Orman on defense (Image: Getty)

In a recent interview with Shartia Brantley of theGrio.com and CNBC, financial guru Suze Orman defended her “Approved Prepaid Mastercard,” one that she has called a “game changer.” Endorsers from Kim Kardashian to Lil’ Wayne to Russell Simmons have all taken heat in the past for endorsing prepaid cards and targeting the less than “creditworthy” community. As Brantley writes, “launching a prepaid debit card that bears her name has brought an onslaught of criticism for Ms. Orman. Critics say she is held to a higher standard than other celebrities who have endorsed or placed prepaid debit and credit cards on the market.”

See Orman’s video with theGrio.com below as she discusses why she launched The Approved card and responds to her critics.

In a recent interview theGrio.com/CNBC reporter Shartia Brantley, financial guru Suze Orman defended her own “Approved Card” as a game changer. (It is the first debit card to share purchase information with credit bureau Transunion; although it does not necessarily create a credit score for the cardholder.)

Simmons took his letter to the Web, writing:

“In recent weeks, coverage of prepaid debit cards launched by Suze Orman and Lil Wayne has repeatedly portrayed me as a “celebrity endorser.” Some of these stories have gone so far as to depict my RushCard business in the same light as the ill-fated Kardasian Kard. The truth is, eight years ago I invested millions of dollars, putting my reputation on the line to found UniRush LLC. With the issuance of the first RushCard, I created the first Prepaid Debit Card Account, requiring no linkages whatsoever to a consumer checking account. Today, millions of Americans manage their financial lives with the assistance of prepaid debit cards issued by UniRush and our competitors.

I created this industry because my customers had been left behind by the banking industry. These hard-working Americans had been left to fend for themselves, managing their lives largely with cash in an increasingly cashless society, accessing their money from people sitting behind bulletproof glass windows at check-cashing stores charging high fees. The process was downright awful, requiring long waits in line, oftentimes with children in tow, just for the privilege of cashing a check or paying one’s bills. Prepaid debit cards put our customers back into the American mainstream, eliminating the indignity and dangers of carrying cash while providing a smarter, carefully considered alternative to banks and check cashers.

What did I do to earn the title of “celebrity endorser?”

Read more on Black Politics on the Web.

What do you think? Are prepaid debit cards doing more harm than good in our communities? Sound off with your comments.

Are you behaving wealthy? (Image: Thinkstock)

As 2012 begins, you are probably reflecting on different facets of your life and may even be drafting a plan to make improvements.  In fact, you may be making a renewed commitment to get your financial life in order this year.  If financial independence is your goal, let me suggest the following quick assessment to get you started on your journey to wealth.  Grab your purse and answer these seven questions to assess whether you are a woman behaving wealthy.

1.  How many different credit cards do you have in your wallet?

Count the number of credit cards (exclude your debit cards).  If you have more than one credit card, then you are likely overspending and incurring debt.  Debt is the enemy of wealth and financial independence.  By spending tomorrow’s money today, you are giving up your future freedom.  On the other hand, financial freedom is built from consistently spending less than you earn.  Thus, a woman behaving wealthy spends on the basis of what is important and pleasurable to her on her current income.  Are you on the road to achieving wealth?

2.  What is the value of your purse and its contents?

Add up the value of your purse and its contents.  For example, if your purse costs $500, your smart phone costs $350, your wallet costs $200, your cosmetics cost $250, and your iPad costs $750, then the value of your purse and its contents is $2,050.  Now, ask yourself if you have invested that amount into savings or retirement accounts over the last month?  In this example, if you have invested at least $2,050 in the last 30 days, then you are building wealth.

3.  Is your cash organized by denomination and facing the same way?

Open your wallet or purse and look at how your cash is organized.  Cash arranged orderly is characteristic of a person whose financial life is organized.  However, cash bills in disarray reflect a disorganized financial life.  As you know, focusing through clutter and chaos is difficult.  Be a woman behaving wealthy and organize your cash, financial files, documents, and accounts.

4.  Do you have an up-to-date daily, weekly, or monthly to-do list in your purse?

Whether you maintain your to-do list in a traditional day planner or in an electronic gadget is not important.  What is essential is that you have a plan for what you would like to achieve.  A current to-do list reflects that you have identified, quantified, and prioritized your financial goals.  Researchers have proven that you are 45% more likely to achieve your goals if you write them down.  Are you on the road to achieving your goals?

