NFCC.org - Free or low-cost debt management advice

CLARKONOMICS: All the talk of recession comes at an interesting time right in the midst of a presidential race. Bush has taken great offense at people calling this a recession. He believes we're talking ourselves into trouble and it's just political baiting. With all due respect to the president, Clark begs to differ: We are in a consumer recession. Consumers are on a strike of sorts and the economy is weakening. GM has reported a terrible decline in sales. Ford, meanwhile, will cut vehicle production by 10% in light of flagging sales.

Construction spending is declining too. Oil is at record high prices adjusted for inflation. So why is Bush upset? When you look at the overall economy, we may actually escape the textbook definition of a recession -- two quarters of decline in the economy. That's only because we're exporting like mad. The decline of the dollar makes U.S. factories more competitive with overseas factories. Some foreign competitors may even build U.S. based factories because the dollar is in their favor.

No matter how you slice it, the truth is that people here at home are having a tougher time -- whether or not we get to the textbook definition of recession. Employers are not hiring as much. Optimism in the small business sector -- the real engine of U.S. capitalism -- is at the lowest level in just short of 20 years. What does this mean to you and me? Clark's usual maxim rings true: Reduce the amount of debt you've got. You must have your financial house in order. If your lifestyle requires borrowing, try to take a step away from that.

Here at Clarkhoward.com, we are constantly working to improve your user experience. The problem is that the Internet was moving faster than we were and the site got stale. But you spoke, and we listened. Clark put more money into the site and now people say they're happier with the results. What exactly did he do? For starters, Clark purchased new search engine technology that allows you to better search the site. He fully admits that he was too cheap (in a bad way) to listen to you on this point before. Thank goodness the winds of change prevailed!

We've also been color-coding the homepage and other parts of the site so you know what you're looking at online going forward. Rip-Off Alerts are featured in red on the home page and in the show notes, while Clarkonomics segments are featured in green. Plus, there is now embedded audio throughout the site and a new RSS feed (best viewed with Firefox.) that is a one-stop-shop for information on recalls.

The idea is to make your Clarkhoward.com experience a multimedia one -- we've got Clark's info whether you want it in text, audio or video format. Coming soon, we'll have commenting on show notes, staff blogs and more. The commenting will allow you to respond directly to Clark's ideas right on your computer screen. The staff blogs, meanwhile, will give you another chance to directly interact with Team Clark. On another note, we heard you and we're rolling it out in the near future: The much-anticipated Clark Stinks podcast. Many people don't have access to this popular segment and really want it. Finally, look for a travel photo section where you can submit pictures when you got a great Clark deal to some exotic location!

CLARKONOMICS: If you've been hearing the Clarkonomics sounder more often, it's driven by your calls and questions about the economy in these difficult times. Personal bankruptcy filings are up about 40% from a year ago. This can't all be blamed on the housing crisis. Beginning in 1998 through 2006, there was always more money available that could be borrowed: HELOCs, credit cards, etc.

First off, Clark always discouraged taking credit card debt and rolling it into a HELOC. Second, he also discouraged people from doing consolidation loans. Such moves were like rearranging deck chairs on The Titanic, not changing course to avoid the iceberg. You are not paying down debt if you just swap one debt for another. Then the music stopped and people could no longer do cash-out refis or HELOCs. So they turned back to credit cards and even borrowed from their 401(k) plans -- a sure way to destroy financial security for decades down the road.

But now it's a new day. You can no longer borrow so freely. "Fresh start" bankruptcies should still be your last resort. Before you become a statistic, trying visiting NFCC.org for free or low-cost debt management advice. Remember that bankruptcy can stay on your credit for 10 years. Do this early on, instead of waiting until the last minute when you're really squeezed. Finally, you must change your relationship with money. Don't purchase something if you can't pay cash for it. The real enemy of Clark's advice is all those "no money down" ads for furniture, big-screen TVs and more.

Need another reason why gift cards stink? Back in June, Clark was given a $25 gift certificate to an ice-cream store for his birthday. When he recently went to redeem it, the store was out of business! That's the big risk with gift cards. Similarly, Sharper Image has announced they won't be honoring gift cards as they re-organize through bankruptcy proceedings. Retail and restaurants are very sensitive to the economic slowdown, so you may see these scenarios play out elsewhere.

Mid-priced eateries are under severe pressure trying to maintain the volume of business. Several chains have begun putting glossy ads in the newspaper. BOGO offers on meals are unusual in the mid-priced sector. This trend tells Clark that the restaurant sector may face some door closures. So you may want to rethink buying that gift card at an eatery. When it comes to retailers, try to use existing gift cards before they're no good any longer. Clark and Lane have a bag full of them and are trying to use them before total depreciation.

Meanwhile, financial writer Pamela Yip has discovered that using a debit card to rent a car opens you up to a whole world of hurt. The rental counter will pull a credit report on you and drastically lower your score. Why? They're protecting themselves against auto thieves that love to use debit cards as a low-risk method to get rentals to steal. Use your real credit card instead!