What is the second largest purchase you'll ever make? Most of you probably said your car. It makes sense though. Your home is probably going to be the largest and a car is the second largest. That would be true if you didn't pay for college.

College, even a modestly priced college, is going to cost you much more than a car. Student loan debt used to pay for school has spiraled completely out of control. According to the Wall Street Journal student loan debt has now passed credit card debt to the tune of $830 billion. This debt is less expensive than credit card debt but is the closest thing we have to a debtor's prison because you can't ignore it, settle it (yet) or discharge it. Point being, you're going to pay it.

Opinions on the topic are going to vary. Some believe that college is a much needed resume filler. Others believe you can do just as good with street smarts and motivation. And still others believe that just because you CAN go to an expensive school does not mean that you HAVE to go to an expensive school.

Whatever your perspective is on the issue, one thing is clear: If you choose to get into a lot of student loan debt, it's a smart move to at least choose a school and major where there's a demonstrated track record of ROI. Law, medicine, nursing and engineering are probably safe bets. Liberal arts degrees (like mine) are fine but a $60,000 price tag, which is really $100,000 after interest, doesn't make a lot of sense unless you can pay out of pocket or fund it using grants or scholarships or mommy and daddy.

John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.

Today, the Federal Trade Commission came down hard on for-profit debt relief firms. The FTC’s new amendments to the Telemarketing Sales Rule will prohibit debt relief companies from collecting advance fees, among other things. Here is some basic information about the new Rule.

Who: The Federal Trade Commission, which enforces the Telemarketing Sales Rule, has developed the new rules.

The rule applies to all for-profit debt relief agencies that sell debt relief services over the telephone, including those that discuss settlement over the phone with prospective clients. In other words, they don’t have to be cold-calling consumers to be covered by the rule.

When: These final amendments are effective on September 27, 2010, except for the upfront fee ban, which is effective on October 27, 2010.

What: The Rule will:

(1) prohibit debt relief service providers from collecting a fee for services until a debt has been settled, altered, or reduced;

(2) require certain disclosures in calls marketing debt relief services; and

(3) prohibit specific misrepresentations about material aspects of the services. 

I will write more as I sift through the details.

Gerri Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes budgeting, debt recovery and savings information online. She is also the co-author of Reduce Debt, Reduce Stress: Real Life Solutions for Your Credit Crisis.

Yesterday I was a guest on Allan Handelman’s radio show and took a call from a listener who faithfully paid a debt relief company $450 a month for two years. But that firm never paid a penny to his creditors, and then abruptly closed shop.

Today at 1:30 pm ET, FTC Chairman Jon Leibowitz and Vice President Joe Biden will announce a new debt relief rule designed to help protect consumers against debt relief abuses. It’s expected that the rule will restrict the marketing of debt settlement services and place limitations on the upfront fees that settlement companies can charge.

At Credit.com we’ve warned consumers to be very careful when considering debt settlement, and have suggested questions to ask a settlement company before you do choose one to help you with your debt. We understand that debt settlement can be a legitimate option for consumers who have too much debt to qualify for a debt management plan administered by a credit counseling agency, and either can’t – or won’t – file for bankruptcy. And in my ebook Reduce Debt, Reduce Stress, I profiled several consumers who successfully used debt settlement to get out from under crushing credit card debt.

I will be watching the announcement today, and will be back with a summary of the new rules, and more advice for consumers who are considering using a debt relief company to get out from under overwhelming  debt.

Gerri Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes budgeting, debt recovery and savings information online. She is also the co-author of Reduce Debt, Reduce Stress: Real Life Solutions for Your Credit Crisis.

Stop borrowing money! This is the advice from all the good financial pundits.

Borrowing money can be addictive and destructive. Divorces, wars and a multitude of other woes can be caused by debt. If you want to really get an idea of how volatile borrowing can become – borrow money from a close friend or family member, don’t pay it back, then crack a joke about it. Paying back borrowed money is a serious personal matter.

But most people don't stop to fully consider their borrowing habits. More and more Americans simply pay with credit for every transaction. If you used a credit card, you borrowed money. I think it’s the new American pastime. We borrow money. We try to pay it back. And when we can’t, it’s destructive. So maybe it's time to ask yourself: why do you still borrow money?

Maybe it’s easier to look back a generation. Why did our parents borrow money and how did they do it? Conventional wisdom suggests they only used credit for basic needs and large purchases, and that they took time to consider the consequences. In most cases, we think their credit use was only for very large and necessary purchases, i.e. houses or cars. America’s “Greatest Generation,” it seems, took their time to make decisions, and used credit for the major, life-enhancing, necessities.

One of my colleagues, and I use the term loosely, would take issue with these historical assumptions. He would proclaim the remarkable and overriding benefits of credit to the world, and point you to The Morality of Moneylending: A Short History, by Yaron Brook. My colleague, Brook, and a whole pot of moody tea partiers would probably point to “evidence” that mortgages, auto loans and plenty of fast cash providers even flourished in the 1940s. He points out that quick cash has existed from biblical times, through Shakespeare’s times, and in the late 1800s. He points to evidence that volumes of spend-happy families from the Greatest Generation had to visit debt counselors in the 1950s. This colleague thinks that the Greatest Generation certainly did some serious borrowing and spending, and that we are not uniquely bad borrowers today.

