it wouldn’t hurt to get these checks even if it’s not as much as that. With debts piling up all over the place, these tax refund checks are a welcome debt relief option.

What to do

The first thing to do is update your address with the IRS. You can do this through their website or their local offices. You may need to fill up Form 8822, depending on your situation.

Next, you have to dig up your copy of your 2008 income tax return papers. You will also need to present your Social Security number and the status of your return’s filing. Make sure you can show to the IRS your tax refund through your income tax return.

Finally, you can also inquire if the tax refund can be deposited directly to your bank account. There are instructions on how to do this in the return itself, or you can seek assistance from your local IRS office.

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Student loans

Remember, you can extend your student loan payments up to 30 years, but they aren’t usually on the table when it comes time for debt relief. You’ll just have to pay them, sooner or later.

Mortgage and car loans

You simply won’t be able to find true debt relief or radical modification on debt linked to mortgage and car loans. However, those usually have their own relief and modification actions and options. The key idea is to communicate with your agents immediately if you foresee trouble down the line.

Child support and alimony

If you can’t pay, it’s best to go to court and prove that you can’t.

Utilities

It’s the same with your mortgage and your car loans. Call the utility companies immediately. Most of them have payment plans and options ready. Barring that, you can also talk to your local government offices for assistance.

Taxes

There’s no getting away from paying the IRS – if you have any problems paying your taxes, you will have to talk to them as soon as possible. Methods can involve extended payment periods or wage garnishment. And even if some of your tax debt is forgiven, you’ll have to probably have to pay taxes on the amount forgiven.

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Justified rate increases

 Double-billing cycles and rate increases without immediate notice will be disallowed, much to the dismay of credit card companies. Many companies started posting higher rates since last summer, saying that it was to offset the lending risks for credit card users, both new and old.

On one hand, this means that many people who have been getting their financial act together will have more safeties when it comes to handling their credit. However, those who are still in trouble may have credit denied them. 

Competition

Still, the fear that competition would dwindle hasn’t come true, as the improving economy has healed some of the financial wounds that credit companies have suffered. Successful debt relief and modification actions have also strengthened the market, allowing more people to choose with their feet if credit card companies aren’t to their liking.

What does it mean?

If you got into trouble with your old credit cards, and you want to start over, you may have to give a good show of paying your old debts first, before applying for a new card. However, the good news is, once you do, there will be more ways to protect yourself from hidden charges and other temptations that will make you go down the slippery slope of debt again.

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Charges – You should ask the credit card company if the card has inactivity fees and charges if you do not use the card for a considerable length of time. If there are no additional charges, then you can probably keep it in reserve.

Temptation – On the other hand, there is no reason to keep an unused card around if you are trying to prevent yourself from spending too much money. In such a case, even if you could use a spare card, the chances of you overspending may outweigh the benefits of a spare credit card.

Account closure – It’s becoming more frequent that banks now close inactive accounts, since whether or not you’re using these cards, they still have operational costs to cover. The kicker here is that your score will be affected, regardless of who closed the account. Therefore, it’s a good idea to use the card every now and then, if only to prevent involuntary closure.

Reputation counts – If your credit history is good, you shouldn’t worry too much if your spare credit card is closed down. While the drop may be considerable, it also takes into account how good your credit history is. In that sense, the drop may only be temporary. And of course, you should still responsibly pay the charges for the unused card.

Sign up on the box at the right for more information and options on debt relief and modification.

Student loans

Come July 1, 2010, students who qualify for federal loans will now be able to borrow directly from the government through school aid offices. Advantages include a lower interest rate for PLUS loans, capped at around 7%, and less paperwork to do. By 2014, more flexible payment options will be available.

Mortgage short sale

New banking rules now stipulate that banks should provide people who do not qualify for loan modification with pre-approved options for short sales. Since a short sale is about houses being sold for less than what the homeowners owe, the process can be sped up, since both bank and homeowner will know what figures they will start negotiations with.

Credit card debt relief

New Federal rules that will kick in on August 22, 2010 will remove some credit card fees, including those for inactivity. The same goes for inactivity concerning gift cards. That way, you can actually stop using your credit card until you can recover, and reserve those gift checks for times when you might really need them.

Sign up on the box at the right for more options for debt relief and modification.

Major purchases

Debit cards can successfully stop you from overdoing your retail therapy needs. However, the main limitation of debit cards is that if you are not satisfied or find a problem with your purchase, your debit card’s company will rarely intercede on your behalf, given that a debit card is essentially your cash in electronic form. Debit cards work best for small purchases, while credit cards are good for large ones.

