Congratulations!

You just kicked off a week of R&R in a tropical paradise, and best of all the travel isn't costing you a dime because you used your flight rewards card.

Feels good to get something for nothing doesn't it?

But air travel isn't cheap and credit card companies aren't known for their charity or stupidity.

So what's the catch?

You might be surprised to learn that that free flight you just booked might be the most expensive one you've ever taken.

Starting with the diner's club card in 1950, Americans instantly fell in love with plastic.

Within just a generation or two credit cards went from being a perk for wealthy world travelers to a practical necessity used by over 70% of US households.

And what's not to like?

As long as you pay your bills on time it's basically an interest-free loan.

And then there's the rewards programs: Cashback, in-store discounts, and of course, airline miles.

Whit all that generosity how on earth did credit card companies manage to post 163 billion dollars in profit in 2016 alone?

Turns out credit card companies make their money in a few different ways: they charge merchants a fee for processing your payment which is often passed on to the consumer in the form of higher prices, and they sell user data to marketers so you might get hit with more advertising.

It's hard to quantify exactly how much of those factors affect you but there are more direct costs to being a credit card user.

Most credit card companies have fees attached, especially if they're an airline or other rewards card.

Missing a payment or overdrafting will also incur late fees or cash advance fees.

One study showed an annual cardholder fee range of twenty five to five hundred and fifty dollars for cards linked to a rewards program, with the average annual fee of a hundred and forty seven dollars.

You might still say you got a good deal on the flight but if you pay a hundred and forty seven dollars for a free thing... it's not free.

Just saying.

And simply paying that fee does and guarantee you'll actually receive any benefit.

A bankrate.com study found that thirty one percent of airline miles never get redeemed at all.

That's at least in part because airlines make it increasingly difficult to actually cash in on your benefits.

It's such a pain in fact that services have started popping up like booking guru that will help you pay for a flight with your saved up miles... for a two hundred dollar service charge.

When you opened your first credit card back in college you probably told yourself that you'd be responsible and always pay off your full balance every month.

I mean who would plan on paying the US average interest rate of seventeen percent?

That would be crazy!

Well easier said than done.

The New York Times reports that 60% of credit card holders don't pay off the balance they accrue each month.

Even the most conscientious of credit users can have a car breakdown a week before payday or an unexpected trip to the vet for poor Mr. Fluffles.

And even if you never pay interest on your cards, are you really getting the better of the credit card company?

Or other credit card users?

The company can afford to let you beat the system only because they know that other less perfect customers will more than make up the difference.

So you might say that your cousin or friend who struggles with credit card debt is helping pay for your trip.

Even if you can avoid fees and interest, credit cards still might be hurting your ability to save money or pay off debt.

How?

By subconsciously affecting your spending habits.

A study by Carnegie Mellon found that spending cash activated the areas of the brain associated with pain.

Swiping a card?

Not so much.

A landmark study by MIT found that on average subjects using credit cards were willing to pay almost twice as much for sports tickets than those using cash.

According to the Carnegie Mellon researchers, "the nature of credit cards ensures that your brain is anesthetized against the pain of payment."

And rewards like airline miles are specifically intended to encourage you to use your card more often.

The thought of earning a few more of those sweet sweet points might be what pushes you over the edge to go ahead and buy an extra pair of sunglasses or splurge on a fancier hotel.

Even if you don't wind up spending twice as much imagine how much you could save if you spent just five or ten percent less a year by using cash.

That could seriously add up.

When you take these less obvious costs into account, you wonder whether it's a better idea to just buy a seven hundred and fifty dollar plane ticket outright.

Which is not to say that you shouldn't cash in your rewards if you have them or that anyone should or even could forgo credit cards altogether.

Credit cards aren't objectively good or bad.

They're a financial tool like any other that has costs and benefits, risks and rewards.

But it's in these companies' best interest to emphasize the rewards and downplay the risks.

And it's in your