HELP ME CLARK!
From HLN's Money Expert Clark Howard

Stephanie:
My sister is turning 18 in a month and wants to go with a credit building service. They will help her build her credit by paying her utilities through them. She says it's a free service, but it doesn't add up. Is this a legitimate service that really is free for her? How can she pay her utilities and build credit?

Clark:
Well, here's what’s going on. There's what's known as an expanded credit score that was designed by the official credit scoring people, FICO. And their expanded scoring model covers things like how you pay apartment rent, how you pay utilities - bills that would normally only end up on your credit report if you went delinquent on them.

Now, the reality is, I know of no one in the credit granting industry that's using the expanded credit scoring model. It would be great if they were, but to my knowledge it's not going to help your sister. The best way for her to establish credit is with a secured credit card.

A secured card is one where you post a balance in a savings account and your credit limit is based on that. If you make on-time payments with a good secured card for 12-18 months, you then graduate to a regular Visa or Mastercard that will help you build the credit you want to.

Money Coach with HLN’s Money Expert Clark Howard

Having trouble managing money? Do your money goals seem impossible? Clark Howard wants to help you!

We’re looking for individuals or families who are willing to be profiled on HLN.

Those chosen will get money advice and information from Clark Howard.

This week’s question comes from the Kerry Genter of Duluth, Minnesota.

Clark Behind The Headlines
From HLN's Money Expert Clark Howard

Have you heard about this E.coli outbreak that killed two people and made hundreds more sick? It’s because of a food processor in New York that had to issue a recall on a huge amount of ground beef. They weren’t testing for a strain of E.coli that was banned 15 years ago.

If you remember, in 1993 there was a deadly E.coli outbreak involving the fast food chain Jack in the Box. And as a result of that, the U.S. Department of Agriculture banned this strain of E.coli from meat and introduced new rules for companies to test their products. But they made it voluntary. Well, a lot of meat companies, including this big one in New York State, came under pressure from the slaughterhouses and suppliers and decided, “Yeah, well, we're just not going to test for that.” And as a result, you have people dead who wouldn't be, and people hurting who wouldn't have been. Inexcusable.

It is so third world that we have the ability to prevent these illnesses and deaths, and just because of financial interests of meat packers, we don't do it. But a few retailers are making an effort. Costco Wholesale processes its own meat, and it fully meets the advisory guidelines and tests everything they put on the shelves. It’s just something where you think, why would a business cut corners like that and why would the meat industry have people lose faith in the safety of the food supply just to shave a penny here or there?

You know, in capitalism, businesses that mess up get punished by the marketplace. And often they get destroyed like the people who sold tainted peanut products. But the fact is, the people that get sick or die are still sick or dead.

The answer is very, very simple. The Department of Agriculture needs to make mandatory the inspections for the E.coli strains that they know are deadly. Think about if it was your kid who died because some meat processor decided to cut a corner and not test its product to make sure it's safe. I find that very upsetting.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

Pat:
I have had my credit card for about nine years. It was due for renewal this October. They sent me a new card that was good for three months. I have called them twice, only to hear that they "will send me a new card when this one expires." What is their purpose for doing this?

Clark:
My guess is this is based on all the disruption in the credit markets.

They may be trying to decide if they're going to fire you. And by giving you a new card, it's very expensive for a credit card company to issue a piece of plastic, believe it or not.

To do that for only 90 days means that you and maybe a lot of other customers are under credit review. Make sure that during this 90-day period, you apply for other cards if you don't have any.

If you have several other cards, you can rest easy even if they decide to fire you.

Clark Behind The Headlines
From HLN's Money Expert Clark Howard

We have a lot of gadgets in the Howard household, which means lots of wires, cables and cords. We keep all this “stuff” in a plastic container that weighs about 20 pounds! Most of it is from gadgets that are either fried or that we no longer use. It’s just sitting there… staring me in the face – a big pile of embarrassing “e-waste”.

