Apparently, the overhaul is the first major revamp of the GSA’s merit badges in a quarter century and organizers got their ideas for new badges by polling current GSA members. I guess those young ladies in brown and green have been paying attention to dire economic news reports – or maybe it’s impossible to avoid the doom and gloom.

Either way, young women in the GSA will now have the opportunity to earn badges that address areas including maintaining good credit, managing money, budgeting and plotting a financial future.

Real-World Guidance

In order to earn the honorable (and decorative) badges, members are required to:

• Complete a five-step process designed to help members develop competency in the area addressed by the badge.
• Participate in real-world practice to apply the skills defined by the badge.
• Learn about and engage with actual problems or challenges they might face in their futures. High school scouts, for example, may be required to speak with a loan officer at a bank. Middle school scouts may have to determine what salary they would need to finance their dream life.

A Tradition of Financial Literacy

While many of the badges of yesteryear were geared toward mastering household tasks, insiders from GSA insist that financial literacy – in one form or another – has always been a central part of GSA’s mission. After all, they didn’t call it “home economics” for nothing.

And I guess it isn’t exactly easy to sell dozens of boxes of cookies and take care of all the organizational tasks that go along with that.

Take the Message to Your Home

Whether or not you (or your kids) are members of the GSA, the organization has some valuable lessons to teach:

• Learn from the times: There’s no denying our nation’s in a bit of financial turmoil right now. Rather than simply worrying about money, it’s smart to use the turmoil as a call to action to learn (or teach) as much as you can about matters of money and credit.
• Practice in real life: Kids can learn valuable money lessons at any age. Look online for tips about activities to do so your offspring start to get an idea of what goes into a household budget and what it takes to earn the money they spend.
• Reward progress: Even if your home isn’t on a badge system, you can set up rewards for when your kids demonstrate that they’ve mastered an important skill. Given the theme, why not offer to deposit money in a savings account or match their deposits?

But you may hate the way credit card issuers can change interest rates, or the steep fees they charge for various actions or that it’s gotten you into debt. You may hate the offer for credit cards that come through the mail to tempt you.

And if you’ve ever filed for bankruptcy, your relationship with credit cards may be even more complicated: credit cards may have gotten you into debt in the first place, but in your life after bankruptcy you might be struggling to qualify for a card that can help you rebuild financially.

Believe me, I get it. That’s why I’m so happy about this new complaint tracker.

Someone to Listen to Credit Card Woes…Online

The newly active Consumer Financial Protection Bureau (CFPB), created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, has launched a new web site (help.consumerfinance.gov) and toll-free phone line that lets consumers take action to address credit card problems. It works like this:

• You describe the problem. The first step asks for a brief description of the problem you’re having with your credit card issuer. It could be anything from a disputed charge to a raised interest rate you didn’t expect. The online form asks for the date the incident happened, how much money (if any) you lost, and whether you’ve contacted the company yet.
• You identify what you want to happen. In the “desired resolution” section, you indicate how you’d like the problem to be resolved. This might take the form of identifying what action you want the card issuer to take.
• You provide your information. This section requires your contact information so that the CFPB has a record of your complaint. This may become useful if the CFBP finds a pattern of abuse and needs to take legal action against a credit card company.
• You provide your card information. Finally, users are prompted to enter their card’s identifying information.

If you’re not sure how to begin, you have the option to chat online with someone who can help.

The CFPB form then prompts consumers to contact their card issuer to attempt to resolve the problem. If you can’t work out a resolution, you can contact the CFPB, which will use your tracking number to determine whether any laws were broken.

In the future, the CFPB plans to have similar sites for problems with mortgage loans, student loans, bank accounts and more. Down the line, information from these forms may be used in legal investigations.

In other words: there’s an exciting new consumer protection available. Let’s take advantage of it.

I know what you’re thinking: who uses pay phones anymore? But people do, whether because their mobile minutes have run out or their batteries have died. Here’s what to look out for next time you’re in need of a phone in a box.

They Charge How Much for a Pay Phone Call?

The New York Times reports of a pay phone and credit card scam that works like this:

• A person decides to make a pay phone call.
• The person has no change so opts to pay for the call with a credit card.
• After checking the call rates posted on the pay phone wall, the person places the call.
• When the person gets a credit card bill, outrageous-seeming charges show up for the pay phone calls.

Sources note that victims of this scam have reported charges as high as $16 – $20 for phone calls listed at 50 cents to a dollar on the pay phone booth.

One problem, though, is that the company responsible for the outlandish charges, BBG Communications, has reportedly claimed that it is doing nothing wrong, and that is charges accurately reflect the cost of providing their services.

