Yesterday I blogged about an economist's answer to the question of how much cash one should carry, which was a surprisingly large amount; almost $500. His conclusions factored in the time required to visit an ATM, the interest lost by withdrawing cash, and the potential loss by theft.

However, I doubt that anyone I know carries even a small fraction of this amount. I rarely have more than $40 in my wallet. Reading various posts about this topic, one message showed up time and time again, that carrying more money would tempt one to spend more money.

I'm very skeptical about this conclusion, however. I believe that we are much more likely to overspend with credit cards than cash, which is why retailers are so anxious for us to use plastic rather than greenbacks. I know that, for me, paying with cash makes the transaction much more tangible. Every time I pull out a $20 bill, I think to myself just how much work I'd done to earn it. This never happens with a credit card.

So while I would be uncomfortable carrying $500 around all the time, I would be well served if I used cash more often. I know it would cause me to think twice about ordering that steak, novel or CD.

As the class of 2008 graduates from high school, a good chunk will be heading off to college. There they will be bombarded with free t-shirts and bottle-openers: if only they'll just take a quick moment to fill out this credit card application. The average college student will graduate with $3 thousand in credit card debt -- which might not sound so bad until you think about the fact that many graduate with none, meaning that the average student who uses a credit card in college graduates with considerably more than $3 thousand in credit card debt. And don't even get me started on student loans.

Since the vast majority of kids will get credit cards (It can be helpful for building a credit history), your role as a parent is to educate Junior about the process. Here are some tips for helping your first time credit card user get off to a good (or at least not destructive start):

• Pick a card with no annual fee -- There's just no reason to pay a fee on your first credit card. Few college kids spend enough money for any rewards to justify the fee. Generally this will mean paying a higher interest rate -- tell your kid the interest rate doesn't matter because if he ever carries a balance you will disown him.
  
• De-emphasize the whole rewards thing: remember, credit companies offer rewards because they increase their profits. Getting a $50 savings bond for every $2000 you spend might sound wonderfully financially savvy, but it isn't if the joy of saving induces you into overspending.
• Urge them not to place anything other than necessities on the credit card: textbooks, gas, and other costs that aren't likely to increase due to the convenience of plastic. Clothing and especially restaurant meals should be paid for with debit cards or, better yet, cash.

Rather than wait for some snake oil salesman to sign your child up for a credit card when you're hundreds of miles away, take the opportunity to do it together, now. The CreditCards.com Student Credit Cards page has 9 cards for you to choose from, and you can click the links and fill out an application in just a few minutes.

Suze Orman knows what she's talking about when it comes to personal finance issues. She's written several books about finance, and she made Time Magazine's top 100 most influential people in the world this year because people are listening to her!

She answered some common questions on The Today Show this week. Watch the video below for some "tough love" answers to questions like:

• Is it bad to have a lot of credit card accounts?
• I have student loans and credit card debt... can I buy a house?
• What's the difference between a Roth IRA and a traditional IRA?
• Should parents co-sign on a car loan for their child?

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Ken and Daria Dolan, America's First Family of Personal Finance, answer your money questions every Friday.

Dear Ken and Daria,

I realize it's important to stay up-to-date on your credit score, but is it necessary to pay for a credit monitoring service?

Jeff

Want to learn more about protecting and improving your credit score? Visit our Credit Center at Dolans.com.

Click here to ask Ken and Daria your question.

Consumers have rights when it comes to fraudulent credit card charges or charges for products and services that aren't what they paid for. The key to successfully challenging a charge is in knowing what to say and who to tell. That sounds elementary, right? Except Consumer Reports is saying that many consumers don't know their rights or how to enforce them.

Small dollar amounts are easy to dispute and resolve, as it's estimated that it costs a credit card company $25 for each charge it must investigate. This means they're likely to give refunds for small amounts without much work. It would cost more to investigate than to just give you your money. The credit card company also has to weigh the risk that you will close your account if your matter isn't resolved. They lose money when you do that.

Here are a few key points about your credit card: Report suspicions of credit card immediately to stop the harm. Most billing problems need to be disputed in writing, and many credit card companies don't recognize e-mail as "in writing." The credit card company must receive your letter within 60 days from the statement date, so don't wait. Include with your letter all copies of supporting documentation to help prove your claim.

Folks, we might have a new winner in the contest for the most hated consumer industry. For years, the hands-down winner was car dealers.

But we think that credit card companies are giving them a serious run for their money!

