Just last week my wife was going through the mail and noticed an envelope from Bank of America. We have a couple of accounts with them so she opened it up. To her surprise, inside she found a new credit card. The reason that she was surprised is that we do not have a credit card account with Bank of America.

She called to complain and was told by a condescending service agent that she must have applied for the card. No one should be treated like an idiot. But especially my wife. She's been a CPA for 25 years and I suspect that she's more knowledgeable than the service agent!

She asked for someone in a supervisory position. That person, too, insisted that she must have applied for the card even
though she explained that she would remember and did not complete any application.

Finally, she remembered that she had used the drive-through at the bank a few weeks earlier to make a deposit. The teller mentioned that she qualified for a special card, but my wife responded that she did not want the card. Although there's no way to know for sure, it would appear that the teller hit the "yes" instead of the "no" button on her screen. Instant credit card application!

Why is this worth your time? (outside of the fact that I feel better for telling it?) Opening a new credit account would
probably reduce our credit score. Not by much, but we shouldn't be penalized for something that we didn't request or want.

Second, it's a good thing that she didn't toss the mail unopened as junk. I'd hate to think of what could have happened if the wrong person got their hands on the unsigned card. Also, I don't like the thought that we'll probably need to be more careful sorting the junk mail in the future. Like we don't waste enough time doing that already.

Third, I guess we'll all have to be very careful with our conversations with banks. An off-handed reply and you could be signing up for a credit card without even knowing it.

Once again, I guess the bottom line is that you really have to watch out for yourself financially. To do otherwise is to take unnecessary chances.

Recently, my husband and I had the displeasure of being ripped off for $400 after eating out at a restaurant. The debit card has now been closed and the bank is supposedly working on the problem of getting our money back to us.

How can one eat out without being concerned that this can happen again. Is there anyway to prevent it? We are very upset and frustrated that someone ripped us off for this money and also cannot afford this big of a loss. My husband is on Social Security and is working part-time. What can we do, if anything, to protect ourselves from this happening? We have discussed buying gift cards to these restaurants, which is a pain but would prevent what happened from happening again. Do you have any other suggestions? -- Cheryl

Cheryl and her husband are not alone. In a recent poll (epaynews.com), three quarters of consumers said that credit card fraud was a major or moderate concern. And, they have good reason to be concerned. The Federal Trade Commission estimates there are $3 billion in fraudulent charges each year.

Guess that shouldn't be surprising. We use our plastic a lot. Visa and MasterCard estimate that we spend near $2 trillion dollars using their cards each year. And, that doesn't include the money we spend using Discover, American Express, store cards, gas cards, etc.

So what happened to Cheryl and her husband? The most likely scenario is that they gave their card to the server to pay for the meal. While out of sight from Cheryl, either the server or the cashier wrote down their card number and the verification code on the back. Later, they used the numbers to make online purchases where a physical credit card isn't required.

How can Cheryl and her husband prevent a reoccurrence? There are things they can do to protect themselves. But, we'll find that security comes with a price. The most effective tools are also the ones that are most inconvenient. So Cheryl will need to decide how much security she wants.

Cheryl is already using a debit card. The advantage is that the crook can only spend what's in the account unlike a credit card that can be used up to its credit limit.

Cheryl probably had the cost of the meal and another $400 in the account that day. One way to limit the loss is to keep less in the account. For instance, if there's only $100 in the account no one can charge more than that using the debit card. Of course, keeping a low balance means adding money to the account every time you intend to use it. If she wants to try this, Cheryl should talk to her bank about using online banking to transfer money. She'll also need to know whether the transferred money is available immediately or if she has to wait overnight.

There are a couple of other ways to make using credit or debit cards safer. One of the most effective is to not let the card out of your sight. That way if someone is going to try to steal your credit card number, they'll have to do it while you're watching them. Chances are, they'll choose someone else who is an easier target to rob.

Use a PIN number. She's probably already aware, but keep your PIN number separate from your card.

Using gift cards probably wouldn't have made Cheryl any safer than taking her debit card up to the cashier herself. You still have someone you don't know handling your card.

One way to make sure no one steals your card number is to use cash. You do run the risk of losing it or being mugged. However, the good news is that you can't lose more than you have in your pocket or purse.

There is, however, one additional risk for cash. Getting cash from an ATM is not completely safe. Some smart criminals put recording devices onto ATMs. They record your account and PIN number for later use. So the safest way to get cash is to visit the bank during normal business hours and deal with an old fashioned, real live teller.

While losing $400 is nasty, it could have been much worse. Cheryl should only be liable for the first $50 in fraudulent charges. So the monetary damage is limited. It becomes a much bigger problem if someone parlays her credit card number into identity theft.

Undoing an identity theft can take hundreds of hours. It's estimated that the time spent by the average ID theft victim to get things straightened out is worth $16,000.

Cheryl is right to worry about safeguarding her credit accounts. Not only are there more ways for crooks to use a stolen credit card number, but also in the age of ID theft, the damage inflicted can be substantial.

