How to Find a Fixed Rate Credit Card

Credit card interest rates fall into two different types: variable rate and fixed rate. Most credit cards today are variable rate credit cards — this means that their annual percentage rate (APR) is tied to an index. As the index rises and falls, so do the APRs on these cards.

On the other hand, fixed rate credit cards have interest rates that are stable and won’t change without sufficient notice from the card issuer. This is because fixed rate cards are subject to rules regarding how and when the credit card issuer raises the interest rate. With a fixed rate card, you can be sure you aren’t paying a higher interest rate if the index goes up.

Although fixed rate credit cards are rare, they do exist and may be useful in some situations. We’re going to look at the main differences between variable and fixed rate cards, where to find fixed rate credit cards and why they may not be the best choice.

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What are fixed rate credit cards?

Unlike a card with a variable APR, a fixed rate card has a more stable APR that isn’t tied to an index like the prime rate (the interest rate that banks charge their best customers). While the APR on a fixed rate card can change over time, your issuer is required to give you notice ahead of any APR adjustments.

Fixed rate cards were more common prior to the Credit CARD Act of 2009, and credit card issuers shifted toward variable rate cards to offset their ability to change terms after the Act took effect. The Act requires issuers to give at least 45 days notice, with some expectation, on APR increases.

With variable rate credit cards, the APRs rise or fall based on when the Federal Reserve raises or lowers interest rates, with no advance notice to cardholders required. Note that the Federal Reserve doesn’t control the prime rate, but the prime rate fluctuates based on the Fed’s actions.

For those who carry a credit card balance on a fixed rate card, you’ll receive ample warning before a new rate increase goes into effect. You even may be able to transfer your balance to a product with a lower interest rate before your new rate kicks in.

“Having the ability to lock in a set interest rate typically gives people better predictability, a higher level of security [from knowing what to expect],” says Lynnette Khalfani-Cox, a personal finance expert and author known as “The Money Coach.”

That doesn’t mean your APR is guaranteed to stay the same forever, though.

Can the APR on a fixed rate card increase?

In a word, yes — the APR on a fixed rate card can still fluctuate, just not as often as a variable APR card might. As mentioned, credit card companies must give cardholders 45 days’ notice before changing fixed interest rates. But outside of that 45-day window, card issuers may change the APR on a fixed rate card as often as they please.

“To some extent, there’s kind of no such thing as a totally fixed credit card interest rate,” Khalfani-Cox says. That’s because issuers retain the right to change card terms, as long as cardholders are given sufficient notice.

Furthermore, there is an exception to the 45-day requirement: A fixed rate card’s APR can increase without notice if your payment is more than 45 days late, or if you have a significant drop in your credit score. However, if your rate increases due to a late payment, your issuer has to restore the original rate after you make on-time payments for six months.

Where to find a fixed rate card

Credit unions are your best bet for finding a fixed rate card.

“Fixed rate cards absolutely are rare — partly because of changes brought by the CARD Act of 2009,” says Matt Schulz, chief industry analyst at LendingTree.

Here are a few fixed rate cards you might be able to apply for:

• The UNIFY Fixed-Rate Visa® Platinum (14.49% - 17.99% Fixed APR). There’s also a variable APR version, the UNIFY Variable-Rate Visa® Platinum (14.24% to 17.99% Variable APR).
• The UNIFY Fixed-Rate Visa® Gold (14.49% to 17.99% Fixed APR). There’s also a variable APR version, the UNIFY Variable-Rate Visa® Gold 14.49% to 17.99% Variable APR).
• The UNIFY Fixed-Rate Visa® Classic (14.49% - 17.99% Fixed APR). There’s also a variable APR version, the UNIFY Variable-Rate Visa® Classic (14.74% to 17.99% variable APR APR).
• The Cencap Visa Credit Card (14.99% Fixed APR).
• The Qside MasterCard Classic Credit Card (12.90% Fixed APR).
• The Qside MasterCard Platinum Rewards Credit Card (9.90% Fixed APR).

Credit unions often have membership eligibility requirements, and they could restrict your ability to apply for a card — still, there are usually other ways that you can join a credit union if you fall outside of those requirements (to be detailed below).

