Every time you buy something, whether it is gas for your car, food at the grocery store, or a pair of shoes at the mall, you are asked, and how will you be paying?, and the response is usually credit card or debit. Plastic money has become the payment method of the twenty first century. After all, it is much safer than carrying cash. If you lose your cash, it is gone forever. If you lose your credit or debit card, just pull out your cell phone and cancel the card.

Credit and debit cards have almost completely replaced checks, especially in stores. Some people still use checks for paying bills, but every day purchases get the plastic. Besides, most stores will not even accept checks anymore. Why would they? It is far too risky. With a credit or debit card purchase, the merchant is guaranteed his money. Even if the credit card company never sees a dime from you, the merchant has been paid.

But few people seem to care how much this extensive credit and debit card use really costs. You know that if you do not pay off your balance at the end of the billing cycle, you will be charged interest at rates of 15%-25%. That is a price most of us are willing to pay. You know your bank charges you every time you use your debit card. Also a price most of us are willing to pay. But why do we do this? These fees and interest charges can add up to thousands of dollars every year. Money you could be spending on much better things than fees and interest charges.

If your credit card balance is $5000 (a conservative figure since most people owe more than that), you are paying approximately $900 a year in interest. That will cover the average person's mortgage payment for a month. Just think how much sooner your house would be paid for if it were not for that credit card.