Fixed Rate Credit Cards in the Chaotic World of Credit
A Credit Article Contributed by Joyce James
Fixed Rate Credit Cards Offer a Sense of Calm in a World of Chaos
Fixed rate credit cards can often sound like an ideal treat in the chaotic world of plastic credit. When the world around us is in a constant flux of economic, political and social change, the little five letter word "fixed" makes us feel safe and in control.
A fixed rate credit card sounds like such a bargain option because "fixed rate" essentially means that the interest remains the same from month to month. Unlike scary variable interest rates, which as the name suggests vary according to other factors, it certainly sounds like a much better idea in the long term to choose a fixed rate credit card.
If you are Mr or Ms Perfect, then you will get on divinely with your fixed rate credit card. But if you are less than perfect when it comes to your monthly credit card obligations then your fixed rate credit card becomes meaningless. That's because banks can de-fix your fixed rate. You'll have to read all the fine print that comes with the specific card you are applying for, but banks can and increase fixed interest rates.
The Fixed Rate Credit Card is Good but It Doesn't Solve All Your Problems
You know about Sisyphus, right? The ancient Greek mythical figure who had to roll an enormous boulder up a hill as punishment for all eternity. When he reached the top of the hill, the boulder would roll back down and he'd have to start all over again. Well, sometimes credit cards can punish you just like that.
First of all, you've got your standard grace period, twenty to thirty days where you may not have to pay any interest at all! But say you can't afford to pay off your month's purchases (who can! ) then you pay the minimum amount and the bank starts charging interest. If it's fixed rate, at least you know that each month you pay the same interest rate, that is until the bank increases it. Still, it is rather comforting. If it is variable however, some months will be lower and some months will be higher.
Some cards give you a nice low introductory rate, sometimes as low as 0% for a short period of time. That's often a good idea if you know how to take advantage of that introductory period, but you should check that the rate after the introductory period ends is fixed and reasonable.
Compare Fixed Rate Credit Card Offers or Be Destined to Forever Repeat Your Mistakes.
Get on the Internet. You'll find all the different cards and offers right there. Compare introductory rates, future fixed rates and how long the introductory rate lasts. Also check the annual fee. You don't want to be making up for a low interest rate with a high annual fee. Cardwatch.com is a great resource for credit card information and credit card comparison. It monitors everything that's going on in the market, so if you are unsure about something your answers will be found there.
