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Karen

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Have you ever been in your favorite store with a cool new pair of jeans, a new t-shirt, and a slew of other clothes in hand, ready to pay when the cashier says, "If you open a store credit card account with us today you'll get 10% off your purchase?" At that moment you consider how great it would be to have a credit card at your favorite store — without having to pay for that $500 charge right away.

Before you decide to sign up for that store credit card, you might want to consider that typical annual percentage rates (APRs) on credit cards from a retail store are about 23%. Ouch!

If you are able to pay off your purchases right away, the percentage rate might not matter to you (just remember the possible effect on your credit). But, if you think that paying a little bit each month is more your style, you should see if the savings will be worth it. To do that, you'll need to know how your rate is calculated. 

Let's break down what a 10% savings at the register for a $500 purchase looks like in one month:

1. Figure your average daily balance.  Add balances each day (purchases minus payments) and divide that by the number of days in the billing period. We'll use 30 days for this example. Say you make no additional purchases or payments for the first 15 days, and then on day 16 you make a $50 payment and on day 21 you make a $75 purchase. So your balance was $500 days 1-15, $450 days 16-20, and $525 days 21-30.

Here's the math:
($500 x 15 days) + ($450 x 5 days) + ($525 x 10) = 15,000
15,000 divided by 30 days in the billing period = $500 average daily balance

2. Calculate the interest. After you have the average daily balance, you can find out how much interest you'll pay that first month. Take your APR divided by 12 to find out how much interest you're charged each month. Then take that number times your average daily balance.

   Here's the math:
   23% APR divided by 12 = Monthly rate of .019166
   .019166 x $500 = $9.58 interest charge

3. Was the savings worth it? Back to your original sale: You saved $50 at the register (10% of $500), but after a month on your store credit card, you owe $9.58 on the balance. That lowers your savings to $40 after the first month. And unless you pay off the remaining balance, those savings will continue to drop.

While I am an advocate of using credit when it makes sense, I'm highly in favor of knowing what my rates are and what it will cost me in the long run. It's easier to make better choices when you know exactly what that retail therapy  will cost.

Barbara

We all strive to be above average in some of the things we do. Scholars are hoping to surpass the average grades, athletes are striving for higher than average statistics, you get the picture.

Yet we tend to settle on being average in other arenas. And, yes, sometimes it's just fine to run with the pack as just your average Joe or Jane.  But there is one area that you should never find comfort in being average — your finances.

Why not? I can tell you from personal experience that finding comfort in being average can come back to bite you!

When I graduated from college, a little over $2,000 on a college credit card followed me into the real world. Now for someone who had a scholarship to cover college expenses that seems a bit high, right?

Well, here's the deal. Looking into some credit card facts  I kept hearing over and over that the average college student graduates with over $2,000 in credit card debt. So I thought, "What the heck?" If my counterparts are dealing with the same situation, I can charge a few things, too.

However, when we get stuck thinking that the debt is inevitable, we become less conscious of how much we are spending on things we don't really need. Part of that $2,000 on my credit card was for an iPod, and be sure that I whipped out the plastic for a pair of shoes or two (or three...).

So in the end, thinking average college debt was OK helped me develop some pretty bad spending habits. And unfortunately, those habits stuck with me until I started working for a bank and talking about financial education!

I challenge you to be better than average when it comes to your finances — both during college and after. Think twice about charging that sweatshirt at the campus bookstore. Resist ordering a pizza for dinner when you could use your pre-paid meal plan at the campus cafeteria.

Don't fall into the average trap with your student loans, either (the average for student loan debt is almost $20,000 ). Consider a part-time job to supplement your living expenses rather than taking out more student loans. Pay your interest during school to avoid capitalization.

Each tiny step will put you leaps and bounds in front of the students who settle for "average."

Barbara

Editor's note: We want to take some time to talk about one of your most important financial assets: your credit. Over the next few days, Barbara, Kathy, and our newest blogger Cheryl will be dissecting credit — why it's important, how you monitor it, and what you can do to build or fix it.

