Americans are doing the wrong credit card thing
By Lucy Lazarony • Bankrate.com

When it comes to credit cards, many Americans are having a tough time doing the right thing.

According to a financial literacy poll by Bankrate.com, most Americans know that switching to a credit card with a lower interest rate is a good idea. But 31 percent of folks never bother to do it.

And it's not like many Americans are losing sleep over their credit card rates, high as they may be.

Twenty-four percent of Americans say that as long as they can afford their payments, they don't worry much about the interest rates they're paying.

That's no way to manage your money. Why not just open a window and throw some money out while you're at it?

If you pay your credit card bills in-full every month, feel free to disregard the interest rate and focus on rewards and perks instead.

Why pay more interest?
Anyone who carries a balance should care about the interest rate they're paying. Plus, there's a good possibility that you're paying your credit card company far too much interest.

How do you make a credit card company lower your interest rate? It's often as simple as calling and asking. Not sure what to say? This Bankrate.com article is full of tips.

If you think you need perfect credit to get a rate reduction, think again. Competition in the industry is fierce, and card companies want to hang on to as many customers as they can.

Plus, with interest rates at record-lows, it's cheaper for card issuers to borrow the money they lend to customers. Your card company can afford to cut your interest rate, but they won't give you a rate cut unless you ask.

If your card issuer won't budge on the interest rate, be ready to move your balance to a card with a lower rate. This Bankrate.com article will walk you through the steps.

If you've got squeaky-clean credit, you may be able to qualify for a card deal with a zero-percent teaser rate. For the lowdown on zero-percent credit card articles, check out this Bankrate.com article.

Once you transfer your balance to a card with a lower interest rate, go ahead and congratulate yourself. You've taken an important step toward financial literacy. But don't get too comfortable because you've got a lot of hard work ahead.

Avoid the minimum-payment trap
The next key step is avoiding the minimum-payment trap -- a trap that too many Americans fall into, even though they know they shouldn't.

More than a quarter of all Americans are snared in the minimum-payment trap.

Twenty-two percent of Americans "sometimes" pay more than the minimum; 6 percent rarely or never pay more than the minimum.

The best way to get motivated to increase that monthly payment is to crunch some numbers.

This calculator from Bankrate.com will show you just how much making minimum payments on credit cards is costing you and how much money you'll save by increasing your monthly payments.

The best way to find the money to beef up your payments and get rid of card debt for good is by living below your means. This article on living below your means will show you the way.

For money saving tips, check out Bankrate.com's Frugal U. channel.

-- Posted: March 16, 2003