If you carry a balance: save money on every purchase by not charging it

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Even if you avoid late fees and penalties which can make it worse, the regular interest you pay on your card balance effectively makes every purchase more expensive. Consider this: if you typically roll over your balance for a year and pay 18% interest, then your $30 gas purchase really ends up costing you $35.40, and your $100 in clothes really ends up costing $118. If you add in a late payment or two, and/or take longer to pay back you could end up paying 25-50% extra on your purchases, which can wipe out any other savings you thought you were getting. In these cases, pay cash if you can or just pay back your balance in full each month to avoid the extra cost.

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