Have you ever stood behind someone in line at the store and watched him shuffle through a stack of what must be at least 10 credit cards? Consumers with this many cards are still in the minority, but experts say that the majority of U.S. citizens have at least one credit card — and usually two or three. It’s true that credit cards have become important sources of identification — if you want to rent a car, for example, you really need a major credit card. And used wisely, a credit card can provide convenience and allow you to make purchases with nearly a month to pay for them before finance charges kick in.

That sounds good, in theory. But in reality, many consumers are unable to take advantage of these benefits because they carry a balance on their credit card from month to month, paying finance charges that can go up to a whopping 23 percent. Many find it hard to resist using the old “plastic” for impulse purchases or buying things they really can’t afford. The numbers are striking: In 1999, American consumers charged about $1.2 trillion on their general-purpose credit cards.

In this article we’ll look at the credit card — how it works both financially and technically — and we’ll offer tips on how to shop for a credit card. (Experts say this should be a project on the scale of shopping for a car loan or mortgage!) We’ll also describe the different credit-card plans available, talk about your credit history and how that might affect your card options, and discuss how to avoid credit-card fraud — both online and in the real world.

Let’s start at the beginning. A credit card is a thin plastic card, usually 3-1/8 inches by 2-1/8 inches in size, that contains identification information such as a signature or picture, and authorizes the person named on it to charge purchases or services to his account — charges for which he will be billed periodically. Today, the information on the card is read by automated teller machines (ATMs), store readers, and bank and Internet computers.

According to Encyclopedia Britannica, the use of credit cards originated in the United States during the 1920s, when individual companies, such as hotel chains and oil companies, began issuing them to customers for purchases made at those businesses. This use increased significantly after World War II.

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­The first universal credit card — one that could be used at a variety of stores and businesses — was introduced by Diners Club, Inc., in 1950. With this system, the credit-card company charged cardholders an annual fee and billed them on a monthly or yearly basis. Another major universal card — “Don’t leave home without it!” — was established in 1958 by the American Express company.

Later came the bank credit-card system. Under this plan, the bank credits the account of the merchant as sales slips are received (this means merchants are paid quickly — something they love!) and assembles charges to be billed to the cardholder at the end of the billing period. The cardholder, in turn, pays the bank either the entire balance or in monthly installments with interest (sometimes called carrying charges).

The first national bank plan was BankAmericard, which was started on a statewide basis in 1959 by the Bank of America in California. This system was licensed in other states starting in 1966, and was renamed Visa in 1976.

Other major bank cards followed, including MasterCard, formerly Master Charge. In order to offer expanded services, such as meals and lodging, many smaller banks that earlier offered credit cards on a local or regional basis formed relationships with large national or international banks

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Many of us don’t realize how much of our budget is used on the daily a.m. latte.

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Although you may see it as a necessary evil, budgeting is an important part of managing finances. If your budget doesn’t balance, you can end up sinking into debt, or worse, losing your house or vehicle — and your credit. Keeping tabs on your budget can prevent these disasters. It can even help you save more money for the things you want.

­The first step in developing a budget is to determine your income. You can use any of the many budget worksheets on the web. There are many resources available, but they all work around the same basic principles: List your income and expenses, and determine whether your income is greater than your expenses.

Once you’ve listed your income, you need to determine your expenses. There are two types of expenses: fixed expenses and non-fixed expenses. Fixed expenses are those that you can be sure of every month, such as your mortgage or car payment. You can read more about fixed expenses in How Fixed Expenses Work.

Non-fixed expenses are variable expenses that can fluctuate from month-to-month. In this article, we will explore the various types of non-fixed expenses, and how to keep variable spending from breaking your budget. These expenses can be hard to manage because they include both your needs and your wants. Lattes, fast food and new CDs all fall into this category. It can be very frustrating to work hard all week and then feel guilty for stopping to pick up burgers on the way home. But budgeting doesn’t mean always denying yourself.

Read on to find out ways to control your non-fixed expenses without giving up all the fun things in your life.

Have you been driving down the road and suddenly seen a car drive by plastered in ads for potato chips or an energy drink? Maybe you thought the car belonged to an employee with the company. But a number of advertising firms will actually pay drivers to have their own cars covered with ads.

Depending on the firm, the length of the promotion and your region, you can be paid between $400 and $900 per month to serve as a moving billboard. Some companies will even provide you with a car to drive, free of charge. All you have to do is sign up on the company’s Web site, filling in basic demographic information [source: Autowrapped, Free Car Media]. Then, if a specific advertiser decides they want to target your particular demographic, they’ll select you for a promotion. Promotions last from a few months to years, so the extra income could add up to a nice sum.

Of course, since you’re chosen based on demographics and region, it could be that you sign up, never to be selected by a company, or have to wait years before being selected. If a sponsor chooses you, the amount of commitment and effort is relatively minimal. You’ll be required to drive a certain number of miles per month to fulfill your contract, and you’ll have to set aside four to eight hours for your car to be wrapped at the beginning of each promotion. Once the ads are removed, your car will be undamaged by the process.

It’s pretty easy to obtain credit, but many people have no credit history. See more debt pictures.

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Credit makes the financial world go ’round. That’s true for Fortune 500 companies, first-time homebuyers and aspiring college students alike. Lenders make decisions about the creditworthiness of borrowers based primarily on credit reports and credit scores — two ways to quickly assess an applicant’s credit history.

