Credit card companies long ago adopted the same tactics as hoodlum drug dealers on the street corner. Pushers may get people hooked on pot, for example, but the real money is in cocaine or meth or what have you. So a drug dealer will give you a free sample of the big-money items to lure you in and create a new revenue stream.

Banks do the exact same thing with credit cards. For years, they deluged your mailbox with debt solicitations. Once you were hooked, they would turn around and raise the interest rates on your existing balances.

But that practice may soon be coming to an end. The House, in a 312-112 bipartisan vote, approved what's being called the "Credit Cardholders Bill of Rights Act" -- and the bankers are squealing like pigs. The bill would halt rate hikes on existing balances. In addition, it would require 45 days of notice if there is to be any interest rate change at all for future balances.

There's another provision of the bill that Clark's particularly pleased about. His American Express bill showed up 4 days before the due date -- fortunately he pays online! Under the bill, banks would have to mail statements 25 days before the due date.

Now the bill goes to the Senate. You just know the banks will be using dirty money to prevent the bill from coming up for vote. The president has indicated he'll veto the bill, but it won't do him any good if it passes both the House and the Senate with a veto-proof majority. That's why the Senate will be a key battleground.

Clark thinks its a rotten game that credit card companies play: They lure you in, get you drunk on plastic with low interest rates, and then once they see you've got a big balance going, they say, "We were just kidding! Your interest rate is now 17%!" Clark has even seen it go as high as 39%. Under current federal regulations, a bank is allowed to raise your interest rates on previous purchases with only 15 days notice. There's been so much uproar about it around the country, that after great delay and much legislation, the Fed and other agencies have issued some proposed rules for the credit card industry. Instead of 15 days notice, you'd get 45. Another new rule is that a bank would be free to raise interest rates on future purchases, but on any balances that already exist, the interest rate you purchased under would apply. The banks are going crazy, because these rules would destroy their ability to cheat you. But that's what Clark thinks the banks are doing, which is nothing short of slimy. When the Fed issued these regulations, they got over 60,000 comments from bank lobbyists--usually they only get a couple hundred at most. The head of the Office of the Controller of Currency even took it upon himself to plead the case for the banks. Clark really wishes he could get him to come on the show so Clark can ask him why he wants to stab the American peope in the back. One of the arguments the Controller makes is that by issuing these rules, there might be less credit made available to the people. Clark says: "As if the American people need more credit!" Spending money we don't have is how we've made our position weaker in the world. If banks can't lend money to people because they can't rip off the customers in the end... so what? That said, it's a free market. If someone says they want to lend money at 35%, that's their right. But if they promise a 7% rate, they shouldn't be able to raise it after the fact. This whole issue has Clark really steamed.

Have you ever used your credit card and been asked for ID or told you'd have to make a minimum purchase? Both stipulations are against the merchant guidelines that govern Visa and MasterCard.

Clark is not upset when he's asked for ID; he sees it as another safeguard, even if it is against the guidelines. However, there is some recourse available if you are peeved.

MasterCard has a simple-to-use form where you can alert them if a merchant required ID or a minimum purchase. Clark has no idea what becomes of this info once you submit it to MasterCard.

Visa, on other hand, has no such procedure in place. So they have a rule, but no enforcement.

The underlying issue here is that we're still using '60-era magnetic strip technology for credit cards. Europe and Asia, meanwhile, are years ahead of us with their smart chip technology. With the smart chip, you're required to enter a secret code to use your credit card. But the banks that issue cards don't want to spend the money to have a safe system on our shores!

Do you recall the T.J. Maxx security breach a couple of years ago? It turns out that was not an isolated occurrence, but part of a long-running criminal conspiracy. It recently became big news again when some of the ringleaders were busted.

These particular criminals would sit in store parking lots and try to hack into credit card processing machines -- and then into mainframes -- to get credit card and debit card numbers.

Unfortunately, there's nothing we as consumers can do to prevent these security breaches. But if you handle them right after being affected, it shouldn't cost you any money.

The solution is simple: Read your bank and credit card statements line item by line item when you get them. With credit cards, you must pursue any discrepancies within 60 days or your forfeit your right to the money.

The real problem is posed by petty thefts that might otherwise fly under the radar on your statement.

College kids are bombarded with an average of 4 phone calls and 5 mailings every month to get them hooked on credit cards, according to a new PIRG study. There's a feeding frenzy because teens are the most profitable of all customers for the banks that issue credit cards. It's unreal to Clark that university presidents and alumni groups are co-conspirators with the banks in trying to demolish the credit standing of our youth. Some cash-hungry universities even make deals with banks to provide them with personal student information and on-campus access to students.

The consequences of this are severe. Clark's senior producer, Kim, ran up $17K of lifestyle debt at college by the time she was 24. She didn't get it all paid off until she was 31. Meanwhile, Citibank and other lenders are being sued in the state of Ohio for handing out coupons for free sandwiches to students. But the catch was students had to apply for a credit card before the coupons could be redeemed. You as a parent have to guide your teens and teach them about the dangers of debt. This should not be a onetime talk; it needs to be an ongoing educational process. Get your own finances in order so you can teach by example.

Many of us have what are called -- in credit card lingo -- "back of the wallets." These are the cards we hardly ever use that may be buried somewhere in our wallets or in a drawer at home.

The typical American has about a dozen cards, but only 2 that are used frequently. The rest of those cards are ignored until they go dormant. In fact, you may not even activate the new card when you get it in the mail.

Banks used to just let these dormant accounts sit and hope you'd someday use the card again -- but not anymore. Now if an account goes stale, they'll close that account. That hurts your credit score and limits your access to funds.

So you may want to consider using your "back of the wallets" twice a year about 6 months apart. Charge a nominal amount and then pay it off. That will keep these accounts current in your credit mix and raise your credit score.

This is not just a silly assignment. You'll be helping your score, which is very important in getting lower interest rates, securing job offers and more.

There's been a widespread security breach at some 5,700 Citibank ATMs. Heed this special warning if you've used a Citibank ATM (including those found at 7-Eleven stores) at any point this year.

Criminals hacked into the bank's system and were remotely able to capture account numbers and PINs. They then made duplicate cards that were used to withdraw money from accounts for about 7 months.

The banking industry's longtime rule has been that the burden of proof was on you if your PIN was stolen. They believed their system was impenetrable and if something went wrong, well, you must have been at fault by not protecting your account or PIN. But the hacker community shares info about how to break into back-end systems on a variety of message boards.

The real problem is that our banks rely on 1960s ATM card technology. Over in Europe, they've long since switched to using smart chips in ATM cards. These smart chips defeat the ability of hackers to duplicate a card should they capture a number.

Washington D.C. has also been complicit in this backwards-looking policy. Federal regulators who are in cahoots with the banks have not followed through on requiring them to follow international banking security standards.

The takeaway for you is that you've got to thoroughly monitor your account and follow up on any discrepancies.

Meanwhile, the folks at Wired magazine originally broke the Citibank story. And Citibank, to its shame, is still being hush-hush about the number of people affected and the amount of money that's been stolen. Ukrainian immigrant Yuriy Rakushchynets and 2 others are the likely culprits of the crime.

Our banking industry operates at below-Third World standards when it comes to data safety. It's well past time for our government to mandate that the banks adhere to recognized world standards in the field. Clark also thinks banks should be required to provide full disclosure to the media and the American people when breaches like this one occur.

The nation's banks are reaching new lows when it comes to customer no service. The latest wrinkle took Clark by surprise because he's received scattered calls about this issue without realizing there was a pattern emerging.

Now The Wall Street Journal has discovered that banks are arbitrarily reducing credit limits without telling you. The first you'll hear about it is when your purchase is denied!

Some banks are having up to a 10% default rate on the cards they issue. That's a huge number compared to historical averages. Their panic is so great that they're indiscriminately reducing credit limits -- even sometimes for those who pay their bills in full every month.

The Wall Street Journal also reports that banks are taking a zip code approach to reducing credit limits. This is especially true throughout the real-estate bubble states -- California, Arizona, Nevada or Florida. Again, the banks are frightened because they've seen people go from being current on their bills to declaring bankruptcy practically overnight.

Meanwhile, the banks are also targeting the self-employed because they're frightened of small business bankruptcies. Clark read about one person who had an American Express card that got cut from a credit limit of $36,000 to $4,300!

