Christmas morning will be a flurry of fancy wrapping, bows and ribbons flying, a symphony of “oooh”s and “aaahh”s, a festival of feel-good gift exchanging, a surfeit of festivities.

Then comes the sobering chill of January. No, I don’t mean the weather. I mean the bills. Suddenly the true cost of all this merry-making will start to arrive in the form of credit card bills and disappointingly low balances on checking account statements. Is it already too late?

It’s never too late to turn over a new leaf when it comes to your attitude towards finances, although at this time of year it may be more out of necessity than good planning.

If you haven’t made that budget with us yet, now is the time to do it. Finding the funds to pay off this extra debt may seem impossible, but if you are serious about repaying your holiday debt, you can do it.

Start with a few New Year’s Resolutions:

1. Make a budget and stick to it

2. Place a moratorium on your credit card spending, if you can’t afford it, don’t buy it

3. Be consistent about making payments towards credit card debt. If you are in over your head, contact creditors to make payment arrangements that could save your credit standing. Generally, it is best to pay off the highest interest debt first.

4. Start saving on luxury expenses you can do without. It may mean small sacrifices such as going without those morning coffee shop stops or making your lunch instead of eating out. Modify your cable TV choices – give up those premium channels and look into renting movies (or borrow them – even cheaper).

I’ve talked a lot about credit card offers, disclosure statements and the importance of reading the fine print. I don’t want to belabor the point, but I received something in the mail today that was just too good not to share.

When I opened the envelope, the first words to greet my eyes were “You are Pre-Approved*” . It took me a few moments to track down the asterisk but when I did, the little footnote said pretty much what I expected it to. I am pre-approved, to receive this application – not a credit card.

The card offers a 9.9% APR for purchases. Doesn’t look too bad, but then I checked out the rest of the disclosure statement. As expected there are transaction fees for cash advances and a higher interest rate. That’s not a problem, still a pretty good deal.

But some of the other fees are pure genius.

Let’s say I am an exemplary customer, always staying within my limit and paying on time. The credit card company thinks I deserve a reward for my responsible account management. If the credit card company reviews my account and decides I rate a limit increase, they will charge me $25. This is not for increases I request, this is for increases made at their discretion. Internet access to my account will be $3.95. There is a copying fee of $3.00, although I am not sure what it is I asked them to copy. There is a penalty APR if I am late with a payment – my 9.9% goes to 19.9% for purchases.

There is an Account Set Up fee of $29.00, a Program Fee of $95.00, the Annual Fee of $48.00, a Participation Fee of $72.00 and if I want an additional card sent to me, there is another $20.00. If I am accepted, all of these fees will be charged to my card upon issuance.

For this “Platinum” card, the initial credit limit will be at least $250.00. Now, say I were to qualify for only the minimum credit limit. When they issue my card they will apply all the above fees. This leaves me with $52 credit available on my new credit card and I am paying 9.9% on nothing but card fees. If I want to use the card to purchase anything I will need a higher credit limit.

At $25 per increase, I hope they never give me one.

The GAO (General Accounting Office) has issued a report on excessive credit card fees and credit dislosure practices.

The report finds that the disclosure statements are still nearly incomprehensible to the average consumer. Penalty fees have more than doubled in the last ten years. Also of concern were hidden fees and transaction fees, such as those for making a payment by phone.

As I cautioned in an earlier post you need to read the fine print on your disclosure statement. The disturbing news is that these statements are purposely written above the average reading level of the intended consumers.

Read more at Consumer News Service.

Very few people read the fine print on their credit card agreements. It’s complicated and hard to understand. Basically, if they can make the minimum payment, they are content. But what’s in that fine print can mean thousands of dollars depending on the balance you carry.

The fine print you never read probably contains a clause that allows the company to change your APR (annual percentage rate) at any time, with only 15 days notice to the customer. They can do this for any reason they deem reasonable. Often the contract states that your rate will increase to a higher default rate if you are late with payments.

Another clause that is gaining popularity with banks is the “universal default”. This allows the bank to raise your interest rate if you are late on payments to other creditors, or if the bank feels you are carrying too much debt. It is very easy for credit card companies to track your spending and debt as well as your credit score.

Remember, read the fine print. Know the terms of your credit card contract before you accept it. Once the bank has raised your interest rate to a punitive level, it will be too late.