Still, the high unexpectedly high costs have reportedly led to hundreds of consumer complaints, which have in turn led the Better Business Bureau to give the company a rating of F.

Fighting against Credit Card Scams

According to the Times, two lawyers are gathering information as part of a class-action lawsuit they plan to bring against BBG Communications. In the meantime, the Federal Trade Commission recommends taking the following steps to avoid scams of all sorts:

• Proceed with caution: It seems that those who use the pay phone services have the option of getting rate information by following auditory prompts during their calls. If you’re not sure about a new service, get all the information before you hand over your digits.
• Check your bills carefully: Some scams work by charging millions of people small amounts of money month after month. Many of those people never notice the unwelcome charges. To make sure you’re not paying money for services you don’t want or need, check your bill each month and challenge charges that seem incorrect.
• Go with your gut. If a company or situation feels less than trustworthy, see if you can find other options. Many times, our subconscious picks up on warning cues we may not notice with our conscious minds.

But, despite the lawmakers’ best intentions, some of the law’s provisions haven’t been explained with complete clarity in the media. Here’s a look at some important legal loopholes that might affect your next credit card statement.

Balance Increase Notices

Before the passage of the Credit CARD Act, issuers were, in many cases, allowed to increase interest rates arbitrarily and apply the increased rate to all balances on a user’s account. Rate increases can make a small amount of debt snowball and led many a consumer to the bankruptcy court.

The CARD Act changed that – sort of. Now, credit card issuers must issue notice of rate increases 45 days before that change takes effect. BUT:

• The 45-day rule applies to payments: In other words, a credit card issuer must give a consumer notice of a rate increase 45 days before the consumer is required to make the first payment at the new rate.
• Increases applied to purchases start sooner: The law actually permits credit card issuers to begin applying the increased rate to purchases made as soon as 14 days (two weeks!) after the postage date on the notification about the rate increase.

In other words, a consumer has a two-week window after a notice of increase of rate is mailed before purchases on the credit card start coming with an amped-up interest rate. In many explanations of the law’s provisions, this is ignored or misrepresented.

Retroactive Rate Increases

Another much-applauded change the CARD Act introduced was the outlawing of retroactive interest rate increases (that is, of an issuer applying a raised interest rate to balances accumulated before the rate changed).

But in reality, the new law only prohibits retroactive hikes in certain situations. Some exceptions to the rule allow rate hikes for existing purchases.

• Late payments: If a rate increase is triggered by a payment that is 60 or more days late, the card issuer can apply the increased rate to all balances on a consumer’s card.
• Other increases: For the most part, other retroactive increases are prohibited. However, if you’re worried about rate increases, be sure to read any mail regarding your credit card carefully.

Credit Cards & Bankruptcy

It’s no secret that many bankruptcy filers need the court’s protection because they’re overextended on credit. And credit cards are an easy way to take on more debt than you can afford to pay back.

Bottom line: Read your credit card agreements carefully. If there’s any language you’re unclear about, call your bank and ask for an explanation.

So allow me to introduce a list of attributes every debtress (or debtor) should consider when looking for a piece of plastic to let into her (or his) wallet.

• Who’s the lender? If you’re trying to establish or re-establish credit, you may want to choose either a large, national bank or a local credit union. These types of card issuers (as opposed to local lending outfits) tend to be viewed positively by potential lenders and thus can strengthen your credit score.
• Do you have to apply for approval? Those with weak or limited credit histories may be better off choosing a pre-approved card their first time out. Why? Because applying for and being denied a line of credit shows up as a negative action on the credit report and can further damage weak credit.
• What kind of fees (if any) come with the card? Some credit cards charge activation fees, account maintenance fees, annual fees and more. Though the Credit CARD Act banned certain fee types, many lenders have simply renamed their old fees and continued charging them. The point is that the dreamiest cards have no fees at all (unless you incur them at some point after getting the card). If your credit is very weak, you may have to settle for a card with some fees, but shop around to find the best deal possible.
• Will the lender report your credit use? In order for your credit card use to improve your credit score, it must be reported to the big three credit reporting bureaus, Equifax, Experian and Trans Union. Be sure to ask about this.
• What are the limit rules? Many credit cards permit limit increases every six months, though you often have to request them. To maximize your odds of getting an increase, use your card regularly and pay the balance in full each month. Sadly, credit cards are like potential mates in this way: you have to act like you don’t need them in order to get one. (On a side note: it is important to request limit increases even if you don’t plan to max out your card. One part of the credit score formula is the credit-to-debt ratio, and the more credit you have available, the better.)

