|
Credit card rates fall
|
 |
June 23, 1998: 1:55 p.m. ET
Competition is driving down interest rates; consumers should remain wary
|
NEW YORK - Fixed credit card rates are on the way down.
Annual percentage rates on fixed-rate gold and standard cards have nose-dived since March, according to the Bank Rate Monitor national index of the Top 10 markets.
The national average for a fixed-rate gold card dropped from 15.88 percent in March to 14.07 percent in June. The fixed rate on standard cards dropped from 16.25 percent to 14.96 percent during the same period.
Trend should continue
Experts say this trend is likely to continue as more and more issuers follow the lead of First USA and Capital One and push cards with 9.9 percent and 9.99 percent fixed rates.
"From a consumer's perspective these rates are absolutely phenomenal," said Jim Accomando, president of Accomando Consulting, based in Fairfield, Conn.
But consumers who sign up for low-rate cards should be especially careful to payments on time. Late fees and penalties are severe.
"You may think you have 9.9 percent, but if you're a couple of days late you might find yourself paying 19.8 percent or higher," Accomando warned.
Jeff Baxter, president of SJ Baxter & Associates in Forest Hill, Md. agreed. "You have to be sure you can manage the account very well if you're going to take one of these offers.
"Send a payment on time or a little ahead of time. Make sure you can pay off what you're charging."
Good credit means good rates
Experts also point out that only those with excellent credit are likely to qualify for these super low rates. And, as with all fixed credit card offers, keep in mind that the rates can be raised.
"Fixed doesn't mean fixed for life," Accomando said.
Howard S. Dvorkin, president of Consolidated Credit Counseling Services in Fort Lauderdale, Fla., pointed out that many people who qualify for these cards jump at the chance of loading up the cards with balances from higher rate cards.
"It may be a quick fix. But it will not get them out of debt.," Dvorkin said.
For that, he recommends doubling -- or tripling -- minimum payments as well. 
--by Bank Rate Monitor for CNNfn
|
|
|
|
|
 |
|