Imagine this summer. You've snagged a great internship or your first job out of college, and you're looking for a place to hang your hat after work. You find a great apartment, fill out the lease application and start thinking about how to decorate your pad. Then you get the call from the apartment's manager. Unfortunately, she says, you don't have good enough credit to live there.

Gasp! Turns out those late payments to your utility companies and spring break costs still sitting on the credit card can affect you more than you'd thought.

Your credit can affect more than just your financial life.  It's true that landlords may check your credit before allowing you to rent an apartment. Your prospective employer may look at your credit to see if you are responsible. You may even find that your credit is examined in determining your auto insurance.

And obviously, the big reason you need to be concerned with your credit situation is so you're able to secure some credit down the road! Whether you're borrowing for a car, your education, or everyday purchases through a credit card, a good credit history is key. For a little more insight into what lenders are looking for consider the "5 Cs" of credit, from the Hands on Banking® program :

• Character: When lenders evaluate character, they look at stability — for example, how long you've lived at your current address, how long you've been in your current job, and whether you have a good record of paying your bills on time and in full.
• Capacity: This refers to considering your other debts and expenses when determining your ability to repay the loan. Creditors evaluate your debt-to-income ratio, that is, how much you owe compared to how much you earn. The lower your ratio, the more confident creditors will be in your capacity to repay the money you borrow.
• Capital: This refers to your net worth — the value of your assets minus your liabilities. In simple terms, how much you own (for example, car, real estate, cash, and investments) minus how much you owe.
• Collateral: This refers to any asset of a borrower (for example, a home) that a lender has the right to take ownership of and use to pay the debt if the borrower is unable to make the loan payments as agreed. Some lenders may require a guarantee in addition to collateral. A guarantee means that another person signs a document promising to repay the loan if you can't.
• Conditions: Lenders consider a number of outside circumstances that may affect the borrower's financial situation and ability to repay, for example what's happening in the local economy.

If you don't have the greatest credit (or don't even know what your credit situation looks like), don't fret: Now is the perfect time to explore your credit.

We'll show you how to get a good picture of where you stand on the credit spectrum and what you could do to help your cause. And if there's something you definitely want to know more about when it comes to credit let us know.

Karen

My Wells Fargo® Credit Card doesn't look like any other credit card in the world!

Want to know why? I used the newest Wells Fargo feature called the Wells Fargo Card Design Studio^SM service to put a picture of my daughter on my credit card. Now, every time I take out my card to use it, it's an excuse to show the world my personalized card and brag about my daughter a little bit. I liked it so much I added a picture to my Wells Fargo Check Card as well.

If you haven't checked it out, you should. Why shouldn't your Wells Fargo card be as unique as you? You can show your school spirit by adding a photo of you and your friends decked out for the big game. Or use the feature to remind yourself of something you miss from back home.

It's easy to upload a photo of you, your pet or your favorite sport — pretty much anything that interests you, but doesn't go against image guidelines. There's also an image library you can choose from if you don't have a personal image handy.

Best of all, it's a free service!

If you already have a Wells Fargo Credit Card or Check Card, sign on to Wells Fargo Online® Banking, click on the Account Services tab and select the "Access Card Design Studio" link to customize your card. If you don't already have a card, you can explore your options at wellsfargo.com. Or if you're just curious about the feature, view the demo  to see how it works.

So, what would you use to personalize your card?

Staci

Happy 2009! Have you made any New Year's resolutions? 

I'm not a particularly successful resolution-keeper. Last year, I vowed to eat healthier, and for six weeks it was nothing but oatmeal for breakfast, salads for lunch, and Lean Cuisine®  for dinner. By the time Valentine's Day rolled around, I felt so deprived that I consumed a two-pound box of See's Candies®  in one sitting.

All bets — and subsequently, all resolutions — were off.

Looking back on it, I know my resolution was too general — not to mention highly unrealistic! I'm guessing that many resolution-makers find themselves in similar situations.

