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How to Get a Fixed-Rate Credit Card

Recent economic and business reviews show that fixed-rate credit cards have become a thing of the past. Nearly all of America’s biggest banking groups and financial service providers, including J.P. Morgan Chase & Co and Bank of America Corp, are rapidly switching from fixed rate to variable rate credit cards. This is an attempt, they say, to cope with the changing market conditions and fluctuating business costs.

It is just the right time to get a good understanding of fixed rate and variable rate credit cards. Then, you may consider taking a look at some good fixed rate credit card offers available in the United States and Canada.

Step 1 – Consider the Pros and Cons of Fixed Rate Credit Cards

The main difference between fixed rate credit cards and those with variable interest rate is that the former give you more financial security. The amount of money you will have to pay off for the credit you use is pinned to a more or less fixed annual interest. In turn, the fixed rate allows you to calculate when and at what pace you’ll be able to pay it off. The latter type of credit cards is more “insecure” because their rate depends on the current interest rates in the country. Thus, you will find it more difficult to keep a balance on your credit card.

Step 2 – Compare Offers for Fixed Rate Credit Cards

You may contact local credit card issuers or browse for fixed rate credit card offers. You need to make sure that they are really fixed in terms of future purchases. Some issuers may try to trick you: the balance transfers may be fixed for the first month only. Read the fine print carefully. Then, you have to look at what type of credit score is required for the particular card. These will be marked as poor, fair, good, or excellent credit. You don’t want to compare fixed rate credit cards that are marked fair if your credit score is excellent. At the same time, if you have a poor credit score, the issuer will be unwilling to entrust you with a card marked excellent. Be realistic about the credit card you can get.

Step 3 – Look for Bonuses that Come with the Card

If you love to travel, you may look for credit cards converting points into air miles. If you shop for gifts often, you may check the gift cards offered by Amazon.

Step 4 – Get Your Credit Card

Choose a credit card with the best rate, bonuses, and no hidden charges. Use it in a responsible manner.

Here are some credit card issuers based in the United States and Canada that still offer reasonable fixed interest rates on their cards:

- US-based New Millennium Bank offers a secured Gold Visa/Mastercard credit card with an annual interest rate fixed at 19.5 percent and a minimum deposit in the holder’s savings account of $300.
- Canada-based MBNA issues a Gold MasterCard credit card with an annual interest rate as low as 9.99 percent The card is available for Canadian residents and has no annual service fee.

Note that the interest rates in the developed economies are determined by the country’s government or the central bank. When the central bank in a given country increases the basic interest rate, the consumer banks invariably increase their prime rate, which is their best consumer rate for short-term loans, and that’s how the interest on your credit card varies. Although the interest rate of a fixed rate card is not tied to the prime rate, it may also go up or decrease within some limits. In addition, when the prime rate goes down, the interest rate of your fixed rate credit card usually remains the same.