I pay my bills on time, have a cushion in my savings account, and don’t spend-and-burn. I’ve also worked with Card Hub since the beginning of time. So, I can honestly tell you I know that secured credit cards can be a super way to build or repair your credit history, and that I never imagined having one in my wallet, given that I have excellent credit.

This goes to show that one should never say “never.” Citibank has a cute little offer going, one that rewards account holders with a 4.07% annual rate of return, and rewards itself with a new base of no-risk credit card holders.

It is frustrating that American banks, post bailout, are paying out record bonuses given that many of those banks would not be in business if they hadn’t received a handout at the tax payers’ expense.  In response, President Obama is now threatening to heavily tax these bonuses to send the banking industry the message that the American people will not stand for such behavior.  The depiction of these banks in the media and by the government, however, is far too simplified.  Not all banks are the same.  Some banks simply didn’t need the bailout and other banks received aid indirectly when the government bailed out their debtors.

For a company like AIG, the issue is quite clear.  They would have failed had we not bailed them out.  As a result, we now own most of their company.  AIG clearly shouldn’t give their executives a bonus.  Moreover, as shareholders, we have every right to demand that those executives don’t get a bonus.  On the other hand, some banks didn’t need a bailout.  Capital One, for instance, was forced to take the government’s money so as to help stabilize the economic disaster.  Their cooperation helped conceal the real problem areas (i.e. Citibank and Bank of America), thus preventing investors from cutting and running on companies that desperately required the bailout to stay afloat.  Those banks which didn’t need the bailout repaid that money almost immediately and they shouldn’t be penalized.  If anything, they should be rewarded for helping the American economy stay afloat and for having a sustainable business model when, all around them, other giants of their industry were toppling.

I had a fascinating conversation with Mr. Herb Weisbaum, AKA the MSNBC.com ConsumerMan, about the scams we should all be aware of. It was an eye-opening conversation, one that I hope will save you a lot of pain and anguish.

Surprisingly, your credit card account is not on the scammers’ most-wanted list. “Con artists are trying not to use credit cards [in their scams] because the charges can be reversed,” Weisbaum said.

I don’t remember how I first heard of Gilt Group, but its sales model intrigued me: Luxury branded items for sale at deep discounts, but only for a limited time. I received an invitation (yes, you need an invitation to join) on my birthday. I needed new shoes. I signed up.

Gilt’s sales begin at noon EST daily and run for no more than 36 hours. They send a daily email to members — I usually get mine at 11:57 — announcing the brands and items for sale that day. In the few weeks I’ve been a member, they’ve offered goods from Vera Wang Collection, Judith Lieber, Rodanthe, American Apparel (really?), Marc by Marc Jacobs, and Alexander Wang.

More and more American families these days are learning to live within their means.  They’re making trade offs about what they want, what they need, and what they can afford.  They’re trying, during these hard times, to make their dollar stretch as far as possible.  You’ll notice that what they aren’t doing, or at least not in great multitudes, is borrowing against their future so as to maintain their lifestyles.  Sure, the draw to live as one has become accustomed is strong, and likewise, the ability to buy on credit is still a possibility.  Were there no repercussions, were it simply a case of someone saying, “here take this, no strings attached,” we wouldn’t need to make sacrifices so that we can live within our means.  However, when we know that there will be repercussions for our spending, that the credit card bill will come or that the bank will want their money back, we also know that we are going to have to do more with less.

Note, this is not a post about family budgets, but a post about national budgets.  America, like America’s households, needs to learn to get more done on less money.  Just as with those households, it is easy for the country to buy on credit, on the assumption that we can repay at some later date… far too easy in fact.  Very little will stand in the way of our nation going deeper into debt, but just as with a normal household, someone has to eventually pay the bill.  That money is not given to us—it comes with repercussions.  Our President seems to be operating in the same mode as his predecessor:  putting our nation into deeper and deeper debt so as to pay for all the projects that he wants to start or maintain.  Congress raised the federal deficit cap in February of 09, they raised it again this month, and are poised to raise it again next month as part of a larger economic bill, currently before the Senate.  Simply raising the amount of debt the federal government allows itself to accrue is easy enough to do.

In an article printed in The New York Times last November, Andrew Ross Sorkin addressed the issue of corporate governance by exploring the proposed takeover of the British confectioner’s company Cadbury by the American company Kraft.  The article explains that because British Boards of Directors act, essentially, in an advisory capacity, the decision to sell the company is based on the shareholder’s desires.

Since the article was written the takeover of Cadbury by Kraft has been complicated by various developments, but the issues discussed by Sorkin still hold.  Sorkin used the proposed takeover as an opportunity to discuss the differences between the power of corporate governance in England and in America.  In the British system, shareholders have much more control over the future of their investments, while in the American system, much of the control of the company is ceded to a Board of Directors and so takeovers, like that of Cadbury by Kraft, generally require the Board’s blessing to move ahead.

On January 14th, Congress voted to increase the federal deficit cap to $12.4 trillion having  raised it from $12.1 trillion February of last year.  The bill was a concession by Democrats who had planned an attempt to increase the federal deficit cap by $2 trillion in order to prevent having to call another vote before next year’s midterm elections.  Already, Democrats are pushing to increase the deficit cap again by mid-February to prevent the U.S. government from spending more than it is allowed and therefore default on certain obligations.  Because the government tax revenues simply cannot cover the rate of government spending, both the national debt and the interest on that debt continue to grow.  For most Americans, this is cause for concern.

