Americans are using credit cards more than at any time in history, and credit card companies are reaping record profits. One of the reasons that the credit card industry is so profitable is that so many of us use our credit cards unwisely.

If you have good credit, you can get a credit card with a reasonable interest rate; say 10% or so. You can keep that rate by paying your bill on time. On the other hand, if you pay your bills late or fail to pay in full, then you will have to pay late fees and interest. Late fees often range between $15 and $29; some card issuers may charge even more. Adding to the pain of paying late fees, however, is the likely change in interest rates on your card if you pay late. A late payment may trigger a substantial increase in the interest rate on your card, and that "reasonable" interest rate of 10% may suddenly rise to 20% or even 25%!

It's hard to pay off your credit card balance when you have late fees and 25% interest, so this is something you definitely want to avoid. If you usually pay on time, and you pay late once and are charged a late fee, ask your credit company if they will waive the fee. They will often do it - once. Some will not do it at all, but it is always worth taking the time to ask. If they are unwilling to help you, then you may be better off shopping around for a better credit card deal elsewhere.

You can often save money by transferring your balance to a lower interest credit card, if you have one. Competition has been fierce during the last few years among credit card companies, and it is fairly common to receive "promotional" rates of less than 5% if you transfer your balance to another card. Be sure to read the fine print, however. Those low rates usually apply only to transferred balances, and not to new charges placed on the card. There is usually a time limit associated with the promotional rate, and higher rates may apply at the end of the time limit, perhaps even retroactively!

In summary, if you want to minimize your credit card costs, try the following:

〤opyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and HomeEquityHelp.net, a site devoted to information regarding home equity loans.