According to Interest.com today's variable credit card rates range from 13.29% interest to 10.72% interest, but credit card holders are aware that interest rates these days vary wildly from as little as 0% on some balance transfers to as high as 30% for consumers with bad credit.
Searching for the right credit card requires reading the fine print on all credit card agreements. While that 0% interest on balance transfers sounds great, make sure you know when that interest rate can change. On some cards, that introductory rate will only last for a month or two, and then your interest rate can skyrocket. In addition, credit card companies often charge a fee to transfer a balance. If that fee is high and your balance is high, it may make more sense to keep your current card and just keeping paying down the debt as fast as you can.
Not everyone even wants the same type of credit card. For some consumers, the low interest rate is less important than the rewards that can be earned by using the card. For example, some people opt to buy their weekly groceries and daily Starbucks coffee with a credit card in order to earn airline miles for travel. Just be sure if you do this to keep paying off the balance in full each month, otherwise you can quickly accrue a lot more debt than you can afford and will be wasting interest payments on items that should be part of your monthly budget.
Snagging the credit card with the lowest interest rate requires a good credit history of paying your bills on time and maintaining a low balance on the credit cards you already have. Borrowers with a low credit score may be forced to accept a credit card with a high interest rate.
If you are currently struggling to get out of credit card debt, as so many Americans are, don't be tempted to pay a company to help you deal with your financial problems. Free, non-profit credit counseling services are readily available to help you consolidate your debt or simply learn to budget.
Financial experts suggest a couple of different methods for getting out of debt, each of which requires firm discipline and a committment to getting out of debt.
Some advisors recommend the "high interest" method of reducing debt. First, tackle the card with the highest interest rate abd find a way to pay it off as quickly as possible either by dipping into savings or taking on an extra part-time job or simply spending less on non-essential items. At the same time, pay only the minimum due on other bills. Once the high interest card is paid off, take that money that you were paying on that card and apply it to the next high interest debt. Keep going - this will snowball so that your kast card wil be paid off quickly.
The second method which appeals to many consumers is to pay off the card with the lowest balance first. The method is essentially the same, but the satisfaction of seeing one debt paid off fast and completely can provide a boost of excitement that will be the incentive to continue paying off all your debts.
Written by Michele Lerner
HULIQ.com
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