If you’ve got a big heap of e-waste in your house, did you know you can turn that trash into cash? Sears has just joined Costco and Walmart as the latest big retailer to partner with “Gazelle.com”, a company specializes in eCommerce and electronics trade-ins.

With the Sears deal – depending on the device – you’ll either get a Sears gift card or Gazelle will just take it off your hands and make sure it properly gets recycled. There are 20 different categories of stuff they will take and you check out the list at www.Gazelle.com.

According to Time Magazine, Americans throw away about 350,000 cell phones a day! With that much e-waste being generated, look for more programs like this to pop up in the future. It’s an emerging trend that’s good for the environment… AND your wallet!

Money Coach with HLN’s Money Expert Clark Howard

Having trouble managing money? Do your money goals seem impossible? Clark Howard wants to help you!

We’re looking for individuals or families who are willing to be profiled on HLN.

Those chosen will get money advice and information from Clark Howard.

This week’s question comes from the Burns family stationed at Ft. Benning in Columbus, Georgia.

HELP ME CLARK!

SID:
My mother gave me $2,000 to invest for my children for college. My children are 14 and 10. What should I invest the money in?

CLARK:

HLN's Money Expert Clark Howard

In a 529 account. 529 is a special tax-free account for college.

There are many many plans and each state will generally sponsor its own or even several. But you don't have to put your money in your own state plan, and in many cases you shouldn't.

I have a guide on 529 plans at cnn.com/clarkhoward, and you should look at my guide to make a selection.

If your state is on either my Dean's list or my honor roll list, go into your state plan. But if your state is not listed, then go into one of the Dean's list plans.

CLARK BEHIND THE HEADLINES

I talk about us all being part of a team: Team Clark. We'll get tips from listeners to my radio show, and I'll say to the listener, "You are now a member of our team." Well, just such a thing happened recently, and this story is all over the news now.

HLN's Money Expert Clark Howard

A listener called and she was talking about how when the feds redid withholding at people's work early this year, the consequences of that are going to be really awful for a lot of people when they file income tax after the first of the year.

It was called the Making Work Pay tax credit. The problem is that the feds apparently messed up the tables, didn’t take some things into account and were too generous. And there is now a guess from the IRS - are you ready for this number? - 15 million Americans may have to pay back some of that tax credit. That's going to be ugly.

Who are the likeliest, according to the IRS? If you moonlight at a second job, if you're married and both spouses work, or if you’re an early retiree who receives Social Security and works part time, your withholding could be all messed up and you may owe taxes that you ordinarily wouldn’t.

So you only have a few pay periods left this year if you fit any of those circumstances. If you can afford it in your budget, boost your withholding, which you can do very easily through a little form on the IRS website. Do that and you will eliminate some of the surprise that you would have when you do your returns next year.

As an alternative, what I would recommend you do is start a savings account now, and pop some money in it each week or each month or each pay period until April 15, so if you do end up with a significant tax bill due, you would have already budgeted for it and started saving for it. If you end up not owing money, look at the great thing that's occurred: you’ve saved money! And you know how much I like for you to do that.

HELP ME CLARK!

ROSEMARIE:

We are scheduled for a cruise to Antarctica and the company is suggesting that we get insurance, $528 per person, for emergency events: lost luggage, illness, etc. We are 65 years old and have no health conditions. What do you think?

CLARK:

HLN's Money Expert Clark Howard

If you're going to go on a cruise and your inability to show up at the port would mean you forfeit all your money - which is almost always what it does mean - you should buy trip insurance.

But don't buy it from the cruise line. You want to buy it from an insurance company. And the best website to shop the policies is insuremytrip.com.

Now, the coverages will vary and the exclusions will be different one company to another, so take the time to sit down and compare the exclusions that various companies have and, in turn, the coverages.

The typical price, though, for trip cancellation or trip interruption insurance is 6% of the cost of the trip.

From HLN's Money Expert Clark Howard