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Finding Great Credit Card Rates on the Web

Another strategy that can help you better manage your debts is to switch to a credit card with a lower interest rate. Let's go back to that $5,000 you're carrying on the credit card. At 18%, your $128 monthly payment will cost you $2,635 in interest over five years. If you switch to a card that pays 14%, you will only pay $1,980 in interest (a savings of $655), and you will finish paying off your debt seven months earlier!

If you've got high-interest rate credit cards, maybe it's time to switch to a card with a lower rate. Bank Rate Monitor (http://www.bankrate.com) offers a free credit card search engine that lets you zero in on the best credit card deals.

To search for a low-rate card, click on the Credit Cards section of their site, and then select your state (not all cards are offered in all states) under the heading "Find the best rate for you."

What Is APR?

APR is the "annual percentage rate" that you pay to a credit card company on your outstanding balance. All consumer loan and credit card agreements are required to display the APR in large bold type. Comparing the APR of different credit cards makes it easier to find the best card for you.

Now you can customize the search to display only those cards that meet your objectives. You can search for cards with no annual fees, low annual percentage rate (APR), or the best overall deals. You can also decide whether you want a personal or business card, and whether you need a gold or platinum card, or whether a standard card will do.

Figure 3.4 At the Bank Rate Monitor Web site, you can find the credit cards with the lowest fees, the lowest interest rates, and the overall best deals.

Click Go and the cards that fit your specifications appear, ranked from best to worst. In addition, click the Details button to get the full scoop on any card's rates, fees, and information about the issuer.

After you have your new, lower-interest card, consider transferring debt from your other cards to the new one. Many credit cards allow you to transfer these balances. But don't fall into the trap of signing up for new cards every couple of months just to transfer balances, even if the new card offers a lower promotional rate. Ultimately, the credit card companies will catch on and your credit rating can suffer as a result.

Avoid Cards with Annual Fees if You Pay Your Bills in Full Each Month

If you don't carry a balance each month, look for a credit card with no annual fee. Because you won't be paying any interest on your card balances, the APR isn't as important. Go for a card with no annual fee and a reasonable interest rate instead.

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