Oooh, credit cards. They're great but can bite you so hard if you're not watching them! Credit card companies earn their money by charging you interest for using their credit cards. The interest rates they charge are lower now than they've ever been and the companies aren't making as much money off of interest as they used to. They don't like that, so they've found others ways to earn money.

A few of the companies charge people an annual fee for using their cards. But, if you're careful when you're shopping around looking for what credit card to get, you probably won't need to pay an annual fee because there are so many companies who don't charge them. Annual fees can be $50 and up, and it's secretly added to your credit card bill.

Another way companies earn more money is by having stricter rules and if people don't follow the rules, they'll pay a higher fee. One of these rules is to charge people more money if they are late paying their bill, even if the payment is only one or two days late! Say your aunt's payment is due July 31, and she doesn't pay it until August 2 or even later than that. The credit card company will charge her a higher fee for not paying on time, and they might also increase the amount of interest they charge her. Some companies raise your interest rate for the life of the card even if you're only late once!

Another rule is that people will have to pay a fee if they go over their credit limit. Say your mom's been approved to charge up to $500 worth of whatever she wants to buy. If she goes out and charges $550 on her card, they will charge her a fee for going over her "limit."

So people now have to be really careful in choosing the credit card they use and not to break any of the rules because the fees they have to pay are higher than ever. I read that in the year 2000 the credit card companies earned 28% of their money from fees. Now they are earning 39% of their revenue from fees!

That's a lot of money to pay just to use a credit card!

Did You Know?

Credit card companies are going to take in up to $13 billion in fees this year!