By summer, some credit card rates will drop to their lowest level in seven years which will give consumers the itch to switch. The rate drop is driven solely by the Fed action to lower short term interest rates, producing a 7% prime rate. Tuesday's action by the Federal Open Market Committee to cut short term interest rates by 50 basis points may drive average credit card rates below 15% for the first time since 1984. Since the rate cuts began this year, variable rate credit cards, generally based on the prime rate, have emerged as better deals than the widely promoted fixed rate cards of the past two years. Many top issuers still offer 9% to 10% fixed rates to their best customers. However some major issuers, including Wachovia and Chase Manhattan, now offer variable rate cards with a 7.50% APR, that will drop to 7.00% by mid-June. Look for fixed rate cards to adjust rates lower by July. But watch out for changes in terms and conditions for variable rate cards. Some variable rate issuers may start to set floor rates or change the rate spread in an effort to protect against further rate erosion.

AVERAGE CREDIT CARD RATES 
For the Month of April 
(offered rates; excludes introductory and punitive rates) 
1990: 19.12% 
1991: 18.84% 
1992: 17.23% 
1993: 16.57% 
1994: 15.63% 
1995: 15.93% 
1996: 16.18% 
1997: 16.48% 
1998: 16.38% 
1999: 16.01% 
2000: 16.83% 
2001: 15.73% 
Source: CardWeb.com's CardData (http://www.carddata.com)