The strength of your credit history is what determines if you qualify for a credit card, a home mortgage or a car loan and at what interest rate. Have you always paid your credit card balance on time? Have you ever defaulted on a loan? It’s all part of your credit history.

For new or young borrowers, however, this poses a serious catch-22: How do you qualify for credit without a credit history, and how do you build a credit history without first qualifying for credit?

More than 50 million American adults have no credit history [source: CNBC]. They’ve never applied for a loan, a credit card or any line of credit. While it’s possible to pay cash for all expenses, it’s hard to build enough cash reserves to pay for important milestones like a college education, car or home.

If you’re ready to start building a credit history from scratch, you probably have a lot of questions. Where can a new borrower go for his or her first credit account? What do lenders look for in a loan applicant? What are some credit traps to avoid? Keep reading to learn our 10 healthy ways to build credit.

Dozens of things can improve your credit score, but one thing helps more than anything else: always paying your bills on time. Because payment history makes up the biggest percentage of your score (35 percent), it makes sense that you should focus your attention on that factor.

If you are dismayed that this is not a quick fix, take heart: This strategy has short-term advantages. That’s because your recent credit history actually carries more weight [source: Weston]. In other words, if you plan to ask for a loan in the next year, and you are late on a payment in the meantime, it will hurt your score more than a late payment from a few years ago [source: Sahadi].

In addition to paying your bills on time, you can bump up your score a few other ways. For instance, the amount of debt you have represents 30 percent of your score, so if you can pay down debt, you will give your number a significant boost. You also can try to lower the ratio of debt-to-credit limit. This means that you should keep your credit card balance below 25 percent of your credit limit [source: Lankford]. If you’re worried about opening new accounts, ask your current credit card company to raise your limit. You also can keep the debt-to-credit ratio low by keeping old credit card accounts open, even if you aren’t using them [source: Sahadi].

Keep in mind that reporting agencies make mistakes. Errors occur frequently, especially for the John Smiths out there or anyone else with a common name [source: Huddleston]. If you discover an error, you can dispute it and perhaps improve your score dramatically.

Late payments aren’t the only thing that can drag your score down. Surprisingly, even unpaid parking tickets or library fines can lower it. Taking out new loans looks bad — not only because it increases debt, but also you look desperate when too many lenders inquire into your score. However, if many lenders inquire within a short time (14 or 45 days, depending on the FICO formula used), the score counts this as one inquiry, as it’s assumed you are shopping for a single loan [source: myFICO.com]. These are referred to as hard inquiries, and can only happen with your permission. Soft inquiries, on the other hand, such as looking into your own score do not affect the number.

Depending on your particular situation, there may be an even more effective way of improving your score. Understanding the process will help you make better decisions about your credit and help you to avoid costly credit counseling. Still have credit concerns? Visit the links on the next page.

One number could stand between you and your dream house. It may seem unfair for one number to define you, but to many lenders, it does. Not only can that number determine whether you get a loan, it can dictate the exorbitant or reasonable interest rate attached to it. Insurance companies, landlords, employers and even utility companies routinely use the number to learn about you and your financial reliability.

Your credit score can dramatically affect your life, and, luckily, you hold the power to change it. Knowing how to improve your score has become an important skill in today’s credit-dependent society. To learn how to improve it, we need to understand what it means and how it’s calculated.

Your score is based on your debt history and your existing lines of credit. The companies you do business with report information about your account activity to credit reporting agencies, such as Experian, TransUnion and Equifax. The agencies gather your information and pull it together in a credit report. You are entitled by law to a free credit report once every 12 months. It’s a good idea to take advantage of this opportunity, especially if you plan to apply for a mortgage soon. You can see it by going to AnnualCreditReport.com. With that report, the agencies calculate your FICO credit score, a three-digit number between 300 and 850 that is supposed to accurately assess and succinctly sum up your creditworthiness.

In the past, the agencies kept the method for determining credit scores secret, lest people try to manipulate their scores artificially [source: Curry]. Under pressure, however, they released the method they use to establish a credit score. Here’s a list of the different factors and their weights, according to myFICO.com:

• Payment history: 35 percent
• Debt: 30 percent
• How long you’ve had accounts: 15 percent
• New accounts: 10 percent
• Types of credit: 10 percent

For a fee, you can find out your credit score from the different reporting agencies. A score less than 620 might land you on a do-not-approve list, but a score greater than 760 could position you nicely for the best interest rates [source: Lankford, Weston,]. If you think your score might need a boost, there is one action you can take that will improve it the most. On the next page, we’ll discuss what that is.

Go Clean Credit backs our service with a refund policy. Simply stated we believe that you should only pay for results and an effective service. Meeting and exceeding a high level of customer service is Go Clean Credit number one goal. Go Clean Credit will endeavor to achieve a client’s objective of obtaining a higher credit score and deleting negative information from the report.

We offer a refund for all fees paid for our service, excluding the initial case set-up and analysis fee, if you feel that we have not preformed up to the expectations that were put forth. This refund policy is effectiveonce you become a Client For Life, depending on your program, which ensures an adequate time has been allotted for the restoration process (6 consecutive months for the Express Programs and 12 months for the Standard Program). This does not mean that your case will take that long as it could be shorter or longer based on each client’s current situation.

If you feel that we have not achieved the desired results, Go Clean Credit will do a full review of your account from initiation to its most current status. We will first take a total of the deleted and/or improved items and assign them a value of $85 per improved or deleted item. We then subtract the total value of the deleted and/or improved items from the total fees that you have paid to us (except for the set up and analysis fee) to determine the total refund