So if you fit into any of these categories, make sure you're not dependent on any one bank or one credit card. You should have multiple lines from multiple banks. But beware if you miss a payment or are late. Then you've really got a bull's-eye on your back.

Gas rebate credit cards are hot right now. Is that any surprise? We're all shell-shocked by prices at the pump and the promise of HUGE rebates sounds great. But beware that these offers may only be good for a couple of weeks or months.

For example, BP has one heavily advertised offer for a card that gives you 10% back on gas for 2 months. After that, it drops to 5%, which is still not that bad.

But Clark doesn't recommend getting a rebate card for any one particular brand of gasoline. Consider this: The price of gas at BP may be, for argument's sake, 10 cents higher per gallon than other brands. So after the rebate drops down, you'd probably be better off having a plain vanilla MasterCard or Visa with rebates.

A word to the wise: Purchasing gas from a major oil company will usually cost more than at an independent. You can buy with confidence from indie brands because their gas is regulated by the government just like the majors. In fact, Clark only goes to the off-brands for gasoline because they're so much cheaper.

The Federal Reserve is proposing new guidelines for the credit card industry. These are simply proposed regulations; they haven't been finalized yet and may not be until after the November elections. The banks, predictably, are going berserk trying to push back on these proposals.

Here are some highlights of what's being considered:

• Banks would be required to give you a minimum of 21 days to pay a bill. That means statements would have to go out in a timely manner. Banks could no longer pull that funny business of sending out your statement a day or so before it's due.

• Credit card companies would no longer be allowed to raise rates on existing balances.

• Holds would no longer count toward your limit. This tactic is frequently used to force you over your limit. Holds are placed on your account when you use your card at a hotel, car rental counter or gas pump.

• Double-cycle billing -- often used to charge interest on a statement that's already been paid in full -- will be banned.

Keep in mind that these are only proposals. The aim is to make it look like there's a cop on the beat during an election year. These may be changed completely before they become the law of the land.

One thing is certain -- you can expect an uphill battle! Here's an example of the mentality coming from the banks: Capital One was recently investigated by California's state attorney general for its practices concerning customers. The company decided to change its registration from a state bank to a national one during the inquiry. That exempted them from the attorney general's scrutiny and allowed them to turn around and file a counter suit!

So what's the takeaway for you? Seize the power by not carrying a revolving balance on your credit card. Stop accumulating lifestyle debt and the banks will have no power over you.

College kids are bombarded with an average of 4 phone calls and 5 mailings every month to get them hooked on credit cards, according to a new PIRG study. There's a feeding frenzy because teens are the most profitable of all customers for the banks that issue credit cards. It's unreal to Clark that university presidents and alumni groups are co-conspirators with the banks in trying to demolish the credit standing of our youth. Some cash-hungry universities even make deals with banks to provide them with personal student information and on-campus access to students.

The consequences of this are severe. Clark's senior producer, Kim, ran up $17K of lifestyle debt at college by the time she was 24. She didn't get it all paid off until she was 31. Meanwhile, Citibank and other lenders are being sued in the state of Ohio for handing out coupons for free sandwiches to students. But the catch was students had to apply for a credit card before the coupons could be redeemed. You as a parent have to guide your teens and teach them about the dangers of debt. This should not be a onetime talk; it needs to be an ongoing educational process. Get your own finances in order so you can teach by example.

There's a bill in Congress to rein in the giant monster mega-banks and their abuses of the public with credit cards. Credit card bills are often due "net 30," which means 30 days after the date the bill was posted. The credit card companies, which are mostly owned by the giant monster mega-banks, have found that they can generate massive late fees by shortening the amount of time you have to pay. Some companies even have it down to net 15 just so they could post late fees of up to $40! Unless you pay electronically, you can't prove timely payments.

Clark was recently talking to a man in Austin who electronically made a credit card payment the day before it was due. The company received it on time, but waited 48 hours to credit his account. They then charged him a $35 late fee and raised his interest rate 15 points. Clark thinks that's despicable. This industry is missing any morality and doesn't care about treating people properly. The federal regulators, meanwhile, only act as the industry's protector. This new legislation would require you be given 25 days to pay your bill; it's ridiculous this has to be done by Congressional act. The legislation also wants to make it so you get 45 days notice -- instead of the current 15 -- that your rates are going up. Clark thinks they're addressing the wrong problem with that latter measure.

The real problem is that the credit card companies are hoodlums because they agree to make a loan to you, get you hooked and then raise the interest rate on loans you already took out. If Congress wants to help the credit card companies, they should allow them to raise the rates on future charges -- not on amounts that are outstanding. It's been said that people love their credit cards, but hate their credit card companies. This is true with any addiction. Credit card debt as a way of life used to be a uniquely American experience, but the international financial press is reporting the same story around the world. The sad thing is that the banks give so much money to Washington D.C. that Clark doesn't foresee anything changing. So you've got to be responsible for getting your balance paid off. Don't carry a card if you can't control yourself. Also, try carrying a check register to subtract your charges from your savings or checking balance so you know when to stop charging.

There are brand-new stats out about credit card debt that really disturb Clark. It turns out 1 in 9 people can barely make their minimum monthly payment. If the average card holder never uses the card again and pays only the minimum payment, they'll be done in 2043. Clark will be 87 in that year! He doesn't want to have to walk with cane and say, "What was that you said? You finally paid it off?!" Minimum payers are also subject to retroactive interest rate hikes under current law. So that means they can raise the rate on your existing balance from 14 percent to 20 percent or even to 39 percent! Clark has no problem with high rates on future purchases, but he thinks it is dirty pool to raise rates on an existing balance.

What if there was a way to make the minimum payment and get out of debt in a quarter of the time? Fortunately, there is: Say your minimum is $100. Try paying $50 every two weeks instead of $100 once a month. By doing that, you'll make 13 monthly payments in a year. Beware that as the balance comes down, the credit card company will drop the minimum to try to keep you in debt even longer. Don't fall for it!

Beware if you're in a credit crunch and you get a credit card offer in the mail from First Premier Bank. This locust lender will offer you a card with a $250 credit limit, but it also comes with a $95 program fee, a $29 set-up fee, an $84 dollar/year participation fee and an annual fee of $48. By the time you pay all the initial fees, you barely have any of your original credit line still available. Lenders like First Premier and CompuCredit have been in the news lately for this practice, yet there are also many online opportunities enticing those with damaged credit. If you're contemplating getting one of these cards, stop it immediately. There are alternatives called stored-value cards that have just a fraction of the fees. Stored-value cards are popular in Europe, but not widely known in the United States. Here's how they work: You pay a fee, usually around $5, to open an account. Then you get a Visa or MasterCard that holds your stored value. So you don't have a credit card per se, but you've got a card that you can electronically load cash onto and use as a payment system. Stored-value cards can help you make online purchases, for example. Be sure to read all the terms and conditions because additional fees usually apply. You can find stored-value cards at discount stores, but don't purchase them at convenience stores. The fees you'll face there will defeat the purpose.

People with damaged credit have a new bull's-eye on their backs. The nation's banks are doing mailings for MasterCards and Visas that are just awful. They're offering cards with low credit limits of a few hundred dollars. The catch is that they charge fees to get the card that nearly equal the credit limit they've given you. This tactic has been called "fee harvesting" by the National Consumer Law Center. That's because there's a multitude of subtle fees that they load on. These can include an annual fee, a setup fee, a program fee and a participation fee. The New York Times reports that Capital One and CompuCredit are some of the worst offenders. Except for the annual fee, all of these other fees are completely bogus. You think they're doing you a big favor by taking you on as a customer. But they eliminate all their risk by hitting you upfront with huge ridiculous fees. Clark thinks practice is diabolical but pretty clever in a sad sort of way. So beware if you're suddenly getting an offer for a card and nobody else has wanted you -- it could be a fee harvesting ploy coming your way.

We're living in a time when people are carrying record levels of debt, close to the trillion dollar mark. Per person that's like $1,500 or $1,600, while per household it's several thousand dollars. The Supreme Court ruled that credit card companies could set up shop in states like South Dakota and Delaware where there is no consumer protection. That's been like a free pass for them to do whatever they want. The big fuss right now is over people who pay on time every month and still get hit with giant increases in their interest rates. Clark is not in favor of having fixed rates set by a government cap. But he does think it's reasonable that if you sign up at a certain interest rate, the bank must honor that rate on all existing balances. They should be free to raise the rate on all future purchases, but not on those existing balances.

