The average annual interest rates for two of the most popular credit card types fell last week.

Low Interest Credit Cards: Average APR fell to 11.25% from 11.29%

Cash Back Credit Cards: Average APR fell to 13.36% from 13.38%

American Express says its profit dropped 79 percent in the fourth quarter, as cardmembers cut back on their spending amid the harsh economy.

Net income dropped to $172 million, or 15 cents per share, from $831 million, or 71 cents per share, a year earlier.

On an adjusted basis, excluding discontinued operations, the company earned $238 million, or 21 cents per share. Quarterly revenue fell 11 percent to $6.51 billion.

Analysts polled by Thomson Reuters expected a profit of 22 cents per share on revenue of $7.22 billion.

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Average interest rates on several types of credit cards fell slightly this week.

Annual percentage rates on four out of nine categories of cards - instant approval, airline, cash back and reward cards - fell from the previous week. Five categories remained the same: balance transfer, low interest, bad credit, student and business, according to the weekly report issued Thursday.

Instant approval cards saw average rates slip to 11.29 percent from 11.63 percent, while airline cards dipped to 11.71 percent from 11.86 percent. Cash back rates declined to an average 12.71 percent from 12.91 percent, while rewards cards slid to 11.43 percent from 11.65 percent, on average.
The APR on cards for people with bad credit held steady at 12.15 percent while rates on student cards remained at 14.21 percent. Business cards held at an average 15.82 percent, and balance transfer remained at 10.21 percent.

American express trimmed certain APRs after the Federal Reserve lowered its key lending rate to near zero last month. AmEx acknowledged the latest APR changes were based on changes in prime rates.
The survey is conducted weekly using offer data from U.S. card issuers.

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Retailers are offering deep discounts and ultra-low interest rates for credit cards. It’s a formula that lures many young people to use credit instead of cold hard cash. The dangers of bad credit are always there, but some East Texans are actually using charge cards to establish and build credit.

Credit is the payment of choice for more and more young people. Chuck Watkins works at Buckle in the Lufkin Mall. He, like many of his customers, uses a charge card to establish and build credit. “I absolutely had to have some credit starting out. For college kids, that’s the easiest way to go about building your credit for life, while you’re in school.”

Something Watkins said can be easy, if you follow some rules. “Definitely have a budget and keep up with your payments on time.”

Once you have built credit, it is increasingly harder to keep it–especially with bargain sales and lower interest rates.

Watkins said some of his friends are experiencing buyer’s remorse after their spending got out of control. “[They are] 23 years old. They have everything in their parents’ name and can’t do anything for themselves. They can’t even get an apartment.”

Credit Counselor Doniece Smith said a growing number young people are experiencing bad credit. It’s something you can fix using a free credit report. “It explains in detail what you did good, what you need to do, what you should have done. It’s specific to your credit report instead of speaking in generalities.”>>

Rebuilding your credit will take time and include setting measurable goals. “Contact each former creditor and find out what the balance is and what their terms and conditions are for pay-off. Pay if off, and then wait,” said Smith.

Those are tips Watkins said he has followed once before, however, his best advice came from his mom. “She always said never to spend the cash and the credit, it’s always has to be one or the other.”

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Credit cards are so convenient. They can be hard to live without, that is until you cringe when you open your bill.

James and Patty Walden know it doesn’t take much to wind up in debt. “There are four areas that are budget busters. One is food; one is entertainment, gas, and miscellaneous items,” says James Walden.

But the Waldens got smart and they’re starting this year off right. “Got on a spending plan and we started watching what we were spending. We got rid of a card, but since then, over 16 years, we’ve been able to manage cards,” Walden says.

Curtis Arnold, founder of CardRatings.com, says it’s important to know your credit score, especially in today’s tough economy. “This time last year, I was saying you needed a credit score of about 700. Now I’m saying about 730,” Arnold explains.

Knowing your score can also save you money by lowering interest rates. “Once you know your score, then that really empowers you as a consumer. Then you know, ‘hey, my score is 730, I should be getting a rate of say under 9 percent,’” Arnold explains.

If your score is good enough, Arnold says home equity loans can be a good way to consolidate your credit card debt. “If you’ve got equity in your home, mortgage rates and home equity home rates are at historic lows,” Arnold says.

Experts also say, it doesn’t hurt to lay off the plastic. “More and more consumers are actually realizing that ‘hey, we can actually save up for something,’ which has really been foreign to us as American consumers, but there’s nothing wrong with saving up, not using credit,” says Arnold.

“We planned ahead on the trip to Colorado with our family and that was our Christmas and we’ve been saving for that for quite some time,” says Patty Walden. So when the Walden’s get their credit statement this month, there won’t be any surprises.

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The average annual interest rates charged on popular types of credit cards fell again last week, according to Bankrate.com.

For low-interest cards, which have rates below the national average but are often offered only to customers with strong credit histories, the average APR declined to 11.33 percent, from 11.42 percent the week before.

Cash back cards, which feature cash or other reward incentives and generally require a good-to-excellent credit rating for approval, saw their average APR dropped to 13.51 percent, from 13.57 percent last week.

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