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Finding a low fixed
rate
credit
card
is
not impossible.
Credit
card
companies
do
offer
fixed
rate
credit
cards
with
the
exception,
the
rate
can
go
up
periodically
if
the
card
provider
chooses to
increase
the
rate.
Variable
rate
credit
cards
charge
a variable rate of interest
at a
certain
percentage rate above prime lending
rate on the credit card balance.
What is the difference between a fixed rate and a variable rate credit card? A
variable rate credit card is directly tied to the prime rate. When the prime rate
rises, the interest rate of a variable rate card also rises. Credit card rates are usually higher than the prime rate
and
difference between the prime rate and the actual rate of a card is the
margin. A fixed rate card is not tied directly to the prime rate so when the prime rate rises or falls, the interest rate of a fixed rate card
usually stays the same
If
you
get
a
low fixed
rate
credit
card
when
the
prime
lending
rate
is
low
and
the
rate goes
up
in
the
near
future
then
a
fixed
rate
credit
card
would
save
money.
However,
a
variable
rate
credit
card
goes
up
and
down
and
chances
are
the
rate
will
go
below
the
fixed
rate
card.
.
One
advantage
that
works
in
consumers
favor
is
the
0%
introductory
offers.
By
using
the
introductory
offer
consumers can
virtually
by
goods
and
pay
them
off
without
any
interest
being
charged
if
payments
are
made
in
full
during
the
introduction.
However,
this
not
how
it
usually
works
and
that
is
why credit
card
companies
are
in
business.
Statistics
have
proven
60%
of
consumers
keep
an
outstanding
balance
running.
Consumers
apply
for
a
credit
cards
thinking
the
balance will
be
paid
in
full
at
the
end
of
each
month.
As
shown,
this
is
not
the
case. So,
if
consumers
are
applying
for
the
reasons
mentioned
above
there
is
a
good
chance
financial
consequences
will
be
paid
Consumers who signed up for variable-rate credit cards are finding
out, the borrower does not always win when the prime rate falls. The rates on variable cards have actually gone up despite the decline in
the prime rate. Sometimes, companies offer consumers
variable-rate cards to get them signed up and then dropped those plans for fixed
rates, which were set higher.
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