Fixed Rate Credit Cards
A fixed rate credit card can lower a consumer’s monthly payments, allow him to pay off his principal fees more regularly, and generally help him stay out of credit card debt. Many people, when looking for a credit card, are drawn in by perks. They see zero percent APR and they are hooked. Unfortunately, many credit card perks only last for a short time. Rates can quickly skyrocket after a short, low-interest introductory period. Moreover, cards that offer low rates as a standard are often under no obligation to keep those rates. Oftentimes, people can see a marked increase in their APR within a year.
The major attraction of a fixed rate card is the stability that it offers. If people know that their APR will stay the same for an extended period of time they can better monitor their spending on the card. Something as simple as a steady rate of interest on a card can help people stick to a budget. It can also free up more of person’s money, which can then be put towards other expenditures each month.
“The rates on a fixed rate card can’t change, can they?”
Somewhat surprisingly, given the title “fixed rate,” these cards’ rates can be subject to change. However, by law, they must give the cardholder 15 days’ notice before rate changes can go into effect. It is important to stay abreast of notices of change associated with any type of card you use.
Choosing a Fixed Rate Credit Card
There are a number of things that lead a person to go with a particular card over others. While finding a fixed rate is often one of those, it is now possible to find several major credit cards that promise relatively low fixed rates. In breaking down the pros and cons of each card, a person should decide what he needs from a card. If a consumer wants an unlimited credit limit, he might be forced to pay a higher APR. If a lower credit limit is acceptable, a person can then look for a card that doesn’t require an annual fee. More people are choosing a credit card based on the specific perks that come with it . A person who travels a lot or a person who is simply planning a major vacation can find a fixed rate card that also offers frequent flier miles. Those who are trying to establish credit for the first time will most likely benefit from a fixed rate card with a low APR that does not require a person to have an extensive credit history.
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