Credit card rewards are fun. I love cash back and gift cards. Isn't it fun to get free money from the credit card companies?

Well, yes, so long as it's really free money. The problem is that many consumers forget that if they're using their credit card to get rewards but not paying off that balance each month, the interest charges cost them far more than the silly little rewards they will get back.

I have one credit card that I use for almost all of my purchases. I use that card because the rewards escalate -- the more I spend throughout the year, the higher my rewards rate goes. But the key is that I pay that balance off every month. So the credit card literally costs me nothing during the year. The rewards I get are totally free... and they add up fast. I got over $250 back last year from my credit card.

So don't use your credit card strictly to get points or miles or dollars. Make sure you're being smart about how you're using your card, and that you're being mindful of the interest charges that you could be incurring each time that card is swiped.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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