Bottom line: It’s not the picture of your cat on the front of a credit card that makes it valuable. Any time you’re thinking of applying for new plastic, make sure you know what you want and how you can get it.

Specifically, business cards do not enjoy some of the protections that consumer-designated cards do. Here’s why that might be a problem.

Business Credit Cards Owned by Individuals

• Individuals with small business credit cards: Sources note that many business credit cards are marketed to individuals and families and that many American households have business credit cards in their lineup.
• Business cards not covered by CARD Act: Because business transactions are not subject to the Truth in Lending Act, regulators did not include business credit cards under the umbrella of the CARD Act’s protections. The reasoning here was that businesses are generally better able to judge borrowing risks than individuals and so don’t need the same regulations in place.
• Millions of non-business offers: In the last five years, sources indicate that business card issuers have bombarded 12 million American households with as many as 44 million business card offers per month. Just to clarify, that’s households, not business addresses. Some of these addresses could be for individuals who work from home and/or have businesses based in their houses; others may not fit that bill.

Protections Business Cards Don’t Have

The Credit CARD Act limited the following exclusively for individual (not business) credit cards:

• Retroactive interest rate increases: This practice, while no longer allowed for typical consumer credit cards, is still permitted for business cards, which could leave unprepared borrowers on the hook for more money than they were initially responsible for paying. This practice can make a reasonable debt into a difficult mountain to climb.
• Over-limit fees: These fees hit card users when they charge more than their card’s limit. While individual cards might simply deny the transaction, business cards can still permit the purchase but charge a hefty fee.
• Other cost-changing practices: The other protections put in place by the Credit CARD Act (like advance notice of term changes, “summary boxes” of debt and payment terms and others) are not guaranteed on business cards.

Considerations if You Have a Business Card

If you have a business credit card, it’s probably a good idea to take a look at the contract you signed to make sure you’re aware of the terms and conditions. You may also want to apply for a non-business card to use as your primary tool of transaction (though it may benefit your credit score to keep the business card open).

How to Behave at the Bank

So how can you present yourself as a good investment risk to bankers and others who might be in a position to lend you money? Here are some short-term things to think about and some long-term suggestions.

• Pay your bills. Okay, so you won’t be doing this at the bank, but one of the most important factors that determine whether or not you’ll be offered a personal loan is your credit history. Building your credit score requires timely payment of bills and loans over a long period of time. So if you think you may some time in the future need a loan, the time to start cleaning up your credit is now.
• Pretend you like your job. Being employed is good when you apply for a loan: it shows you have a source of income that will allow you to make loan payments on a regular basis. But suggesting that you don’t like your job, that you intend to switch careers soon or that you otherwise might jeopardize that stable income could cost you the loan. It’s important to present yourself as a stable, reliable person who can be counted on to send in the payment each month.
• Avoid mentioning past rejections. If you’ve already been rejected by a number of banks, don’t mention these rejections at other banks. Even if it may not officially sway the loan officer’s opinion or final decision, it may prod him to look more closely at your financial records and possibly proceed with more caution than usual in your case.
• Don’t mention your plans to drop your mortgage. These days, it’s much more common than it once was for people to discuss “walking away” from mortgages that are underwater. While the ethics and morality of doing this can be debated ad nauseam, the effect it will likely have on a lender is almost certain to be negative. Why? Because, even if walking away from your mortgage means you have more money each month to put toward a new loan, it suggests that you don’t take financial commitments too seriously. If you walk away from one loan, a banker might reason, what’s to stop you from walking away from another?

Remember: getting a personal loan may be difficult in tough economic times, but you have the power to improve your odds of being offered a reasonable, affordable loan.

Your Credit: Why It Keeps Mattering

Not to be a Grinch, but it can be easy during the holidays to give into the “holiday cheer” mentality of buying stuff we can’t afford (for others!) on credit, telling ourselves that we’re doing it in the spirit of the season.

But this recent post from WalletPop.com reminds us why it’s always important to keep your credit health in mind.

• Landlords like to check: Because it’s difficult to evict tenants (even those who don’t pay their rent), landlords may be less willing to rent to you if you have poor credit, which can make finding a good apartment tough.
• Utility companies might want more money: If you have a history of late or missed payments, utility companies may ask for a larger security deposit upfront (ouch).
• Car costs can skyrocket: Bad credit can make a car loan more expensive and cause you to pay extra for car insurance.

Keep this in mind as you cruise the mall this holiday season!

Credit Card Transfers: Could They Help Your Credit?

On a related note, another post from WalletPop.com explores the question of when and how a credit card balance transfer might help (or hurt) your credit score.