Most credit card companies are downright ingenious when it comes to cooking up sneaky new credit card fees and dirty tricks that take more money out of your pocket. If you've had enough, keep reading because today we are going to reveal seven of the industry's dirtiest tricks. We hope this list will help you protect yourself, slash your costs and be credit card smart.

Dirty Trick #1: Say "Bye-Bye" to Your Grace Period

No grace period means that you'll start accruing interest the moment you charge something. That can cost you a bundle of "extra" interest.

Ken and Daria Dolan, America's First Family of Personal Finance, answer your money questions every Friday.

Dear Ken and Daria,

My husband and I have $7,000 in credit card debt. Should we take out a home equity loan?

Lyndajoy

Ken and Daria Dolan offer advice on all of your debt concerns at their Credit Resource Center.

Click here to ask Ken and Daria your question.

"Cause marketing" is a current buzzword in corporate circles. It stands for a simple idea: that you can convince more people to buy your products if you promise to give some of the proceeds to a social or environmental cause.

Consumers get to buy something they like and do good at the same time. Businesses fork over some of the profits, but get a halo effect (hopefully), for encouraging a greener planet, end to poverty, cure for breast cancer and the like.

Product Red may be cause marketing's most conspicuous recent example. It is a brand licensing effort started by U2's Bono and Bobby Shriver. Companies including Gap, Apple, American Express, Microsoft and Dell have participated, creating specially branded "(Product) Red" items and contributing 50% of the gross profits to the Global Fund for AIDS, Tuberculosis and Malaria. It has been criticized since such a small portion of dollars people spend on the products actually makes it to Africa, but also heralded as a huge success for raising $100 million for the Global Fund in just two years and generating goodwill toward the companies involved.

Here's a new cause marketing effort that may be the first aimed specifically at small businesses: Kiva.org, a microfinance site which allows individuals to make loans as small as $25 to entrepreneurs in developing nations, teamed up Advanta to launch the KivaB4B program in mid-April. Advanta issues a Kiva-branded small business card and will match grants made by cardholders to Kiva dollar for dollar (up to $200 a month). Entrepreneurs get to flash their Kiva credit card, which has no fee and low rates, plus they get an insignia to put on their web page or office that shows they are supporting entrepreneurs in the developing world. "Entrepreneurs recognize the value of getting a little seed money," says Ami Kassar of Advanta. "This program allows them to be the good guys and show they care about the community."

Can small companies create their own cause marketing efforts, while avoiding any potential pitfalls? Bryan Specht, an expert in corporate responsibility with Dig Communications in Chicago, believes it can be a terrific strategy for increasing sales and building customer loyalty if done right.

Lita Epstein is WalletPop's resident credit score expert. Write to her in the comments box below.

Many of the questions I receive relate to credit scores and how to improve them. There are many myths out there which I debunk below, but first let's take a look at what a credit is and who creates it. Actually there isn't just one type of credit score. The primary driving force behind most of them though is the Fair Isaac Corporation, known by most as FICO.

Each of the three credit reporting agencies has a score developed by FICO. Equifax's is called BEACON, TransUnion's is called FICO Risk Score and Experian's is called FICO II. Each one is tweaked slightly differently, so you'll find your credit score is not exactly the same at each agency, but scores are usually within 20 points of each other. If you find a greater difference, one or more of the credit agencies probably have inaccurate information in your credit file.

In addition to these three types of scores, there are new scores from Fair Isaac called NextGen. The names given to these new scores are Pinnacle (Equifax), FICO Risk Score (Experian) and Risk Score Next Gen (TransUnion).

That's not all. In addition to these scores there is scoring done for insurance companies and others designed for different types of businesses that set up a different set of parameters they want monitored. Insurance companies believe that people with a low credit score tend to file more claims, so in many states your insurance premiums can be higher if you have a low credit score.

Ken and Daria Dolan, America's First Family of Personal Finance, answer your money questions every Friday.

Dear Ken and Daria,

There is a lot of controversy over closing credit card accounts after the balance is paid. What should I do?

Alethea

Ken and Daria Dolan offer advice on all of your credit questions and concerns at Dolans.com.

Click here to ask Ken and Daria your question.

BusinessWeek recently asked two experts -- a college professor and a senior fellow at the Competitive Enterprise Institute -- about whether laws should be passed to protect consumers from sudden increases in the interest rates on their credit cards. The pro/con piece is a good introduction to this topic, and definitely worth a read.

Karen Gross of Southern Vermont College describes the current policy of disclosure as a "flawed paradigm," writing that that "We erroneously assume consumers read, understand, and act on the explanation of credit card terms they receive. Many consumers, even those who read what they receive, do not fully understand the disclosures, which are often in small print or legalese."

