A credit card is great to have when you use it with care. Simply pay off each monthly balance in full, and you will get the equivalent of an interest-free loan from the credit card company - letting you beat them at their own game.

But too many people take on too much debt as they pile up hefty balances on one or more cards, which takes them years to pay off, during which time they pay hundreds, if not thousands, of dollars in interest to the credit card company.

For instance, suppose that you buy a $2,000 TV set and elect to pay the minimum monthly payment (for example, two percent of the balance or $10, whichever is higher). For a card with a 13 percent annual interest rate, you would pay off the initial $2,000 balance in 18.58 years (223 payments), while paying an additional $1,996.76 in interest for a total payout of $3,996.76.

A $5,000 purchase with the same terms results in making 323 payments over 26.92 years with a $5,542.23 interest charge resulting in a total payout of $10,542.23. So your original purchase price is doubled and you have the burden of paying it off forever. And if you continue to add new purchases on the card, the interest charges get even larger so the nightmare may never end.

10 Credit Card Tips to Help You Avoid Trouble

• Have only one card, or at most two cards. Why have more? A fist
  full of cards just lets you spend more money and charge more.
• Throw out all unsolicited credit card offers that come in the
  mail. You didn’t request the card, so just say no.
• Keep only one card with you. Then, you are less tempted to go
  on a buying spree.
• Charge only what you can pay off each month. Don’t maintain
  a balance. This practice gives you an interest-free 30-day loan
  from the credit card company.
• Don’t buy something just because you can afford the minimum
  monthly payment. You’ll pay a pile of money in interest, especially
  if you take many months to pay off the balance. Learn not to buy
  stuff until you can afford it.
• Use a card with no annual fee and low interest rates - in case
  you must make carry a balance.
• Never miss a payment, even by one day. Any missed payment is
  a blemish on your credit rating, making future loans at reasonable
  interest rates for a car or house more difficult to attain. And
  when you are delinquent on a payment, the credit card company
  automatically increases your future monthly minimum payment and
  increases the interest rate that they charge you.
• Throw out all unsolicited blank checks that you receive with
  your monthly statement. Interest begins to accrue the moment that
  the check is cashed, meaning that you will pay a steep check-cashing
  fee, even if you pay off the balance in full.
• Don’t take cash advances with your credit card. Like writing
  checks against your credit account, interest charges for cash
  advances begin immediately.
• Leave your credit card at home if you plan to party. Partying
  and access to fast cash are not a wise idea.

2 Additional Tips

• Keep your credit cards in a safe place. If they are lost or stolen, immediately notify the credit card company.
• If you see an error on your statement, such as a purchase that you did not make, immediately notify the credit card company. Billing errors happen occasionally and can be rectified.

For more money-saving tips, see buyupside.com, a free site about saving and investing.