Here’s a brief overview – the full article is lengthy and very helpful:

• What is a balance transfer? It’s exactly what it sounds like: when you transfer the money you owe on one credit card onto another credit card.
• Why do people transfer balances? In a worst-case scenario, someone struggling with debt might transfer a balance from one card to another without being able to make significant progress in paying down the debt. In some cases, though, balance transfers can be used strategically to lower the total dollar amount a person pays and even (according to the post) to improve a credit score.
• Should I consider a balance transfer? Again, the best way to answer that question is to read the article linked to above. Keep in mind that you should be absolutely sure you understand your long-term plan for paying down the debt if you do choose to transfer a credit card balance.

Tips to Save Money Around the House

Last but not least, a post at Bargaineering.com offers some great tips for saving money around the house. If you’ve had enough of spending and donating (and who hasn’t at this time of year?), these might provide you with some welcome financial relief.

The tips aren’t groundbreaking, but they’re all pretty easy to enact, which means you stand to save some money without working too hard – and I think we can all agree that that sounds good.

But closing old cards is often not a good long-term strategy, as this post about hanging onto old credit lines reminds us. So why bother keeping open a card you don’t plan to use? Here are a few reasons.

The Big Picture: Your Credit Profile

• Keep your credit ratio strong: One of the factors that affects your credit score is the ratio of credit you have available to the amount you’re using. Having access to more credit than you use increases your credit score – so leaving open accounts that you never touch will make you seem like a better credit risk. If you don’t think you can trust yourself to not use a credit card that you keep open, try literally freezing the card in a bag of ice.
• Have access to that money: These days, it’s common for people to make all kinds of purchases online, from clothing to automobiles. And, while online shopping is wildly convenient, it’s practically impossible without a credit card. So keep the card around in case you need to make a purchase from a vendor who won’t accept cash – and just know that you’ll pay the full balance any time you do use the card.
• Prepare for an emergency: This is one of the most important reasons to hang onto at least one credit card. Emergency situations are called that because we never expect them – which means we might not be prepared with adequate cash on hand, even if we’ve saved that cash in a bank account. Knowing you have a way out of true emergencies can mean the difference between a nagging sense of worry and a calm mind.

Learning Not to Spend

Of course, keeping your credit cards open will only benefit you financially if you can commit to not charging more than you can afford to repay month by month. To get into that habit:

• Take some time off: While you’re paying off your initial credit card debt, you’ll want to stop racking up new charges. This period without plastic should get you in the mindset of not using plastic once you’ve paid off the cards.
• Keep them at home: Besides a single emergencies-only card, leave your plastic at home when you’re out – especially if you’ll be in a place where you’ll be tempted to spend money on non-essentials.
• Reward yourself: Every month you pay your credit card bill in full (or don’t have any balance to pay), congratulate yourself and celebrate in a small, inexpensive way.

While the CARD Act includes many welcome reforms for debit and credit cards (including a limit to abusive overdraft loans), its protection is far from total. It may have expanded our rights as consumers, but it didn’t create a bubble of consumer safety around all credit products.

This post about understanding gift cards from Mint.com offers an important reminder about just costly some cards can be. Here’s a summary of what you need to know if you’re thinking about giving gift cards this year – or if you have some parked in your wallet.

Spend Your Money Wisely

Sources note that, as a nation, we drop about $87 billion on gift cards every year – and far too much of that money never goes to actually making purchases. Here’s a primer on what the CARD Act requires from gift card issuers.

• Expiration limits: The new limits on expiration dates state that a gift card cannot expire earlier than five years after its purchase. You may want to mark this date on any cards you buy.
• Fee limits: Card issuers can only impose fees on unused cards after they have been idle for a full year; further, such fees can only be charged once per month. Also, card issuers are prohibited from charging replacement fees for lost or stolen cards.
• Fee disclosures: Somewhere on the card or its packaging, all fees must be detailed in full.

This is all good news, but keep in mind that reloadable plastic cards (which are often non-gift items) are not covered, and neither are promotional gift cards.

Watch Out for Bankruptcy Filings

The other tricky thing to consider if you’re buying gift cards is the financial state of the company. In many cases, if a company files for bankruptcy or goes out of business, its gift cards are no longer valid. And, according to sources, this can be a big deal: it seems Sharper Image’s customers had about $20 million in unused gift cards when it went under.

A License to Overspend?

We all know that one of the most important parts of maintaining financial health is saving money when we can by bargain shopping. But, according to Mint.com, when we shop with gift cards, we’re 2.5 times more likely to pay full price than when we’re paying with cash.

This is understandable, but can be frustrating for budget-conscious folks. So remember: an informed consumer is a better consumer. Spend well!