Clark likens the credit card companies to drug dealers. They want to get you hooked, so they hand out the cards like candy. If you pay down your balance, they'll lower the minimum payment to try to keep you hooked. So it's up to you to control yourself and not abuse that card. Don't charge balances you can't pay. Get yourself on a debt diet. If you have multiple cards, pay as much on the one with the highest rate as possible. Try making a payment every 14 days instead of every month. This works to your benefit because interest is calculated daily. If you keep paying what you've already been paying when they lower your minimum payment, you'll find that steadily more of your dollar will go to the principal instead of the interest. One final thought: This is not like ancient times when people were forcibly enslaved. Today we're making slaves of ourselves with our debt.

For weeks, Clark has been receiving scattered calls from people who say they've received a new unsolicited credit card in the mail. The complaints stem from Citibank buying Macy's credit portfolio and mailing out MasterCards to some 3.5 million inactive accounts. This is outrageous, disgusting and it should be illegal, Clark says. Citi is contributing to account and ID theft by its behavior. A report in The Boston Globe states that Citi says they've received positive feedback from customers about these new cards. Citi also goes on to claim that they informed customers about how to decline these new cards, and that there are no privacy or security issues of concern. Lies, lies and more lies, according to Clark. What's really going on is that Macy's now has created another credit line for people -- also lowering your score, by the way -- by reducing the aging on your credit accounts and issuing you a new major credit card when you might not have wanted one. So if you get one of these pieces of trash in the mail, cut it up. And if you do other business with Citi, don't use their cards. This is the power the marketplace affords you to punish a company that has done the wrong thing.

Clark has taken about 8 calls over the last several months that he thought were UFO questions with no connection to each other. People have been telling Clark they're getting harassed by collectors over debts that were wiped away when they filed for bankruptcy, or that debts that had been thrown out in bankruptcy court are showing up on credit reports as outstanding. Then Clark read Business Week's recent cover story "Prisoners of Debt" and it all made sense: Certain banks, collection agencies and credit bureaus are working together to undermine existing bankruptcy laws. When you file for Chapter 7, you get a bad mark on your record for 10 years. The tradeoff is that you also get to wipe out any credit card debts clean and clear. You usually first go through an evaluation process to see if you should pay a portion of your debts back under Chapter 13. Today you can only do Chapter 7 if your situation is hopeless.

Business Week discovered that Capital One, Bank of America, Chase and Discover are ignoring these bankruptcy laws -- by accident or on purpose -- and illegally selling debts to collection agencies so they can go after you. This flouts the law of the land, whether you agree with it or not. When a Chase lawyer was questioned by a judge about why they've sold bankrupt debts, the lawyer replied that it happens all the time. The Business Week article says the banks claim this is all an unintentional mistake. But there's a clear pattern here: First the lenders fail to wipe out the debt when you file for bankruptcy. Then they sell it off to collectors and score some cash. Next the collectors try to illegally collect the money. Finally, the credit bureaus act as co-conspirators by listing debts on your report that aren't valid. So if you've filed for bankruptcy and are caught in this vicious circle, contact the banks and bureaus by phone and in writing. Try getting them to update the status of your legally expired debts. If that doesn't work, go back to the bankruptcy court where you filed and talk to the judge.

The banks that issue the bulk of credit cards in our country are seeing more and more problems with delinquency. Their response has been to raise interest rates across the board -- even on people who have not been late on their payments in any way. Sometimes they try to justify the hike by telling you that you've cross defaulted, which means you're penalized for being late on another bank's card. But your bank can also arbitrarily raise your interest rate -- sometimes up to 30 or 33 percent -- on just 15 days notice. So what power do you have? Much of the time, you have the option to suspend charge privileges on a card in return for being able to pay off your balance at the old rate. But if you have other credit lines, vote with your feet by threatening to take your business elsewhere. Try pitting your lenders against each other to get the lowest interest rate.

Several weeks ago, Clark told you that Consumer Reports rated the best and worst credit cards in America. The single best card was the USAA Federal Savings Bank MasterCard, while all cards issued through credit unions came in at No. 2. Meanwhile, the big banks that issue the bulk of cards in America got stinky scores. Now there's a new survey out from J.D. Power and Associates that corroborates the findings of Consumer Reports. The J.D. Power tally focused on the big names only and is topped by American Express and Discover. On the bottom of the heap, J.D. Power says HSBC is the worst, followed by Bank of America and Capital One. That's very similar to what Consumer Reports said in ranking Capital One as the worst followed by Bank of America. Meanwhile, Citibank, Chase, Washington Mutual and Wells Fargo all got lousy scores from J.D. Power even though they came in near the top of the tally. So the important thing to note is that you should get your credit card through a credit union if you have access to it. Don't go through one of the giant monster mega-banks. Size does not equal quality in the world of credit cards.

Clark has long believed that debt is a disease when it becomes your way of life. It can eat at you, lead to anxiety, hurt your confidence and so much more. The New York Post recently ran a story about how members of Generation X (aged 30 to 45) are saddled with debt. Some of their debt stems from educational loans, but even more is attributed to lifestyle debt. Some 33 percent are so deep in debt that they'll never get out. About 20 percent are depressed over the financial obligations stemming from their lifestyle. The irony here is that Gen X got into lifestyle debt because they were doing something that was called "keeping up with the Joneses" back in the 1950s. People want to live large and have all the things their friends have. But the folks who ride in BMWs with the fancy houses may not own -- rather they owe through financing.

If you watch TV during fall season premiere week, look at all the local ads for furniture with no money down or no payment until whenever. It feels like it's free, but it builds a burden in your life. The pleasure of the possession is eclipsed by the burden of the debt. It is the very freedom to borrow today that has created this burden. Past generations like the baby boomers had to put money down to buy their first homes; today you can finance 100 percent. But just because the freedom to borrow and get buried in debt is there, it doesn't mean you have to use it. The Post article quoted a Charles Schwab employee who said that they expected Gen X to be saddled with debt, but they didn't expect them to develop anxiety over it. That's funny, because Clark has been hearing about debt anxiety for 20 years doing the show. As a parting thought, Clark said home is defined by where you are with your family and loved ones. It's not defined by square footage, crown moldings or a huge stainless steel fridge in your kitchen.

Sometimes it seems like young people have a huge bull's eye on their backs for the banks. People who are between the ages of 18 and 24 are being killed with bank overdraft fees. The latest stats say they're paying more than one billion dollars in overdraft fees every year. Clark recently heard from someone who has a teen that overdrew a debit account by $15 and that generated $80 in fees. As a parent, it's getting more and more difficult to teach the young about money. But it must be done. When Clark was in school, you paid for things with cash. Today there's no equivalent in a credit-crazy world. While cash is finite, plastic is infinite. A parent's most important lesson to a son or daughter should involve a pen and a check register -- showing them how to take debit transactions seriously. Banks are only too happy to approve transactions that will result in overdrawn accounts and high fees.

There's a bill in Congress that's trying to make it so that a bank must contact you for approval before they overdraw your account. The banks, predictably, are incensed about this because they may lose profit. Clark loves it when people have more info to make smart (or dumb) choices. What happened to ethics and morality in the banking world? Why do bankers get up in the morning and try to figure out how to rip off fellow Americans? If a bank approves an overdrawn transaction that generates fees, how is that moral or ethical?? It's not. The bill will probably be killed because the bankers are so strong giving dirty money to politicians. So teach your children well and you'll save them from losing money in the school of hard knocks.

Five years ago, Clark's daughter Stephanie was three years old and received a pre-approved offer for a Visa credit card -- what she then called a "Wisa" card. Stephanie loved the fake plastic card that came with the offer and often tried to scan it using her Barbie cash register. At that time she didn't really understand that you have to apply for credit and use it responsibly. Now that Stephanie is eight years old, she's received a solicitation from American Express. She wants to apply and so far Clark hasn't discouraged her. She's going to list her income as zero, her occupation as a student and disclose her true age. Then she'll wait to see if her application gets approved. Clark wonders what he's going to say to her when she's declined. Even worse, he's wondering what to say to her if she gets approved! The credit-card companies are so desperate for customers that there have even been documented cases where they've extended credit to people's dogs. Clark thinks his executive producer Christa should sign up her cat Willow for e-mail lists from merchants and assorted cat-alogs -- pun intended! The whole trend of young people having credit cards is very dangerous in Clark's eyes. One in 10 high-school students has one. But teens should be learning about saving, not spending. It's also important to look at the message about credit that we as parents are giving our children. If you run a balance every month, you need to get your own finances in shape before you try to teach your children by example.

