WASHINGTON —Worried that a jarring credit crunch would stifle the economy, Federal Reserve policymakers at their September meeting felt compelled to act aggressively in lowering a key interest rate for the first time in over four years.

Fed policymakers unanimously agreed to slash interest rates by one-half percentage point to 4.75 percent, calling it “the most prudent course of action,” according to minutes of the Sept. 18 meeting released Tuesday.

The minutes underscored just how concerned Fed Chairman Ben Bernanke and his central bank colleagues were that the credit crisis and the worst housing slump in 16 years could undermine the country’s economic health. The minutes offered fresh insights into the September meeting, where Bernanke was faced with one of his most important decisions since taking office in February of last year.

“Given the unusual nature of the current financial shock, participants regarded the outlook for economic activity as characterized by particularly high uncertainty, with the risks to growth skewed to the downside,” according to the minutes.

Some participants expressed concern that a weaker economy could worsen the credit crunch, which, in turn, could “reinforce the economic slowdown.” At the same time, participants pointed out that in previous episodes of financial market disruptions, the economy showed some resilience when the country was suffering through a period of financial turbulence.

“Although financial markets were expected to stabilize over time, participants judged that credit markets were likely to restrain economic growth in the period ahead,” the minutes said.

Lowering its main interest rate, called the federal funds rate, “was appropriate to help offset the effects of tighter financial conditions on the economic outlook,” the minutes stated. The funds rate, the interest banks charge each other on overnight loans, affects a wide range of interest rates charged to millions of consumers and businesses. That’s why it is the Fed’s main tool for influencing national economic activity.

If the Fed did not lower rates, Fed policymakers “saw a risk that tightening credit conditions and an intensifying housing correction would lead to significant broader weakness” in the economy as well as in national employment conditions, according to the minutes.

Fed policymakers also believed that the rate cut “should not interfere” with lenders and other investors making the painful adjustments that they need to get their financial houses in order, the minutes said.

With economic growth likely to run at a sub-par pace for a while and incoming inflation data on the “favorable side,” the lowering of rates “seemed unlikely to affect adversely the outlook for inflation,” the minutes said.

The credit crunch was likely to deepen the housing slump, raised the possibility of dampening consumer spending and could weigh on business investment in the months ahead, the minutes said. Spending by consumers and businesses are crucial ingredients keep the economic expansion going.

Policymakers didn’t think that the job market had deteriorated as much as a government report at the time suggested. Nonetheless, they believed that “some further slowing of employment growth was likely.”

The government originally reported that the economy lost 4,000 jobs in August Д the first such decline in four years. At the time, that news sent Wall Street in a nosedive, intensified fears that the economy was heading toward recession and was seen as cementing a case for the Fed to lower rates at its September meeting.

Last week, however, the government released revised figures Д based on more complete data Д showing that employers actually added 89,000 jobs during that month.

Job-creation picked up in September, with employers boosting payrolls by 110,000. Workers’ wages also grew solidly, the government reported last week. That news eased fears the economy would slide into a recession and cast doubt on whether the Fed would lower rates again at its next scheduled meeting, Oct. 30-31.

December 30, 2007 — Savvy retailers are making the $35 billion holiday gift card business even more profitable.

They have set up separate gift card subsidiaries in states that allow them to keep the unredeemed balances from long unused cards - which can total 10 percent of all gift card purchases, or a staggering $3.5 billion this holiday season.

Many states, like New York, take possession of the balances of dormant gift cards - called breakage in retail circles - under laws that govern abandoned property like dormant bank accounts and checks.

At Richfield, Minn.-based Best Buy, the electronics retailer, profits last year were goosed by $19 million in breakage.

That healthy figure is partly a result of the chain’s shrewd move to establish its gift card operation in Virginia, which has a more retailer-friendly law regarding the growing booty of unredeemed gift card balances.

The companies’ gain is a loss for taxpayers.

These separate gift card units - known among industry insiders as “giftcos” - have helped thwart states like New York who have sought gift-card money to boost their coffers.

New York takes possession of unredeemed balances on gift cards inactive for 5 years. Other states’ possession laws carry varying dormancy periods.

New York and other states also redistribute breakage to consumers who can prove they’re eligible for funds.

During the most recent fiscal year, New York collected $9.69 million in unused gift-card money, according to Thomas DiNapoli, the state controller.

That may seem like a lot to the average gift-card recipient, but it’s peanuts compared with the total that went unredeemed statewide - a total that could have approached $1 billion, based on an estimate derived from census data and national sales trends.

“Unfortunately, the current laws benefit retailers by allowing them to incorporate their gift-card business in another state,” DiNapoli told The Post. “The best way to avoid this problem en tirely is for consumers to use gift cards within a year of purchase.”

About half the states allow stores to pocket this easy money. In turn, retailers have become shoppers and have scouted out these friendly states as a base for their gift card units.

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December 30, 2007 — As folks get ready to make resolutions to be better people in 2008 - pledging to lose weight, volunteer more and to check in more with Grandma - there are just as important financial resolutions to make to improve your portfolio.

Here are five goodies:

* I will get out of credit card debt.

The average US household owes nearly $10,000 in credit card bills, making debt a huge problem. Become debt-free in 2008 - or at least make a huge dent in your debt - by following these strategies: Negotiate lower interest rates with your creditors or switch to a credit card that offers a better rate. Apply “extra” money, like your IRS refund check, cash gifts, or a work bonus, toward your debt. Pay more than the minimum payments on your credit cards. Don’t charge anything you can’t pay off in one month. And, lastly, sell unneeded assets, like furniture, clothes and electronics, and use the money to eliminate debt.

* I will save 10 percent (or more) of my income.

An emergency cash cushion can keep you out of debt if you face a layoff, divorce, medical bills or unexpected expenses. To save more, make automatic payroll deductions into your checking or savings account. Another tip: contribute to your 401(k) or 403(b) plan at work. Your employer may offer a matching contribution.

* I will improve my credit rating.

What is your Fair Isaac Credit Organization (FICO) credit score? Not knowing can hurt you financially. FICO scores range between 300 and 850 points. The higher your score, the better a deal you’ll get on everything from mortgages and credit cards to student loans and auto loans. You’ll also save money on life and auto insurance, and be better positioned to land a new job.

* I will hire a financial planner.

Financial planners aren’t just for rich people. Financial advisers help people at all income levels reach their goals.

* I will knock out my student loans.

If you went to college, or if your kid does, chances are you’re paying student loans. To knock them out faster, add at least $50 a month to your normal monthly payments in 2008 and beyond. If you can afford it, double your payments. Either way, by paying extra on the principal balance, you’ll reduce interest charges and more quickly eliminate those college loans.

Lynnette Khalfani-Cox is the author of Zero Debt: The Ultimate Guide to Financial Freedom.