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If you are one of the 60% of Americans who do not pay off their credit card balances each month, ask yourself if an extra $1,100 into your bank account would be useful. That is the amount of money the average American family pays in interest on credit cards each year.

Credit card companies have devised many methods to separate us from our money. They apply these methods like sunscreen, early and often. Banks are not evil, just doing their job, and they do it well.

An unemployed high school student in Scottsdale, Arizona got a credit card before he even graduated. The card started out with a $1,000 limit and a modest interest rate of 12.4%. At the first late payment, not only was a late fee assessed, but the interest rate was increased to over 23%, and not only on future purchases, but on the balance already owed. This is a great deal for the bank. They loan money at one interest rate and then the money is paid back at a higher rate, legally. It's all in the fine print.

So the student wanted a new TV, shopped around, waited for a sale, and then put it on his credit card. The amount charged was over the $1,000 credit limit, but the bank didn't decline the sale. They allowed the charge at the store; then tacked an over-limit fee on to the bill. Our student would have been better off if he had paid full price for the TV in cash and avoided all the credit card fees.

Start now by vowing to stop giving the bank your money. With discipline and a plan, you can free yourself of credit card debt. This plan is so effective that you may want to tackle your car payment next.

Step 1. Stop using your credit cards today, not one more charge. Cut them up or hide them in a drawer. If you think you can't manage your expenses without them, Helium.com is a great source of articles on ways to manage your spending and set up a budget if you haven't already done so.

When you set up a budget, include a category for credit card debt. It will be a set amount that will not go up until the last credit card is paid off. Budget for it.

Step 2. List all of your credit cards in order starting with the highest interest rate or APR. Some may argue that the order should be by largest outstanding balance or highest minimum payment. If one makes more sense to you than the other, do it that way. The point is, organize your credit cards into a list then stick with it.

Step 3. Continue making the minimum payment on all the accounts.

Make the payments early in the billing cycle rather than on the due date.

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