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Owning a credit card can be a god send, the extra money you have to spend can make life seem a little more bearable. However, credit cards can be a very costly business and as you climb higher and higher into debt, the repayments and interest begin to mount too.

Correct management and use of the credit card can save users a tidy sum and put a stop to those ever increasing charges. The first thing that should never be done with a credit card is to use it for cash, whether that be withdrawing cash from an ATM machine or using the card to fund online gaming/gambling. The credit card company has an interest charge for cash withdrawals that vary from account to account but you can expect to be charged a cash withdrawal handling fee that is around 3% and this is charged per transaction and added to your balance owing. This cash withdrawal fee will then begin to accrue interest along with the rest of your debt making that 3% charge much higher when a few months interest has inflated it.

If you must use a credit card always do so to buy things in store and save your physical cash to fund spending on the smaller purchases or places that a card isn't considered as convenient. Some credit card companies offer cash back schemes on all purchases for an allotted time frame from when you opened your account, these cashback schemes can be used as an advantage for a discount on your purchases but only as long as you repay the total sum owing on the card within the month of purchase otherwise the interest charge will gobble that cash back incentive up very quickly.

There are a few other very lucrative areas of your credit card that the issuing company is itching to cash in on too. Every month you will receive your statement and there will be a section on it that states how much they want you to pay by the pre-determined date set. This small payment will mainly cover interest charges that you will receive next month if no further debt is added to the balance. A very small percentage of the repayment will actually go towards reducing the balance owing, so while making a very small repayment seems very attractive, you should always strive to pay more than the issuer is asking for. In some instances is has been calculated that it would take up to 40 years to repay a debt (dependant on the size of the debt).

The second and most profitable money making scheme for any credit card company is the fees it imposes when customers fail to meet the demands asked of them.

Late payment charge will

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