note: some of the following has now been incorporated in the original article, to address deficiencies identified by Chris.
Conventional depictions of "karma" have been twisted over the centuries and millennia to suit particular religious dogmas. To make the situation even worse, modern widespread western use of terms such as "yoga" and "karma" have debased the meanings of these in the minds of most, such that the original meanings have been obscured and forgotten about. "Yoga" means union (typically with God i.e. the divine oneness), and "karma" simply means action (which in this case includes thoughts, i.e. mental action, and words spoken) - in effect, anything that I (or you) the soul creates.
The "law of karma" is simply that whatever we give out to the cosmos is returned to us by the cosmos, such that balance is always sought and returned to . Everything that we experience is a direct result of our prior actions. Our every intention comes back to us - whether to haunt us, or to uplift us, or whatever, depends on the nature of that intention. We simply get what we give. When, where, and how, is a different issue - and karmic return can take place on other planes of existence than the physical plane - but that is irrelevant to the basic concept, that whatever we create, we will experience the consequences of, and that whatever we experience, we have already created. Accordingly we, as divine beings, are personally responsible for every experience we have. This is an expression of the oneness of all - the recognition that we are all one means that whatever we do to others we are also doing to ourselves.
The rewards for true spiritual progress are immediate - we experience them now, in this life. To hope for "jam tomorrow" in exchange for suffering today (the carrot), or to be manipulated by fear (the stick) are both misguided approaches, IMO.
I agree that the representation of karma in accounting terms (debt, credit, balance) is over-simplistic and dualistic, and may cause more misunderstanding than illumination! I will think twice before using this analogy again!
A final aside on karma: karmic return can manifest (typically in "the future") as thoughts, feelings, conversation, or physical actions of others - in "real life", in dreams, in visions - that is, in a great many ways. But we can also circumvent such return through remorse - simply by sincerely regretting an action that has hurt others, we can balance that karma. We can also clear ("burn away") karmic imbalance through divine consciousness (God consciousness) - this is the most direct method. If we are constantly in divine consciousness - the embodiment of divine love - then karmic return becomes irrelevant to us.