Credit card delinquency in the United States hit a record high in 2005, due to a number of possible factors. The American Bankers Association blames the devastation incurred by hurricanes Katrina and Rita, as well as the ensuing spike in gasoline prices.

Nobody wants to pay high fuel prices, but shelling out more at the pump shouldn't make you default on your payments if you're using credit responsibly.

The Unwelcome Truth about Credit

There are plenty of great reasons to use credit cards. They are convenient, eliminate the need to carry large amounts of cash and can be a lifeline in an emergency. Many cards offer excellent rewards - like airline miles and cruise ship rewards - for everyday purchases. Discover Card has "cash back" programs that enable users to get discounts on almost everything they buy.

However, the bottom line is if you can't pay cash for a purchase, you can't afford to make that purchase. Too often, users treat their credit cards as financial crutches, buying things that they can't afford. If a spike in gas prices could leave you unable to meet your minimum payments, gas isn't the only thing you can't afford.

Get Your House of Cards in Order

If you carry a balance on your credit cards - especially if you can only make minimum monthly payments - it's time to take control. Look at the snowball effect with a credit card to reduce debt. Read the fine print on your credit card agreements, paying particular attention to the following items:

Yearly Fees - Why pay a fee on top of 14% interest for items you can't even afford? If the card in your wallet comes with a yearly fee, cancel it.

Interest Rates - Credit card companies charge high interest rates because consumers will pay them. Pick up the telephone and ask your creditors to lower your interest rate. Many companies will do so simply because you called.

Late Fees " There is a penalty when you don't make payments on time, and this will set you even further behind. When you shop for a credit card, be sure to compare late fees.

Penalty Rates - According to a 2005 Consumer Action survey, nearly 80% of credit card companies impose higher interest rates on people who carry balances and make late payments. Because 21% of issuers don't engage in this practice, it should be easy to find a card without a penalty rate.

Over-the-Limit Fees - Many companies impose penalties if you go over your spending limit. Compare these fees before choosing a card.

Bounced Cheque Fees " Like banks, many credit card companies charge fees for cheques that dont clear. Avoid this added expense if possible.

Minimum Payments - If you think gasoline is expensive, why carry a balance and pay interest on top of the initial cost? According to Bankrate.com it can take 60 years and $35 000 to pay off a $12 000 balance at 18% interest if, like many Americans, you only make minimum payments. Federal regulators recommend that card issuers demand at least 1% of your principal balance each month. At this rate, it would take 30 years and $17 500 to pay off that $12 000.

Summing Things Up

Credit cards don't put people in debt. They are tools, and tools are only as dangerous as the people who use them. To minimize danger to your financial health choose your cards wisely, think twice before using them and, most importantly, don't carry a balance. Use your cards to save money and collect useful rewards at no cost, or don't use them at all.