Newspaper article St Louis Post-Dispatch (MO)

It's about Time to Go Shopping for New Credit

Newspaper article St Louis Post-Dispatch (MO)

It's about Time to Go Shopping for New Credit

Article excerpt

American consumers have the opportunity to benefit from the lowest credit-card rates in more than 20 years.

The average bank-card rate has fallen by 2 percent in the last year to around 16 percent, but you may be able to cut that rate in half by shopping around.

This column has railed for years about how high credit-card rates remain no matter what happens with savings rates. But now recession, consumer awareness and industrywide competition are making their presence felt.

"Since we've offered low-rate credit cards, we've seen explosive growth, our cardholders doubling to 60,000 in a year and a half," said Richard Rieser, president of Oak Brook Bank (800-666-1011), which offers an 8.9 percent variable rate MasterCard with a $39 annual fee. "A bank our size can do that, but the largest card issuers can't, since offering low-rate cards would cannibalize their existing high-rate business."

Low-rate cards aren't for everyone, as you must meet credit criteria.

"If you're looking for a low-rate card, don't apply to lots of them all at once, for this triggers a red flag to card processors that you're going after too much credit," warned Jeff Sandefur, vice president with AFBA Industrial Bank in Colorado Springs (800-776-2265), which offers an 8.9 percent variable rate MasterCard and Visa with no fee. "If you already have a large number of cards with high limits, you might have to reduce that number before we could offer you one of our cards."

It makes good sense to improve upon the rate you're now paying.

"If you're paying more than 14 percent interest, you're probably paying too much," said Gerri Detweiler, executive director of the non-profit Bankcard Holders of America. Her agency sells a $5 booklet called "Exactly How to Get a Low-Interest-Rate Credit Card." The address is 560 Herndon Parkway, Suite 120, Herndon, Va. 22070.

"Furthermore, if you have a low-rate card but still have high balances on your high-rate cards, use your low-rate balance to consolidate that debt."

In some cases, especially if your credit record is good, you can successfully ask your current credit-card company for a better rate - if it means retaining your business. …

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