I have, on occasion, stepped into the lives of the Kardashian sisters.

Famous for doing absolutely nothing except being born into money, Kim, Khloe and Kourtney have devoted their lives to exposing their overspending, bratty drama-filled lives to a series of reality shows on E!.

They’re like one giant, untalented, stiletto-ed train wreck. It’s hard to turn away.

Now TMZ says the girls are trying to wiggle out of one of the worst ideas they’ve ever foisted on their fans – their pre-paid debit MasterCard.

The “Kardashian Kard” charges so many fees that the Connecticut Attorney General is trying to figure out if it violates consumer protection laws and Consumers Union (the publishers of Consumers Report) has issued a special warning about it.

We can certainly see why.

Prepaid debit cards are notoriously expensive. And the Kardashian’s pre-paid debit card is the most expensive prepaid debit card we’ve ever seen.

You’ve got to pay $59.95 to open an account and cover the first six months of use, or $99.95 for the first year. After that the monthly fee is $7.95.

It costs $1.50 for every ATM withdrawal, $2 to pay a bill, and $1.50 to talk to someone in customer service.

Transferring money from another debit or credit card to the account costs $1 plus 2.5% of the amount being added.

Lose the card and it will cost $9.95 to get a replacement. Fed up and want to cancel this money-sucking piece of plastic?

That will cost you $6.

Connie Prater over at creditcards.com found this lovely tidbit in the fine print:

“Some fees and charges may be for services that you request that are not included in this disclosure or the schedule of Fees and Charges set forth below, but you agree to pay those fees and charges.”

To quote Prater, “Translation: There may be fees for things we haven’t thought of yet, but you agree to pay those, too.”

All of this has generated so much bad publicity for the Kardashians that TMZ says their legal team sent a letter to the bank that markets the debit card, demanding to terminate the contract.

Whether they can do that, and what might happen to the fans who have already paid for their cards, isn’t clear.

Kim, Khloe and Kourtney should have seen this coming.

Even they’re smart enough to recognize they were putting their name on an outrageously expensive their debit card.

What disappoints me is that they’re trying to put a stop to this because it’s hurting their reputation. Hey girls, what about all of the financial pain you’re causing your fans?

While trying to decipher what exactly what kebab I was ordering, I noticed an odd statement on the menu:

“Credit card processing fees that we have to pay, will be your discount when you pay by CASH! , therefore the prices that we have posted here are reduced CASH prices. (10% will be added to your bill, if you prefer to pay by VISA or MasterCard.)”

I’ve been waiting to see merchants start offering cash discounts, but surcharges?

While retailers can cut your bill for paying in cash, they can’t add to it if you use plastic.

Stores and restaurants pay credit cards an “interchange fee” every time customers charge a purchase, which usually costs the retailer about 2% of every transaction.

“The merchant can offer an incentive for the consumer to pay with cash– thus avoiding the interchange fee — but is not allowed to pass that fee along to the customer,” says Gail Cunningham, spokesperson for National Foundation for Credit Counseling.

This wasn’t the case until October of this year.

That’s when Visa and MasterCard reached an anti-trust settlement with the Justice Department over their previous policies, which forbid retailers from offering customers discounts if they paid by cash, check, or even credit cards that have a lower interchange fee.

(American Express was part of the suit but has refused to settle.)

But while retailers are noww allowed to offer a cash discount, they can’t add a surcharge to bills when customers pay with a credit card.

That’s still a violation of their agreements with Visa and MasterCard.

The fact that the restaurant I went to tried to add a 10% surcharge, when the interchange fee is about 2%, is pretty outrageous.

If a restaurant springs something like this on you, you don’t have a lot of options.

You can, as Cunningham suggests, take the diplomatic route by telling them they’re in the wrong and hope for free dessert.

But they probably know that – and don’t care.

You’ll either have to pay the surcharge or do what we did and scrape together enough cash to pay the bill.

After you leave you can call the credit card companies and report the surcharge.

You can also decide not to go back.

This restaurant also charges a corking fee on Friday and Saturday nights.

It fee-ed us right out of there.