There are changes coming to the way credit scores are calculated that could affect millions of women. For many years, people have been allowed to share their credit cards with authorized users. Husbands historically have done this for their spouses. But then some criminals figured out how to take the whole authorized user thing one step further -- they actually generate inflated credit scores for risky candidates by renting out someone's good credit. Think about it in the following way. Let's say Clark has terrible credit and his executive producer Christa has great credit. A third party operator can charge Clark $1,000 to rent Christa's status. Christa will receive $500, the operator will keep the other $500 and Clark gets a bogus good credit score in his name. The problem is that the renters -- Clark in this example -- have been defaulting at huge rates. So now the credit bureaus are just eliminating all authorized user credit standing across the board.

Women (or men) who have been married for many years and have always used their spouse's credit cards in lieu of building their own credit will be most affected by this change. They'll go from having great credit to zero credit overnight. The San Francisco Chronicle reports that there are more than three million women who have no credit standing of their own. Clark sometimes gets calls from new widows who suddenly have to deal with all the finances after a husband's death. He advises all women to have credit of their own. If you don't already have two credit cards in your name, now is the time to get them.

Talk about kicking people when they’re down. Credit card companies are now targeting those in danger of losing their homes because of sub-prime mortgages. Imagine being a homeowner who is in trouble and getting offers for new credit cards in the mail. While you might think you’re getting a lifeline, you’re actually being thrown a cinder block. The Boston Globe reports that the credit card industry has doubled its solicitations to households in sub-prime status. The Consumer Federation of America is angry at the banks for targeting these people. So if you are in trouble and get these solicitations, look at them as a burden -- not a gift. The banks are trying to score money on your hard times. Compounding debt on top of more debt is not a path to wealth -- it’s more like rearranging the deck chairs on the Titanic. So which banks are the worst offenders? HSBC is tops, with its solicitations to sub-prime mortgage holders doubling year over year. Following closely behind is Capital One, with its solicitations up 20 percent; and Washington Mutual, which is up 35 percent.

Have you ever wondered about the best credit card in the country? The October issue of Consumer Reports turned its attention to a survey of this all-important industry. The single best card to have in your wallet is USAA Federal Savings Bank of San Antonio's MasterCard. This card is exclusively for members of the military, their families and in some cases certain retirees. This little piece of plastic was singled out because of its reasonable interest rates and cash back earnings. USAA also delivers the best focus on customers and problem resolution, according to the report. But what about a good card for those of us who aren't in the military? A card issued by Navy Federal Credit Union came in second, while cards issues by credit unions in general took third place. Credit unions offer their cardholders good problem resolution and better interest rates than a typical bank-issued card. Overall, the only big issuers who got decent scores were American Express and Discover. The other major companies, meanwhile, were in the toilet. Providian was named the single worst card issuer. Following right behind at the bottom were Capital One, Bank of America's MBNA division and JP Morgan Chase.

Clark recently spoke on the show about how what happens on Wall Street affects what happens on Main Street in America. One way you may feel a pinch is in the credit card field. Dow Jones recently reported that credit card companies are starting to tighten their standards. This will happen in a number of ways: Credit limit increases won't be so common; potential customers who may have previously qualified for a card may no longer qualify; and you'll probably be seeing less balance transfer offers.

Credit card companies have historically borrowed money short-term at very low interest rates. Then they turned around to lend that money to you via your credit card at an average interest rate of about 16 percent. But now their ability to borrow at ultra cheap rates -- what's known as commercial paper -- is being squeezed. Since they don't have such easy access to money anymore they can't offer their deals to you. The credit card companies are also worried about people's ability to pay their debts. A Dow Jones survey found that a number of banks are tightening their standards one by one. This is not being done across the board, it's more of an industry trend -- so you still may see some low-interest transfer offers in your mail. The car loan field will also be clamping down too. You may be expected to have higher credit score, pay a higher interest rate or come in with a down payment on your vehicle if you want to qualify. All of these trends are signs that the pendulum is swinging back in the business world. For years we've had very low terms for borrowers. Now things are changing and some us are going to get pinched in the process.

In today's special edition of Clarkonomics, Clark looked at the increasing trend of credit card delinquency. While you are ethically obliged to pay your credit card debt, Clark thinks more people should start paying off their credit card last when they're facing other bills. Does that sound crazy? Well, think about it like you would triage: You treat whatever is most life-threatening first. Credit card creditors scream the loudest so people tend to pay them off first. But does it make sense to lose your home because you're paying your card instead of your mortgage? No way. So Clark advises people to pay their mortgage first and put the credit card bills on hold if need be. The same applies to your car loan; if you're struggling financially, put it to the side and pay your mortgage first. Then you can resume paying your credit card and car loan when you're back on your feet financially.

Clark despises debit cards -- or what he calls "piece of trash fake Visa and fake Mastercards." The banks love debit cards because they make huge profits on them. Most of us have had the experience of making a purchase with a debit card and being asked if we want to do it as debit or credit. If you go for credit, the merchant will pay $1.50 in processing fees. If you opt for debit, the merchant may only pay 17 or 18 cents. So the merchants are always battling with the banks over the use of these cards. Sometimes the banks will even assess you a fee when you select the debit option for a purchase. Meanwhile, the September issue of Consumer Reports' Money Adviser states that your account is 17 times more likely to be hijacked if you go the credit route versus the debit option. But the debit option has other dangers. Certain banks now allow customers to use it to cover purchases that exceed their balance. The banks are all too happy to collect interest of around 1,000 percent on overdraft charges. So ultimately, it's your responsibility to not overdraw your account. Clark advises people to deduct your debit purchase from your account ledger right after making that purchase. It may be a hassle, but it will save you in the long run.

There are a few scenarios where consumers really have to be aware about the dangers of using of debit cards. These include paying for gas at the pump, paying your hotel bill during check-out and doing a car rental. If you use a debit card in any of these situations, you have to know that the bank will put a hold on your account for an amount that exceeds the total of the bill. So though you may only get $10 of gas, the bank may hold $100 -- and if you don't have a lot in your account, you may start bouncing checks. Also, when you use a debit card to pay for something now that you'll get later, you have no recourse if the merchant goes bust or your purchase never arrives in the mail. However you can dispute the charge if you use a credit card. The only time Clark thinks it might be advisable to use a debit card is if you're someone who has been in trouble with credit cards in the past and you habitually go into debt using them. Then the benefits may outweigh the risks.

Do you remember when gas stations used to offer cheaper prices if you paid cash? Cash discounts at the pump are starting to make a comeback. This might seem like an odd thing, especially considering that people overwhelmingly fuel up using their credit cards nowadays. But the gas stations take a big hit on the credit card processing fees for every charge at the pump. These fees can be anywhere from several cents per gallon to a dime per gallon. So some stations now offer cash-paying customers anywhere from a nickel to 15 cents off per gallon to encourage cash transactions. The Los Angeles Times reports that cash discounts on the West Coast are spreading like wildfire. But this trend also raises a dilemma for stations. If people don't pre-pay via credit card, there's always the risk that they'll fill up and drive off without paying at all. Meanwhile, if you have to pay cash upfront, the stations may have to hire more staff or worry about losing business because of long lines at the pump. There's a balance that has to be struck. QuikTrip is trying to strike that balance by offering a pre-paid cash card. You have to register your personal info at the gas station -- to discourage you from driving off -- and then you're issued a card that lets you fuel up.

For the last few years, Clark has trashed Capital One -- one of the nation's largest credit card issuers and the purveyors of those memorable "What's in Your Wallet?" commercials that people either love or hate. Well, today the company gets some praise from Clark because it's agreed to change a policy about how it reports your information to the credit bureaus. In the past, Capital One would not report how much of your credit limit you were using. That way it always looked like you maxed out 100 percent of your credit, effectively destroying your score. According to Clark, this was an intentional move on Capital One's part because they wanted to hurt your credit and prevent other companies from poaching their customers.

