The Nissan GT-R has been a hot car this year, winning prestigious industry awards such as Motor Trend’s “Car of the Year.” If you’re looking to save on insurance costs, don’t expect to be cruising around in this sports car anytime soon because Nissan’s GT-R takes first place in another arena: insurance costs. The GT-R is ranked 2009’s most expensive vehicle to insure, totaling in at an average premium of $2,533 according to Insure.com. Your best bargain insurance-wise would be the Hyundai Santa Fe, which has the lowest insurance premium averaging at just $830.

While auto insurance can be pricey, many financial emergencies are caused by major life events such as car accidents or medical conditions, so maintaining adequate insurance is one good way to stay protected from financial ruin. With all the different types of auto insurance available, understanding what you are getting for your money is important.

-Liability is the most important type of insurance and is required by state law. It covers costs associated with property damages or bodily injury caused by you or a member of your family in an accident.

-Collision insurance will pay for the repairs if your car is damaged in an accident.

-Comprehensive insurance pays for damage to your car from factors other than collisions, such as damage from fire or vandalism.

-Uninsured motorist coverage protects you if you are ever in an accident caused by an uninsured driver. It may also protect you against a hit-and-run.

-Personal Injury Protection (PIP) pays medical expenses and lost wages for you and your passengers if you are injured in an accident. If PIP is not required in your state, and you have good health and disability insurance, you can skip purchasing this type of protection or just get the minimum coverage.

-Medical payments (MedPay) will guarantee immediate medical payments regardless of who is at fault. It also covers you and members of your household in any accident involving an automobile, even if you are walking or riding a bicycle.

-No-fault insurance is required in many states. With no-fault, your insurance company would cover your expenses in an accident regardless of who was at fault. Other drivers would be covered by their own policies. This type of insurance eliminates the need for accident victims to establish another’s liability in a lawsuit.

When taking out an insurance policy, finding coverage that meets your needs and the requirements of your state is a top priority. Remember that your insurance must also be affordable.

-Ask your insurance company about discounts. You may be eligible for discounts for being a safe driver, good student, or college graduate.

-Remember, your credit matters. Car insurance companies take your credit rating into account when creating a policy for you. Insurance companies view credit reports as predictors of risk: if you’re responsible with your finances, you’ll be responsible with your car.

-Shop around. Web sites like Insurance.com and Esurance.com let you comparison shop major auto insurance providers to find the best policy for you.

Most people like surprises; unless they are related to a credit card. Fortunately, creditors are required by law to disclose the terms and conditions of their offers in detail before you sign on the dotted line. Unfortunately, those terms and conditions can be overwhelming—the amount of information is as huge as their impact on your finances. Your card’s interest rate, fee policies, and grace period are all extremely important to your overall financial health. Consider this scenario:

If you have $5,000 on a credit card with 18 percent interest, it would take you more than 16 years to pay off if you made only the minimum monthly payment (3 percent). During that time, you will have paid more than $4,698.46 in interest charges.

On the other hand, if you had that same debt with a 4 percent interest rate card, your 3 percent minimum payments would result in a total of $593.49 of interest charges. Your debt would be paid off in a significantly shorter (but still pretty long!) 121 months.

When shopping for a credit card, it pays to take the time to read and understand the terms of your agreement. Remember, a credit card agreement is a legally-binding document. Following is a glossary of need-to-know terms.

Annual Fee. It is not uncommon for cards with a perceived high value to charge consumers for the privilege of holding the card. These cards usually offer rewards like cash back or airline miles. Before you agree to pay an annual fee, make sure that the reward is worth it. Keep in mind that finance charges can accrue on the fee itself.

Note about annual fees: If you hold a card with an annual fee, keep track of the renewal date; some cards will automatically renew if you don’t tell them otherwise.

Annual Percentage Rate (APR) for purchases. The APR is the loan’s interest cost expressed as an annual rate. According to CreditCards.com, the average APR is 13.54 percent. However, it is not uncommon for credit card interest rates to vary significantly (typically from zero to 29 percent). Credit cards can either have (1) a variable rate, (2) an introductory rate, or (3) a fixed rate.

Note about variable rates: With variable rate credit cards, the interest rate is computed by adding a set amount (called the margin) to the prime lending rate. Therefore when the Federal Reserve Board raises the prime rate, most variable-rate credit cards will move in direct response.

