Ignoring monthly statements

This may be the easiest pitfall to avoid. As soon as you receive your monthly credit card statement, take a few minutes to look it over. Mistakes happen, so be sure there are no erroneous charges. The sudden appearance of unfamiliar charges can also signal identity theft. Call your lender immediately to report discrepancies.

Reading your bill can also help you understand how long it will take to pay off your debt. As mentioned earlier, the length of time required to retire your balance by making minimum payments is displayed, as is how much you would need to pay each month in order to pay off your balance in three years. These numbers could act as a wake-up call for you to increase your monthly payments.

Also, pay attention to the various interest rates you pay on purchases, cash advances and other charges. Look for changes from the previous month. Lenders are now required to give 45 days' notice before hiking rates. And it never hurts to double-check the due date of your bill to avoid late fees.

Racking up foreign transaction fees

There's no surer way to ruin a trip abroad than coming home to a credit card statement chock full of foreign transaction fees. Most bank-issued credit cards tack on these fees, which often run as high as 3%, including the 1% that Visa and MasterCard charge on foreign transactions.

It is possible to dodge some foreign transaction fees. Capital One, for example, waives the fee completely. Other issuers waive foreign transaction fees for certain cards, including Citibank's ThankYou Premier card, PenFed's Premium Travel Rewards American Express card and Chase Bank's Sapphire card.

Because foreign transaction fees vary by credit card, it pays to contact each issuer to find the one that charges the lowest fee. Use that card for purchases while abroad. Note: Many banks also charge for foreign debit transactions and ATM withdrawals, so check on those fees, too.

Taking cash advances

Unless it is an emergency, do not use your credit card to get a cash advance. If you do, you'll incur sky-high interest charges and probably pay an upfront fee for the privilege. Adding insult to injury, there's no grace period before interest starts accruing.

For example, if you take out $1,000 with your Citibank Platinum Select credit card, you will be hit with a $50 fee. The APR, which starts being tallied immediately, will be 25.24%, five percentage points more than the highest rate for purchases. Even if you pay back the advance within one month, you will owe $21 in interest on top of the $50 fee.

The longer you take to repay a cash advance, the worse the blow to your wallet. Wait a year to pay off that $1,000, and you will owe more than $250 in interest on top of the original $50 fee. If at all possible, explore other ways to get extra cash before resorting to a cash advance.

Click here to become a fan of MSN Money on Facebook

Spending to earn rewards

It's easy to get sucked in by credit cards that offer "free" rewards, such as cash back or airline tickets. But "free" rewards aren't free. To earn rewards, you need to spend money, and the promise of rewards can lead you to spend more than you otherwise would -- and perhaps more than you can afford.

In general, any reward you earn on a credit card will be worth 1% of the amount you spent to qualify for the reward. In comparison, the average APR right now is about 14%. "Rewards never offset interest charges, unless you're in a promotional period," says Woolsey.

Pay careful attention to the fine print on cash-back promises. Credit cards that tout 5% cash back on purchases "almost always" operate on a tiered-spending structure, warns Woolsey. People who charge little every month might fall into the lowest tier, meaning they might earn just 1% cash back. You'll need to spend much more, and keep spending much more, to qualify for the full 5%.

More from Kiplinger's Personal Finance magazine: