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It’s entirely possible to be wasting plenty of money, and not even know it. Many of us have been really working on tightening our belts during these tough economic times, and have made many sacrifices to bring our monthly budgets more in line with what they need to be. But did you know it’s possible that you are throwing a considerable amount of money away every month on your credit card? Unlike cash, which is very easy to monitor as it comes from your wallet, or a debit card (considering that most of us check our bank accounts online or by phone on a regular basis), it’s pretty easy to be spending money on a credit card and not even be aware of it. To a certain extent, are all psychologically programmed to consider credit card funds as something less than “real” money, and something that we don’t need to watch as closely. Think that this could not possibly be happening to you? Read on, and get educated.

When we use credit cards, it’s possible that we unwittingly let money slip through our fingers. If we were dealing in “real” money, it’s possible that we would be more careful. And yet, we are not. Here’s a few good examples of way that we blow money on plastic without realizing it. If you know, you can pay more attention!

Recurring monthly charges are something that we might originally authorize when they begin to be charged to a credit card, but tend to lose track of over time. It could be one of those insurance policies for your credit card (which almost always costs more than it is worth realistically), a Netflix or book-of-the-month subscription that you never really use, a monthly credit monitoring service that you don’t even remember the password to, or a magazine that you never read. Oftentimes these subscriptions or recurring charges aren’t necessarily for a lot of money, but consider the matter this way: would you take a five or ten dollar bill and just set it on fire every month for the hell of it? I think that you would not. Check the terms of your membership or subscription to make sure that there are no penalties or charges for cutting off the service, and cancel that thing! And that’s assuming that you even know about these charges. The Senate found recently, shockingly, that American online shoppers had been defrauded of as much as one point four billion dollars in bogus monthly subscriptions that they had signed up for without noticing or understanding it. It gets worse. These charges show up on credit card bills every month without fail, yet almost one-third of all the affected consumers had let them go by without canceling. About half took between two and five months to cancel, padding these companies’ pockets while charging up their credit card balances.

Don’t forget about credit card interest promotions, either. As card companies jack up their rates in seeming lockstep (seriously – was there a top secret conference call or something?), many credit cardholder shave been left confused and angry by the changes to their card terms and conditions. Card companies, rather than actually responding to these frustrations with better rates, have turned the whole situation into one big, opportunistic marketing situation. These intelligent, cagey corporate hounds have come up with a slew of new ways to “reward” customers with breaks in their monthly interest rate for paying their credit cards on time. The biggest one coming to mind is the Forward Card product by Citibank, the biggest credit card company in the nation. Cardholders will get a quarter point of interest chipped off their APR for every three months that they pay their bill on time and keep the balance on their card below the spending limit. I’ve also heard of the Discover Motiva, which “motivates” consumers to use responsible habits by refunding a month of interest every six months. Sounds great, right? Don’t be fooled. Credit card issuers are never really out to help you, and are invariably interested solely in their bottom lines. Cards like the Motiva and Forward make up for these piddling perks by carrying rates of interest considerably higher than other products by the same companies. The savings are really negligible, and you might just end up paying more. Even worse, consumers might fall prey to the logical fallacy of carrying a balance on their card from month to month without needing to do so, just to cash in on their “savings.” Holding a high interest credit card is never a good idea, and you will just be paying money every month that perhaps isn’t really necessary. Don’t fall victim to card companies’ racket. Find yourself a nice low-interest card with perhaps less spectacular rewards, and pay it off in full every month to the best of your ability. You’ll end up with much more money this way.

Of course, the biggest way of throwing away money on your plastic is by just paying the minimum balance due every month. Up until just now, credit card companies have been marvelously secretive about the fact that you will be in debt for years on end paying three or four times your balance in interest fees if you only pay the minimum balance. It’s no way at all to get out of debt, that’s for sure. With the passage of the CARD Act, which will take effect this time next month, card companies will now at least be obligated to place any monthly payments in excess of the minimum on your highest-interest purchases. They will also be obliged to show you on your monthly statement how long you can expect to be paying your balance if you pay only the minimum. You will lose a LOT of the new benefit by paying only the bare minimum – any excess could go most effectively towards paying down your debt! Of course, the best way to save money on your credit card is to not carry a balance at all.