Credit cards could be considered a staple among the financial tools at our disposal. Some experts consider them a requirement in today’s world. Today, you can’t buy a plane ticket, reserve a hotel room, or rent a car without a credit card. I suggest you view credit cards as a tool that can help you. If you’re responsible and payoff your credit card bill every month, you can use that card to help you earn bonuses such as frequent-flier miles, which is a great benefit.

Credit cards are also known as the best friend of new business owners, who often don’t have the track record to get a traditional bank loan. Often, they can finance their new business by utilizing their credit cards as a lending vehicle, and spreading the payments out over time. While credit cards can be wonderful and offer us convenience, they can be a deadly part of the debt game.

Credit card lenders are really banks. The banks collect deposits from consumers and other entities, and then loan that money out. However, in the case of credit cards, they’re loaning that money out to credit card customers instead of traditional bank lending customers.

A credit card provides high-interest, unsecured loans that allow the cardholder to “buy now, pay later.” This is a very lucrative business for the banks that issue credit cards to consumers. They make up to 21 percent or more on the balance due if the balance is not paid off each billing period, and new purchases begin accruing interest right away.

This is known as a revolving account because the holder can simply roll the new balance to the next billing cycle and pay only the stated minimum amount shown on the bill. These cards mayor may not have an annual fee depending on the other “goodies” like frequent-flier points, money back at the end of the year, or no annual fee.

Credit card rules can also change frequently. What may look like some junk mail may actually be a brochure that tells you the rules of the game have changed. If you don’t pay attention to it, you may be in for Some surprises on your bill. My credit card company changed the envelope that the bills came in and it looked to me like more offers to get a credit card. I threw them away unopened until I got a phone call asking me why I suddenly stopped paying my bill. When we discovered my problem, I agreed to pay it immediately and they cancelled the accrued interest and late charges, due to my excellent payment record. Keeping the cardholders ignorant is an advantage to the credit card issuer but they do have to disclose any changes to your original agreement. If you miss them, you’re the one responsible.

Most of the major credit card companies work hard to educate consumers about credit card debt and how to make it work for you. Next time you’re in the bank or browsing online, look for information about the use of credit cards by the issuing companies represented by the bank.

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Rule #1: What you borrow, you pay back with interest. Once you’ve signed on the dotted line, you’ve committed yourself to repay that loan, and then some. According to Steve Rhode, creator of myvesta. com’s “The History of Money and Debt,” an entertaining and enlightening online exhibit, the Sumerians were the first recorded culture to develop the concept of interest, and they called it mash, the word for calves. Herds of cows were loaned for, say, a year. When the herd was returned, calves had been born and the size of the herd had increased. These calves were the interest on the loan of the original cows. As Rhodes says, “If cattle were the standard currency of the time, then loans in all comparable commodities would be expected to “give birth” as well. Why shouldn’t the same be true for money?

Rule #2: If you don’t pay, you suffer. There are consequences when you don’t repay a loan-unpleasant ones. Urgent messages arrive in the mail, creditors call you at home, and surprise visits from skilled repossessors come to take back what you bought but didn’t pay for. Avoid this type of grief in your life. Repay what you borrow.

Rule #3: If you pay your loan on time with interest and you are rewarded. In other words, companies in the business of loaning money will think you’re great and will want to loan you even more because they know chances are good you will pay them back.

Rule #4: Your performance in the game of debt earns you a score. Everyone has a credit score. Three primary credit agencies in the United States keep sophisticated records of each individual’s credit history, including yours. The better you pay back a loan (for example, you never miss a loan payment and you always pay your loan on time each month) the better your credit score will become. An excellent credit score simplifies life in a number of ways, from simplified car loans to a better night’s sleep.

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