Act to lower your credit card rate

With the national average interest rate for credit cards reaching a record high of 14.73% (creditcards.com Feb. 2), you'll want to make sure you're getting the best deal possible.

The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 restricts issuers' ability to raise rates, but whenever they can, you can be sure that many will. Here's some advice from the Credit Union National Association's Center for Personal Finance for getting the lowest rate possible on a credit card:

• Get a card from a credit union. A credit union credit card typically has a significantly lower interest rate than a bank credit card. For example, right now the national average rate for a high-limit "platinum" card is 2.34 percentage points higher at a bank than at a credit union ( Informa Research Services Inc. Feb 6).
• Use your card for convenience only. The very best way to control credit card costs is to use your card for its primary advantages only--as a convenient and secure way to make daily purchases or cover emergency expenses. Then always pay off your balance as soon as possible--preferably within the grace period, when no interest charges apply.
• Use a different kind of credit. Suppose you're buying a big-ticket item, such as a computer, or paying for major car maintenance. Rather than use your expensive credit card, consider "closed-end" credit, a loan with a set number of monthly payments. A personal installment loan, even if it's unsecured--that is, not backed by collateral--will have lower finance charges.
• Tend to your credit score. The rate a credit card issuer will offer you is highly sensitive to your credit history and the score derived from it. The credit score is the lender's estimate of the risk that you won't repay your card balance. That's why you'll want to do everything you can to demonstrate that you're creditworthy, such as by paying all your bills on time, without fail.
• Use a secured card. A credit card backed by money you've set aside in a special account is a good way to start improving a weak credit score. Your lender will give you a better interest rate because it can always take money from your account if you don't make your payments. But if you do, your credit record will improve and, over time, so will your score and your future cost of credit.