We don’t think that’s the case.

All of the rules are spelled out on the card’s Web site.

But we understand why he’s angry because Discover has made its reward system needlessly complicated and confusing.

The rebates it promotes to new customers – 1% on everything you buy and a 5% bonus rebate on some types of purchases – come with too many strings attached.

So let’s grab a magnifying glass and take a look at the fine print:

You’ll actually earn 0.25% cash back, not 1%, on the first $3,000 in non-bonus purchases each year.

That’s because you must charge $3,000 before the 1% rebate kicks in.

Each year, on the anniversary of your account, you’ve got to start all over and charge another $3,000 before you begin earning your 1% rebate.

Discover publishes a calendar of categories that will earn 5% each quarter of the year.

From October through December, for example, cardholders earn 5% on restaurant bills and clothing purchased at department and specialty stores.

You don’t earn that 5% automatically. You must register each quarter on the Discover Web site.

You start earning the full bonus immediately, even if you haven’t reached the $3,000 minimum required to trigger the 1% general rebate.

Unfortunately, that 5% rebate is capped at anywhere from $200 to $800 in purchases, which limits your bonus on those types of purchases from $10 or $40 a quarter.

Purchases within those categories that exceed the limit go back to earning 0.25%, unless you’ve spent enough to qualify for the 1% rebate. In that case, you’ll receive 1% cash back.

Got that?

Discover urges customers to “See how it all adds up.”

Unfortunately you’ll need some patience and a calculator to do that.

So imagine my shock when, as part of my daily morning routine, I logged into my checking account and found a $112 purchase at the Lego store.

I’ve been a victim of debit card fraud before, but it happened on a massive scale.

Someone cloned the card while I was on vacation, and racked up hundreds of dollars in charges at gas stations and grocery stores, before I found the purchases and had the card cancelled.

I’d never seen just one instance of fraud before.

When I did, I was so surprised that I did a quick check of my recent purchases to make sure I didn’t forget buying a birthday present for a friend’s kid, and to make sure I didn’t buy anything affiliated with Lego.

Then I logged into my account, and sent my bank an email through their online contact form. Within an hour, I received a reply with a phone number of where to call to start a fraud claim.

First I had to answer a few such the date of my last valid transaction and whether I’d ever bought anything from the Lego store before (Answer: No.)

Then I was able to ask that my debit card be cancelled.

The Wachovia customer service representative emailed me an affidavit to sign and fax back, stating the nature of the purchase that it wasn’t mine. They’ll be giving me a $112 credit while the case is being investigated.

That was the easy part. Now I have a lot of work to do.

I have no debit card for five to 10 days, so if I want to pull money out of my account, or deposit a check, I need to go to a teller, and I’ll be charged a fee for that service.

I must change over any account that automatically charges my debit card, like my Netflix subscription, EZ Pass and iTunes accounts.

So even though I’m the victim here, I’m going to pay with my time, my extreme annoyance, and possibly a few bank fees.

I have to figure the crook that used my card wanted to see if I would catch a single fraudulent purchase, and would have continued to occasionally ding my account again until I did.

The moral is to make sure you go online and check your account summary every single day. Or at least every other day.

Debit cards don’t offer the same protections as credit cards, even if they say “Visa” or “MasterCard” on the front.

If your credit card is stolen or cloned, you’re on the hook for $50, period. With debit cards, your liability depends on how quickly you find and report the fraud.

According to the Federal Trade Commission, if you catch an unauthorized purchase within two days, you’re liable for $50.

If you find it within 60 days, you’re liable for $500.

Longer than 60 days? You’re screwed.

If you have a Bank of America credit card you can qualify for up to $220 in bonuses for opening a new checking account.

You receive a $100 credit on your credit card statement when you open the account and establish a qualifying direct deposit within three months.

Then you earn another $20 each month for up to six months by paying your Bank of America credit card bill online using your new checking account.

Those credits will be applied to that part of your balance being charged the highest interest rate too, not the lowest.

Here’s where you’ll find all of the details about the offer.

You need to open your new Bank of America checking account online using the offer code CHC220OL.

