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One way to find credit cards with a fixed rate is to use an online credit card finder. This will allow you to compare the terms and benefits of a number of different credit cards so you can choose the best one for your needs.
In regards to interest rates that credit cards offer, you can choose a card with either a fixed rate or a variable one. Although whether the interest rate changes or not is one of the factors you should keep in mind when looking for a credit card, there are a number of other things you should be aware of as well.
What are the benefits of a fixed interest rate?
There are a number of benefits to choosing a credit card that has an interest rate that is fixed. One is that you will never have to wonder what the interest rate will be on your next statement, so you should be able to determine how much you will owe on your bill.
Another benefit is that a fixed rate is often lower than a variable rate, because a variable rate is tied to the national prime interest rate, and when the interest rises, so does the interest rate of your credit card.
In general, fixed interest rates are simpler because they do not need complex calculations to determine interest payments like variable interest rates do.
What are the negative aspects of a fixed interest rate?
Although there are benefits to having a credit card with a fixed interest rate, there are some negative aspects to keep in mind as well. Since a variable interest rate is tied to the national index, if the national interest is lower, the interest for the variable credit card may be lower than the interest rate for the fixed one.
Another negative of a fixed rate credit card is that the credit card company can change the interest rate as long as they give you a notice of 15 to 30 days. This usually results in an increased rate, which essentially makes it similar to a variable rate.
Although you can cancel your account if the interest rates rise and you don’t want to continue with the card, you are responsible to pay off the balance of the credit card before your account will be closed. If you have a large balance on the card and are not able to pay it off, you will have to pay the higher interest rate.
Also, read the terms of your credit card account carefully. Some credit card companies only apply the fixed interest rates to purchases, which means that if you transfer a balance, the transfer will be charged a variable interest rate.
For tips on how to read your credit cards terms you can visit MyMoney.gov.
What if the fixed interest rate increases a lot?
If you have a fixed rate credit card that continues to increase and you don’t want to use it anymore, there are a couple of things you should do.
If you have a balance on your credit card, you will need to get rid of the balance before you can get out of your contract with the credit card company. The best way, in general, is to pay off the balance in full. This will save you a lot of money in the future that would have been spent on the interest.
If you have a big balance and are unable to pay it off, the next thing you will want to do is shop around for a credit card with a lower interest rate. Once you find one, you can transfer the balance from your current card to the new one and then close your account.
Keep in mind that you may be charged a fee for the balance transfer. If you are transferring the balance to a credit card that has an introductory offer of zero percent, look at what the interest rate will jump to after the introductory period and whether the rate is fixed or variable.
The safest way not to be negatively affected by an increased interest rate is to pay off your balance every month so that the interest rate does not affect you, whether or not it is variable or fixed.
You can compare credit cards right now just by using the credit card chaser tool.
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