Regina Lewis, Special for USA TODAY

Whether we're buying lattes or laptops, gas grills or gargantuan TVs, chances are we're using a credit card to pay for them. But how much do we really know about that plastic in our wallets?

For starters, the average American carries at least three credit cards. According to, you need at least two credit cards - excluding store cards - as you never know when an issuer will decrease your limit or even close your account. It's a good idea to make your main card a rewards card, preferably a no-fee, cash-back version that will give you a rebate of up to 5% on everyday purchases.

Real features a list of "The Top 5 Rewards Cards" for you to consider. You can also compare a wide variety of credit cards and their features at or As for the second credit card to carry, this one should be reserved as a backup to use mostly for emergency expenses such as car repairs.

And what about all of those features that you see on any given credit card? Here's a quick look. Let's start with the numbers on the front of a card. The first digit designates the type of card you have. For example, 4 is for Visa and 5 is for MasterCard. The other numbers identify the bank that issued the card and its currency, the user's account number, and the "check digit." This verifies that the complete series of numbers is legitimate.

And some new cards contain a chip on the front that's actually an embedded microprocessor that encrypts your personal information. The chips, which are currently a standard feature on cards issued overseas, are expected to become mainstream in the U.S. by 2015.

The swipe strip on the back of a credit card contains encoded data. This includes the card's expiration date, a code that corresponds to the country that issued the card, your personal account number, and sometimes your authorized spending limit.

Now for some common myths about credit cards, according to

Myth #1: Paying an Annual Fee Is a Waste of Money

Fact: The card may be worth the price. But to know for sure, do some quick calculations to see if the benefits you receive pay for or exceed the annual charge.

Myth #2: Just One Missed Payment Won't Harm Your Credit Score

Fact: Actually, it can and in a big way. According to Liz Pulliam Weston, the author of Your Credit Score, your score could plummet more than 100 points if you miss a payment. Setting up automatic bill pay is a great way to make sure you never miss a payment.

Making sure that your credit cards work for you instead of the other way around is part of becoming a smart and savvy consumer.

Regina Lewis is a national television contributor and host of USA TODAY's "Money Quick Tips" videos. Follow her on Twitter: @ReginaLewis.

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