Our friends at the Federal Reserve Board recently cut the discount rate and short-term lending rates by a quarter of a percent. If you have serious credit card debt and are beginning to visualize your savings, hold on. The cut isn't as big a deal as it might seem. Sure, rate cuts can lower the rate your card charges you, but keep these things in mind:

  • Your card's rate may not be a variable one. Only 57% of credit cards sport variable rates.
  • When your interest rate is lowered by a quarter of a percentage point, it isn't going to save you gobs of money. At lowcards.com, Bill Hardekopf recently explained that a half-percentage-point rate cut in September "saved cardholders about $2 per month on a $5,000 credit card balance." Tack on the new cut, and the total monthly savings will be about $3 -- or $36 per year. Yawn.
  • While rates for purchases fall slightly, other card costs are rising, threatening you with a net loss, not a gain. Bank of America (NYSE:BAC) recently raised its ATM fee for non-customers to $3, while Discover Financial Services (NYSE:DFS), which issues Discover cards, has raised its cash-advance rate from 20.99% to 23.99%. Look for news of upped fees in the fine print.

The good news
Fortunately, you don't have to sit there and settle for rates that are steeper than they need to be. There's a good chance you can shave several whole percentage points off your card's rate, simply by asking. If you've got sizable debt and are making timely payments on it, a card company will want to keep you around. The average annual percentage rate on cards these days is around 15%. Shooting for a 12% rate is not unreasonable. Ask for it, and let the company know you're prepared to take your debt elsewhere. (Do a little research online so you can demonstrate your familiarity with offers out there.)

It can help your case if you haven't exceeded your credit limit and owe less than a third of it, and if your rate has been hiked several times already. Hardekopf has noted that a 4% rate cut, from 18% to 14%, will save you $200 on a $5,000 balance in the first year alone.

Learn much more about the credit card industry in our Credit Center.

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Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. Bank of America is a Motley Fool Income Investor recommendation. Discover Financial is a Motley Fool Inside Value recommendation. Try any of our investing services free for 30 days. The Motley Fool is Fools writing for Fools.