Fair enough.  However, my point is – be a prudent borrower, like your father and grandfather would want you to be. Most people realize the Greatest Generation was great because they were personally responsible, frugal and humble. If you’d be embarrassed to tell them about your borrowing, maybe you should reconsider. Nobody’s grandpa would approve of financing $70 on a pair of chinos, even with a discount. Grandpa would probably rather invade Normandy again than have his grandson finance pants.

Thought-out, balanced, affordable and necessary borrowing may be wiser and cheaper. Like everything for sale in the market, the quicker you want something, the more expensive it is. Compare buying bacon at Sam’s Club to buying bacon at a convenience store. Compare the higher expense and convenience of taking a taxi, to the lower cost and longer wait for a bus. If you want something immediately in this country, you pay more. Credit is not unique, and obeys every universal rule of economics. If you want someone else’s money and you want it quick, that is going to be risky for the person with the money, and you'll pay to offset the risk.

Financing anything requires applications, reviews and credit checks. For example, student loans take time to get, and should be beneficial, but you still need to be careful.  Even student loans can be more dangerous than they appear – students are exiting school with whopping debts and student loans aren’t dischargeable in bankruptcy. Hallowed halls, ivy, books and smart professors just ain’t cheap. So take time to review any loan materials with someone you trust, and to consider the long-range consequences before borrowing money if you can afford the wait.

By Clinton Heyworth, with contributions by Justin Hosie

Credit.com's credit card payoff calculator can show you how long it'll take to pay off those chinos.

Stop borrowing money! This is the advice from all the good financial pundits.

Borrowing money can be addictive and destructive. Divorces, wars and a multitude of other woes can be caused by debt. If you want to really get an idea of how volatile borrowing can become – borrow money from a close friend or family member, don’t pay it back, then crack a joke about it. Paying back borrowed money is a serious personal matter.

But most people don't stop to fully consider their borrowing habits. More and more Americans simply pay with credit for every transaction. If you used a credit card, you borrowed money. I think it’s the new American pastime. We borrow money. We try to pay it back. And when we can’t, it’s destructive. So maybe it's time to ask yourself: why do you still borrow money?

Maybe it’s easier to look back a generation. Why did our parents borrow money and how did they do it? Conventional wisdom suggests they only used credit for basic needs and large purchases, and that they took time to consider the consequences. In most cases, we think their credit use was only for very large and necessary purchases, i.e. houses or cars. America’s “Greatest Generation,” it seems, took their time to make decisions, and used credit for the major, life-enhancing, necessities.

One of my colleagues, and I use the term loosely, would take issue with these historical assumptions. He would proclaim the remarkable and overriding benefits of credit to the world, and point you to The Morality of Moneylending: A Short History, by Yaron Brook. My colleague, Brook, and a whole pot of moody tea partiers would probably point to “evidence” that mortgages, auto loans and plenty of fast cash providers even flourished in the 1940s. He points out that quick cash has existed from biblical times, through Shakespeare’s times, and in the late 1800s. He points to evidence that volumes of spend-happy families from the Greatest Generation had to visit debt counselors in the 1950s. This colleague thinks that the Greatest Generation certainly did some serious borrowing and spending, and that we are not uniquely bad borrowers today.

Fair enough.  However, my point is – be a prudent borrower, like your father and grandfather would want you to be. Most people realize the Greatest Generation was great because they were personally responsible, frugal and humble. If you’d be embarrassed to tell them about your borrowing, maybe you should reconsider. Nobody’s grandpa would approve of financing $70 on a pair of chinos, even with a discount. Grandpa would probably rather invade Normandy again than have his grandson finance pants.

Thought-out, balanced, affordable and necessary borrowing may be wiser and cheaper. Like everything for sale in the market, the quicker you want something, the more expensive it is. Compare buying bacon at Sam’s Club to buying bacon at a convenience store. Compare the higher expense and convenience of taking a taxi, to the lower cost and longer wait for a bus. If you want something immediately in this country, you pay more. Credit is not unique, and obeys every universal rule of economics. If you want someone else’s money and you want it quick, that is going to be risky for the person with the money, and you'll pay to offset the risk.

Financing anything requires applications, reviews and credit checks. For example, student loans take time to get, and should be beneficial, but you still need to be careful.  Even student loans can be more dangerous than they appear – students are exiting school with whopping debts and student loans aren’t dischargeable in bankruptcy. Hallowed halls, ivy, books and smart professors just ain’t cheap. So take time to review any loan materials with someone you trust, and to consider the long-range consequences before borrowing money if you can afford the wait.

By Clinton Heyworth, with contributions by Justin Hosie

Credit.com's credit card payoff calculator can show you how long it'll take to pay off those chinos.