"Many consumers see the value of credit monitoring services. And there is definite value in that," says Cundiff. "The primary value is to detect fraudulent activity relatively early. We generally find that consumers are not held liable for fraudulent charges, but it's a major hassle to sort out."

Plastic surgery

• Switch to a card with rewards. • Redeem your points for rewards. • Pay off the balance. • Shop for a better interest rate. • Read the monthly statement. • Check your credit report. • Curb spending with a debit card.

When you check your report, you will probably find errors such as your name spelled two different ways or a former address where you've never lived. You can correct these errors, and you should. And certainly if there are more serious mistakes -- such as a report of delinquency when you know you've paid -- you must start the correction process. It's up to you to keep your credit reports accurate.

Curb spending with a debit card
Debit card use has outpaced credit card use over the past few years, and that trend continues. In 2007, U.S. cardholders were expected to make 26.6 billion debit card transactions and 24.4 billion credit transactions, according to the ATM & Debit News EFT Data Book.

Using a debit card instead of a credit card is a "great step, because it's coming right out of your bank account when you spend it. You're feeling the effect. You know you're spending it instead of spending on a credit card and being surprised when the statement comes," says Jacobs.

But there are a few things to keep in mind before you swipe at every turn.

"The downside of using a debit card is spending your money instead of getting a float. There's usually at least a 15- to 20-day float on a credit card," says Cundiff.

He also warns about banks authorizing a transaction that will put you over the amount in your checking account. "People need to understand the policies of their financial institutions. They need to read the fine print on overdraft protection. A bank should be responsible for protecting the consumer, saying, 'No, you don't have any money, you can't make this purchase.'"

Instead, overdraft protection kicks in and the consumer continues spending, not knowing that they're being charged additional fees to cover each transaction.

The bottom line, Cundiff says, is "controlling spending by controlling spending, not by the method of payment."