When used responsibly, credit cards offer extraordinary perks. The key is to avoid interest and fees by paying off your balances in full after making a purchase. That means using a card to spend just like you would with cash or a debit card, not using your credit limit to make purchases you otherwise couldn't afford.

Here's the simple guide for how to use a credit card to get the most benefit without any of the sky-high costs most people associate with credit cards.

Credit cards aren't very well understood by the general public, especially when it comes to the interest they charge. The reality is that as long as you always pay your bill in full, you'll never pay a dime in interest, even if the card charges an APR of 25%, or even more. That's because credit cards have what is known as a grace period, or a certain amount of time before interest is charged to your balance.

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Source: Fool.com