My husband was out of work for two years. We were forced to live off credit cards, so we have five cards that are close to their limits, along with a mortgage and a car payment. Despite our circumstances, only a couple of credit card payments were late over that time, but our rates skyrocketed while our credit score dropped dramatically even though I had had a nearly perfect credit score before. My husband now has a job and our income has increased. What is the best way to get our financial life back on track? Does income count in calculating credit score or in assigning credit card rates? Is there something we can do besides paying off as much as we can as quickly as possible? --Stephanie

Stephanie is smart to want to boost her credit score. That score is quickly becoming a very important number for all your financial affairs.

Let's start by examining her current situation. We'll begin with something called the FICO score. It's named after Fair Isaac, the company that calculates and provides credit scores. The score is a number between 300 and 850. A higher score is better. It attempts to predict how likely you are to be able to pay your debts.

Lenders use the score to determine whether to approve your loan and how much interest to charge you. Others use the score to see how financially responsible you are. Insurance companies, employers and landlords are among those using your credit score in determining whether they want to do business with you.

Stephanie admits that during her husband's unemployment they had a few late bills. And that the interest rates on their credit cards jumped. That's common. In fact, you should expect that a late payment on one will have an effect on all your cards.

According to Fair Isaac, negative information can include "overdue debt from collection agencies, and public record information...including bankruptcies, foreclosures, tax liens, garnishments, legal suits and judgments." Fortunately, for Stephanie, only a couple of payments were late and they stayed current on the mortgage and car payments.

So what's the best way for them to improve their credit score? Fair Isaac will not say how they're calculated. But some general information is known. Stephanie's income is not part of the score. In fact, the scoring company does not know her income.

Some companies claim that say they can raise your score immediately. Don't trust them. Repairing your credit score is not an overnight event. It takes time to improve it.

If information is accurate, you cannot remove it. For instance, a late payment will remain on your report for seven years. That might seem like a long time, but it becomes less significant as you continue to make timely payments. Recent late payments hurt more. The number of late payments counts, too.

Fair Isaac says that about 35% of the score is based on your payment history. So it is important for Stephanie to make all of her payments on time.

If Stephanie is creative, it might occur to her to close the accounts that were late. But, a closed account will still show up on your credit report. You can't "erase" a late payment by closing the account.

Stephanie is right that reducing her loan balances is important. An additional 30% of her credit score is based on the amount of outstanding debt. Ideally, her card balances would be 25% or less of the installment credit available to her.

Do not open up new credit card accounts in hopes of creating new, unused credit to lower the ratio. That would actually work against her by raising the amount of unused credit and by lowering the average time that the accounts have been open.

Stephanie has already limited the number of accounts carrying a balance to five. It is believed that your score will drop if you have an unpaid balance on more than 6 or 8 accounts.

It would probably also be a good idea for Stephanie to check her credit report for errors. Actually, that's a good idea for everyone. At least once or twice a year. Tests show that one in four credit scores have a significant error. Get a free credit report at annualcreditreport.com or call 1-877-322-8228.

Stephanie and her husband are fortunate. They've survived a tough financial situation. Although some damage has been done, their credit score will rebound in time. The key now is to avoid any 'quick fixes' or missed payments that would make things worse. Simply following good money management practices like paying down her credit card balances is the best thing that she can do.

I requested that my credit card account be closed in June. In November, I received a bill for $110 for automated charges that go through once a year. The credit card company said that it was my responsibility to request that these charges stop going through. The problem is that I can't get through to these companies to have these charges stopped. I had actually requested that one of these companies stop charging my card and they did not. This is a big part of the reason that I requested to cancel the card. Is it legal for the credit card company to continue allowing charges to be made to my account months after I request the account to be closed? If I can't ever get through to these companies because they are always having technical difficulties, am I just doomed to have the credit card account forever? Who can I ask for help? - Kristen

Kristen has discovered that there's a flip side to the convenience that's offered by automatic bill payments. Sometimes, it can be difficult to stop those same automatic payments. Let's take a look at automatic bill paying and see if we can't find a solution to Kristen's problem.

It's easy to see why automatic bill paying is popular. For the consumer, it is very convenient. No need to write and mail checks each month. As long as you have enough money in the account, there's no chance of triggering a late fee. The Electronic Payments Association estimated that consumers saved $4.5 billion in 2002 by using direct payments.

The companies whose bills are being paid automatically love it, too. They spend less when they don't have to sort, post and process checks. They're more likely to be paid on time. And, the consumer is more likely to continue paying for the service even if he doesn't use it. No check writing to remind him he's wasting money.

According to the Automated Clearing House Network in the 3rd quarter of 2005, there were 2.7 billion automated transactions worth more than $6.1 trillion.

It's a great system, except when it goes wrong. And sometimes it seems as if the selling company wants it to go wrong. Because the longer they can pretend not to know that the customer wants the service stopped, the longer they can charge for it. Some companies are notorious for making it difficult to cancel automatically billed products and services. As in Kristen's case, sometimes their phones always seem busy.

