Having a credit card or three can be a thrilling adventure: all of the sudden you have more cash available and can buy things that you otherwise couldn't afford. You understand that you need to pay your bills on time, pay the minimum payment every month, and that you can obtain cash advances. Yet, do you know what risks are involved in minimum payments and cash advances? Educate yourself to avoid the most easily misunderstood credit card traps:

Paying the Minimum Monthly Payment on Credit Cards

The minimum monthly payment is a very small amount that your credit card company requires you to pay each month to keep your balance in good standing. It seems like a dream. You owe $1,200 and only need to pay $50 this month. Unfortunately, this dream has a harsh reality to it. The less you pay, the higher your interest and the faster you balance climbs, whether you are making new purchases or not.

If you pay only the minimum due, even on a small amount, it may take years to pay off the debt. What you will really be paying is interest, and lots of it. The smartest way to avoid this trap is to pay as much as you can each month, or only spend what you can afford to pay in full. It might seem like a dream to pay such a small amount, but in the end in can turn into a nightmare in interest and debt.

On the flip side, if you miss a payment or pay less than the minimum, you will be charged a late fee on top of current interest charges and will likely get a negative mark on your credit report. It is imperative that you at least pay the minimum, no matter what your financial status.

Credit Card Cash Advances

Cash advances seem easy enough: go to the nearest ATM and withdraw whatever amount of cash you need. What you may not know is that most cards charge a special fee on a cash advance, the interest rate is usually higher than on normal purchases, and you pay interest every day until you pay the advance, without a grace period.

Be sure to check the details on the credit card contract to find out what fees you will pay for this easy transaction. The best policy is to only use advances for emergencies. If you get in the habit of withdrawing money from you credit card, you could see your balance skyrocket in no time.

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Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

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