Comparison-Shop to Get a Lower Rate

Although low rates can be incredibly beneficial, getting credit cards with rock-bottom rates can be a challenge. The people who get the lowest rates have solid credit scores, generally in the 720 range.

If you do have good to excellent credit, then you’re in the driver’s seat, but most cardholders can find great deals.

According to credit expert Gerri Detweiler, author of Invest in Yourself: Six Secrets to a Rich Life (Wiley, 2001), you can use several different avenues of approach to obtain a lower rate, and it’s worth trying them all:

• Don’t put it off: The money you save will be your own. The longer it takes you to get going, the more money you’ll give to your lender. “There are many banks that want your business and are willing to give you good rates and terms,” explains Scott Bilker, author of several best-selling books on consumer debt, including Talk Your Way Out of Credit Card Debt (Press One Publishing, 2003). “You just need to start looking for these credit options.”

• Write down the rate information for the first card that seems appealing, and compare that offer to others as you collect the pertinent information on each card. You can also compare the Schumer Boxes. Just be sure to read the offers very carefully to make sure you know the deal. Is there a low introductory “teaser” rate or an ongoing (non introductory) rate? Any great freebies to be had?

• Don’t be so quick to trash those envelopes from issuers. Some real gems can get buried among the junk, including some offers that are exclusively marketed by mail. You might even find a balance transfer offer with no expiration date, meaning that the rate remains in effect until you pay the balance in full (more on these offers later).

• Find some of the best offers online. Either visit each individual card issuer’s site or use CardRatings.com to quickly search a comprehensive, current listing of low-rate offers from various lenders.

• Pick up your phone and call issuers directly. You might hear about some offers that aren’t being advertised online or through direct mail. It makes the most sense to call when you’re familiar with the online and mail offers, because some customer service
representatives don’t seem to know many of the details of their card offers.

• Check with local or regional banks. These smaller institutions often have some of the best rates in the country—you might save the most right there on Main Street. Talk about keeping money in a community!
One potential drawback is that although you might find the customer service more personal and appealing, smaller issuers usually apply very selective approval criteria in deciding who gets their super low-rate cards (at or slightly above the prime rate), and their credit lines tend to be less than $10,000.
(Larger banks usually give more generous lines.)

• Consider credit unions, which are also known for offering attractive rates. Plus, their fees are usually more modest. Credit unions tend not to push low introductory rate offers, but they have a reputation for marketing lower ongoing rates than banks typically offer.

If you belong to a credit union, find out if the credit union offers a card. If so, get the rate details and compare.

Not a member of a credit union? Visit joinacu.org to see if you’re eligible to join one. Many have recently expanded their membership criteria.

• Be sure to investigate credit card offers from associations and nonprofit organizations. Whether it’s an alumni group, a labor union, or a cause you support, you might find a really great deal.

The larger groups often have more muscle and can negotiate special terms for their members. As I mentioned, AARP got the anti-consumer binding arbitration clause removed from the terms and conditions of credit cards using its name. Cards offered through such other organizations, which are also called affinity credit cards, are definitely worth taking a look at.