From the consumer’s point of view, credit cards can be ideally used as short-term interest free loans and a way to establish good credit. The most effective way to use your card is to make sure of your ability to pay before you charge anything. With most cards no interest is charged if you pay them off by the due date. If you fail to pay the balance in full, interest is charged from the date of each purchase. Also, if you fail to make your payment on time, many credit card companies will charge a $30 late fee, even if you are only one day late. Late fees substantially increase your effective interest rate, so watch out and avoid them. If unauthorized charges appear on your statement, notify the credit card company in writing immediately.