Consumer advocates are urging that now– more than ever– it is crucial to pay attention to all of those notices you are receiving from your bank. That’s where you’ll find out how much that credit card is really costing you, and the results may take you by surprise, if you are not careful.

We are definitely not advocating avoiding the use of your credit cards, simply suggesting that you use them wisely and to your financial advantage. If you are not in a position to use them in this fashion, you should not use them at all, because the advantage will be solely on the side of the credit card company– at your expense.

The cardinal rule? Never use a credit card to finance a purchase that you can’t afford. The mistake so many people make is to use their credit cards for what they perhaps have convinced themselves will be simply a short-term loan, but good intentions are often short-lived. Soon, fees and interest charges mount, and other “necessary” purchases come along and the balance just grows. It’s a story we hear over and over.

What is responsible use of a credit card? Paying off the balance in full every month. Credit cards should be used as a convenience, and even better, to obtain financial rewards by simply spending money that you would be spending regardless of the method used. What do we mean by this? Most consumers spend money each month on staples such as groceries, gasoline, utilities, etc. So if you have a credit card that actually rewards you in some fashion for paying these bills using their card, what is the downside? There is none. So find a card that gives good rewards for purchases that you use on a regular basis and use it for everything, then pay it off in full each month. Read more about rewards cards here.

The good news is, in 2010 there will finally be some long-in-coming credit card reform in place. The bad news is, until then, consumer advocates are warning us to expect credit card companies to exploit rapidly closing loop holes as much as possible: such as raising rates, arbitrary service fees, and double cycle billing– common practices that fortunately, will soon be illegal.

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