 TITLE: How Do Credit Card Companies Make Money? CONTENT: Avoiding the Costs of Using a Credit Card\n-----------------------------------------\nCredit card companies make a large part of their profits from cardholders. But don't let that discourage you from using a credit card: Savvy cardholders can avoid most of the costs of using a credit card. From interest to miscellaneous fees, you can steer clear of many fees if you plan ahead and make sure you spend within your means.\nFirst, make sure to know what your annual fee is on all your credit cards. Then consider whether paying that annual fee is worth it. Do the benefits of the card outweigh the cost of the fee? If you consider the annual fee worth it, carefully read your card agreement and note all the potential benefits—then take advantage of all the card has to offer.\nAvoiding interest is simple if you manage your card right: Just make sure to pay your bill in full each month. If you need to carry a balance from month to month, make sure you do it on the card with the lowest interest rate, and pay it off as quickly as you can.\nTo avoid miscellaneous fees, be aware of what you could be charged for and when. If you know one card charges foreign transaction fees, for example, use a different card that doesn't charge these fees when you travel. Use the same strategy for all your cards. If you're not sure what fees your card charges, read through your cardholder agreement and note all the potential scenarios that could trigger fees. END