Screw Up and Suffer

Pitfalls and problems in the credit card world are nothing new. For example, in addition to new late-payment fees as high as $39, credit card companies may also penalize you for paying other bills late. Via "universal default," credit card issuers could raise your interest rate to 25% or more if you're late paying bills to other parties -- including library fines, in some cases.

With the spending-happy holiday season just behind us, it's a good idea to keep these credit card dangers in mind. Paying just three credit card bills late -- even by a day -- could cost you $117 in fees. Those late payments could also double your interest rate; if you're carrying $8,000 in revolving debt, your annual interest expense will soar from $1,200 to $2,400.

Fortunately, some card issuers are changing their ways for the better. JPMorgan Chase (NYSE: JPM) and Citigroup (NYSE: C) are among the banks discontinuing their use of universal default.

What to do
If I've got you scared now, take a deep breath. It's probably not too late to spare yourself from extra expenses. Make sure you get those bills paid on time, even if you have to raid your emergency fund to do so. (Don't dip into your retirement funds, though -- the penalties might ultimately be greater than credit card costs.) Ratchet down your current spending immediately, too, so that you'll have more money with which to pay your bills.

In addition, consider using cards that require you to pay their balance in full each month, such as certain cards from American Express (NYSE: AXP). And for next year's bills, consider socking away a little sum each month beginning now. That way, you'll be able to cover tomorrow's bills well in advance.