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5.  Do you have protection plans on the electronic devices in your purse?

Protection plans protect you from loss or malfunction of your gadgets.  Let’s say that you lost your $300 smart phone and you need to replace it.  With a protection plan, you have the option of receiving a free replacement or one for small fee.  Protecting your gadgets is analogous to protecting your assets.  Everyday, you face innumerable risks and, thus, some degree of risk exposure.  A woman behaving wealthy protects her assets – loved ones, income, health, and property.

6.  Do you have an emergency card in your purse?

An emergency card details your healthcare emergency names and numbers (e.g., hospital, doctor, dentist, pharmacy, health insurance plan, insurance policy).  It also holds your family’s contact information (e.g., spouse’s, parent’s, and kid’s contact numbers) in case of an accident.  The best time to prepare for an emergency is before it happens.  If you have an emergency card, then you have taken steps to create a preparedness kit.  Women behaving wealthy are also prepared for the occurrence of other unfortunate instances.  Have you selected a custodial and financial guardian to care for your children in case a tragedy befalls you?  A woman behaving wealthy has a plan in place that protects her loved ones in the event of misfortune.

7.  Are your receipts and important papers (in your purse) organized by category?

The receipts and important documents in your purse can represent additional income and savings for you if you apply them to decrease your taxes.  Many purchases are potential deductions from and credits to income taxes.  By consistently categorizing the expenditures you make that are potential deductions and credits, you are employing tax-reduction strategies to increase your income or wealth.  Taxes are another detour on the wealth-building journey, as they erode your investing power.  A woman behaving wealthy has the objective of retaining as much income as possible, which can then be redirected to more savings.

After Peeking in Your Purse, are you a woman behaving wealthy?

Congratulations are in order if your answers to six or seven of the above items indicate you are on the journey to wealth! However, if your purse audit suggested that you aren’t quite on your desired road to financial independence, don’t worry! Take action today and transform your financial life by completing Women Behaving Wealthy’s FREE Wealth Assessment at www.womenbehavingwealthy.com.

Dream it.  Plan it.  Live it.

Wealthy Women are rarely born that way. Most wealth is created. Robin A. Young creates Wealthy Women. It is Robin’s mission to educate and empower women to embody the necessary habits that create wealthy lives. Hence, Women Behaving Wealthy™ was born. Over Robin’s 12-year career as a Wall Street executive and financial advisor, she has adeptly integrated her academic training and investing experience with sound financial principles and a unique customized approach. This approach has allowed her to successfully manage the portfolios of over 500 millionaires and hundreds of other investors.

Keep tabs on your credit utilization.
A credit utilization ratio is a calculation used by creditors that measures how much credit you’re using compared to how much you have available. The more unused credit you have, the better. Your credit utilization accounts for 30% of your score.

Stay in contact with your lenders.
If you find yourself in a tight spot and you don’t think you’ll be able to pay your bills on time, contact lenders immediately. You might be able to work out a payment plan.

Devise—and stick to—a budget.
Knowing exactly how much money you have available will help you manage your finances.

Cut the fat.
Once you’ve devised a budget, identify areas where you’re overspending. Cut back or eliminate those items.

Pay off high-interest debt.
Once you’ve paid off those bills with the largest interest rates, apply your dollars toward your next highest debt and so forth. This way, you’ll get rid of high maintenance fees faster.

Use cash whenever possible.
Paying for items with actual dollars from your wallet will make you think twice about creating new debt.

Add income.
If your belt can’t get any tighter and spending less isn’t helping much, find a way to make more money. Now is the time to look for a part-time or freelance job.

Seek help from a certified financial planner.
A CFP can help you identify areas where you need to improve and assist you with reaching your goals. Some planners will conduct the first session for free or at a reduced cost.

(Image: Thinkstock)

Thirty days.

That’s roughly the amount of time the average American sticks to his or her New Year’s resolution.

If we’re honest about our financial New Year’s resolutions – like saving money, organizing our finances better, or laying off the credit cards – many of us will admit that we might not even make 30 days.

But what if there was a way to jump-start your finances in 2012 so that even if your willpower waned after a month or so, you’d still be enormously ahead of the game?

