by Karen Duvall

Created on: June 15, 2009

There's been a lot of flux in the world of credit cards recently, and some cardholder agreements are seeing a few unwanted changes that affect interest charges, credit limits, late fees, and annual membership dues. New rules to limit the changes credit card companies are imposing on cardholders may not take effect until early next year, so in the mean time consumers should focus on keeping their interest charges under control.

Pay more than the minimum balance due each month.

Paying off your credit debt is the better answer, but not everyone is able to do that. Second best is to pay off as much as possible each month. Interest charges accumulate on the balance due, so the more you owe, the higher the interest you'll pay. Raising your monthly payments means a savings in finance fees.

Be careful how you use your card.

Charging everyday items on your credit card instead of using money from your monthly income could make that $3 gallon of milk end up costing $30 by the time you pay it off. Try not accumulate more debt on an already loaded card.

Beware of cards bearing gifts, or rewards.

Getting rewarded for using your credit card may seem like a nice perk, but that rising balance from increased card usage means more interest for you to pay. So that bonus discount you get isn't much of a discount if what you saved is spent on finance fees instead. The "reward" is rarely worth the expense.

Cash advances will advance your debt.

Check your cardholder agreement and you'll find that cash advances made with your credit card are calculated at a higher interest rate than regular purchases. So when those convenient blank checks arrive in the mail from your credit card company, encouraging you to buy something special for yourself, don't do it. Tear them up and toss them in the shredder. Same with getting cash at the ATM with your credit card. Those are cash advances and will be financed as such. So if a pin number comes with that shiny new credit card, do yourself a favor and shred it along with the blank checks.

Don't skip a payment, and don't be late.

Skipped payments mean added finance fees, and when a late payment is added on top, you could be paying a finance fee on the late fee as well. Defaulting on credit card debt will have an adverse effect on your credit scores, which will be detrimental to your overall credit history.

If you feel overwhelmed by credit card debt, contact your credit card company and see if you can renegotiate your cardholder agreement. Sometimes a company will lower an interest rate or remove late fees if the cardholder makes an effort to rectify a problem.

Used wisely, credit cards can be useful tools that aid in financial management. It's when debt gets out of control, and finance fees accumulate, that credit cards can be dangerous to your fiscal health.

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