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How to Make Sure You are Getting the Lowest Rate on Credit Cards

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  • How to Make Sure You are Getting the Lowest Rate on Credit Cards

    Americans carry an average of four credit cards each, although 14 percent of us carry 10 or more! With a heavy reliance on credit such as this, knowing how to find the best and lowest rates is not just a matter of frugality -- it’s a necessity.

    Credit card issuers routinely charge interest rates of over 19 percent (even to those with good credit), up from 17.7 percent in 2005. This seemingly slight increase adds up to billions of dollars in interest charges added to credit card bills every year, The New York Times reports.

    So how can you keep as much of your income from contributing to those billions? By paying cash, or paying off your credit card balances in full every month so you avoid the interest charges altogether. But when this is not a possibility, seeking out the lowest credit card rates is essential.

    How to Get the Lowest Rate Credit Cards

    1.Choose fixed rates over variable rates. Low fixed rates are usually the best deal, although keep in mind that even fixed rates can go up when interest rates increase.

    2.Avoid cards that offer rewards. Cards that offer reward benefits such as airline miles, cash-back incentives or other retail options typically charge higher interest rates. Though this is fine if you intend to pay off the balance each month, if you intend to carry a balance opt for a card with a low-interest rate, not rewards.

    3.Overcome the emotional tendency to be swayed by gimmicks. It’s tempting to choose a credit card that offers free airline tickets, electronics or other retail items, but as we said above, it’s usually at the cost of a higher interest rate. Why are we so easily tempted by such gimmicks?

    "Gimmicks work because we want them to," says Hale Dwoskin, CEO and director of training of Sedona Training Associates. "The problem is not in the gimmick but in our wanting the happiness and protection we imagine we will get from buying things that we may not need or cannot afford."

    4.Realize that APR is not everything. A low APR is good, but other factors, such as an annual fee, penalties, late payment charges, over-the-limit charges and other hidden fees can cancel that out. So when shopping for a card, keep the big picture in mind.

    5.Watch out for teaser rates. Many cards offer low teaser rates, such as 0 percent interest for six months. While this is a good offer, make sure you know what the interest rate will become after the promo period has ended.

    6.Ask for a lower rate. Believe it or not, according to a survey conducted by the U.S. Public Interest Research Group, 56 percent of consumers who called their credit card companies and asked for lower rates got them. The APRs on their cards dropped from an average of 16 percent to 10.47 percent, according to

    7.Release your emotional baggage. What do your emotions have to do with credit card rates? They may be inadvertently causing you to spend more than you should, and ultimately become a slave to interest rates and creditors.

    "As you release your fear and lust about having and spending money and using credit in general you will make much more intelligent choices about how to spend money and when it is appropriate to use credit," Dwoskin says. "The more you let go of your fears and lust you will find you are no longer subject to credit card come-ons. You'll even find as you let go that you do not feel like you are sacrificing or giving anything up by being more prudent with credit."

    So before you make any large credit purchases, and even before you settle on a card in the first place, learn how to let go using a tool called The Sedona Method. Doing so will make you impervious to credit card "deals" so that you make the right credit choices for you. Even beyond credit cards, The Sedona Method helps you to control your spending and urge to accumulate more "stuff,"making it an ideal investment to save you big money in all aspects of your life.
    Purchase Letting Go Movie on DVD
    Purchase Beyond Letting Go
    Purchase The Sedona Method Course
    Learn The Sedona Method in 2 hours.