Now the company has agreed to report credit limits to the bureaus. So some Capital One customers will have big score boosts and be eligible for better auto insurance rates, homeowner's insurances rates, mortgages and more. Capital One's change is huge because 30 percent of your credit score is based on how much credit debt you're carrying versus how much credit is available to you. So someone who has a card with a $5,000 limit and uses only $1,000 (20 percent usage) has a higher score than someone who has a card with a $20,000 credit limit and uses $15,000 (75 percent usage). Also it's important to know that when you change credit card companies you shouldn't close your old account. You need to keep it open -- even if you don't plan to use the card -- so that you can get a higher credit score.

Did you know there are new requirements for reporting debts or delinquencies? Clark recently had the chance to speak with two experts on the Fair Credit Report Act and the FACT Act (Fair and Accurate Credit Transactions Act). What he learned was illuminating. For example, if you have a credit card debt that went delinquent in January 2000, you might start getting calls from collection agencies in December 2006 -- one month shy of the seven-year expiration limit. What's probably going on is that the collection agency has put a new date on your account. By doing this the agency is breaking the law. If the debt has moved beyond the statue of limitations, you have no legal requirement to pay that creditor anything. Bear in mind that Clark is not talking here about the ethical obligation to pay up -- that goes on forever. He's only talking about your legal obligation.

So what can you do if your debt has passed the statute limit and the collection agency puts a new date on the account just to harass you some more? You can sue them in your own small claims court where you live. They have to come to you and answer for their actions! Just beware that these legal battles can be a two-way street. There are a lot of unsavory characters in the collection business who will try to sue you on expired debts. If you don't show up in court, they get a judgment in their favor when they didn't deserve it in the first place. Meanwhile, Clark also shared some personal anecdotes about working as a bill collector in graduate school, and trying to collect on past debts when he had his travel agencies. To do the latter, he often showed up in person to collect his money! He was always polite and calm. And you know what? It actually worked and he got a lot of money that way.

One crooked employee at Fidelity National Information Services stole the personal information from 2.3 million Americans, taking their checking account numbers, social security numbers, and more. He has since sold the information to a "broker." This is a big deal, because if someone gets your checking account number, unlike your credit card number, you could end up behind bars when the criminal writes checks pretending to be you. Criminals are able to steal information easily. You never know that they have it until it’s too late, and it's almost impossible to know where the breach in security originated. In 37 states, you can freeze your credit file so that if someone does steal your identity, there's nothing they can do with it. It's very beneficial, but credit bureaus are keeping this secret. This is because they lose all the money they make from your dossier if you freeze your credit. Clark thinks we need a fining system in place for credit card companies, banks, and lenders so that they are held responsible when something goes wrong and they give credit to the wrong person. You can check if your state has credit freezes at financialprivacynow.org

Look out for the advertised "deals" on reward cards: Clark saw one in a retail store. He opened the brochure and flipped to the "mice-type" in the rewards section. The 2% reward turned out to be only .5%! You only got 2% if you shopped at that store and ran a credit balance. It's not that all rewards cards are a bear trap, but there are enough duds out there that you just can't trust them without really looking over all the asterisks.

You have to be very savvy to even make airline reward cards work. You have to be doing a substantial amount of flying on the airline and charging on the card to get your rewards. And even so, the company might cap the amount of miles you can earn per year, or they may suddenly change the rewards on those cards! Look out for three things:
(1) be wary of annual fees;
(2) be aware of fake reward levels (like the 2% "deal" above)
3) these cards have awful interest rates.
For people with money, it’s hard to beat the deal from emigrantdirect.com! They have a deal where you put money with their savings account, and you get a MasterCard that earns 1.4% But you have to maintain $10,000 in the account. Other good deals include the CostCo "True Rewards" card: No annual fee, 1% back on all purchases, 2% on all travel, 3% on all restaurants. It's pretty simple and clear, but you must pay your balance in full each month to avoid high interest rates!

We are defaulting on our home equity loans more than ever, while simultaneously defaulting less on our credit cards. What's wrong with this picture? Credit card collectors are so aggressive that even if you're one minute late, they're all over you like a cheap suit. They know there's nothing they can really do to you, so instead they use bully psychology to force you into paying up. Contrast that approach with the one taken by your mortgage lender. If you're late on your home payment, they're very non-confrontational. Why? Because they can actually take your house away!!

Human nature dictates that people will pay the person who screams the loudest. But that's the wrong approach. Instead, try thinking about your finances like you would a triage room at a hospital: the doctor sees who has a life-threatening sickness and immediately treats that person. Similarly, it's important to prioritize your monthly bills. Your mortgage should always come first, followed by your transportation bill or car loan -- so you can get to work and keep earning! Try dropping your credit card debt lower on your list of monthly payments. People immediately say, "Well, I'll ruin my credit if I do that." But if you don't have enough money to pay your mortgage, chances are your credit is already being messed up. On a related note, many folks think you can just tell a credit-card collection agency not to call you. Unfortunately there's a special loophole in the Fair Debt Collection Practices Act that the banks got written in. It states that if the collector is an employee of the bank, he or she is exempt from many of the regulations. So they can continue to hound you day and night. If you're getting threatening phone calls where collectors are cussing you out, try taping it. Then bring the tape to your nearest TV station and they'll be more than happy to put the bank on the hot seat.

The Wall Street Journal isn't usually known for protecting the consumer. Yet the paper recently ran an article explaining how dangerous the use of debit cards can be for the average person. That's no secret around here at Clarkhoward.com, where Clark routinely refers to debit cards as a "piece of trash fake Visa or fake Mastercard." Sure it looks like a credit card, and it works similarly to one, but it can really foul you up in ways that a traditional credit card can not.

Say for example you buy a knife set that's being advertised on TV. If you pay for it with your debit card and it never arrives in the mail, you have no recourse. Had you paid with your credit card, all you have to do is dispute the charge. The same pitfalls can occur anytime you use your credit card to pay for something now that you'll be receiving later, such as airline tickets, cruises reservations and more. Other areas of danger with debit cards include the difficulty of refuting charges if your card is stolen, and the practice of hotels and some car-rental agencies that put a large hold on your account in advance of a transaction. Did you know that the latter practice can cause you to bounce checks even though the money is there in your account? The bottom line is that Clark believes the same protections enjoyed by credit-card users should be afforded to debit-card users. But the banks are making a fortune off debit cards, so there's no real incentive for them to change their ways. As Clark says, it used be that bank robbery involved a thief going to a bank and saying "Stick 'em up!" But today it's you that's getting robbed by the bank when you use a debit card.

Did you know that if a criminal gets your credit card number, they can show their "generosity" by donating money to charity using your credit card? Why are criminals doing this? This is happening because the charities will let the criminal know if the card is verified and still active. More importantly, it's a great way for criminals to test if the card will be reported stolen, according to a story Clark read in Newsday. Criminals can then sell your verified card number for three times the value of an unverified card! If someone steals an unverified number, it's worth $6; if it is verified, it sells for $18. The Red Cross has reported 700 fraudulent donations using stolen cards last month alone! Therefore, if you see a small unauthorized charity donation on your bill, be alert. Clark says the solution to this problem is so easy. The credit card companies should do what is done in Europe by inserting a smart chip in the card which requires a secret code. So even if someone steals your card, if they don’t know your code the card can’t be used. The result in Europe is that credit card fraud is nowhere near the problem it is in the United States. So why are we still using '60s technology to print out credit cards here? It seems like the banks would rather deal with the fraud that occurs and then clean up the mess after the fact, rather than spend the money proactively to get things done right in the first place.

Roughly 1 in 7 Americans are carrying credit card balances exceeding $25,000. Since the average income is around $50,000 a year, that means that 1 in 7 have a debt amounting to about half their salary. Once you get to that point, you've dug yourself a hole that's pretty hard to get out of. When financial counselors ask people what their debt level is, most don't know, or pretend not to know, because the real figures are just too frightening. And what's troublesome is that not only is the amount of average debt rising, but the number of debtors is rising too. Only 31% are paying off their monthly balance now, down from over 40% not too long ago. So if you're carrying a debt load, Clark is assigning you homework: redefine how you deal with money. Think about the interest you're paying to credit card companies and imagine what else you could do with those funds. Nobody gets rich paying Visa or MasterCard interest. If you are carrying a credit card balance, here's what Clark would like you to do: women, go to your closet of clothes, and guys, head to your closet of "stuff." See how many things there are in there that you bought but don't use. If there's a lot, it could be an indicator of a problem. And while your debt was built up slowly, the answer is quick: cut up your credit cards. if that's too tough of a chore, how about putting the credit cards in a bag of water and freeze them in your freezer...then your credit will be truly frozen! And if you have extra stuff, sell it on ebay or Craigslist, and use it to pay off your balance. It won't make a significant difference, but you will start to heal yourself of the habit of buying things you thought you wanted but didn't really need. He promises you'll feel much better. What if you have a huge debt? You stand a chance to whittle that away if you go on a budget and give yourself a cash allowance each pay period. Contract with yourself to take out only what you'll really need, then stick to it. It will amaze you how much less you spend. Sure, you may have to eat at home or take a sack lunch to work at the end of the pay periods, but so what? Clark wants you to be strong and take hold of your financial future. If you feel burdened by debt, think of the calls he gets from those that got out from under, and how liberated they feel. Be inspired by that. If you still feel overwhelmed, get yourself a credit counselor at nfcc.org. Most affiliates have counselors you can talk to for free. Time's a-wastin', so take control.