While any personal checking account will work, the promotion directs applicants to “MyAccess Checking,” which charges no monthly fee if you have a payroll or similar recurring check direct deposited.

Since you need that to qualify for more than half of the $220 bonus it seems like a good choice to us, too.

This is only for new customers. You can’t have another Bank of America checking now, or anytime within the past six months.

If you don’t have a Bank of America credit card, but would like to take advantage of the deal, there’s time.

You could sign up for the BankAmericard Cash Rewards Visa Signature Card — one of our favorite credit cards.

It has no annual fee, offers at least a 1% cash rebate on all purchases, and a 0% APR on purchases for the first 12 months.

After the introductory period ends, your rate will range from 12.99% APR to 20.99% APR (prime rate of 3.25% plus 9.74% to prime plus 17.74%), depending on your credit.

Once you have the card, you can go after the checking account bonus which doesn’t expire until Dec. 4, 2010.

The average combined debt for bank-issued credit cards – typically Visa and MasterCards — fell to $4,951 by the end of June, down 13% from $5,719 in at the end of June 2009.

Those balances range from a high of $7,148 in Alaska, to a low of $4,753 in Alabama.

The credit reporting agency said it was the first time our combined credit card debt had fallen below $5,000 since early 2002.

The optimistic spin to put on this is that we’re all making a determined effort to pay down our balances. And there’s undoubtedly a lot of truth to that.

But you can’t ignore the fact that at least some of the decline was due to all of the bad credit card debt the banks have written off this year.

Click here to read more about the latest report on credit card debt.

But the Credit Card Accountability, Responsibility and Disclosure Act put an end to that this year.

Credit cards can no longer offer free stuff if they’re soliciting customers on campus. Applicants between 18 and 21 must also prove they earn enough money to pay the bill or get mom and dad to cosign the agreement.

The act is trying to curb credit card debt among college-age consumers, which has increased in recent years.

A whopping 82% of college students don’t pay off their balances each month, according to a 2009 biennial study by Sallie Mae, the big student loan company.

As a result, graduating seniors now begin their careers with an average of $4,100 in credit card debt, up from $2,900 in 2004.

That’s why it’s important for college students to shop around for a credit card that offers these three things:

No monthly or annual fees. There’s no reason to pay $39 to $69 a year or more to carry a credit card.

Free online access to your account. To avoid big surprises when the monthly statement arrives, you need to be able to track how much you’re spending and what you’re spending it on.

Reasonable interest rates. Don’t be suckered into a credit card based on the introductory or teaser rate that’s only in effect for the first few months.

The regular rate on most of the cards you’ll be offered will be variable.

Look for one that charges the prime rate — the rate banks charge their best commercial customers — plus a premium of anywhere from 5.99% to 12.99%.

With the prime at 3.25%, that means you’re looking for a card that currently charges 9.24% APR to 16.24% APR.

Avoid credit cards with your school’s mascot or logo.

Colleges make a lot of money by licensing their name to credit card companies, who then market the cards to students and alumni. Unfortunately, they often come with shockingly poor terms.

Another perk to ignore: Elaborate reward programs.

Getting something for nothing always sounds great.

But realistically, as a college student you won’t be spending enough to earn all of the the miles or points needed for the free trips or electronics you see in the ads.

Sounded like a pretty good deal.

But something in the fine print made her hesitate: “Payments are allocated to pay off lower APR balances before higher balances.”

Wait a minute, she thought.

Doesn’t the Credit Card Accountability, Responsibility and Disclosure Act require payments in excess of the minimum payment to be applied to higher APR balances first?

Indeed it does.

This offer seems to be asking customers to waive that right if they transfer a balance to their Citibank card, and it wouldn’t be the first time we’ve seen it try to avoid the new rules.

By applying payments to the low-cost portion of the customer’s debt until its paid off, the bank could continue to collect interest on the high-cost debt for as long as possible.

I asked an expert at the National Consumer Law Center if credit cards can include specific terms in their agreements that essentially nullify one of the Credit CARD Act’s key rules.

