By Adron Krekeler

Americans are paying more than ever for credit. According to a recent report, credit cards now carry an average interest rate of more than 17 percent – a 35 percent increase from just five years ago – despite the prevailing low interest rate environment. Almost half of cardholders surveyed carry a running balance each month, paying high interest rates on their unpaid balances.

Many are also paying late fees. According to the report, 26 percent of cardholders have made a delinquent credit card payment – 30 days late or more – and 12 percent have made multiple late payments. Such late fees are estimated to top $3 billion – and that’s not counting interest charges.

Clearly, a lot of people could use help in managing their credit card use. If you are among them, consider these time-proven tips for smarter ways to use your cards.

Don’t carry a running balance

Credit card debt is among the most expensive ways to borrow money. If you carry a running balance, pay it off. That may mean dipping into your savings or investments, but those investments are probably earning a much lower rate of return than the card is charging for interest.

For example, say you have a running credit card balance of $5,000 with a 17 percent interest rate. If you have money in a savings account, that money is likely earning under 3 percent in the current market environment. And even if you manage to earn much more on an investment, paying off higher rate debt may still be a better bet. Even though your savings may take a hit, you’ll generally be better off. It’s all about the interest rate.

Lower your rate

If you must carry a running balance on your card, then find a card that offers lower rates.

The market is awash with cards offering low or zero introductory rates on balance transfers. Shop carefully and read the fine print. Many so-called teaser rates increase significantly after the introductory period, and some cards charge a balance transfer fee as well as annual account fees, late fees, over limit fees, etc.

In addition, the low-or-no-fee offers typically apply only to balance transfers, not new purchases. So, unless you intend to use the card only to transfer balances, not to make purchases, and pay off the entire amount during the introductory period, the better approach may be to shop for a low fixed-rate card.

Also, be sure you are looking for the lowest interest rate, not the lowest minimum monthly payment rate. The latter could end up extending your payback period and costing you more in the long run.

You may also be able to lower the rate on your current card by calling the issuer and asking for a reduced interest rate. Many card issuers will be willing to lower your rate if your credit and payment history are good.

Prioritize rates, not rewards

A lower interest rate should be a higher priority than rewards. Many credit cards offer rewards on your spending, with some giving as much as 2 percent cash back for every purchase. This is a great bonus, but it makes financial sense only if you pay off your balance every month. If you carry a running balance, you probably won’t earn enough rewards to outweigh the high interest costs.

Consider cheaper ways to borrow

If you do need to borrow, consider other, lower interest channels such as installment loans or a home equity line of credit. Generally speaking, a home equity loan or line of credit is one of the lowest cost options for borrowing money, although you should use caution when using your home as collateral for a loan.

Use your cards wisely

While it may not be easy or quick, you can get yourself out from under the burden of credit card debt by using your cards prudently. Here are some best practices that can help: Pay your bills on time, pay more than the minimum amount due each month, pay off the cards with the highest rates first, pay cash for smaller purchases, save up for larger purchases and develop a spending plan.

Make 2020 the year to improve your credit card use by taking these simple steps. You – and your wallet – will be glad you did.

The writer is managing principal of Thrive Wealth Advisors.