It was only last week that the average credit card rate hit a two-year low. Not so surprisingly, rates are even lowering even more this week. Now, you might wonder why?

Well, the answer is the Federal Reserve. Around seventy percent of credit cards depend on the Federal Reserve’s interest rates in order to employ their own rate. So, the Federal Reserve cut the rate by three-quarters of a point is making the lowering of rates possible.

In a survey which included American Express, Bank of America, Capital One, Washington Mutual and many others the average credit card rate for non-reward cards fell to 13.16% from last week’s 13.29%. The rate for cards with rewards fell to 15.09% from 15.15% of last week. The average for Student Credit cards fell impressively to 15.07% from 15.22% last week. One of the most important ones though, the Business credit card rates fell to 1.11% for non-reward and 12.49% for rewards. Which is also a two-year low.

The letters are daily in your mailbox, just waiting for you there. “You have been Pre-Approved for a Credit Card,” is what the titles say. While the time passes by, you only get more and more of these letters, which are just patiently waiting for you at your mailbox. But, have you actually been pre-approved? How, if they don’t even know you?! Well, this is how it works…

They get your mail address from a database, probably from a form you filled up a few days or even months ago. Based on the info you provided or whatever it was that you signed up for, you will get various different offers. It is even worst if you take the bright decision to apply for one! If you and you are approved, you will continue getting more offers. But, if your application is denied, though, you will finally stop getting offers, right? Sadly, no; that’s not true. You will actually start receiving offers to improve your credit…so, you are screwed both ways.

Now, that does not mean that all of those letters are complete trash. There might actually be a few good offers in those letters. Just remember to take care of a few things before you do anything…if you decide to apply to one of those credit cards it is always a good idea to do some research about the company and make sure that they are legitimate, and have a good reputation.

As you know, credit card companies are always on the look-out for people to fall into their little holes. Sometimes it seems impossible to escape some fees or interest rates, and nothing seems to help stop the fact that you are going to have to pay them. Well, here are five tips for you to prepare…

Late Payments: A big one is late payments. Credit card companies sometimes will go ahead and charge you a very…excuse me, extremely awful fee for missing the payment date by one day. It is as simple as that. Try to synchronize your money right, so that when you need to pay you are ready and won’t be caught off guard by these companies.

Increased Interest Rates: It wouldn’t be a surprise if your credit card interest rates go up without notice. Credit Card companies will go ahead and increase the interest rate in your card without you having a say on it, like it or not. Even worse, this new interest rate will apply to your past purchases. Congress is working to pass a bill limiting some of these laws, but there haven’t been any outcomes yet.

Double Interests: In double-cycle billing you are charged interest on the average daily balance of two months, instead of one. That means that even though you pay most of your credit in one month, next month you will still be charged.

Grace Periods: They are not what they used to be anymore. While on your grace period, if you don’t pay it in full by the end of it, you will still be charged all of the interest. So, watch out and always try to have your full payment in time. Don’t rely on anything.

Payment Fees to Pay: So, you are trying to get your payment in time so you don’t get charged any fees. You proceed to pay online or through the phone…however, Credit Card companies didn’t let this one slide by. Expect to pay some kind of fee in order to be able to pay. Pretty ironical, no?

Many people are scared of having too many credit cards. They either think that it could be unsafe, temptation could take them over, it would be hard to control their finances, lenders won’t give them money, etc… But, the reality is, having multiple credit cards guarantee you more benefits. Here are some good reasons to have multiple credit cards:

Financial Safety : A main reason to carry multiple credit cards is safety. Let’s say you are robbed, or you loose your only card. You will then have to wait several days in order to receive your new credit card. Experts also recommend to have one credit card with zero balance in a safe box our outside your home. That way if your home ever gets burned down, destroyed, or robbed you have a credit card to rely on until you stabilize.

Rewards: There are many cards that offer a specific kind of reward for having the card. Sometimes it is cash back or sometime miles for a free flight to Europe. However, no card will give you both. That’s why having a card for each provides you with double the rewards! Other credit cards offer gift certificates which are great and easy to use in many locations.

Easier Control: Sometimes your boss tells you to buy something and not to worry…you are going to be reimbursed. Or you are self-employed and are always having trouble defining which purchases were work related. Well, solve it by having a credit card specifically for work. That way you will exactly know what needs to be reimbursed, what you bought for what, or what is tax deductible or not.

Payment Procrastination: So, let’s say you have a Visa card which billing cycle ends the 5th; but your AmEx’s billing cycle ends the 10th. You can arrange your cards to pay for each other so that you can wait even longer to pay the actual bill. That way you don’t have to worry about paying all at the due date…or you can wait until you get your salary without having to worry.

Unlimited Options: Sometimes you are stuck at some place that doesn’t accept American Express, or your MasterCard was disabled because you traveled to Europe and when you were trying to buy something they thought it was fraud. Several places only accept certain kinds of cards. With having multiple cards, you are assuring yourself to be accepted everywhere.

Leverage: Having multiple credit cards means that you can choose some cards over other ones. Even though you can usually get better terms for a card by just asking…the option of being able to fire a bank over another one is always good. If you don’t like the terms of one, what does it matter? You have another credit card.

Credit Score: Even though every time you open a credit card your score goes down, while maintaining it, it increases. Think about this with multiple credit cards. If you maintain a decent debt to credit ratio with multiple cards, your credit score will eventually boost up very nicely.

Now…this does not mean that you should go ahead an open five new lines of credit. But, it demonstrates that it is good to have more than one.

It’s pretty interesting to see what MasterCard is lobbying for. In this case it seems to all be good for the consumer. Better security and hopefully lower fees and rates.

“MasterCard International Inc. spent $1.8 million in 2007 to lobby on Internet-related issues and on fees merchants pay when customers use credit cards.

The company spent $880,000 lobbying in the first half of the year on financial literacy, data security, microchip technology and fees banks pay to credit card networks.”

source: http://www.businessweek.com/ap/financialnews/D8V6AFF01.htm