If you are late paying your bills it can really hurt your credit score. The amazing thing is that if you have a company credit card, and your company is late in paying the bill, that can affect you too. It can happen through bureaucracy or just plain laziness on their part. If you rely on your employer to pay the bill, monitor the card online to make sure that they aren’t dragging their feet and hurting you in the process.

The US Senate has introduced legislation that, if passed, will curb many of the corrupt practices of the Credit Card companies. The banks are playing dirty pool. Pay your bills in full, when you don’t owe them money it makes you strong and the banks weak. When they try to push you around, tell them you are going to call your Senator’s office. You have the power, don’t get pushed around.

The Federal Reserve has issued new rules for credit card companies and Clark couldn’t be happier about it. First of all, credit card companies won’t be able to change the terms of your contract in just 15 days. Companies could jack up your interest rate to an ungodly amount and they were only required to tell you 15 days a head of time. Now, they must give you 45 days notice before changing a rate. That gives you time to switch cards or plans if you want. Companies will also have to tell you what kind of penalties you could face if you pay a bill late or makes some other error. You will be informed about what rewards the card offers and it must be written in a way you understand. In addition, when you transfer a balance, companies must tell you how the rates apply on transferred money and remaining balances. Right now, when you make a payment on a card with different rates, the money goes toward the lowest interest rate. From now on, the money will go toward the highest rate. Credit cards are going to fight this until the very end but Clark wants you to know what will probably happen.

Clark has talked in the past about a credit card that helps save money for college. It was offered by Fidelity Investments and it paid 2 percent of all your charge volume into a college savings plan. Well, that program is no longer available to people other than those who already have the card. Now, the company has reduced the benefit to 1.5 percent. And there is now a cap on how much you can earn each year for your child’s education. This is a sign of the times. Credit card companies are reducing benefits and rewards more often these days. Or, for some specific charges, you don’t get rewards. So, it may be time to find a better card. That doesn’t mean you should close the accounts you have. Keeping them open helps your credit score. Just don’t use that card anymore. On another note, Fidelity has a new Visa card that gives you 1.5 percent back into a Fidelity investment account. There is no limit on earning power. Capital One has a card that earns you 1 percent each month, plus an additional. .25 percent at the end of the year. Of course, that could change too. Always keep your options open.

When you visit a retail store these days, you probably didn’t notice the war going on behind the scenes. Banks and retailers are going at it over debit cards, and we – the customers – are the pawns in the game. Basically, banks are trying to get people to use their debit card like a credit card because they make more money when you do it that way. Banks are offering all kinds of rewards and trips if you’ll sign for a charge instead of entering your pin when you make a purchase. Banks get just pennies when people enter their pin number. In turn, retailers are livid and are doing all kinds of things to get you to punch in your PIN. According to the Wall Street Journal, retailers are reprogramming their registers so the code option automatically pops up and customers are more inclined to do it that way. So, what’s it all mean to you? Eventually, banks will get more of your money if you swipe your card like a credit card. Merchants will start charging more money for items to make up for their cost, and customers will suffer for it. If you use a debit card and you’re being asked to punch in a code, it will help you in the long run. You can ask to use your card as a credit card; that is your option. But it may end up hurting you more in the system. Clark hopes the whole system breaks up and debit cards become a thing of the past. We’ll keep you posted.

A criminal ring based out of California has been moving around the country, stealing people’s debit and credit cards by taking over the card swiping machines incheck-out lines at retailers. Oftentimes, the cardholder never knows they've been a victim. What happens is the criminals either pretend to be technicians or they work in groups to distract cashiers, allowing time to install a small device on the card-swiping machine at the counter. Then, every time a customer swipes a card, the criminals capture the number and secret code entered. Within minutes, they have pulled hundreds of thousands of dollars out of accounts. It’s a very big, very efficient ring. So what can you do? Well, the greatest risk comes to those using debit cards because that money may not be replaceable. At least if you’re using a credit card you can file a dispute and get your money back. Other than that, make sure you check your statements religiously every month. If the criminals have created an exact duplicate of your card, it’s going to be hard to prove it wasn’t you making those charges. So, keep an eye on your accounts – always. And, if you can, use cash!

If you have a Capital One card in your wallet, you need to listen up! Capital One uses an analysis program to figure out which customers are near their limit and likely won’t be able to stay under it. The company then sends another card to that person in the hopes that you’ll charge that card beyond the limit. Capital One will keep sending cards to people who are beyond their limit as a way to generate ‘over limit’ fees. These can add up to $350 a month. And the more cards you have, the higher the fees. The Federal Reserve has refused to comment about the practice so far, but it has basically said nothing is wrong with it. If you are with Capital One and you’re getting close to your limit, know that this is not a safety net the company is throwing you. It’s meant to sink you. Turn down the additional cards as soon as you get them.

Clark read in USA Today that families are taking on just under 80 percent in credit card debt these days. That number has gone up over the past 10 years and it means that - over time - people are getting poorer and poorer. Yes, those people will have possessions. But they will have no financial security. The only reason you want to wrack up that much debt is if you are opening or starting your own business. Inflation is not up 80 percent, so there is no way consumers can live comfortably with that much debt. Think before you spend for lifestyle!

Clark often gets calls from people who have never established credit and need to know how to do it. It’s changed over the years, starting with secured credit cards and transition periods. Now, there is another way to establish credit through General Electric. That’s right. In addition to making appliances and jet engines, GE is also a huge lender. The company does a lot of store credit programs and plans, including Wal-Mart, J.C. Penney and Circuit City. GE has factored in the risk of default on these cards, and even calls people who apply to offer a little consumer education before they start using the cards. The program is called, “The Road to Credit,” and it’s available at seven different retailers. Clark wasn’t able to find the list of all seven, but ask about it when you’re in one of the stores we mentioned. It’s a great way to get started and establish credit.

You’ve probably heard about the Capital One lawsuits going on. Clark has talked about the system Capital One has to damage your credit. Well, now Capital One has stubbornly refused to modify its position. What happens is Capital One does not report the credit limit on your card. Why? It lowers your credit score and therefore destroys your credit image with other potential credit card companies. So, you’re more likely not to get approved for another card and will continue to use the Capital One card. By not reporting your limit, the credit bureaus guess your limit and that makes you very risky. Now a new lawsuit has been filed against the credit bureaus for reporting erroneous information on our reports. TransUnion, Equifax and Experian have some responsibility here, for sure. But it would be simple if Capital One just behaved itself. Clark has given Capital One the chance to come on air and talk about this, but they haven’t responded. So, you have to decide if you want to be their customer. If you’re currently a customer and you want to stay with them, you should charge a bunch of stuff to the card and pay it off. Then, moving forward, the credit bureaus will see and use that credit limit, sending your score back up. Clark will keep trying to come up with ways to manipulate the system, but for now that’s the only way you can turn the situation around.

The credit card industry was patting itself on the back when the new bankruptcy law it has been pushing for finally got passed recently. But the banks and credit card companies may soon regret what they wished for. The new bankruptcy law has gotten so much publicity that people are scared and they’re paying down their credit card bills at an unprecedented rate. People are realizing that there is no second chance with this new law. If you borrow a lot of money, you’re going to have to pay it back now. And people don’t like paying money back, so they’re being more careful with credit. MBNA, for example, has already had a decline in profits of 94 percent. Capital One has also seen its outstanding balances decline. As a result, these companies are going to flood your mailbox with solicitations for cards. It’s a move of desperation, and you don’t want to get involved. So, keep paying down your debts and let the credit cards reap what they sow.

