Smart tips for credit card use...

1 Use the card whenever you can... but pay it off each month

The cheapest way to manage your daily purchases is to use your credit card whenever you can and pay off the outstanding balance in full every month.

The money you would have used to pay for purchases can continue to sit in your savings account, or other investments, earning interest until you need it. And apart from a base fee charged on some cards, you'll incur no other costs.

But you must pay the card off. If you don't, this option rapidly gets expensive. To make things easier and to maximise your earnings, you can set up a direct debit to pay off the outstanding balance right on deadline.

If you can't trust yourself to pay off the whole balance each month, only use the card in emergencies.

Make sure you make at least the minimum payment each month. If you don't, not only will you incur interest, but you may be charged a late payment fee as well.

2 Avoid cash advances

Use a credit card to buy something and you'll get up to 44 or 55 days' free credit (depending on the card). But use it to withdraw money and you'll be paying interest, of around 18 percent, from that same day. It's a very expensive way to get cash.

If you want access to cash on the card for an overseas trip, deposit money on the card, and use another card for purchases.

3 If your credit card is out of control, seek help

Abuse a credit card, and you can end up bankrupt. If you find you can't control the debt, take prompt and serious action.

First, stop using the card. Cut it up if need be.

You should then speak to your bank about restructuring the debt. One option is to set up an automatic payment to pay it off. Another is to add it to your mortgage.

If you do this, make sure you repay it as soon as possible, or your gains through a lower rate of interest will be undone by the longer time it takes to pay off the debt.

4 Apply for charge-back

If you don't receive something you've paid for by credit card, you can get a refund. It's called a "charge-back".

The charge-back system is part of the conditions imposed by card companies on all traders offering credit card facilities. You can claim if mail-order goods do not arrive or are not what you expected, or you pay in advance for a good or service not supplied. You can't usually get a charge-back if you've bought unsatisfactory goods over the counter.

If you want to make a charge-back claim, contact your card's inquiries centre and ask them what to do. You'll have to make the claim in writing, usually within 60 days of the original statement's date.

(Stick to reputable mail-order firms and Internet sites.)

5 Report lost cards immediately

If you lose your card or something odd appears on your statement, contact the lost card centre immediately.

Keeping an eye on card security is another good idea. Don't leave your card lying around at home or work. You may also like to consider a card which will display your photograph.