Because credit cards are the riskiest kind of loan a bank can make, fees, interest rates and repayment terms reflect that risk. Those of us who manage our overall debt responsibly and make monthly payments on time are not charged late fees or higher interest rates. Those who don't pay their bills on time do wind up paying a late fee, or become subject to a higher interest rate. Seems fair.

But the vast majority of Americans pay their credit card bills on time. Good borrowers are universally seen as good credit risks, and their responsible use of credit means they have access to this safe, convenient means of exchange - at virtually no cost.

Is credit card debt a cause of the increase in personal bankruptcies during the past decade, as some have suggested? No. One South Carolina bankruptcy attorney, looking back at all the bankruptcy petitions in the state over a period of years, found that fewer than 1% of those filings were due to credit card debt. And a recent Federal Reserve (news - web sites) study found that credit card debt as a percentage of indebtedness of all U.S. families has hovered at under 4% for more than a decade. Not much change there.

So what has changed? People today are taking on more debt, often in the form of home equity and auto loans. Consumers, however, are still in control. They can eliminate late fees and manage the interest rates on their credit cards by paying, on time, their credit card and other accounts that might contribute to their overall credit profile.

The financial services community can help. Many financial institutions, federal regulatory agencies, the American Bankers Association and other groups have developed programs to help consumers understand and manage debt. These financial literacy resources are free and often available online.

A more likely cause of the increase in bankruptcies is that a borrower experiences some unusual financial hardship, such as the loss of a job or overwhelming health care costs. Congress wisely is completing bankruptcy reform legislation right now that protects people who face these kinds of catastrophic loss. The legislation also brings greater fairness to the bankruptcy system. People who can afford to pay back some of their debts will be required under the new law to do so, rather than use the bankruptcy courts to duck their obligations.

Our nation's credit system is the finest in the world, offering readily available, convenient, affordable credit. Americans take the credit card for granted. And that's the point.

Donald Ogilvie is president & CEO of the American Bankers Association.