Not for Congress though.  The increase to the deficit cap follows on the heels of  last year’s huge omnibus spending bill signed into law on December 16, 2009 which earmarked $446.8 billion for special projects and increased federal spending by 10 to 12%.  Its the kind of thing that can only make it into legislation in December when lawmakers are in rush to make it to the holiday recess and haven’t had the time to give proper vetting to the measures on the table.  It was a holiday surprise for the average tax-payer and a gift to the numerous special interest groups that, sadly, have influence on our lawmakers.  We may recall that it was just such an omnibus spending bill that legalized Credit Default Swaps.  In 2009, despite the fact that the federal government had reached the limit of money that it could borrow, the omnibus spending bill wrapped together 6 different lesser spending bills and had provisions for over 6,000 back home projects for the lawmakers who sponsored it.

Is your fat costing you money? Suze Orman thinks so. On this season of NBC’s “The Biggest Loser” weight-loss competition reality show, Orman quizzed the participants. Turns out that yes, an unhealthy waistline can contribute to poor fiscal health. This is bad news for the 34% of Americans who are obese.

Obese employees earn less money than their co-workers: Research shows that an obese worker earns $7,000 less than fellow employees. Orman attributes this in part to more sick days taken by obese people. Additionally, workers with above-normal body weight have an increased risk of short-term disability: from 7.3% for normal-weight workers to 14.9% for obese workers.

The board of the UK Payments Council, a body composed of England’s top banks, has voted to phase out paper checks by 2018.  With the rise of electronic bill pay, the old tried and true method of paying by check is becoming, not only obsolete, but also expensive.  According to a Reuter’s report, it costs nearly a British pound (roughly $2) to process a check.

We ought to see this as a sign of things to come for the U.S. as well.  Our banks and economy, similar to Britain’s, are moving towards greater streamlining through electronic payments.  People demand the speed and efficiency of electronic and on-line banking.  The paper check has already become obsolete for many purchases (on-line shopping, for instance), and retailers are increasingly refusing to accept personal checks as a means of payment.  Many retailers see checks as an unnecessary invitation to fraud.  Others see it as an unnecessary complication in payment processing relative to the debit card efficiency and speed.

A recent article in the San Francisco Chronicle offered an interesting opinion by Brent T. White, a law professor at the University of Arizona.  He advises homeowners to allow their home’s to go into foreclosure when they find that their home is worth less than what they owe on their home loan.  His argument is that foreclosure is a smarter economic decision and that it is only the social stigma of losing one’s home that is keeping homeowner’s paying their bills when it would be in their best interest to cut their losses and run.

I agree with White that there are times when it is in a homeowner’s best interest to simply walk away from their loan.  However, I also feel that he grossly misrepresents the repercussions of a foreclosure. White’s suggestion completely downplays that, in most cases, creditors can still legally pursue you.  He also suggests that one’s credit score after going into foreclosure is likely to recover in two years.  The truth, however, is that you will have bad credit for the next 5 to 7 years, which means limited access to credit and increased costs on anything that relies on your credit history (e.g. renting an apartment).  Finally, White’s suggestions ignores the human cost of this stressful process.  Going through foreclosure creates a great deal of anxiety.  It is not something you can simply do without feeling the effect on your own well being.

Our government suffers from a naivete with some of its plans to resuscitate the economy which consumers simply cannot afford.  To be more specific, the current administration needs to come to terms with the fact that business practices are dictated by laws and potential for profit.  Businesses cannot, and should not, be counted on to change their policies out of the goodness of their hearts.

Last March, the Obama administration put into place its Mortgage Relief Plan to help homeowners stay out of foreclosure by urging banks to institute loan modifications for borrowers.  Renegotiation of their loans would allow borrowers to make payments on a more affordable rate, allowing them, in theory, to keep homes that would otherwise go into foreclosure.  Since its launch last March, the plan has provided permanent loan modifications to only 4% of those who have attempted to sign up.  Lenders like Bank of America have helped only .06% of the people who’ve requested a modification.

From time to time, we are sent relevant information from other sources hoping to use Wallet Blog as a way of getting important information out there to American consumers.  We were sent this explanation of Medicare benefits by David Colgren, the media relations counsel to CalCPA and thought it might be of interest to our readers. Here is his explanation:

Step 1. Understand how Medicare works.
Medicare is a federal program that provides health insurance to retired individuals, regardless of their medical condition. Here are some basic facts about Medicare that you should know.

Here’s a new credit card scam for you. Cleverly enough, it convinces its victims to call a voicemail system and input the access data for their credit cards.

Victims in Kent County, MI reported receiving cell-phone texts and recorded calls that said that one of their credit cards had been deactivated. They were directed to please call  (616) 855-1134 to set everything right again.

It’s almost to the point that I don’t want to read the Business section anymore. Are you with me? And cognizant as I am that “if it bleeds, it leads,” it’s time for a feel-good financial-services story. So I emailed Liz Pulliam Weston, nationally syndicated personal-finance writer and author of many books, to “get her thoughts on the best and worst financial products and services of 2009.”

Tell you what: the woman’s smart with a capital MART, but I was surprised by her answer.