(This article, originally published in late September, has been updated.)
NEW YORK (CNN/Money) -- You can't talk about interest rates anymore without using the phrase "at or near record lows." And, believe it or not, the same can be said for credit card rates.
The average interest rate on credit cards has fallen about 2 percentage points since the Fed started its rate-slashing campaign in 2001. But, let's face it, the current average of 14.74 percent hardly screams "Free money!" And credit card rates are actually beginning to creep up again, said Robert McKinley, CEO of credit-card tracker CardWeb.com.
What, you may ask, gives?
Not much, apparently, when it comes to plastic. That's because credit card lenders have a lot of latitude in the rates they charge and much depends on a customer's creditworthiness.
"The trend this year has been to raise rates because of the increasing number of defaults among consumers," McKinley said. Defaults, in this instance, include not just personal bankruptcy, but also late payments and going over one's credit limit.
Variable vs. fixed
There are two types of credit cards: variable rate and fixed rate. And both to a large extent are affected by movements in the prime rate, the interest rate banks offer their most creditworthy customers. The prime rate, in turn, is highly sensitive to rate moves made by the Fed.
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Variable-rate cards, which currently account for about 55 percent of the market, are officially tied to the prime. As the prime rate floats, so does the card's rate -- automatically. But it's up to individual lenders to determine just how much above prime they set their rates.
Fixed-rate cards, meanwhile, are something of a misnomer, since their rates aren't actually fixed. They can -- and do -- fluctuate. Just when and by how much is entirely up to the lender. It's a good bet rates will rise if the prime rate increases, since the lender's cost of doing business will be higher. Or they may change if the lender sells its portfolio of customers to another bank. And sometimes a fixed rate may increase for select customers whose credit has worsened.
And whether they issue a fixed or variable-rate card, lenders often set a floor on rates, McKinley said. So even if the Fed does decide to cut rates again this year, it's unlikely your credit card company will. At this point, McKinley said, "nearly all credit cards with floor rates have already been triggered." Translation: They've bottomed out.
But even if they hadn't and the Fed does lower rates today, he added, it's unlikely the rate cut would have much effect on your credit card until January, which is usually the time when issuers adjust their pricing. "So it's possible that any rate cut today could be offset by a bump-up in pricing," McKinley said.
Fixed rates lag market
Unlike with a variable-rate card, fixed-rate card lenders must give customers at least 15 days notice when they change rates and they must go through a lot more paperwork to implement the change. Since there's a cost to the lender to make that change, the rates on fixed-rate cards tend to change more slowly than they do on variable-rate cards.
If you believe the Fed is more likely to raise rates in the coming year, now may be a good time to get a low, fixed-rate card because of the lag factor, McKinley said.
If you're not sure whether a credit card has a fixed or variable rate, you can check your cardholder agreement or the disclosure box on the credit card application.
How to lower your costs
The average credit card balance per household with at least one credit card has risen to $8,500 this year, up from $8,367 in 2001, according to CardWeb.com. So John Q. Public carrying an $8,500 balance at 14.71 percent will be paying off his cards for nearly 29 years and forking over $11,808 in interest if he pays just the 2 percent monthly minimum. If he manages to pay $350 a month every month, he can rid himself of his debt in two years and five months, paying $1,505 in interest.
But if he's really smart, John Q. will take advantage of some of good, low-rate offers that come his way. If his credit is solid, chances are he'll receive solicitations for cards offering zero percent interest for limited periods of time, in some cases for as long as a year, which is unprecedented. "That's where the consumer can take advantage of the low interest-rate environment," McKinley said.
But, as always, read the fine print. Sometimes the zero percent rate only applies to new purchases, not the balance you transfer. Or it may only apply to cash advances. And there may be balance-transfer fees. And, of course, the last thing you want to do is pick a card that offers a low rate for a very short period, after which it skyrockets. That would only be a good option if you're sure you can pay off your balance before the low rate expires.
There's another way you may be able to lower your rate. If you're a customer of good standing, sometimes getting a better rate just involves one phone call. In a survey conducted by the Public Interest Research Group (PIRG), 56 percent of those surveyed got their credit card rates lowered simply by asking their lenders to do so. In the current environment, if you have reasonably good credit, McKinley said, you should be able to get a rate between 10 percent and 11 percent.
Keep in mind, a card with that rate is not likely to include perks such as frequent flyer miles. "There are sort of give backs with those low rates," McKinley said. And if you see a startlingly low rate, such as 5 percent, there may be a high annual fee or other cost involved.
One of the fastest ways to trim your overall credit card costs, of course, is to pay on time every month. Late fees have been going up -- the average is nearly $30 -- and the time you have to pay your bill before a late-fee is assessed has been getting shorter. There are two easy ways to avoid a late fee: either mail your payment in with at least five business days to spare or mail in the minimum due as soon as your bill comes and then send the rest later.
(For help in figuring out the most cost-efficient way to reduce your credit card debt, try our Debt Reduction Planner.)