No. of Recommendations: 2
Be a freeloader.

No, I haven't lost my mind. And I'm certainly not suggesting an irresponsible lifestyle. In credit-card-company parlance, "freeloader" is simply a pejorative term for those of us who leave it entirely to others to bestow generosity upon the credit-card issuers.

Credit-card issuers make money (potentially, at least) off both ends of the transaction: They take a prearranged fee (say, two percent) off the merchant's end, plus a much larger chunk out of the borrower's hide. The trick is to make you feel special, with gold, platinum--is titanium next?--adorning your wallet. Special, just for the privilege of being fleeced.

And it isn't just the interest, and interest on top of interest. What with more and more Americans paying off their credit-card balances each month, many credit-card issuers have turned to another source of income. The naughty-naughty charges--late fees and overlimit fees, for instance--are no longer intended just to discourage inappropriate behavior, and recoup the issuer's resulting losses. Rather, they have become a depended-upon source of income. It is a little like a small town whose police force sets speed traps for out-of-town motorists: The very behavior it pretends to discourage is precisely the behavior it can use more of.

My own advice: See if your credit-card company will automatically debit your checking account--preferably for the entire balance. The automatic-debit feature eliminates any possibility of your ever being charged a late fee; and if you pay the balance in full, it simultaneously eliminates any possibility of your being charged interest. (I am assuming that you are not holding a credit card with no grace period--the kind of credit card that relates to other credit cards about the way a payday-loan establishment relates to a bank or credit union.)

In short, it is best not to use a credit card as a vehicle for living beyond one's means--but merely as a convenience. The key to making it work is patience--the patience to save methodically and regularly, toward a goal, while drawing the interest, rather than pulling out the plastic ("I gotta have it immediately, if not sooner!") and paying the interest...and interest on top of interest...
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