If you are a merchant and you own your own business, Clark has a warning for you. Research from CardWeb.com shows that merchant fees – the fees charged to business owners when customers use a credit card - are rising rapidly. Purchases of $5 or less on credit cards now add up to $13.5 billion a year. Charges under $10 now represent $35 billion in credit card volume. So, many consumers, including Clark, use their credit cards for everything they buy. Some stores have fought back by posting signs requiring a maximum for using a credit card because the fees are so high. That’s why it’s important to shop merchant fees out there. A number of services have much lower fees for businesses that have low average charges. That’s why fast food restaurants now take credit cards. Even parking meters take charge cards these days because it boosts money coming into governments so much. People just seem to end up spending more when they use a card. And credit card companies calculate merchant fees based on the average amount people charge at your store. So figure out what your average charge is and find a service that benefits you.

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Speaking of credit cards, you may already know that Costco Wholesale, BJs and Sam’s Clubs all offer credit card services for businesses. They offer great rewards cards for business owners, so check them out. In addition, Wal-Mart is now offering a Discover credit card. There is no annual fee, and there is a 1 percent rebate for anything you buy. In addition, there is a 3 percent rebate on gas, which equates to about 5 cents off a fill up. It’s got the major oil companies quaking, and we’ll see how it works out.

When was the last time you checked your credit card statement line item by line item? Most people do not and it’s simply not smart in today’s identity theft ridden society. Channel 14 in Evansville, Indiana proved that even further in a recent story about credit card scams. The station found that consumers' credit cards were being charged $29.99 for no reason. Most often the charge showed up as “Pluto Data, ” which neither Visa nor MasterCard knew the meaning of. So, if you see a charge you don’t recognize, challenge it. There is obviously a failure to provide proper transactions and information to customers, so it’s up to you to protect yourself.

It’s important that you shut down credit card pre-approvals in general to prevent identity theft, but it’s even more important if you’re planning to move. That’s because the companies continue to send pre-approvals to your address even if you move. Identity thieves can simply grab those forms out of your old mailbox and fill them out, pretending to be you. They then rack up all kinds of charges on “your account.” So, be sure you OPT OUT of those pre-approvals now! When you do, you can either opt out permanently or for five years. You can either call 1-888-5-OPT-OUT or go to optoutprescreen.com. It won’t eliminate every pre-approval. Frequent flier cards and hotel points cards are not blocked, for example. But it will take care of most of the offers you would have received.

One of Clark’s credit cards was frozen lately because there was activity in several states in one day. It’s a common security move, especially with all of the ID theft going on. That’s why it’s a good idea to call the companies of the cards you’re planning to use and tell them when you’re planning to leave and come back. It’s also important to remember that banks and credit card companies are going to start questioning you more severely, in and effort to prevent fraud and ID theft. One woman in Rhode Island had her credit card shut off recently. When she called to get it reactivated, they asked her several “unusual” questions. They asked her for her ex-husband’s name, her ex-husband’s sister’s name and what county she lived in. Enough criminals know your credit card number, social security number and your mother’s maiden name, which is a common security question. So, most questions aren’t protecting you from criminals anymore. As long as you’re aware of that, you don’t have to get offended when they ask you all kinds of questions. It’s for your own good.

Capital One, one the nation’s largest credit card issuers, is not reporting your credit limit to credit bureaus. Clark has offered Capital One multiple opportunities to come on the air to discuss this practice, but Capital One has continually not responded. By not reporting your credit limit, Capital One makes it look like you are spending money that your don’t have. This ends up lowering your credit card score tremendously. One customer’s score dropped 66 points. Another customer’s score dropped 43 points. Besides lowering your credit score, it also harms you from being able to move to another credit card. Not reporting your credit limit also hurts you when you are trying to get a mortgage or a car loan. Capital One is really doing its customers a disservice. If you have a Capital One card, do not close your account. Pay the down balance and then don’t use it anymore. This is key because paying down your balance will automatically increase your credit score. Hopefully, Capital One will realize how harmful this is to customers and turn this problem around. Until then, every time you see a commercial with a crazed Viking running around a mall and yelling, “What’s in your wallet?” remember that Capital One is really harming their customer’s wallets.

Interest rates are now rising on anything with variable rates. You would think, as a result, that interest rates on savings accounts would rise too. But that’s not the case. Some banks are still paying less than a half a percent on savings accounts. The exception is online banks, which are paying 2 to 3 percent on savings accounts in some cases. The problem is that very few people have accounts with online banks. Many think it’s not safe, but that is simply not true. These banks are FDIC insured just like bricks and mortar banks. You can find online banks on bankrate.com under the Savings area. For a checking account, you want to be able to go into a branch. But for savings accounts, it’s just fine. Also, Charles Schwab is again making it easier to do business with the well-known brokerage that has experienced some turmoil over recent years. Ameritrade has also launched a new $5 stock-trading program, which is a great deal.

Vending machines have started accepting credit cards instead of cash. A study by USA technologies has discovered that when vending machines accept credit cards then spending goes up 76%. Since credit cards are becoming the dominant payment choice, then in the future all vending machines will probably accept major credit cards. How many times have you tried to force a crumpled dollar into a vending machine? How much easier will it be to just insert your credit card? The reason that spending has increased so much is that when customers use credit cards they don’t really feel like they are spending real money. Are you one of those people? Are you spending money you don’t have? If you are, then try leaving the credit cards at home, and paying for your expenses in cash.

Clark got a call from his credit card company recently, telling them that his card had been shut down from use. He had gotten stuck traveling during a winter storm and had to buy new clothes in three different states before he got back home. So, the company blocked his account until he could prove that he’d been in all those places in one day. It’s a good benefit on the one hand because it prevents you from losing money if your card is stolen. But it’s also sort of a hassle when the card is blocked. Just be sure to call your credit card companies ahead of time to let them know you will be out of town, especially if it’s an international trip. That way, you won’t be blocked from using your card when you need it most.

It’s important that you shut down credit card pre-approvals in general to prevent identity theft, but it’s even more important if you’re planning to move. That’s because the companies continue to send pre-approvals to your address even if you move. Identity thieves can simply grab those forms out of your old mailbox and fill them out, pretending to be you. They then rack up all kinds of charges on “your account.” So, be sure you OPT OUT of those pre-approvals now! When you do, you can either opt out permanently or for five years. You can either call 1-888-5-OPT-OUT or go to optoutprescreen.com. It won’t eliminate every pre-approval. Frequent flier cards and hotel points cards are not blocked, for example. But it will take care of most of the offers you would have received.

Timing is becoming much more important in the credit card industry these days. The penalties people suffer for late payments are unbelievable, according to cardweb.com. One company, for example, charges a $155 late fee. Most fees are $35, but some base the fee on how high your balance is. What’s considered “late” has also changed. Some companies only count your payment as “on time” if it’s received by a certain time of the day. So, even if you get your payment in on the due date, it’s still considered late. And if you’re late on one card, it can trigger penalties from another company. Credit card companies are doing this because the industry has changed drastically. Very few people pay annual fees and about 40 percent of people pay their balances in full every month, meaning they don’t pay any finance charges. So, the other 60 percent are carrying the load for everyone else. If you pay your balances in full, you may be getting airline, money or gas rewards and you probably aren’t paying any fees. But if you’re part of that 60 percent you are getting gouged. You need to get out of that group as soon as possible. And you do that by not using your credit card until you can pay off your balance in full.

Capital One, one the nation’s largest credit card issuers, is not reporting your credit limit to credit bureaus. Clark has offered Capital One multiple opportunities to come on the air to discuss this practice, but Capital One has continually not responded. By not reporting your credit limit, Capital One makes it look like you are spending money that your don’t have. This ends up lowering your credit card score tremendously. One customer’s score dropped 66 points. Another customer’s score dropped 43 points. Besides lowering your credit score, it also harms you from being able to move to another credit card. Not reporting your credit limit also hurts you when you are trying to get a mortgage or a car loan. Capital One is really doing its customers a disservice. If you have a Capital One card, do not close your account. Pay the down balance and then don’t use it anymore. This is key because paying down your balance will automatically increase your credit score. Hopefully, Capital One will realize how harmful this is to customers and turn this problem around. Until then, every time you see a commercial with a crazed Viking running around a mall and yelling, “What’s in your wallet?” remember that Capital One is really harming their customer’s wallets.

