Finding a low fixed interest credit card can often feel like searching for the proverbial needle in a haystack. You might find it good to know they do exist but do not always stay fixed forever.
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There are so many types of credit cards on the market today it can be hard to choose. Selecting the one that is best for you and your unique situation can seem even harder. Sorting through all the offers, fees, terms, and limits may have you feeling like the combination of low and fixed interest in a credit card is just a myth.
What are the different types of credit cards?
Before you can determine which type of card is right for you, it would be helpful to know all the various options that are available. They come in many forms, each with its own pros and cons. Credit cards are designed with a variety of ranges, from store or industry specific cards to those made for international use anywhere credit cards are accepted.
The most popular option is the basic or traditional credit card. This card typically spending limit, or maximum dollar amount you can charge, usually based on your credit score. For this type, the credit card company gives you a longer time to pay the balance but if you don’t follow the repayment schedule exactly, you can be hit with extra interest and fees on top of the cost of things you have purchased.
There are also credit cards with no spending cap. Sometimes referred to as charge cards, they are considered by many to be safer because they act more like a cash substitute in that you must pay off the credit card debt in full every month, which serves to strongly discourage overspending. Perhaps an even safer option is debit cards, in which you can only spend the money currently in your bank account and merchandisers will reject an attempted charge if it is shown that you don’t have the funds to cover the purchase.
Are there credit cards for people with exceptionally good or bad credit?
A more selective version of the traditional credit card is the gold or prestige credit card, often marketed as a card for only the best customers. It has a larger spending limit or even no spending limit and a system that allows you to earn bonuses as an incentive to spend more.
For those with past credit problems, there is the secured credit card choice. The difference between this and the others is that you have to pay a fee upfront in order to prove you have the means to handle the responsibilities of a credit card. This can be a smart option for you if you have ever had a bankruptcy or foreclosure, a poor or nonexistent credit score, or any other reason that makes it difficult to be approved for a standard credit card. Think of it as a second chance to prove yourself and to improve your credit score.
To learn more about how credit cards work, check out the Federal Trade Commission.
How do you get a low fixed interest credit card?
If you have outstanding credit, low fixed interest credit cards are available for you. Each credit card company has its own version and gives you the opportunity to select either an attractive promotional interest rate in which you pay no interest for a set period or a more long-term low interest rate.
Fixed rate credit cards do still exist and you may often see a figure of 9.9%. Normally, credit card companies only advertise their variable credit card APR, which is likely higher than the fixed rate. For more information about interest rates, visit the Federal Reserve website.
Although in the real world no means no, in the credit card universe fixed does not always mean fixed. Simply put, credit card companies have the right to alter a fixed rate, as long as they inform you beforehand. If you do have a fixed rate credit card, be sure to check all the paperwork and supplements in your monthly statement to avoid being blindsided by such a change.
What are some credit card statistics?
It has been said that people today expect instant gratification and entitlement in every aspect of their lives and our mentality about credit cards would seem to serve as evidence of this trend. Surveys have shown that the average person owns approximately four credit cards, of varying types and terms. This adds up to almost a billion credit cards currently in use each day. Most people using credit cards are paying an annual percentage rate between 10 and 15%.
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