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A Common Misconception About Fixed APR Credit Cards

Think your credit card rate is a fixed one just because the intro "teaser" rate has ended? You might be in for a rude awakening. Many credit card holders are finding out the hard way that what they thought was a fixed APR credit card was actually something very different.

The End of a Teaser Rate Does Not Mean a Fixed Rate

The first thing you need to understand is that just because your rate isn't a teaser or intro rate, it doesn't mean it's a fixed rate either. Some credit cards have a variable rate that can change at any time, for any reason. The rate of a fixed APR credit card, on the other hand, rarely changes and if it does the card must give you notice in writing.

Where to Look

So how do you know if your credit card rate is a variable rate or a fixed rate? If your card is a fixed APR credit card, it will mention it in the card's Terms of Service. If the rate is defined as a fixed rate, you have a fixed rate APR. If, however, the rate is dependent upon another interest rate, such as the Prime or the Treasury bill rate, you have a variable rate card and your interest rate could go up without notice.

May the Best Card Win

So how do you find good fixed APR credit cards? Word of mouth doesn't always work, since one man's dream credit card is another man's nightmare. Your best bet is to try comparison and review websites. Star Reviews, for example, lists fixed APR credit cards by category and lets you know what terms are currently being offered.

No one wants to be stuck paying more interest than they had initially agreed to. If you want to avoid the pitfalls associated with variable interest rates, make sure you carry a fixed APR credit card instead.

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