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!

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.

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.

If you caught Clark's Good Morning America appearance yesterday, you know that the quick format of TV forced him to speak in sound bites. Today, he wants to expand on his message about what to do in tight economic times.

There's no automatic easy answer. Let's face it, you can't control the price of a barrel of oil or the rising cost of food. So what can you control? Well, just take a look at your monthly bills.

If you have a landline, analyze your phone bill and find out if you're getting the "tariff rate" for your dial tone. Local monopoly phone companies train their employees to sell the "regular" rate, which is actually a heavily marked-up price for dial tone. But in reality, states set the tariff rate, which can be anywhere from $7 to $17. Keep in mind you have to pay junk fees in the $7 to $12 range on top of that.

When it comes to your TV, try reducing your programming package. You may want to go to broadcast basic, which is another regulated rate for cable TV. You'll typically pay between $9 and $14 for about 30 channels. Or you might even want to eliminate your cable/satellite bill altogether and go the rabbit ears route.

Go through your life, bill by bill, and see what you can do to free up more money. Many times, there's something we can cut out without radically changing what makes us happy.

If you're a shopaholic, try shopping without a cart. When you just fill your arms, you're not able to pick up those impulse purchases. Clark himself only shops in stores with concrete floors like the warehouse clubs -- no malls. When it comes to grocery shopping, he suggests that you buy perishables every week and non-perishables every 6 weeks.

Debt has made us feel like things are worse than they are. Clark recently read an article about how our health can be damaged when we constantly worry about debt. But nothing is worth your health. So come up with a plan and tackle your debt.

The Federal Reserve recently released a chart that shows how much debt we carry on loans -- credit cards, car loans and personal loans. As a country, our level of consumer debt has doubled in less than 10 years, adjusted for inflation. The increase began after 9/11 and kept climbing, along with the federal budget deficit.

Today, 70% of us owe balances on credit cards. Not long ago, it was still 60%.

When it comes to cars, some of us could take a cue from Clark's 24-year-old associate producer Joel. He scoured Craigslist and other classifieds for a used car that was in his budget, and he wound up paying $3,200 in cash for a 2000 Nissan Altima. Joel learned early that we don't have to borrow money for transportation. Yet it's anecdotally been said that only 1% of car buyers pay cash!

The truth is we create our debts and obligations. Clark recently saw an illustration in US News and World Report that showed a consumer using a MasterCard shaped like a shark. Next to the consumer was another person walking a dog marked with a dollar sign. The implication is clear: One person has money on a leash, while the other is at the mercy of debt.

We choose to create the debt monster. Nobody held a gun to our head and said, "You must borrow money on a credit card, take a personal loan or buy a car with borrowed money." We choose to do these things with our own free will.

Half of all Americans would rather fess up to their weight than reveal their credit card balance. The amount of debt we're carrying is up 400% in the last 18 years, adjusted for inflation. Credit cards are most often used for lifestyle means. There's nothing wrong with using money to have fun, but you need to be able to pay for the fun.

If you carry credit card debt, Clark wants you to list all your balances and list the interest rates. You'd be amazed at how many people don't know this basic info about their debts. The first step to being healed is to know the problem and attack it. Next, you've got to stop using your credit cards.

When you're readying a plan of attack, there are 2 different philosophies on paying off credit cards. Clark says either is just fine, though he's biased toward the latter.

You can throw most of your money at the smallest balance, while paying minimums on all others. That way you begin to eliminate debts and psychologically gain control. Or you can focus on paying the debt with the highest interest rate first (again, while doing minimums on all others) and then go on to the next highest one. That way you ladder your debt. This second approach is also favored by a lot of personal finance types.

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.

Financial writer Jonathan Clements recently wrote an interesting piece comparing people to junk bonds. Such a comparison is apt for about 20% of Americans. First, a little background: Junk bonds are typically issued by companies in financial trouble. They carry a high rate of interest because everybody's worried the company won't be able to pay up. So when you're talking about an individual, someone carrying too much debt can be called a walking junk bond.

About 1 in 5 of us carry such high levels of debt that there's a real question if we're good for the money. Have you created a perfect storm by having credit card debt, HELOCs, mortgages, car loans and more? If that sounds like you, recognition is the first step to erasing your junk bond status. Going forward, you have to be sure to buy things cash only and work your debt down, bill by bill. Your goal should be to create financial breathing space in the event of an emergency.

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.

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.

Many Americans are feeling squeezed financially, according to surveys. So that bodes the question: Do we have an income problem or a spending problem? Do we create our own hazard with finance or do we not have enough opportunity to earn a viable paycheck? Money magazine recently ran a story about how debt has risen so much over just one generation. The story adjusted figures for inflation and found that the average household debt one generation ago was $600. Today it's up to $7,300 -- a 1,200 percent increase. Mortgage debt has risen 50 percent, while the average size of a home has risen 50 percent! Think about that for a moment. Our expectations have grown so much that we're taking on 50 percent higher debt for a 50 percent larger house -- even though the average family size has shrunk. Clark's executive producer, Christa, is among those who have decided to take on more debt to have a larger home with her husband and two children. It used to be that multiple kids would share a bedroom, but today each child gets their own. So we are choosing to take on more debt that people did a generation ago. And it increases the amount of pressure that people feel when they face a job loss or illness. The question Clark wants people to decide for themselves is what is your additional debt worth to you? Is it better to live in a smaller home and have less debt? Only you can answer that.

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.

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.

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.

It's been several years since the last "Clarkonomics" segment, but today we have another installment for you. This may again become a regular feature on the show since we're in a time of economic uncertainty. Before coming to the studio today, Clark was talking to a man about the stock market. It got him thinking about how what happens on Wall Street affects Main Street America. If you're one of those people with leveraged investments (investments you've made with borrowed money) this is not a good time. You may be getting "margin calls" from the broker who lent you the money. That's when they call you up and basically ask for more dough or they'll sell out your position.

A lot of people are hurting financially; the very rich have gotten burned by hedge funds and those who are struggling to get ahead in the housing market are getting clobbered on their mortgages. Are the rest of us also going to get squeezed soon? There are so many unknowns. But Clark has a standard piece of advice he gives people when the economy is facing tough times: Reduce the amount of debt you carry. Get your life in a position so that regardless of larger economic trends you're not feeling squeezed. Clark himself is now doing something that he hasn't done in 26 years: He's putting cash into a tax-free money market fund. He wants to build reserves because he believes that next year there'll be good opportunities to buy distress real estate.

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.

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.

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.