Credit cards suck. They can be as addictive as any drug. Unlike some other addictions, though, I think it's feasible to control one's credit card spending. The way credit cards operate is also deceptively complex. Our culture, however, has an addiction to credit and credit card overspending is one symptom of this addiction. Rehab may be on the way. Ask Greece. Or Ireland. Or Spain. Or Italy.

Many students here at Fanshawe may have been offered a student credit card along with your student loan if you have a loan through a bank. Other than your student loan, your credit card may be your first experience with borrowing. There are a number of things about credit cards you need to know about before you get in over your head, such as credit limits, grace periods, interest rates, other fees and your credit score.

If you have a credit card, it has a limit. Student credit cards are usually capped at about $500, although this varies. If you spend over this limit, you'll incur a fee, usually $20 or so. Worse yet, spending over this limit may change how much interest you're charged on a permanent basis. Typically you're looking at somewhere between 17 to 20 per cent annual interest, with some credit cards being as low as 10 per cent and some being way higher than 20 per cent. The ones above 20 per cent tend to be for so-called 'higher risk borrowers,' such as those who have gone over their credit limits in the past.

Interest is calculated daily and added monthly. You've typically got 21 days after the statement date to pay off your total balance before interest is charged. This is the one minor advantage to credit cards. If you pay off your card to zero within those 21 days, you aren't charged interest.

Here's where it gets complex. First, you need to pay your entire balance, not just the recent purchases. Second, even though you may have a 21-day grace period, interest is still accumulating during those days. If you don't pay off the balance in full, you're charged interest for that time. The math can be a tad complex, to say the least.

Your credit card can affect your credit score either positively or negatively. Credit scores are pretty complex, too. They're basically calculated using computer algorithms that most people who work in finance don't even understand. A good score is typically something above 700. A passable score is above 600 (although that still can be quite low for some purposes). Anything below that and you're considered a credit risk.

If you pay your credit card on time, that can help your score. Getting behind on your payments can hurt your score. There are a couple of services you can access that will provide your credit history and score: transunion.ca and equifax.ca. You can order your free credit report from either of these services (the report is the same whichever service you choose). They have paid options, too, but the free report has everything you'll need and I highly recommend getting a credit report sent to you.

Jeremy Wall is studying Professional Financial Services at Fanshawe College. He holds an Honour's Bachelor of Arts from the University of Western Ontario.