Downsides of fixed rate credit cards

While fixed rate credit cards may sound good, they do have drawbacks. Once you understand what they are, you’ll be better able to decide which type of card is best for your needs.

Few intro APR rates

Keeping a locked-in APR is mostly important if you plan to carry a balance. And while we recommend paying off your full balance each month, a big and/or unexpected expense may leave you with a bill that you can’t afford to pay off right away. A card with a long intro 0% APR is ideal in these situations.

Among variable rate cards, it’s possible to find 0% intro offers as long as 21 months. In other words, some of these cards allow you to carry a balance for over a year without paying a cent of interest.

Lack rewards programs

Fixed rate credit cards tend to be light on additional benefits, and you’ll be hard pressed to find one that includes a rewards program. So if you want to earn cash back rewards or points that you can redeem for travel or merchandise, you’re likely better off with a variable APR credit card.

May not be available to everyone

Fixed rate cards typically come from credit unions, and aren’t widely available. Unlike banks, credit unions only allow members to apply for their credit cards. Each credit union sets its own criteria for membership, which may require you to work for a qualified employer or live near the credit union.

As an example, you can join New York City-based Qside Federal Credit Union if:

• You live, work, worship or study in certain area of the borough Queens
• You have an immediate family member who is already a Qside member
• You work for one of Qside’s Select Employer Groups
• You qualify for another membership opportunity (such as working for Qside)

However, some credit unions may offer ways to join even if you don’t qualify for membership based on where you live or work. UNIFY Financial Credit Union, for instance, will let you apply by joining their affiliate partner Friends of Hobbs, a nonprofit that supports Arkansas’ Hobbs State Park.

Tip:

When you look for local credit unions there’s a better chance you can qualify for membership. To find a credit union that offers fixed rate credit cards near you, a quick online search for “credit union in [your STATE] with fixed rate credit card” can give you a starting point if you feel that a fixed rate credit card is best for you.

How to avoid interest on credit cards

The best way to avoid interest on credit cards is to not carry a balance. However, when that’s not an option, try using one of the following products to minimize your interest payments:

0% APR cards

A card that offers a 0% intro APR is great for large purchases, like new furniture or a planned auto repair. To ensure that you pay no interest, divide the purchase amount by the number of months that are left in the offer. Pay that amount each month, so you have a $0 balance by the time the intro APR expires.

Balance transfer cards

A balance transfer card with a long 0% APR is great for consolidating debt and gaining traction on your finances. But while you’ll generally pay a balance transfer fee, there are some cards that don’t charge balance transfer fees.

Low APR cards

A low APR credit card could also be better than a card with a fixed rate APR. Look out for cards with variable APRs that are equal to, or even lower than, the fixed rate cards mentioned above. You might even find a good sign-up bonus or rewards program with these cards.

Personal loans

If you’re open to other lending products, a personal loan could provide you with the cash you need now at a lower interest rate. You’ll get the benefit of the same interest rate for the entire life of the loan, plus you’ll get a schedule to repay your loan.

Unlike a credit card, you won’t be able to use the loan to make additional purchases. Still, you’ll have a predictable APR and payment schedule that may help you pay back the loan faster.

Are fixed rate credit cards worth it?

While we don’t recommend carrying a balance on your credit card, a fixed rate card could be worth it as a last resort.

However, a variable rate card with a 0% intro APR offer could be a better way to save interest on a balance transfer or large purchase.

The best credit cards generally don’t require credit union membership, making them accessible to a wider audience. And since many variable APR cards come with a rewards program, they’re worth keeping long after the intro APR is over.

The information related to the UNIFY Fixed-Rate Visa® Platinum, UNIFY Variable-Rate Visa® Platinum, UNIFY Fixed-Rate Visa® Gold, UNIFY Variable-Rate Visa® Gold, UNIFY Fixed-Rate Visa® Classic, UNIFY Variable-Rate Visa® Classic, Cencap Visa Credit Card, Qside MasterCard Classic Credit Card, Qside MasterCard Platinum Rewards Credit Card, BankAmericard^® credit card and Discover it^® Miles has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.