“Travel expenses”

In the case of expenses such as car rentals, hotel room charges and filling up with gasoline, it’s always best to use credit cards, as debit cards have a holding system to prevent sellers from being shortchanged. This can lead to hundreds of dollars being frozen in your account. That can lead to overdrafts. It’s best to use your debit card as the final payment after all the expenses tally up.

Rewards

Debit cards are still falling short when it comes to rewards, compared to their credit-based brothers. However, do remember that part of the reward system is to encourage you to spend. If you think of it that way, it’s not so bad to have a less comprehensive rewards package.

Security

If you like the idea of packing a lot of “money” then credit cards are the way to go, given you may be liable for only about $50 if it gets stolen. Debit cards, on the other hand, can have you hanging out to dry, particularly if you’ve activated the overdraft options. But a debit card set up to your specifications is much more comfortable to use, as you know that you will never go over a certain limit (if you set it). Still, in both cases you should always check your monthly bills carefully.

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Minimize, not accessorize

The first step is to cut down on temptation. If you have more than three credit cards, do cut it down to only two. One card should be for your main purchases, while the other should be for the rewards and offers. You can also have a debit card, but make sure you have it set up so that in the event you are scammed, that not much money will be lost.

Mother’s little credit helpers

If you feel a bit of a pinch in your purse, then it’s time to ask for help. A little debt relief and modification can go a long way in keeping the household happy. Don’t wait for the figures to get larger – like any good diet, it’s easier to get back to being fit when you’re still somewhat in shape. Just remember, any debt services agency that asks for money up front, and does not work closely with you is suspicious. A true debt relief and modification agency will always confer with you, as their options will have to be done with your approval.

Saving a little means a lot

Always save even a little bit for yourself. No life is complete without a little retail therapy. Even if it’s only a nice second-hand blouse or a good meal in a decent restaurant every month, the point is you’re still enjoying life. Do plan for a little Mother’s Day celebration of your own every month.

Sign up on the box at the right for more debt relief and modification options. And do have a happy Mother’s day!

Debt can be good. If you’re borrowing for a scholarship or for mortgage, then debt is actually good – provided you do plan correctly. Shop around for the best rates and compare your financial state to the offered plans.

Do plan for debt relief and modification actions. With the economy as it is now, you should have all your bases covered.

Debt can also be very bad. The two bad words for debt are: Consumables and Impulse. Do not use your card for consumables (food and leisure travel) or for retail therapy (shopping). With consumables, you will be paying for it long after the fact, and with shopping – let’s just say that it’s good money sense to simply save up and make sure that you do have cash on hand for reasonable impulse buying. Credit cards really should be for emergencies or special transactions only.

Rank your debts. The first step to reasonable debt management is to organize your priorities. The largest debt may not necessarily be the most important or the first to be taken care of. Balance between length of time for payments and your resources to see which is best. If you can pay off most of your smaller debts within a year and keep current on your larger debts, like your mortgage and car loans, then do pay your smaller debts first. However, if you feel that your belt is so tight that you may have to service the more important larger debts first, then you may have to let payments for smaller debts slide, if only for a month. Always do a priority check every month.

Organize your wallet. It’s very simple: make a laundry list of everything you’ve spent for in a month. From there, you’ll be able to plan how to handle the next month’s expenses.

Get help before it’s too late. The trick here is to see how your resources are holding up before they take a hit. For example, if you see that you can only pay a month ahead for large debts, with no buffer savings, then it’s time to start asking around for debt relief and modification. Even if you do practice belt-tightening procedures, it may be best to get professional debt management.

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Control your spending online. It’s easy to say you won’t, so create safeguards to stop yourself from using your tax refund for online purchases. Unsubscribe from RSS shopping feeds. Remove all your favorite shopping bookmarks. Delete or deactivate your profiles in your favorite shopping sites. In other words, make sure that you have put as many additional steps to shopping online as you can.

Divide the refund immediately. The moment you do get the tax refund, remove all the amounts that will go to debt relief or modification, savings or mortgage payments. But be kind to yourself and save some of it for simply spending on what you want. There’s no need to feel deprived. You can also divide it by spending only an allotted amount monthly. That will prevent you from blowing it all on one big purchase or spending spree.

Pay the IRS early. Earmark the tax refund for next year’s tax return. This way, you save money in an indirect way. You will be able to lower your monthly savings for the expected taxes. Even better, it’s possible to end up with a little extra if your tax refund is larger than your taxes. If you can also defer spending even more by continuing for the next few months with your tax savings, until the point where you estimate you’ve saved enough so that you can pay the full tax return with the tax refund and your savings at that point.

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