Charles R. Wilson had been watching interest rates falling everywhere -- everywhere, that is, but on his credit card.

So, last month the 46-year-old government worker from Frederick did something about it. He turned in his card for one with an interest rate that rises and falls with the market.

"Why continue to pay 19 percent on an $800 balance with Choice from Citibank Maryland when Wachovia Bank of Winston-Salem, N.C., is currently charging half that?" he says he asked himself.

Mr. Wilson, a communications technician for the U.S. Information Agency in Washington, is one of tens of thousands of consumers deserting some of the nation's biggest credit-card issuers for upstarts offering bargain rates.

While the bottom is not likely to drop out of the credit card business at the 10 top banks, competitors are whittling away at their share. The competitors, in turn, are experiencing explosive growth.

Indeed, the consumers' shift toward cheaper credit cards moved nearly $6 billion to banks with lower rates last year.

Bargain-rate card issuers -- banks charging from 8.5 to 16.5 percent -- saw new accounts grow 17 percent last year, according to a study by RAM Research Corp. of Frederick., compared with little or no growth at giants like Citicorp -- the biggest of the 6,000 issuers of Visa and MasterCard.

Higher interest issuers -- those charging more than 18 percent -- saw their share of the credit-card industry drop 3.4 percent, the firm said.

The shift really took off after President Bush took a shot at credit card rates on national television last fall and consumers began looking closely at the monthly cost of credit, said Robert B. McKinley, president of RAM Research.

"What's different now is that consumers are finally doing something about it," said Mr. McKinley, whose 6-year-old credit-card tracking service for bankers and consumers has fed the phenomenon. "It has just been an awakening," he said.

Virginia Stafford, spokeswoman for the American Bankers Association, said cards with low interest rates always have been available, but that until now consumers tended to shop for cards based on other factors, such as annual fees, services and enhancements.

"What's happening in the marketplace now is in response to consumer demand," Ms. Stafford said. She and others note, however, that banks with the lowest fees are restricting cards to the "very, very creditworthy" customers -- people who don't miss payments and pay on time.

Across the country, banks offering lower rates have been flooded with calls from consumers like Mr. Wilson, who reacted to a growing number of media reports about the stable cost of credit at the same time interest rates nose-dived.

"The main reason for switching was the lower interest rate," said Mr. Wilson, who estimated he'll save nearly $100 in interest charges this year by swapping cards. His new credit card issuer made the change easy: In exchange for his business, Wachovia Bank gave Mr. Wilson three checks to pay off old debts; the amount of those checks was added to his Wachovia credit card balance without the extra fees or higher interest rate that often accompany such transactions.

The Winston-Salem, N.C., bank's variable-rate "Prime Plus" MasterCard and Visas offered the third-lowest interest rate in the country last month: 9.4 percent (the prime rate plus 2.9 percent), with a 25-day grace period and a $39 annual fee.

The bank has long offered a card with an interest rate of 14.98 percent. But since introducing its variable rate card, business is up 10 percent, said Ray Costner, vice president for marketing. "It's not a tidal wave, but if we were doing national advertising on TV, we could make it much larger than it is," he said.

People's Bank in Connecticut reported more than 50,000 applications last month for its card with a 11.5 percent interest rate. The rate dropped from 13.9 percent last year, when the bank averaged 10,000 to 15,000 applications a month.

The bank with the lowest interest rate is swamped every day.

Simmons First National Bank of Pine Bluff, Ark., where state law limits the rate to 5 percent above the discount rate, is getting 20,000 calls a day for its 8.5 percent interest credit card, according to RAM.

This is despite the bank's selectiveness when it comes to credit-worthy customers -- 90 percent of the applications are rejected.

In Alexandria, Va., AFBA Industrial Bank got 25,189 calls for its 12.5 percent interest card with no annual fee last month, up 5,000 from January. The rate is the fifth-lowest in the country.

With the upswing in consumer switches, the biggest issuers, which long have dominated the market, are scrambling to

defend their turf.

Top bankers at Chase Manhattan and Household Bank of California held emergency meetings in the past few weeks to figure out what to do, said Mr. McKinley of RAM.

And another big issuer, NBD of Detroit, became the first bank to simultaneously end the annual fee and drop the interest rate on its most popular card, now fixed at 16.8 percent, down from 18 percent, he said.

Citibank isn't talking about changes, at least not publicly.

Citibank of Maryland, which issues the Choice card, is testing a no-fee gold card version of its discounted rate Choice card. The card carries a 15.9 percent interest rate good unless a customer misses two payments, when it goes up to 19.8 percent. Choice is available to people with higher incomes and credit standards.

Mr. McKinley of RAM suggests the person with a decent, but not perfect, credit rating might go to banks offering cards at rates between 10 and 14 percent.

More information

Lists of low-rate bank cards are available from these sources:

* For RAM Research's 12-page newsletter, send $5 to CardTrak, Box 1700, Frederick, Md., 21702, or call (800) 344-7714.

* Bankcard Holders of America, a non-profit consumer grouppublishes a list of 47 banks offering cards with low rates and no fees. It is available for $4 from BHA at 560 Herndon Parkway, Suite 120, Herndon, Va., 22020, or call (800) 327-7300.

Flipping cards

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Low-interest credit cards gain . . . Bank-card issuers with greatest growth in accounts during 1991.

Issuer .. .. .. .. .. .. .. Rate .. .. .. Growth

1) Simmons Bank .. .. .. .. 8.5% .. .. .. 73.2%

2) AT&T; Universal* .. .. . 16.4% .. .. .. 60.4%

3) Fidelity Investments. . 16.44% . .. .. 37.2%

4) Abbott Bank. .. .. .. . 16.3% .. .. .. 16.3%

5) USAA Federal .. .. .. . 13.75% . .. .. 18.8%

. . . at the expense of big banks The largest bank-card issuers.

Issuer .. .. .. .. .. .. .. Rate .. .. .. Growth

1) Citibank. .. .. .. .. .. 19.8% .. .. .. 0.0%

2) Chase Manhattan .. .. .. 19.8% .. .. .. 1.9%

3) MBNA America .. .. .. .. 18.9% .. .. .. 4.9%

4) Bank of America .. .. .. 19.8% .. .. .. 1.1%

5) First Chicago.. .. .. .. 19.8% .. .. .. 1.4%

NOTE: AT&T; will lower its most common rate to 15.4% on April 1.