Fixed Rate Credit Cards

Written by Jared Vincenti
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The APR of a credit card is the Annual Percentage Rate--the amount of interest that will be charged to you for the balance on your credit card each year. These rates vary from company to company, and from person to person. Your own credit score will play the largest part in determining the APR on your credit card.

Looking Closer at APR

When you apply for a credit card, you'll probably see an enticingly low APR rate on your application. This number usually has an asterisk next to it, directing you to the fine print. There are a few variations on the fine print that may appear, but you can rarely expect to get the advertised APR on every statement.

The most common proviso is an "introductory" APR. This means the first few months you have the card, you enjoy a nice low APR, regardless of your credit. However, the rate will soon get hiked up to a higher rate--usually once you've managed to establish a balance on the card. The other common item in the fine print is the "variable" APR.

Many cards have a variable APR, which means your APR goes up if you miss a payment, but it goes down if you show you have good credit. A variable APR can lead to disaster, though, because if you're suddenly unemployed, not only can you not pay your balance, but you also owe more and more interest each month that you cannot pay. For this reason, you can look for fixed rate credit cards. A card with a fixed rate won't have as low an APR at the beginning as other cards, but may well be worth the security.


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