Watch out for traps to avoid when using a credit card, and find out what to consider if you plan to use credit card cheques or your credit card abroad.

Your statement will show that you must make a payment by a certain date each month. If you miss it, you may have to pay a late payment charge and your interest rate may also increase.

The credit card company must credit your account on the day they receive your payment if you pay by cash over the counter at a branch, or if you make an electronic payment (for example over the internet or by Direct Debit). If you pay by cheque it will take longer for the money to reach your account – you need to allow up to 6 working days to let the cheque clear – see Cheque clearing cycle at Related links.

If you're behind with your payments, this could also show up on your credit history, which another potential lender might also see. This could make it more difficult to get credit in future.

An easy remedy: ask for a Direct Debit form from your card issuer. You can then choose to pay off the full balance every month, or the minimum payment, or a set amount in between, automatically from your bank account.

It's easy to slip into a pattern of paying just the minimum payment each month. But it means, of course, that interest is building up, month after month, on every pound you owe. You will also be charged interest on the entire balance on the statement – not just the amount still left to pay after you’ve made the minimum payment. If you can't pay the balance off, at least try to pay a bigger amount each month. You can use a repayment calculator from Which? (an independent consumer body) to work out how much more quickly you could pay off your credit card bill by making a higher monthly repayment – see Related links.

Don't confuse credit cards with debit cards when you're at a cash machine. If you use a credit card to withdraw cash, you'll normally be charged an extra fee every time. You will also start paying interest immediately on the amount you withdraw and the interest may be higher than for purchases. You should also check how your payments are allocated – see Allocation of payments – as this more expensive borrowing may be the last to be cleared when you pay your bill.

It’s wise to check what other transactions may be treated like a cash withdrawal, as they will also carry higher costs as described above. Check the definitions in your terms and conditions and ask the company to explain anything you don’t understand. Although definitions may differ between companies, it is likely they will include:

You will also be charged more if you use credit card cheques.

Many leading shops and stores have their own cards. They are not the same as credit cards as you can only use them in their own stores or group of stores. They may offer benefits such as extra discounts for cardholders only, and preview days for sale goods ahead of the general public.

However, many store cards carry very high interest rates if you don't pay them off immediately – in some cases, double the cost of ordinary credit cards. Be careful to check their APR before taking out a card.

Some credit card companies offer credit card cheques, which can be used in situations where you would like to use credit to pay but the supplier does not accept credit cards. Credit card cheques are used in the same way as normal bank cheques, but any money you spend using them is added to the amount you owe on your credit card rather than coming out of your current account. This means you will pay interest, usually from the day the cheques are used. In addition, you may be charged a handling fee by the credit card issuer (usually 1 or 2% of the value of the cheque or a minimum of £2).

Not only can credit card cheques be costly in interest and charges, they do not offer the same legal protection that credit cards themselves offer. For more information on credit card cheques see the UK Cards Association’s website – see Related links. For more information on credit card protection see Protection for your credit card purchases.

Before you go, tell your credit card company you may be using your card abroad. Otherwise they may think your card is being used fraudulently and so block your card transactions.

If you withdraw cash or make purchases abroad, you may have to pay a fee and the money will be charged at foreign exchange rates. This cost is likely to depend on the value of the transaction. This is on top of any interest or fees you have to pay normally. See our Travelling abroad guide.

Credit cards have their advantages, but they're not always the right choice. If you can't pay for what you're buying and need the help of some extra funds, consider a bank overdraft or a personal loan – see Loans for more information.