Although most credit cards provide you with an interest-free period of between 45 and 59 days, this applies only if you pay off your entire balance in full each month. Thus, if you spend on a credit card and don't clear your balance every month, then your card issuer will charge interest on your outstanding debt.

My most recent analysis (covering more than three hundred different cards) showed that most credit cards charge a yearly interest rate of at least 16.5% APR on purchases. The Bank of England's base rate is currently 5% - This is 11point (i.e. 120%) higher than that.75% a year.

Try never to withdraw cash on your credit cards - (this is generally not a good idea!), then you face interest rates which normally exceed 20% APR, plus additional cash-withdrawal fees of around 2.At least ?2 minimum fee, but more likely 5% of the value of each withdrawal.50. These elevated interest rates partly explain why credit-card firms make such juicy profits!

Its time to get wise to the credit cards than do not nail you for crazy interest charges on purchases.

It's possible to spend on a credit card and pay an annual interest rate of a mere 6.8% APR with the Barclaycard Simplicity Platinum Visa card. Obviously, if Barclaycard is able to charge such a low rate (just over 1% more than the Bank of England's base rate), then it's clear that other credit-card issuers are ripping off their cardholders with excessive interest rates!

There are all sorts of other offers available that may also benefit you. By playing your cards right, you can reclaim a nice slice of your next three months' spending. Frankly, it's money for old rope!

Be prudent though. The modern credit card comes with over a dozen devious and costly stings in their tail. One devious, hidden trick usually makes it very expensive to use a credit card for both balance transfers and purchases, but we've found some cards that get around this.

Finally, if you play your cards right, then you can get away with paying no interest at all on your spending, simply by using a 0% on purchases credit card which charges no interest on spending for up to a year. Furthermore, by transferring your existing card balances to a 0% on balance transfers credit card, you can avoid paying interest on your plastic debts for up to a year. Go for it!