Depending on what stage you are in your student life — soon-to-be-student, current student, recent graduate — here are a couple of specific, achievable New Year's resolutions you could adopt in 2009:

1. Apply for at least one scholarship. Remember, free money for college means less money you'll have to borrow, and plenty of scholarships are out there for those willing to do a little work. Find one that's right for you by checking with your high school guidance counselor, your college financial aid office, your employer (or your parents' employer), or a scholarship search.

2. Before you apply, read the fine print. Know exactly what you're getting into before you sign a credit card application or a student loan promissory note, because your signature indicates that you agree to the terms and conditions. Pay attention to interest rates, fees, grace periods, and repayment periods. If you don't understand anything, ask — before you sign.

3. Make an extra student loan payment. Student loans don't have prepayment penalties. At least once this year, scrounge up enough cash to throw an extra $50 at one of your student loans, preferably the one with the highest interest rate. Just be sure to communicate with your lender and let them know exactly which loan you want the extra payment applied to.

My one resolution for 2009? Not to eat an entire box of See's Candies in one sitting. Sounds pretty doable, right?

Barbara

One of the first things I bought as a college freshman was a USD hoodie from the campus bookstore . And I pretty much lived in it for the following four years. OK, not completely true, but be sure that T-shirts, sweatshirts, and jeans were staples in my collegiate wardrobe .

I allocated very little of my budget during college to clothing. When I did get new clothes, it was for a specific event, and, generally, my mother let me use one of her store credit cards to purchase the clothes. Thanks, Mom!

However, some would argue it's important to dress well on campus. Here are two reasons I've heard before:

1. Dressing well increases your focus and can help your grades. I knew someone in college who would literally get ready to study. That means nice clothes, fixed hair, and done makeup. She said it helped her prepare better for tests. By dressing up she felt more attentive and focused — kind of like she was wearing a school uniform.

2. A neat appearance  can help your rapport with professors and boost your ability to network. Come graduation time you'll need those professors to offer recommendations. And while for some your dress during class may not matter, to others it may be skew their opinion of you. You never know who you're going to meet on campus. Potential employers and connections could be lurking.

I'm not necessarily convinced on the first point. I think it depends on the student. After all, I pulled good grades in my sweats. However, I'm definitely down with the second point.

What do you think? Is your appearance on campus a big deal or are you fine in the stereotypical university sweatshirt? And if you are staying fashionable on campus, how do you budget for clothes?

Caroline

Identity theft can happen to anyone. And at college, you're particularly vulnerable . You lock your apartment and your car, right? Your identity is much more valuable, so guard it just as carefully as you do your other possessions.

Here are some tips to keep your identity safe:

• Check your snail mail . Don't ignore your mailbox, even if you don't expect any mail. You may be receiving credit card offers or other mail that could be swiped by an identity thief. Check your mail every day.

• Watch your personal possessions. Studying in the library and need a break? Don't leave your backpack, laptop  and other personal items unattended.

• Keep a skinny wallet. If you lose your wallet, you'll need to cancel any credit cards immediately, so the fewer you carry, the better. And don't keep your Social Security card in your wallet at all. Make a photocopy of the cards in your wallet, and stash the copies in a safe — you'll be able to cancel them in a flash if need be.

• Shred, shred, shred. Don't just toss junk mail and other paperwork with personal information on it. Identity thieves are notorious for raiding garbage cans. Invest in a paper shredder and use it liberally.

• Check your bank and credit card statements closely. Whether you rely on hard copy or online statements, check them regularly for suspicious activity.

• Get a copy of your credit report  annually, for free. Again, you want to check for any suspicious activity, such as name or address changes, or accounts you don't recognize.

These are just a few ideas. Got any other tips or personal experiences to share?

Karen

Mid-summer, as I was blissfully reading email, I received three order confirmations from iTunes  thanking me for my gift card order.

"Wait!" I thought to myself, "I haven't placed any iTunes orders!" I tried to stay calm, but there was that little voice in my head saying, "Someone stole your credit card!"

