Those thin slivers of plastic in your wallet might look shiny and inviting, but they're actually a cancer.

Halfway through 2001, the average American carried a credit card balance of more than $8,400, according to CardWeb.com. Assuming an average interest rate of about 15%, that adds up to more than $1,000 annually in interest alone.

Credit cards are essentially designed to bleed you dry, and the sooner you accept that harsh reality, the richer you'll be. American Express requires that you pay your full balance each month, but most others ask for only a minimum monthly payment of just 1.5% to 3% of your outstanding balance. Problem is, thanks to steep interest rates, it takes you years to pay off your bills if you pay the minimum.

Let's consider, for instance, how a couple of DVD players and a gaggle of DVDs that total $1,000 can actually cost you more than three times that much.

Let's say you and your brother Al like movies and you've always had a soft spot for Al. Along come the holidays and you splurge on both yourself and Al, buying each of you a DVD player and some DVDs. The bill comes to $1,000. Well, if your card carries an 18% annual interest rate and you religiously pay the minimum monthly balance of about 2% of the total bill, you'll end up paying almost $4,000 for that stuff and it will take you 19 years to do so, according to the MotleyFool.com's math.

The bottom line on credit cards: Find one card with a reasonable interest rate that lasts longer than six months and with no annual fee or pesky hidden fees -- all the time avoiding carrying a balance beyond one month. For more details on shopping for the right credit card, check out CardWeb.com.

10 Things You Should Do Before You Invest

  • Figure out what you're worth.
  • Set your goals and figure out how much they cost.
  • Spend less than you make.
  • Build an emergency savings fund.
  • Pay off your credit card debt.
  • Insure yourself against the unexpected.
  • Contribute to tax-deferred retirement plans like 401(k)s and IRAs.
  • Consider using software to keep track of your money and help with your taxes.
  • Be your bank's thriftiest customer.
  • Check out your credit report.

Ian McDonald writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to imcdonald@thestreet.com, but he cannot give specific financial advice.