Actually, there are several steps you can take to greatly improve your chances of achieving your financial goals in the coming year.

Here are three powerful ways to turbocharge your finances in 2012. These strategies can also help you make the most out of just 30 days in the New Year.

1. Give yourself a one-month challenge

Behavioral experts say it takes about three or four weeks for you to do something repeatedly, and have that action turn into a habit that lasts. So give yourself a one-month challenge to do, or stop doing, something in order to improve your finances.

If you want to start a good habit, try logging your expenses daily to better track your spending. Alternatively, you could carpool to work or even just put every dollar you get into a savings jar each day. Remember, you only have to do it for one month.

At the end of 30 days, you can always stop or tweak what you’re doing. But you will likely be so satisfied with the benefits of your newfound habit that you will decide to stick with it for the long haul.

To eliminate a bad habit, like overspending, consider not visiting your favorite retail store for 30 days, not carrying your credit cards with you each day to avoid impulse shopping, or not eating out at all for one month.

(Image: Thinkstock)

2. Join a financial boot camp

For the ultimate month-long challenge, and to achieve financial fitness, join a financial boot camp.

One option is MyMoneyCircles.com, a free, four-week boot camp that guides you to financial health one step at a time. As a Money Coach, I’m proud to lead this online boot camp, along with a team of other personal finance experts.

In just one month, we help you address some of your most pressing financial questions and concerns, and deal with your most stubborn financial challenges. For example, you’ll learn how to save money quickly on your immediate and long-term bills, including groceries, communications, housing and more.

You’ll get the skinny on how to manage credit and debt wisely. You’ll figure out what you need to do to adequately protect you, your family and your assets against unforeseen circumstances like a layoff or illness. And you’ll get a game plan to save more money for retirement and other future-oriented financial goals.

The boot camp includes community groups that let you to connect (anonymously) with other like-minded people who share your same financial goals. And while MyMoneyCircles is designed to keep you accountable and on track financially, a range of resources, quizzes and tools also make the process doable and fun.

(Image: Thinkstock)

3. Get started now

Why wait until January 1, April 15, or some other arbitrary date in the future to begin fixing your finances? Start taking charge of your money matters today just by adopting this motto: “Think-Do.”

Simply put, it means when you think of something you know you should do, or need to do, go ahead and tackle that task immediately. Think-Do.

For instance, if you’ve been too scared to check your credit report, you can order it online today from AnnualCreditReport.com. Done.

If you’ve neglected to buy much-needed life insurance, you can get life insurance quotes today from Insure.com. Done.

Of if you’ve put off organizing your tax records, you can start gathering your receipts and financial paperwork today. Done.

Exactly what you do isn’t as important as doing something – and doing so today.

If you put the “Think-Do” strategy into practice for 30 days, you’ll be amazed at how much gets accomplished.

By taking just one small but powerful action step, you push past the inertia and inaction that cripples many people financially. Instead of procrastinating important financial goals month after month, you’ll be addressing many of those issues in just 30 days flat.

So instead of making and breaking financial New Year’s resolutions, this time simply put these three ideas into practice for one month – and watch your finances reach another level of success in 2012 and beyond.

Here are four ways to keep your credit in tip-top shape during the holidays.

Don’t apply for store credit cards.
Opening a new account could spell trouble for your credit score. This is because the length of your credit history makes up 15% of your FICO score.  The older your credit age the better, as it shows a long history of credit management. Opening a new credit card account will lower your overall credit age, and consequently, your score. Applying for credit also means that there will be an inquiry on your report. Inquiries related to new credit accounts make up 10% of your FICO score.

Don’t overcharge.
Be mindful of how much you’re spending. If you won’t be able to repay the amount you charge at the end of the month, reconsider your purchase. Charging too much on your card will cause the amount you owe to spike. Amounts owed account for 30% of your FICO score.

Be cautious when shopping online.
If you’re shopping for gifts online, make sure that you only visit websites that you’re familiar with or that you’ve done business with in the past. You can also protect your information by applying for a temporary credit card number. To do this, you have to contact your credit card issuer or bank and make a request. The bank then provides a new, temporary number that is linked to your credit card account.

Don’t forget to pay your bills.
It’s easy to forget to pay your bills when you’re traveling and visiting relatives. Set up reminders on your calendar or automatic bill payments so that you won’t miss a payment and get a negative mark on your credit report.

