Yes, mortgage rates are at 40-year lows and energy prices are dropping, but credit cards continue to carry double-digit interest penalties and fuel costs threaten to rise again in the near future.

Although the media is full of news about all-time low interest rates, most credit card and retail outlet cards charge nearly 20% or more on monthly balances. Take a close look at your next statement and you'll see that these companies are getting astronomical returns on your money.

Some companies add extra rate penalties for late payments that may not be clearly outlined to card users. Store cards, which in some cases charge 28.8% interest, carry such outrageous interest rate charges that consumers often end up paying above retail prices for items they bought on sale.

This false affordability leads more and more Canadians into crippling debt each year.

Many Canadians seem to have forgotten that smart use of a credit card means paying off the balance each month so that you have the benefit of using someone else's money for free.

If you want to see just how crazy it is to use a credit card any other way, total up the interest you paid on all your outstanding balances this year and, using a mortgage calculator, apply this amount to your mortgage debt. This potential saving in mortgage interest may be the incentive you need to get rid of those money-sucking balances and free up more cash to pay down your mortgage or to buy a home in the first place.

Hot tips for reducing energy costs

Experts tell us that a 1/4-inch gap at the bottom of an exterior door has the effective cooling power of a hole four inches square in the middle of an outside wall, but many homeowners live with drafts by putting up the heat or throwing on a sweater instead of adding insulation.

A few dollars worth of caulking and weather stripping can eliminate between 25% and 40% of a home's heat loss. If you want to see how many "1/4 inch crack = 4 inch square holes" you have try these simple draft investigations:

• Turn on all the lights in the rooms just under your roof and go up into the attic. Stand in the dark and see if any light shows through from downstairs. These are places where you are losing heat.

  (Safety tip: Avoid contact with fiberglass insulation and suit up with safety goggles, gloves and a dust mask before you try this exercise.)

• On a windy day, use a lighted candle to check for drafts around windows, light fixtures, ceilings, doors, baseboards, electric outlets and plumbing.

• In checking the basement for drafts from windows, doors, cable entry points, furnace ducts and other openings, don't neglect the greatest heat loss source second to your attic þ the sillplate between the foundation wall and the floor joists.

Saving on energy does not mean taking one action or installing one new gizmo. The hundreds of small steps you can take to conserve energy will compound their return to reward you with lower costs and a more comfortable home. You'll be amazed how many of these savings opportunities cost little or nothing to achieve.

The Internet offers a wealth of ideas, but don't get so busy collecting suggestions that you have no time to implement these tips and gain benefits. To get you started...

• BC Hydro offers energy-saving tips for computers, home offices, and those living in apartment buildings or renting a house, plus energy management guides on a variety of topics.

• The Energy Library provides information on everything from thermostats to heating systems and appliances.

• Nova Scotia Power PDF bulletinsgive you the facts on a range of energy-saving improvements including caulking, weather stripping, energy-efficient lighting, heat-recovery ventilators, ground-fault-circuit interrupters and thermostats.

Whether you replace standard light bulbs with energy-efficient compact fluorescent, add insulation, upgrade your furnace, buy energy-efficient appliances or merely install a water-saving showerhead, don't forget that your savings could be negated by credit card interest. Besides, paying cash sometimes carries an additional discount.

For more articles by P.J. Wade, please press here.