That’s a lot of verbiage and what it says can either cost you big bucks or save you a bundle. It all depends on whether or not you heed what that fine print says. The ten largest credit card companies didn’t earn more than $16 billion last year with those low interest introductory offers.

Lets look at late charges and other hidden fees

Since 1995 late charges have tripled to an average of $30, with many approaching $40.

Your purchase on a card may be less than $50 but miss the payment by one day and you could owe more than $75 before the ink on the check is dry. That annualized penalty of over 20,000% would make the toughest loan shark look like a philanthropist.

There’s more. Transfer fees can add up fast. Say you transfer a total of $10,000 from several high-interest cards to ones with a lower rate. At the average transfer fee of 3%, you just lost $300. Sometimes, the amount of the transfer fee makes switching cards, even to lower interest ones, impractical and costly.

Overspending your limit can really be costly. A fee of up to $39 is immediately added to the principle and therefore included in the interest calculations. In many instances, this additional fee may be more than your minimum payment, thus negating the next month or two's payments  toward reducing the principal. Some people, when realizing this oversight, may immediately call the credit card issuer and make an "emergency" payment by phone. Once again a hidden fee comes into play as making a payment by phone usually costs at least $15.

Together, these penalty fees account for an amazing one-third of total credit card revenues.

Only ten years ago this percentage was less than 15%, so it is easy to see why those disclaimers have grown to be so long and wordy. It seems that writers may not be the only people who earn by the word.

Foreign Currency Exchange

If you travel overseas often and use your credit card for purchases, you may be charged a foreign currency service charge in addition to the APR you're already paying. Using your credit card overseas is usually a good idea since you get the security and accounting features inherent in credit card usage. It also assures you will be getting the fairest exchange rate at the time of your purchase, but the down side is that the credit card issuer has a built-in profit in the conversion rate and most cards add an additional 3% conversion fee on top of that.

Household Credit Card Debt

Today, the average consumer has 8.5 credit cards. That number includes a mix of major credit cards, several local and chain store cards and maybe two or three debit cards. The average household credit card debt is $10,000 with an average annual interest rate of 13.08%.

An estimated 40% of credit card holders carry a balance month to month. For them, the minimum monthly payment frees up cash, but may in itself be a debt trap. Let's say you spot a leather couch you must have. You put the $2,000 purchase on a credit card with 18% APR. If you make merely the minimum monthly payment on that $2000 balance, it will take 30 years to pay that debt down to zero. That's not all the bad news, either. What you may not realize is that will only happen if there are no more charges put on that card during those 30 years. Not a realistic scenario at all.

Additionally, that $2,000 original charge grew to more than $7,000, with interest adding up to $5,000  by the time it was paid off.

Good News for Card Holders?

Is there good news for the average credit card user? Well, that may depend on the amount you owe. Most of the big card issuers have decided to increase the minimum monthly payment by 100% - from 2% to 4% of the balance. This will help most households get out of debt sooner and end up paying much less in interest.  Back to the couch you bought for $2,000. Now, since you must make the 4% minimum monthly payment, you'll cancel that debt in only ten years with interest totaling just over $1,000. If your debt load is fairly small, any way you look at it, it is a much better way to manage credit card debt.

However, if you are already hard-pressed to make the minimum payment at 2%, $200 per month on that $10,000 average household debt, that additional $200 may be impossible for many families to find. And that's just for the one card. Multiply that by three or four cards,  even those with lower minimums, and the situation may be one where default is a real possibility.

Managing Unmanageable Credit Card Debt

One way to avoid such a situation is obviously to limit credit card spending to start with. However, for too many families that is water under the bridge. Once again a careful reading of the disclaimers may be where a partial solution  lies

First, finding and avoiding hidden charges that can add to the principle and thus increase interest amounts can save hundreds. A switch to a lower interest rate card may be the biggest  help, however, here is no denying that the most productive way to decrease credit card debt and become more financially stable with credit is simply to limit buying until a credit card balance becomes manageable again. You may have to design a budget around the new minimum payments rather than traditional expenditures such as mortgage and car payments.

There is no silver bullet but credit card shopping and attention to the details of the agreement you are entering into with the issuing company may be the best way to manage debt you are already obligated for.