I learned that it's hard to dial a customer service number when your hands are trembling, but I managed to do it. The nicest Wells Fargo customer service person answered the phone and walked me through all the pending transactions on my account, and at least five of them were purchases I had not made.

The representative noticed I was starting to get nervous again and assured me that I had nothing to worry about. After all, I have the WellsProtect® program built into my Wells Fargo credit card. This free program comes with all Wells Fargo credit cards and automatically protects the cardholder from liability for fraud and theft when reported promptly.

The representative closed my account and explained that a new account number would be set up for me. All I had to do was sign an affidavit  of forgery, which was mailed to me a few days later, and return it to have the charges that were not mine removed.

Everything that the Wells Fargo representative explained to me was exactly how it went. I received a new card in the mail. A few days later, I received the affidavit and returned it to Wells Fargo, and then my fraudulent charges were removed from my account.

I wonder what happened to the charges, or if the culprit was ever caught?

Now I'm a little bit more cautious about shopping online with my card, but knowing that the WellsProtect® program is always going to be there for me, I'm not going to let that stop me!

Staci

Last week, we commemorated Get Smart About Credit Day. This week, we're calling attention to a related event: National Protect Your Identity Week .

Spearheaded by the National Foundation for Credit Counseling, this initiative is designed to bring identity theft awareness and prevention programs to consumers in communities across the country.

Has your identity ever been stolen — even just a small piece of it? Mine has, and it was a maddening experience. A credit card that I hadn't used in a long time started accruing random charges for teenage clothing in New York and sports equipment in Texas. I didn't know that the charges were happening until I received a bill for thousands of dollars.

It took a lot of convincing before the credit card company (not Wells Fargo) would believe that the charges weren't mine, and frankly, their representatives weren't very helpful or empathetic. Countless phone calls, notarized fraud affidavits, and a freeze on my credit report later, I resolved the situation in a matter of months — fortunately with no damage to my credit rating.

Others haven't been as lucky. In fact, one of my high school girlfriends had her name, birth date, and Social Security number stolen by a former coworker. My friend used the experience to start her own nonprofit organization, the Identity Theft Action Council of Nebraska . Now she educates others about the crime of identity theft, helps victims put their lives back together, and shapes federal and state legislation. She's amazing!

Later in the week, Karen will tell her own personal story of fraudulent credit card usage, and Caroline will share some tips for identity theft prevention. Stay tuned.

Barbara

This morning, as I was cuddled up and hitting snooze, hoping that time would go just a bit slower, my sister came into my room with an unexpected wake-up call: "There's water in the basement."

After a night of rain, my first thought was a failing sump pump. But as I walked into the basement lake, I had flashbacks. This was exactly what happened nearly one year ago.

I decided to use the same plumber I did last year. They said they'd be here in a couple hours. So I started working a bit, trying not to think about the greasiness of my unshowered hair.

Then the plumber called. "Because we're switching credit card service providers we can only accept checks or cash right now," they informed me.

Oh, did that throw a kink in my plans.

Lately, I've been so focused on paying down some of my debt that I've neglected my emergency fund and have chosen to rely on credit if something comes up. Cash or check for this large repair sum wasn't going to work with my current balance/budget.

A few calls to different plumbers for time and price quotes later, I kept thinking how nice it would be to have a plumber who really knew the situation from last year. If only I had enough cash to get the same guy and stick to my budget.

Faced with a bit of a quandary, I did something of which I'm not proud. I called Mom. Yes, folks, with one call to Mom and Dad bank my problems were solved. She agreed to throw some extra cash into my checking account on her way to work.

However, by the time Mom called as she neared the bank, the guilt had gotten to me, and I had already scheduled with another plumber who offered the same service for a comparable price that could be charged to a credit card. Plus, they offer a two-year service guarantee. Can't beat that.

While waking up to a backed-up sewer wasn't a great thing, it was a good thing to get me thinking about my finances. Deep thought session re: emergency savings vs. debt reduction  needed.

Have you had any similar incidents that triggered a financial wake-up call?