All credit card holders are subjected to an annual percentage rate (APR), which is the interest rate paid to the credit card company for their loans. These annual fees and finance charges can significantly increase your credit costs. The APR is set by the card issuer, and differs depending on which credit issuer you are using as well as your own credit behavior.

NOTE: Universal Default Rate. There is a new punitive rate being assessed card holders who are late with payments to other creditors. Some credit card companies will raise your interest rate significantly – as high as 35% APR, if you are late with another creditor or your credit score declines. You should avoid any card that charges the “Universal Default Rate”.

In order to get the lowest possible credit card rate, you should:

1. Compare rates between different credit card companies to see which one offers the lowest APR.

2. Call your credit card company today and ask for a lower APR. (Remember, your chances are best if you have had the card for some time, are not maxed out or close to your credit limit, and do not make late payments.)

Sample script: Hi, my name is [Your Name]. I am a good customer, but I have received several offers in the mail from other credit card companies with lower APRs. I want a lower rate on my card, or I will cancel my card and switch companies.

3. Never pay just the minimum payment due; instead, always pay as much as you can afford. If you have more than one card, make your biggest payments on the cards with the highest APRs. If you pay only the minimum payment, you are running on a debt treadmill—the bank wins, and you lose.