An undergraduate friend recently shared his financial woes with me. He's about $8 thousand in credit card debt and has fallen behind on his payments. His parents have suggested that he take out a student loan and use it to pay off the debt over a longer period of time at a lower interest rate.

In theory, this makes sense. Paying a lower interest rate is always nice, and replacing delinquent revolving debt with a loan will help out his FICO score. To make this an even more lopsided decision, interest on student loans is often tax deductible.

Even so, I don't think consolidating the debt with a student loan is the right move, even if it's a good idea on paper.

The problem is that people who consolidate delinquent credit card debt and find themselves once again able to rack up big balances tend to do just that. Instead of being $8 thousand in debt, they up $16 thousand in debt. $8 thousand seems like a lot of money but if he spends the summer working 60 hours per week at $9 per hour, he'll earn $540 per week. If he scrimps and saves, he'll be able to make a big dent in the credit card debt. Of course he could consolidate it and do the same thing, but I somehow doubt that that would end up happening.

Taking out a student loans seems like a cop out to me, and a way to avoid dealing with the actual problem: owing a lot of money. Eventually my friend, who I hope is not reading this, will have to grow up and take responsibility for his financial life. A student loan in the situation is essentially a shovel to dig a deeper hole, unless there's a real change in behavior accompanying it. But if he was really committed to turning the situation around, he could work a ton of hours and spend less money.

As for the tax benefits, a student loan in this context does not appear to be tax deductible, as the IRS states that the loan can only be deducted if used for the "total costs of attending an eligible educational institution," which include "tuition and fees, room and board, books, supplies, and equipment, and other necessary expenses (such as transportation)."

I don't see anything in there about paying off credit card racked up buying clothing, cigarettes, and pizza. Of course you could probably deduct it and nothing would happen, but it's not kosher.

Unless he's ready to make serious changes in his life, taking out a student loan is a terrible idea. He should be looking to fix the problem, not thinking up creative ways to prolong it.

I've reached the age where the loved ones I gift are beyond toys, and I've taken to giving gift cards so they can buy their heart's desire. I'm also in the habit of dropping the day's pocket change into a jar on my dresser. Today, I realized this would be a great way to fund next Christmas.

What brought this to mind was an article about Coinstar, the automatic coin sorting machines seen in many groceries. I don't use them because I don't like giving up the 8.9% counting fee. However, instead of cash, one can choose gift cards for bookstores, theaters, restaurants and other merchants. When you buy one of these, the sorting fee is waived. I figure that, by the end of the year, the daily change from my pockets will buy enough cards for everyone on my Christmas list.

One-stop shopping and a painless savings program; now that's what I call a good Christmas shopping experience.

CNNMoney has a great list of 6 of the best credit cards out there, depending on your situation: one with a good interest rate for those who are unfortunate enough to carry a balance, and others offering cash back, lots of air miles, contributions to your retirement, and more.

That's all well and good if you're incredibly responsible with your spending, but numerous studies have shown that people who pay with credit cards rather than cash spend more money -- even if they do pay off the balance every month. A card that can add $75 to your retirement account if you spend $5 thousand isn't helping you out if it makes you spend $200 a month more than you otherwise would.

Remember: credit card companies wouldn't offer these great deals if it wasn't in their best interests. They know that, on average, these gimmicks will increase their profits, not the consumer's.

According to CardTrak, 60% of people don't pay off their credit cards every month. With the average credit card rate hovering around 13%, there is no perk in the world that makes carrying a balance a financially responsible thing to do.

Unless you're really sure that using a credit card won't increase your spending, I would recommend going with a no-frills card that won't subconsciously tempt you into spending more with promises of air miles and free toasters. Credit cards destroy more consumer wealth than they create, and I'm highly skeptical of clever plans to use them to better our financial lives.

I am an avid weekend commuter. With family and friends four states away, I get to see the varying gas prices along my weekend route.

Currently, the average price of car life giving blood is $3.28 in Maryland, and just last week I went in search of the ever elusive just-a-few-cents-cheaper gallon. I came across a rinky-dink station, with blaring red neon signs that read, "Regular $3.19", JACKPOT! Then I see the blaring blue sign, "CASH ONLY." Uhhh, seriously?

I realize it's one of those smaller chain gaseterias, and that I will now have to find my way to a bank to get, yick, "cash." I really do like the ease of swiping a debit card and being on my way, call it spoiled if you want. I guess being able to accept cards costs the station owners money, so if they're willing to pass on the savings for not using credit machines, I'll play along.