Visa’s check card is supposed to help elminate debt by drafting money directly and immediately from your account that has money. But there are some problems with the cards. First, criminals can empty your checking account if they get their hands on your card. Who pays the bounced checks charges if your check card has been stolen? YOU DO! Also, on a real credit card, if you order something you have the right to dispute the charge if something happens to your order. Until now, you could not dispute an order problem on your check card. Visa is now offering modified dispute rights for check card customers. If you have a check card, look on the back and see if it says ‘enterlink’. If your card does say this, then you might be covered under Visa’s new policy. Make sure you check with your bank to see if you are covered before you begin ordering on your check card.

Have you ever gotten convenience checks in the mail from your credit card company? They usually come in a batch of three and are offered as a “convenience” for those bills you’ve accumulated after the holidays. But they’re not convenient at all because each check has different terms and conditions than the other two. For example, one check might have zero percent interest while another is 9.9 percent for an unlimited amount of time. The big gotcha is what happens when you use one of the checks and continue to use your card at the same time. Let’s say the regular rate on your card is 15 percent and the convenience check carries 5 percent interest. When you send in money, you probably expect that it’s going toward the 15 percent balance. But the credit card company applies it to the 5 percent balance so that more of your outstanding money is at a higher interest rate. So, when doing convenience check offers make sure that you have no outstanding balances on the account and that you don’t use the credit card until you’re done paying off the “convenience” charges.

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A similar situation is happening to consumers who own Lowe’s or Home Depot cards. These two competitors are in legal trouble because of their store credit cards, which are operated by GE. Both companies told customers that if they used their store credit cards, and spent a certain amount of money, they would have no interest for six months. The problem arose when people sent in their payments. GE applied the payment to the zero percent balance and no money toward higher-interest balances. Home Depot and Lowe’s have now reached an agreement, whereby people can choose which account they’d like the money to be applied to. Also, avoid “No, No, No” plans when buying things. Companies that do these plans avoid telling you when the deadline is for your free interest period. That’s because the interest on that purchase is retroactive (usually at 22 percent to 25 percent) to the date of purchase if it’s not paid off by the deadline. Also remember to send every payment by Fed Ex or UPS tracking.

Tens of millions of people have damaged credit or “thin file credit,” which means they have never had credit. If you are one of those people, you may get solicitations from credit card companies offering you all kinds of cards. The problem is that the offers are either a not worth it because of the upfront costs, or they are scams that could clear out your checking account. They are known as “advanced fee loan” credit cards, and they require you to pay money up front to get the loan. It can be an offer to expand a business, an offer to get your first credit card or others. But, in many cases, you pay the money and there is no card or company. It is just a scam to get to your bank account. The worst part is that most of the time the scam artists are from another country. So, it’s next to impossible to get your money back. The fee is usually a couple hundred bucks, which may not seem like a lot. But it adds up. And for people with already-damaged credit, this kind of decision can be devastating. It’s the No. 1 crime on the Federal Trade Commission’s list of scams, so warn your friends and family if they are thinking of applying for one of these cards.

Do you have a credit card that gives you bonuses? There are some amazing things coming in the credit card business over the next 24 months for people who pay their credit cards in full. People are applying for cash reward cards because they offer such good deals. And now more people will be able to acquire American Express cards more easily. To give some background, banks haven’t had a choice about which credit card they can offer you. It’s been either Visa or MasterCard. But now, because of an anti-trust case headed for the Supreme Court, Amex is about to break the Visa/MasterCard monopoly. So, if you pay your bills in full every month, you will hit the sweet spot with credit card offers. Visa is in such fear of Amex that the company is promoting a premium program known as the “Signature Program” that competes with some of Amex’s premiere programs. So, over the next year, open up the credit card offers coming in the mail. They could be worth it. Clark prefers the cash reward cards, which offer you between 1 and 1.5 percent cash back on your purchases. If you are able to redeem airline rewards often, you are better off with airline cards. But you have to be flexible because airlines have so many rules with those deals. With cash, there are no rules. If you’re not getting anything in return and you pay your bills in full, you are losing out. You could be making easy money.

You may have heard that the credit card industry is trying to create a card that allows people to deduct money from 401k plans. When Bank One first came out with this idea, there was a lot of heat and Bank One walked away. But it appears that the banking industry doesn’t want to give up on the idea. According to the Washington Post, it’s being presented in Washington D.C. tomorrow and, if all goes as planned, will available in Connecticut first. It would allow you to do instant borrowing from your 401k account, and it’s got to be one of the worst ideas Clark has ever heard. Not only does the card cost $50 a year, but also the creators encourage you to use it on a daily basis. About one in five people already borrow against their 401k accounts and have outstanding debt. We don’t need anyone else doing this. Your 401k plan is for your retirement. You don’t want to tap into it before you reach that act. It’s not a smart thing to do, and it will also cost you tons in taxes. About 40 percent will be taken out if you do an early withdrawal. So, leave your money alone and let it grow. Participation in these plans and the amount people are putting in are both declining, statistics show. You want to start contributing if you aren’t already, and it’s best to put in at least six percent. That usually guarantees a company match if there is one, and 401k plans with a company match is a complete no-brainer. It’s free money! Don’t treat your 401k as a piggy bank. You will regret it.

Clark has great news for you if you carry a credit card, or two or three. The U.S. Supreme Court has busted up a monopoly when it decided not to decide something. Sound confusing? To give some background, there has been a shared monopoly between Visa and MasterCard in the banking industry. Basically, banks have been prohibited from issuing any credit card other than Visa or MasterCard to its customers. Banks fought to keep this monopoly in place for years, with appeal after appeal. Well, the banks took it all the way to the Supreme Court, and the high court shot them down, too. So, essentially, by agreeing with all the other court decisions, the Supremes have decided once and for all that the monopoly should not exist. Now, there will be far more competition in the credit card industry. For example, Diner’s Club is now going to offer a Diner’s Club MasterCard. American Express will soon issue cards through MBNA bank. Creative ideas are going to come out of the box. It creates a new playing field, and you and I will benefit. What matters after that is that you come up with a plan to pay down your debt.

The Federal Reserve is in the process of raising interest rates right now. The Feds actions directly affect you if you have outstanding balances on credit cards. Roughly 60 percent of us have balances on cards, and many of these are variable rate cards. So, as the Fed keeps raising rates, the interest you pay on variable rate cards will go up. The same is true for home equity lines of credit. Many home equity lines have gone from 4 percent to 4.75 percent. If you have variable rate debt, you need to pay it off. The inflation rate over the past 12 months has been about 2.7 percent. So, if you’re paying anything more than that, your money disappearing from your pocket! Most credit cards have interest rates of more than 14 percent. So, if you have this problem, you need to come up with a plan. The No. 1 objective is to stop using your credit cards the cards. Put them in a bag with water and throw it in the freezer. By the time it melts and you can get to the card, the urge to use the card will have passed. If your balances are aggravating but manageable, figure out what you need to do to pay off that debt in two years. Then, get it done!

How frustrating is it when your credit card company suddenly raises your interest rate without your knowledge? Some people don’t even know it’s happened. According to federal regulations, credit card companies can change the terms on your credit card agreement on 15 days notice. Even worse, many banks wait until you’re deep in debt to increase your rate. But the Office of the Comptroller of the Currency is finally doing something about this travesty. First of all, they have made it illegal for banks to entice people with low rates and high credit lines that change down the road. Also, when credit card companies solicit for cards, they have to tell you the truth about when they can raise the interest rate or raise the fees. But it’s up to you to read the card member agreement and find out. It applies to most new credit card companies and new solicitations. So if you already have the card, it doesn’t apply. What happened to these banks to make it okay for banks to lie and cheat you? And what took the federal government so long to do something about it?

If you pay your credit card balances in full, these are the best of times for you. On the other hand, if you only pay the minimum, these are not good times for you. Basically, the industry is splitting into three different business models. The first group is geared toward people who charge a lot and pay balances in full. The second group has maxed out their credit cards, can only pay the minimums and has outrageous interest rates on the cards. The third group pays more than the minimum, but can seem to pay off the cards. The industry used to abhor those people who paid balances in full because they didn’t make any money off of them. But now they are the favored group because they are making a lot of money off the charges they make through “merchant’s fees.” It’s led to an amenities war between cards from which you will benefit. The hottest amenity is the cash back rewards card. American Exp