Unfortunately, attorney Chi Chi Wu said they can.

While the preamble of the Credit CARD act discourages asking customers to waive their rights under the law, there’s nothing that makes it illegal.

She suggested I ask Citibank exactly how it intends to credit payments under these terms.

So I did. But after initially agreeing to find out, the bank’s public relations staff stopped returning my phone calls and emails.

The language Citibank uses in its balance transfer offers is very different from those we’ve seen from other big credit card issuers such as Bank of America and Capital One.

They clearly state that anything in excess of the minimum payment will go toward balances with the highest interest rate — just as the new law intends.

Bottom line: I would ignore all of the balance transfer offers Citi is promoting until it explains how payments will be credited.

And Citibank, you’ve got my number.

Now there’s a more rewarding, albeit more costly, alternative.

The new Venture VISA card is Capital One’s entre into the growing “upscale” market.

It offers pretty much the same rewards as the No Hassle Miles card, allowing users to redeem miles for hotels, rental cars and airline tickets on any carrier, with no blackout dates.

To figure out how many miles you need, just add two zeros to the price. If, for example, your ticket costs $150, you’ll be charged 15,000 miles. If your hotel costs $99, you’d need 9,900 miles.

The big difference is that the Venture card allows users to earn miles more quickly by providing 2 miles for every dollar spent, instead of the 1.25 miles per dollar with the No Hassle Miles card.

New cardholders can earn an extra 10,000 miles if they charge $1,000 worth of purchases during the first three months they have the card.

The drawback is the $59 annual fee — something most No Hassle Miles don’t have.

In dollars and cents, you must charge $2,950 a year to cover the annual fee and then another $1,844 to make up for all the miles that spending would have generated with the No Hassle card.

That means the break-even point is $4,794. If you charge more than that each year, you’re better off with the Venture card. If you charge less than that, stick with the No Hassle Miles card.

In our view, the Venture card should appeal to users with expense accounts and savvy consumers who charge virtually all of their personal expenses, from groceries to medical bills, to generate the most possible miles.

One final reason we like Capital One cards: If you travel abroad, you won’t be charged foreign transaction fees for items bought with foreign currency. Many cards ding you for 3% of the purchase price in U.S. dollars.

Want another opinion? Check out Bargaineering’s picks for the best credit cards.

But there’s a loophole in the new regulations that really bugs us.

In the past, credit cards routinely applied payments to that portion of your balance being charged the lowest interest rate.

If, for example, you took out a cash advance with a 29.99% interest rate but were charged only 8.99% interest on purchases, the credit card company would apply your payment to the balance with 8.99%.

That way, they could keep charging you 29.99% on as big a chunk of money as possible for as long as they could, making it harder for you to pay down your debt.

The Credit CARD Act was widely praised for reversing that and forcing credit cards to apply payments to the most expensive debt first.

But the new regulations don’t really go that far.

The rules have left many cardholders wondering how their payments are being credited, and provided no relief for those who need it most — customers who can only afford to make the minimum payment each month.

Here’s what the law says:

Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted.

That means the portion of your minimum payment that goes toward reducing your debt can still be applied against the balance with the lowest interest rate.

Discover and Bank of America told us that that’s exactly what they’re doing. Chase (true to form) declined to comment. But you know it’s taking advantage of the loophole, too.

The only way to reduce your high-interest debt is to remit more than the minimum payment.

Using our previous example, let’s say your minimum payment is $300 a month, with $100 going to interest and the remaining $200 to reducing your debt.

Banks can still apply that $200 to the balance that charges 8.99% interest.

If that’s all you send in, this part of the Credit CARD Act hasn’t made it any easier for you to get out of debt.

If you write a check for $400, only the $100 “in excess of the minimum payment” would be used to pay down that portion of your debt charging 29.99%.

While that’s an improvement, most of your payment still went towards reducing your least costly debt.

We think Congress should have demanded that all payments be credited to the most costly portion of a cardholder’s balance.

But it’s hard to do the right thing when the credit cards, and all of their highly paid lobbyists, are fighting to do the wrong thing.