Fair Isaac, creator of the FICO score, has rolled out to all three credit bureaus its newest general-purpose FICO score, dubbed FICO 08. With this new version of the credit score, FICO says its will disregard collection accounts and other dings on your credit file when the original balance owed was under $100.

The logic there,” says FICO’s Tom Quinn, “is that for small dollar amounts, like a collection notice from a public library system, the (credit scoring) model will now bypass those and not consider those to be negative. Any kind of derogatory public information that’s less than $100” will be excluded, Quinn adds.

This certainly has the potential to help boost your FICO score if it was impacted by such a blemish. But beware: amid the credit crunch, every single account you have, and every single financial transaction you engage in is being analyzed to determine your credit worthiness.

All Transactions – Large and Small – Matter Greatly Amid the Credit Crunch

Also, even with FICO saying it won’t use those small accounts in its scoring methodology, the debts nonetheless remain on your credit file, and some lenders may require that you resolve those issues or pay off those debts before approving you for a loan.  More importantly, you should know that every transaction – large and small – matters greatly amid the current credit crunch. And when I say “every” transaction, I mean it.

Your Financial Habits Are Under Intense Scrutiny, Even if You Don’t Know It

Increasingly, retailers, credit reporting agencies, credit scoring companies, and of course banks and other lenders are watching every financial transaction you make. Made an online purchase to buy some shoes lately? Somebody tracked it.

That’s why the next time you’re working at your computer – or simply surfing the web – you’ll see a pop-up or some advertisement featuring shoes. Ditto for school supplies, furniture, electronic gadgets, or anything else you purchase. But the scrutiny goes way beyond just watching what you buy, and then trying to sell you more of it.

Retailers, lenders and credit-scoring firms are all capturing a wealth of data about your financial habits, both on and offline, in an effort to tell them who among us is the most credit-worthy – and who is the least.

(Image: Thinkstock)

You May Be Deemed “Risky” Based on What You Buy and Where You Shop

So what exactly are they watching? In a word: everything. They’re looking to see whether you accept credit card offers, online, in the mail or via telephone. They’re gauging whether or not you’re likely to take a balance transfer offer for the initial low interest rate – only to toss the card when the offer expires, or when a better deal comes along. They’re looking at the types of stores you frequent, and whether you spend money (that is, use your credit cards) at “risky” establishments, like bars, clubs and casinos.

They’re also poring over all manner of data regarding your housing, and that includes both renters and homeowners. For those of you who rent, they’re looking at whether you’ve consistently paid your rent or time, whether you’ve been delinquent, and whether you’ve ever been evicted.

For homeowners, they’re looking at how much overall debt you have, whether or not your mortgage is a fixed-rate or adjustable loan, whether or not you have a home equity loan or line of credit, and if so, how much you typically tap and how often. If it seems as if the credit industry has got a spotlight on you, it’s because they do. But you don’t have to be blinded by it – or blind-sided – if you manage your financial affairs properly.

Your Credit Report is Constantly Being Updated

Again, when I say that every transaction counts, let me make something clear: I’m not just referring to business transactions that involve loans. Every transaction means just that – every economic exchange you make, every credit, loan or contract agreement you enter into, and every financial move of yours that can be documented – all of it matters greatly. Every single transaction counts.

Do you think that your dealings with cell phone companies, water end electric services, and public utilities aren’t being monitored? Think again. About 100,000 organizations supply information to the credit reporting agencies. These organizations include banks, lenders, collection agencies, credit card companies, leasing firms, utility companies and any other entity that extends credit or reports information about you. Even libraries have been known to rat on delinquent patrons to the credit bureaus for having an overdue library book!

The same pattern holds true for various municipalities around the country; places like Chicago and New York City will report you to collection agencies in a hot minute to for failing to pay parking tickets or moving violations. And as cash-strapped cities try to cope with budget shortfalls and a tough economy, you don’t have to be Nostradamus to predict that many more cities will soon start using collection agents to pursue “small” debts due from local citizens.

