10 New Year's Resolutions for 2012

1. Review Your Credit Report

This one is easy. Thanks to a federal law, each consumer is entitled to a free copy of their credit report, once a year, from each of the three credit reporting agencies.

To get your free credit report, just go to www.annualcreditreport.com. Do not go to any of the commercial sites that offer a "free" credit report, unless you want to sign up for a credit monitoring service that carries a monthly fee. 

"In looking to find out about a problem on my wife's credit report, I visited the Experian website and was redirected to Freecreditreport.com," Austin, of Bellmore, N.Y., told ConsumerAffairs.com. At some point while on their website, I was signed up for monthly monitoring and they began charging me $19.50 a month. They would not refund all the money they charged me. They claimed that I was supposed to go back to their website to cancel the services. I was never notified that I was receiving services from them. And if I had not reviewed my credit card statement, I would have not known I was being charged for the services."

It's understandable how consumers could confuse a website called "freecreditreport.com" with the government's free service, but rem

2. Change Your Password

Cyber-security becomes a more pressing issue every year. Hackers use all sorts of sophisticated tricks to compromise password-protected accounts. That's why its a good idea to resolve to change all of your passwords in the new year.

And when you choose a password, choose something that can't be easily guessed. Security experts also suggest including a number and a special character, such as an exclamation point, as part of the password.

Afraid you won't be able to remember your new passwords? Write them on a piece of paper and store it in a safe place for reference.

3. Pay Down Credit Cards

Since the start of the Great Recession, consumers have done a pretty good job of paying down credit card debt. Our advice? Keep it up. The faster you can eliminate debt, the more money you'll have in your budget.

However, don't do what Victor, of New York, N.Y., did.

"In January of 2010, I desired to start the year with new resolution regarding my debts," Victor said. "So, I called Square One and did my enrollment with them. They asked me to fax them a check so they can have my bank account number. And I did. They have been drawing money from that account for a year and two months.

Victor said he assumed all along that the money was going to his creditors. It wasn't. He said Square One told him all the money was their fee.

Stay away from so-called debt settlement firms. Instead, consider selling an asset and applying the proceeds to your debt. Paying just the minimum due each month is a recipe for staying in debt forever.

4. Make a Monthly Budget

Congress has failed to pass a budget for a couple of years now, and look at the shape we're in. Resolve to be more fiscally responsible than Congress in the New Year and work out a budget, balancing your income against expenses. 

Recurring expenses - like rent/mortgage, utilities, insurance, etc. - are easier to gauge. Harder to plan on are the unexpected things, like a car repair. That's why your budget should have a little money left over each month, if at all possible. If it isn't possible, it may be time to consider cutting costs.

5. Dump Big-Fee Banks

This was the year that consumers appeared to have it up to here with big banks that charge big fees. Eric, of Tuscaloosa, Ala., says he has three accounts at Regions Bank and one day, made seven deposits into them.

"One deposit, for $180, went into the wrong account that made the account that was supposed to get the funds go red," Eric said. "Six or seven small debit card purchases each with a $39 fee tacked on! I know this was my mistake, I get that. But geez! Do they have o squeeze me for $230?"

Eric and other consumers might find more consumer-friendly service at a small community bank or credit union. Back in November National Bank Transfer Day saw thousands of consumers switch their accounts. If you haven't already done so, you might consider making a move in 2012. Before moving, however, carefully read the bank's policies and research their products. It's possible you might even find a free checking account, something that's fast disappearing from the banking scene.

6. Review Insurance Policies

Is your homeowners insurance still adequate to cover you in the event of a major loss? An annual policy review can help answer that question. The first step is to make a home inventory. Make note of any new additions or substations to your home, or its contents.

For example, did you replace carpeting with hardwood floors during the year? That will add to the value of your home and should be noted with your insurance carrier. Maybe you added onto your home, or converted a carport to a garage.

Don't overlook the contents. If you inherited a number of expensive antiques, they should be documented as well. Take photographs or video of any improvements and store them in the cloud, if possible. Call your insurance company and ask for an annual policy review, making note of all the changes with the agent.

While you need adequate coverage, don't let the agent talk you into more coverage than you think you need.

7. Avoid 'Free' Offers

Everyone likes the idea of getting something for free, but the hard truth is very few things - and almost nothing on the Internet - is really free. There is always a catch, which usually results in a monthly charge to your credit or debit card.

In September a federal court, acting on a complaint from the Federal Trade Commission, halted an online conspiracy that allegedly took in more than $450 million from consumers in the United States and several other countries, and froze the alleged ringleader’s assets, pending trial.

The scheme allegedly lured consumers into “free” or “risk-free” offers for weight-loss pills and tooth whiteners, and then billed them for things they did not want or agree to purchase, providing false or misleading information to merchant banks in order to acquire credit and debit card processing services.

When you are offered a "free" or "trial" offer, just say no. Otherwise, it's going to cost you.

8. Travel Smart

Travel has become both more unpleasant and costly. Consumers can save money and aggravation by changing some travel habits. First, avoid third party travel sites that supposedly offer bargains on hotels and airfare. If you have to change your travel plans, often you are unable to get a refund. Also, since the third party site is acting as a middle-man between you and the hotel or airline, it increases the possibility of mistakes.

"Hotels.com failed to make hotel reservation, saying they were having computer glitches," Daniel, of Laramie, Wyo., told ConsumerAffairs.com. "After numerous attempts, I told them to cancel any reservation they had made. They confirmed they had. I checked and they'd made three charges against my credit card."

By dealing directly with the hotel, you reduce the chances of a misunderstanding. Many hotels will provide discounts if you'll just ask.

When renting a car, keep in mind that rental agencies now take every opportunity to stick consumers with paying their overhead. Any minor damage to the vehicle, real or imagined, can get charged to you after the fact. One defense is to take the rental car company's insurance. It's expensive, but probably lessens the chances of a nasty surprise when you return your vehicle.

9. Take Care of Your Car

Getting more miles out of your vehicle is a great way to save money, especially if your car is already paid for. If you can go another year without a car payment, that's money in the bank. That means regular maintenance on your vehicle, especially oil changes.

Also, keep your tires inflated at the proper pressure. It will not only improve your gas mileage, it will reduce the wear on your tires, making them last longer. In case you haven't priced new tires lately, they've gotten pretty expensive.

10. Refinance Your Mortgage

This one is a bit tricky, since it's a lot harder to get a mortgage than it used to be. If your mortgage is "under water," it will probably be impossible.

However, if you can qualify, interest rates at the end of 2011 were at record lows for those with good credit. If you can trim a percentage point off your current mortgage, it's probably worth it, as long as you expect to be in your home a few more years.

Assuming you have ample home equity, resist the urge to take out extra cash, as was standard operating procedure during the bubble days. The only reason to take out additional equity is if you use it to pay off high-interest credit card debit with it. Then, it's probably not a bad idea.