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:: HOME :: CREDIT CARDS · Main Page · Card Recommender · Comparison Chart · Sort by Bank/Issuer · Top Five Credit Cards · Credit Card Specials · Sort by Credit Rating Main Categories · Balance Transfer Cards · Business Credit Cards · Cash Back Credit Cards · Fixed APR Credit Cards · Instant Decision Cards · Low APR on Purchases · Rewards Credit Cards · Student Credit Cards · Travel Reward Cards Other Specialty Cards · Cards for Parents · Gas Rebate Cards · Hotel Reward Cards Bad/Damaged Credit · Bad Credit Credit Cards · Catalog Cards · Debt Consolidation · Pre-paid Cards Credit Resources · Calculators - New! · Tips & Advice - New! · Credit Card FAQ · Credit Card Glossary · Credit Reports, Scores · Identity Protection · More Credit Resources :: LONG DISTANCE :: INTERNET SERVICE :: LOANS :: CELL PHONES :: INSURANCE :: ONLINE BANKING :: KNOWLEDGE :: MORE |
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Credit Card Tips and Advice Center Topic: Fixed APR Credit Cards See the subtopics menu for tips and advice about fixed rate credit cards. For additional information about credit cards, see the topic list directly below.
 Fixed vs. VariableWhat is the difference between a fixed APR and a variable APR? When comparing the various credit card offers available online, you may have stumbled across the terms "Fixed APR" and "Variable APR." If you are unfamiliar with the way credit works, the difference between these two terms can be a little confusing. In theory, a fixed APR is an annual percentage rate that is fixed, or does not change, while a variable APR is an annual percentage rate that varies, or fluctuates up or down. Fluctuations depend on the current interest rate market or other factors set forth by the credit card issuer. Variable APR's are often tied to the current prime rate, which is a commonly used interest rate used by banks at any given time. For example, a credit card can have an APR of Prime + 5%, which would equal the current prime rate plus 5%. So, if the prime rate goes up or down, so does that card's APR. Fixed interest credit cards do not necessarily remain the same interest rate forever, as market fluctuations make it is unrealistic to think that a credit card company will settle on one interest rate for their cards and never change. However, a fixed APR tends to stay more constant than a variable APR. The interest rate on a fixed APR credit card can increase when overall interest rates go higher, but change is not automatic and is usually accompanied by advance notice. Credit card with variable APRs, on the other hand, can change interest rates more often and often without any prior notification. Occasionally, you can find a credit card that offers a fixed APR for life on a certain balance. For example, you may be able to find a credit card that offers a 6.9% fixed APR for life (until the balance is paid in full) on all balance transfers made during the first month of card membership. When you are shopping for a credit card, it is a good idea to look for fixed interest rates as long as those fixed rates are low compared to all the other offers you find. It may not remain that same interest rate for as long as you have the card, but at least there will not be as many fluctuations as with a variable APR card. ^ Back to top Fixed Interest BenefitsWhat are the benefits of owning a fixed APR credit card? A fixed APR on a credit card guarantees that your monthly payments will not increase unexpectedly because the interest rate stays the same on the account for a specific period of time. Fixed APR credit cards do not necessarily have the same interest rate forever. However, if a specific portion of your balance has been assigned a fixed APR for life, then the APR on that balance will not change. For example, if your purchases for the first six months of having the credit card are guaranteed to have a certain interest rate, then you know what to expect. You know that for at least the first six months there will not be a huge leap in your interest rate that will raise your monthly payments. You benefit by knowing what your interest rate is and being able to plan accordingly. If you know your fixed APR is about to expire, then you can either pay off the balance before the fixed APR expires or you can transfer your balance to another card. There are no big surprises with a fixed APR, and that can be a huge benefit. ^ Back to top Best Fixed Rate Credit CardsWhat are the features of the best fixed rate credit cards? The very best fixed rate credit cards are those that feature the low interest rate for a long period of time. Instead of offering a low annual percentage rate for a promotional three-month period, some credit card companies extend the low APR for much longer periods of time - even until balances are paid in full. Indeed, some of the best fixed rate credit cards include low rates for the life of balance transfers in addition to not requiring additional fees. The best fixed APR credit cards also should not require excessive fees for any other aspect of the card, including application fees and annual fees. Fixed rate credit cards can also offer reward programs so that you can build up points toward a nice reward, whether it's an airline ticket, cash back, or a big chunk of points to donate to your favorite charity. Look for all of these features when you are trying to find the best fixed rate credit cards. People with excellent credit should have no problems finding a suitable card like this, while applicants with less than perfect credit will need to search a little longer to find something comparable. ^ Back to top Changing your APRHow can I get a lower fixed rate? If your fixed interest rate credit cards feature high annual percentage rates then you may want to attempt to get the interest rate lowered by the credit card company. Just because the interest rate is fixed does not mean that the credit card company cannot change the interest rate. In fact, having a fixed rate does not necessarily guarantee that you will have a low interest rate. Fixed rates can be just as high – if not higher – than variable interest rates. If you have made your payments on time consistently for the full time you have had the credit card then there is no reason why you should have to pay higher interest rates than what you would be offered if you were to apply for a new credit card. Make it clear to your credit card company that you deserve the best fixed interest rates. You should also make sure that the interest rate drop you receive is permanent, and will not expire at some point. If you have been a good customer, then your credit card company may honor your request and lower your interest rate. ^ Back to top
Should you transfer an existing balance from one card to another? Use this calculator to help determine the best distribution of your credit card debt. Enter your credit card balances, rates and credit limits to find out. · Calculate which balance transfers will produce the greatest savings
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