The Convergence of the Credit Crunch, Technology and Big Brother Means You Must Be Careful Even With Small, Overdue Bills

Thus, transactions large and small take on greater importance amid the credit crunch because, in many ways, Big Brother isn’t merely looking over your shoulder these days. Big Brother now seems to be peeking into your laptop, using a skycam to watch where you go, accessing your Blackberry or iPhone, and placing wiretaps on your home and business phones too. OK, so maybe it’s not that bad. But you get my point.

An incredible amount of information about your finances and money patterns is being captured, analyzed, and dissected in ways you probably never imagined. I predict that in the future, this trend will greatly increase—even for small bills.

Simple, little transactions that you may regard as minor or even big bills that you are disputing can all wind up having serious ramifications for your credit rating.

That magazine subscription you ordered (even if it was just part of a sales promotion) can come back to haunt you if the $14.95 bill isn’t paid. Those music videos you’ve neglected to return (since forever) could land you on someone’s collection list. And even that hospital co-payment or medical debt that you’ve been sent a bill for yet again – for the umpteenth time after your insurer refused to pay – that too could ultimately damage your credit rating if left unattended.

So do yourself a favor—handle all your bills wisely and pay everything on time, and that includes small bills of less than $100.

“Ask The Money Coach” is a syndicated column written by personal finance expert Lynnette Khalfani-Cox, co-founder of the free financial advice blog, AskTheMoneyCoach.com. Follow Lynnette on Twitter at @themoneycoach.

A strategic default is when a borrower decides to default on their mortgage – basically refuses to make payments – and walks away from the loan.

The bank will obviously report this delinquency to the credit bureau. But for many borrowers, the cost savings and the ability to be financially free from a burdensome home is enough to prompt this type of drastic move.

Reasons Why People Consider a Strategic Default

An increasing number of borrowers with very strong credit and a healthy credit history are choosing a strategic default in recent years.

Foreclosure defense attorneys warn that borrowers should consider all of the long-term consequences of this type of move, but many are still going ahead with it.

According to a national survey by Reecon Advisors, nearly one out of 10 homeowners, or 7.4 million, would be likely to choose a strategic default strategy if they were in a situation where their house was worth less than what was owed on the mortgage.

Many homes have fallen “underwater” from the recession, and most homeowners are finding it impossible to sell their homes for anywhere close to pre-recession prices. While there is always the option to wait it out and hope that your home value improves when the economy turns around, this could take several years.

Effects of a Strategic Default on Your Credit Score

Officials from Fair Isaac Corp., creators of the FICO credit score, report that borrowers who choose a strategic default on their mortgage typically lose about 150 points from their credit score. This is a significant amount when you consider that the highest FICO score you can have is 850. Unless you have a very high score – somewhere above 750 points — you could put yourself at risk for a very poor credit rating from this single move, at least in the near-term.

The effects of a drastically lower credit score include:

• Difficulty obtaining a home loan at an attractive interest rate
• Inability to open up new lines of credit
• Missing out on low-interest credit card offers
• Being turned down for even a basic personal loan or auto loan from a bank or other financial institution

Still, thousands of homeowners are choosing a strategic default just so that they don’t have to deal with a mortgage that is now underwater. They feel like they’re “throwing good money after bad” to keep paying a lender for a house that’s clearly not worth what’s owed on it.

If you have considered strategic default to catch up financially, or to simply walk away from a house that doesn’t make economic sense to own, the good news is that the hit to your credit rating doesn’t have to last seven years.

Yes, it’s true that negative information, such as a foreclosure, will remain on your credit reports for seven years. But it’s also the case that how well you handle your finances after a strategic default is equally critical.

For example, since the credit-scoring system places a heavy emphasis on your payment behavior in the two most recent years, you can help restore your credit rating more quickly by making sure that you pay all your bills on time following a strategic default.

Also, to the extent it is possible to isolate the strategic default, doing so will help your credit rating. In other words, if it’s feasible, pay your other obligations on time – such as your car note, credit card bills, etc. That way, the credit-score damage from the strategic default will still be severe, but not as bad as it would be had to let all your bills go delinquent.

The bottom line is that you can bounce back and recover after a strategic default or a foreclosure. And it won’t necessarily take as long as you may have thought.

“Ask The Money Coach” is a syndicated column written by personal finance expert Lynnette Khalfani-Cox, co-founder of the free financial advice blog, AskTheMoneyCoach.com. Follow Lynnette on Twitter at @themoneycoach.