Thirdly, and this is sneakiest part of all, in order to secure 0% rate on your transfers, you are required to purchase a minimum amount on your card for several consecutive months. At first, this doesn’t sound so bad. However, fine print tells you that interest rate applied to these new purchases is NOT same 0% rate, but a different, much higher rate.

What’s more, all your payments will always be allocated to balance that will earn credit card company most money. This means that balances with lowest rates will be targeted first, while balance with much higher rate keeps accruing and compounding interest month after month. So, if you transfer a large sum in order to take advantage of this seemingly generous offer, you will likely be paying on it for a very long time before you ever get around to paying down mandatory purchases, which are racking up some pretty serious charges in meantime..

And we’ve only looked at interest rates here. There are also default penalties, late charges, over-the-limit fees, transaction fees, ATM fees, stop-payment fees, cash advance fees and annual fees, all of which are on increase. Over half states in union have no limit on what credit card issuers can charge for annual fees and yearly interest rates. These companies are gouging their customers with charges that are downright outrageous, and unfortunately for us, legal.

So how do you avoid falling into these sneaky traps that credit card companies set? If you are lucky enough to not be playing losing game of credit card roulette, for heaven’s sake, don’t start! If you are already involved, get out as fast as you can. Here are a few basic steps.

-Don’t carry a credit card. It’s amazing how easy it is to ignore this obvious first step.

-Apply any extra money to your debts first. If you’re saving a little nest egg earning at a rate of 5%, but you have debts gnawing away to tune of 12%, it’s not difficult to see that this is a losing proposition. -Target one debt for elimination at a time. Pick one that can be wiped out most quickly first.

-Take all extra money from first debt and apply it to your second target.

-Continue in like fashion until you have dug yourself out of this miserable pit.

And finally, breathe a major sigh of relief and vow never to pass that way again.

You can apply rule backwards as well. Let’s say you have a lump sum of $5,000 that you would like to grow into $10,000 in 8 years. You would need to find an investment that pays 9% compound interest. (72/8 = 9). If best you can find is an 8% return on your money (hypothetically speaking,) then it would take you 9 years to double your money. Not bad for just letting it sit there!

Now let’s assume that you want to help growth rate along, so you add an extra hundred dollars to this account each year. At end of 12 years, you would now have $3,800. If you could discipline yourself enough to add $200 a year, then you would find yourself with almost $5600. Seeing your money grow like this might well entice you to invest more money each month and really reap benefits of this wealth-generating principle. And there’s more good news. These examples demonstrate what happens when your investment compounds annually. Some institutions are more generous, compounding your interest quarterly, monthly or even daily.

It’s pretty clear which end of compound interest principle you want to be on. The first step toward winners’ circle is to pay off your existing debts. Even if you’re already having trouble making ends meet, a mere $1 addition to a minimum payment can significantly shorten life of that loan. That’s right, just one dollar. You won’t miss it and it would be well worth it. Remember compounding effect. And once you’re out of debt, there’s no minimum for earning compound interest. Any sum that you can set aside will do. You don’t need to be Donald Trump or Bill Gates in order to benefit from compound interest. It can work wonders for us all.