Other APRs. Cash advances, balance transfers, and overdraft advances normally carry higher rates than purchases. You should also be aware that your payments may be applied differently for these uses. Called “non preferred pricing,” a creditor may also choose to charge you a higher APR if you miss payments.

Note about APRs: Interest continues to accrue until an account is paid in full; this holds true if you close the account. Even if an account is charged-off, interest will accrue on the unpaid balance.

Grace Period. This is the amount of time you have until interest begins accruing on new purchases. The grace period is normally 20 to 30 days and only applies if you do not carry a balance.

Note about grace periods: If your card does not have a Grace Period, the card issuer may charge interest from the date you use your card or from the date each transaction is posted to your account.

Method for computing the balance. Because finance charges are based on your balance, it is important to know how your balance is calculated. One of the most common type of finance charge is the average daily balance. To calculate your average daily balance, the creditor adds each daily balance together and then divides by the number of days in the month. Some issuers include new purchases in their calculations; others do not.

Other possible methods include the previous balance method (based on the amount owed at the end of the previous billing cycle) and the adjusted balance method (where they subtract payments before calculating the finance charge).

Transaction Fees. Many cards assess fees when you use your card in certain ways. For example, transaction fees are common for cash advances and wire transfers. Some cards also charge fees for balance transfers and foreign transactions.

Late fees. If you make late or partial payments, most, (if not all) creditors will charge you a fee. Fees often range depending on your balance; the higher the balance, the higher the fee. According to CreditCards.com, the average late fee in 2008 was $25.90. Since fees are high, consider setting up automatic bill payments to help you to avoid making late payments.

Note about late fees: Send your payment at least one week before the due date to avoid these charges.

Over-the-limit fees. It pays to pay attention to your balance—fees for charging over your limit typically range from $15 to $40. If you want to charge past your current limit, call your credit card company and ask them to raise your limit instead.

Note about over-the-limit fees: Just remember that an increased limit is not a license to spend.

Also, be on the lookout for term changes as a result of the Credit Card
Accountability Responsibility and Disclosure Act of 2009 (CARD Act). The CARD Act may change your existing credit card agreement in many ways including how interest rates are increased, how fees are charged, and how payments are applied.  For example, under the CARD Act, over-the-limit fees cannot be charged unless theyou request that the creditor allow transactions that will exceed your credit limit.

If you are unsure whether or not your card is the best one for you, you can visit sites like Cardtrak.com or Bankrate.com to compare terms. Just remember that not everyone qualifies for every card; this is true even in you receive a “preapproved” offer in the mail. Preapproved offers are still contingent on you meeting the creditor’s qualifications.

We all know that money problems aren’t only about money. Financial problems have far-reaching impacts in many aspects of our lives. For example, we know that financial problems prevent people from doing a good job at work. We also know that financial problems are one of the top reasons couples fight. But can it really be proven that debt impacts your health?

To find out, I contacted a few folks who have recently repaid their debt and asked them if there were health benefits to debt repayment. The responses flooded in! Here are a just few:

“We are healthier as now we can afford better quality foods (more fruits, leaner meats, we can even eat salmon which is our favorite fish! etc)”

“I am less stressed (only good stress - not financial stress!!!). I am much healthier.”

“It is amazing how the added stress of bad financial decisions can affect ones health, but thanks to (debt repayment) I do exercise more and eat healthier.”

“I got benefits, take care of myself, feel better about my body and my mind.”

“I am happy to say I finally have health insurance through my work which I couldn’t afford before with all the debt I had.”

“I feel pretty good, a little over weight (20 lbs), but all in all I’m in pretty good shape. I do many things now that I wouldn’t have dreamed of before I repaid the debt.”

“In the sense that I feel less worried about money and the future, I’d say I’m healthier!”

“I have managed to save money up for health equipment and other exercise habits like a gym membership.”

“I am healthier, I exercise, and I feel I have more free time.”

“My life has changed my life for the better. It had got to the point where I was so stressed from work and debt I started smoking. I stopped smoking two years a go. I am less stressed and healthier.”

“I sleep better!”

“You may not think so, but carrying a bunch of debt also affects your health and mental well being. Paying off my debt has allowed me to walk and talk with more confidence.”

“I feel I am unbelievably more emotionally healthy than I’ve ever been before. I no longer lose sleep at night or have panic attacks from the fear I carried before.”

While debt repayment won’t guarentee that you will never get sick, it clearly has the potential to benefit both your physical and emotional health.

Are financial problems impacting your health? Or, has debt repayment improved your emotional and physical well being? If so, please share your story through the comments section.