She has already discovered that the credit card company will not be responsible for notifying companies that she wants a service/billing stopped. In fact, she can pretty much expect that they will process any bills that are legally presented to them.

But that doesn't mean that Kristen is doomed to pay for these services forever. The Fair Credit Billing Act provides some protection. Kristen needs to notify the billing companies in writing that she wants the service/billing to be stopped. She should send the letter via "certified mail, return receipt requested" so that she has proof that it was received. Check the statement from the company for a heading like "in case of error" or "send inquiries to."

If a statement is not available, Kristen can do a web search for the company. Once on their site, she should find a "contact us" page that will have their mailing address. Be sure to include sufficient information in the letter: account number, how much is being charged, how often and for what goods or services. State clearly that you want it stopped immediately.

At the same time, Kristen should also send a second letter to the credit card company. It, too, should be sent with return receipt. State that you have contacted the billing company in writing and ordered them to stop billing your credit card. Include the company name, the amount being charged and the product/service that has been cancelled. Kristen should keep her copy of both letters and the return receipts when they come back to her.

That should take care of the problem. But, sometimes things don't go according to plan. The next step would be to contact the Attorney General's office in her state. She can find a listing at . Kristen will want to write them a letter explaining what she has done. Include copies of the earlier letters to the billing and credit card companies.

The Federal Trade Commission (FTC) is the final recourse. For information on consumer issues call 1-877-FTC-HELP or go to www.ftc.gov and fill out the complaint form.

As to closing the credit card account, Kristen should be able to do that at any time. That, too, should be done via return receipt mail. And Kristen needs to recognize that even if she closes the account to new charges, she's still responsible for paying any balance on the account.

We were offered a one-year 2.99% interest rate on an existing Visa account that we didn't use very much. We wanted to use the card to make a very large purchase with the intent of paying it off within one year.

Luckily we checked the "fine print." The original purchase will be at 2.99%, but any subsequent purchases on that card will be charged interest at 15.99%. There's a huge red flag! The original "loan" must be paid off before any payments will be credited to the new purchases that are made. So what we pay every month goes toward the 2.99% charge and, for example, the airline tickets I later purchased with this card will continue to accrue 15.99% interest charges until I pay off the original purchase sometime next year.

I said we're lucky because we understand the rules and have put the card away until it's paid off. I shudder to think how many people don't catch this little quirk. -- SB, Virginia

SB is right. Many people are being tripped up by the fine print in credit card agreements. She's fortunate to have caught on before charging up a bunch of stuff at a pretty stiff interest rate.

Credit cards have come a long way. A generation ago, there was a "one size fits all" approach. Today, you can choose cards based on their fee structure, interest rates, cash advance provisions or even the rebate offered. But, with all those choices, comes the responsibility to know what the credit agreement says.

The agreement will specify what the card issuer can do with the account. The language isn't always easy to understand. If you have trouble figuring out what something means, call the card issuer and ask for an explanation. Don't use the card until your question is answered.

All that fine print is actually a blessing in disguise. It will tell you how the card issuer intends to take your money. All you have to do is to read and understand the credit agreement. There's no reason to get caught. Most of the traps can be avoided if you know where they are.

Be careful of zero or low rate offers. Low initial rates typically are only for a limited amount and a short time period. The agreement will explain which purchases or balance transfers are eligible for the low rate. It will also say what you'll be charged for other non-eligible purchases. That's the trap SB uncovered.

You might also find that cash advances and balance transfers carry a different, higher interest rate than other purchases.

You would expect that variable rate accounts would have changing interest rates. But, even so-called 'fixed' rates can be changed. They're only fixed for 15 days.

When you get the card in the mail, don't assume that you're approved "up to $5,000" as advertised and that your credit limit is $5,000. Depending on your credit score, you could be approved for something considerably lower.

Understand what happens when your account goes "over limit." Don't assume that they'll automatically refuse to accept a purchase that puts you over limit. Most will actually let you go over limit, but then penalize you with fees and higher interest rates!

Another trick is to send you a card that's different than the one for which you applied. You could be turned down for the card with the low-rate balance transfer but issued one without that special feature. If you use the card, you will be accepting the terms on the agreement that came with it, even if they're different from the one for which you first applied.

You'll find other little tricks in the fine print. For instance, it's common for the "grace period" to expire early in the morning. You can be pretty sure that the mail delivery will be later in the day. So your payment needs to be there a day early.

Look for something called "universal default." It means that if you're late on another payment, the interest rate on this account will be increased.

Finally, the lender will have a provision in the agreement that allows them to change the agreement. All they have to do is to notify you of the change in writing. That means that you need to read everything that comes from the issuer. Some have been known to send out amendments that look like junk mail. If it comes from your card issuer, you need to open and read it.

SB has learned that you can use credit card rules to your advantage, but if you don't know the rules, you're almost certain to lose the game.