4. Never give out your credit card to anyone! This includes people in your family and any of your friends. It is not that you cannot trust these individuals, but you cannot track purchases you are not even making.

5. Never charge more than you can repay. When you do, you can hurt your future chances of getting any kind of credit, including car loans, home mortgages and other forms of loans.

6. Pay your credit card bills on time or even before they are due. Doing so will not only help improve your credit scores, but also help avoid additional costs associated with late payment charges and accrued interest.

7.Try to pay all your credit card bills in full each and every month. Have payments of a certain amount in your budget and try not to purchase more than that amount.

8. Use your credit cards for new purchases only. Too many people use one credit card to pay another credit card bill and that always leads to more spending and higher balances.

MasterCard and Visa offer zero-liability protection where you won’t pay any charges if someone uses your credit card to make an unauthorized purchase.

The protection offered to debit card fraud is similar but with a few exceptions. For example, your liability under federal law is limited to $50, same as for a credit card, but only if you notify issuer within two business days of discovering card's loss or theft. Your liability for debit card fraud can jump up to $500 if you don’t report loss or theft within two business days.

And if you are type of person that gives a passing glance to your monthly bank statement, you could be totally liable for any fraudulent debit card charges if you wait 60 days or more from time your statement is mailed.

Visa and MasterCard zero-liability protection applies to your debit card but only for transactions that do not involve use of your PIN (personal identification number).

Additional protection against fraudulent use of your credit or debit cards may be available through your homeowner’s or renter’s insurance. Check your policy or with your agent for more information about your coverage.

Also be aware that you should contact your card issuer by certified letter, return receipt requested, after you’ve contacted them by phone to protect your consumer rights.

As for which card to use for what type of purchase, most experts agree that you should use your debit card for same type of purchases you’d make as if you were using cash. Therefore, it makes more sense to use your debit card than your credit card at grocery store or gas station (provided you have sufficient funds to cover these purchases of course).

Avoid using your debit card for any online purchase or for something which is expensive. Why ? You’ll find it much easier to dispute a charge when you use your credit card. If your gold-plated, limited edition, hip-swinging Elvis wall clock arrives broken, your credit card company will remove charge until problem is resolved.

With your debit card you are stuck dealing with merchant directly to resolve any problems with a purchase, even if your banking institution could really use a gold-plated, limited edition, hip-swinging Elvis wall clock of their very own.