Do you have more than one credit card? Did you know that if you make one late payment your credit card company can and will raise your APR to the highest rate they charge? In some cases they will raise your rates if they see in your credit report that you have applied for a lot of credit and this can even include department store cards. And did you also know that if this happens to you, all of your other credit card companies will find out and they'll raise your rates too? You can actually end up paying way more in interest than you actually owe the credit card companies.



First let's examine what APR is. APR stands for Annual Percentage Rate. Simply put it is the percentage per year that you would pay on your balance. This is pro-rated to a monthly rate based on what you currently owe the company. Rates can fluctuate wildly depending on your current credit rating. Credit card companies reward those customers who have good credit ratings with the lowest interest rates. These rates can have a very wide range, but you won't be able to qualify for the better rates if your credit isn't impeccable.

Now of course the ideal situation is to pay your balance off in full each month, but sometimes this isn't possible and you end up carrying an outstanding balance. In some cases you may have balances on more than one card. If this happens to you,my advice would be to pay the highest payment you are able to pay on the card with the highest interest rate, rather than the highest amount owed. Just keep in mind that every dime of interest is more money that you are paying to the credit card company. We seem to be more worried about paying extra shipping on items we purchase but seem to dismiss the extra money we pay in interest payments. That's probably because it is largely unseen and in some cases hard to figure out how much we're actually paying.

I personally try not to carry balances when I can, but periodically I have had balances on several different cards. But I can honestly say that I haven't paid any interest on any of my cards since 1991.

The way I have accomplished this is very simple. I get an average of 3 or more credit card applications in the mail every day. I typically look for an offer with a balance transfer. These are very competitive. You can always find one with a 0% APR. But that's not all you're looking for. You want to find one with 0% for at least a year (you can sometimes find them for 18 months). The next thing you look for is when the 0% will expire, and what the APR will go up to when it does. You may be able to give yourself 18 months to pay off the debt without paying any interest and if not you will most likely be at a much lower APR than you currently have. Sometimes you can find 0% for 18 months and then 3.9% after that. Start adding that up and you can save yourself a lot of money if you currently have 6% or higher. Now you transfer your balances from your other higher interest cards and you can avoid paying any more interest. You could pay more, but WHY?

NOTE: You must pay attention to the deadlines and if you haven't finished paying off your balance, by the time the interest rates kick in you will need to find another card offer and do it again. You will need to make sure you apply within about 6 weeks of the deadline to make sure you don't wait too long. Be aware though that you can actually make your credit look bad if you have too many cards or credit lines, so when you transfer your balance you should cancel the old card so it is not showing up on your credit report.