There are no major credit card providers currently offering fixed rate credit cards. Credit cards with a fixed rate are usually only available when interest rates are high as a way to appeal to cardholders. Since interest rates are relatively low, variable rate credit cards with special introductory rate periods are much more popular right now.
The FREE credit card chaser tool might not be able to find a fixed rate credit card for you, but finding a low interest variable rate credit card will be no problem!
You can learn more about the benefits of variable rate credit cards at SmartMoney.
What is the difference between fixed and variable interest rates?
A fixed rate does not change as long as the credit card account is open. A variable rate changes over time. These changes are based on the prime interest rate. The majority of available credit cards today have special introductory interest rates. That means for a certain amount of time the credit card has a fixed interest rate, a rate that does not change, and then switches to a variable rate card with the interest rate being determined by the cardholder’s credit score and the prime interest rate.
What are the different types of credit cards that are available?
A low interest credit card is the type of credit card that most people want. Interest payments are one of the main reasons people’s credit card debt can grow out of their control. Having a credit card with a low interest rate can be hard for many people to get since they usually require a better than average credit score.
It is important that if you get approved for a low interest credit card that you check to see if the card has a penalty annual percentage rate. If you make a payment late on a credit card with a penalty interest rate, then your low interest rate will immediately be increased to the penalty rate, which can be as much as 15% higher than your original rate. The penalty rate can often become permanent.
A rewards credit card lets the cardholder earn points for every purchase they make. Most rewards cards will give the cardholder one to five points per dollar spent depending on the type of purchase. The cardholder collects these points until they have enough to exchange for the rewards they want.
Cash back credit cards are a different form of rewards credit card. Instead of earning things like plane tickets and concert tickets, someone with this type of credit card earns a certain percentage of their purchases back. Depending on the type of purchase, the cardholder could earn 1 to 5% of the amount they spent, back. Once they earn a certain amount, usually a minimum of $50, a check or statement credit will be issued.
A credit card that is perfect for balance transfers has a long zero percent annual percentage rate period. Most new credit cards today have some sort of introductory interest period and if you can find one that offers a year or more they could be perfect for balance transfers. If someone has a credit card balance with a high interest rate, they can transfer that balance to the new credit card with the zero interest.
If the cardholder does decide to do a balance transfer, they need to make sure the majority, if not all, of the transferred balance is paid off before the introductory period is over. If the new interest rate after the introductory period is over is higher than the rate on the original card, the cardholder will not save any money.
A secured credit card is meant for people with poor credit scores. The cardholder can rebuild their credit score with this type of card because the provider reports directly to the credit bureaus. With this type of card, the cardholder puts down a security deposit to prevent defaulting on the card. The credit line for this card will be the same amount as the deposit.
What is the best way to find the perfect credit card?
There are two steps to finding the perfect credit card, determining the type of card you really need and then comparing many different cards. You need to fully understand how each of the different cards works to be able to decide which will work best for you.
Once you decide what type of card you need, use the FREE credit card finder to compare credit card rates for you!
- Are there any current fixed credit card rates?
- Where can I find low interest fixed rate credit cards?
- Are there any credit cards offering fixed rates of interest on transfers?
- What are some fixed rate credit cards?
- What is the difference between a fixed and variable credit card APR?
- United Bank Natural Choice Credit Card
- Is it possible to find cheap fixed credit card rates?