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