How to Find a Fixed Rate Credit Card

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 45 days’ notice ahead of any APR adjustments according to the Credit CARD Act of 2009.

Fixed rate cards were more common prior to this law. However, credit card issuers have since shifted toward variable rate cards, which don’t have the same restriction.

 

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.

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.

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 consumer finance analyst at LendingTree.

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

• Few have intro APR rates

  A card with a long intro 0% APR can help you pay off a large expense with no interest. You’re unlikely to find a 0% intro offer on a card with a fixed APR.

• 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 usually only allow their members to apply for 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 areas of the Queens borough
  • 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.

 

The best way to avoid interest on credit cards is to not carry a balance. However, when that’s not an option, try one of these alternatives:

0% APR cards

A card that offers a 0% intro APR is great for large purchases, like new furniture or a planned auto repair. It’s possible to find 0% intro offers as long as 21 months, which could easily add up to more interest savings than a fixed rate card.

Balance transfer cards

A balance transfer card with a long 0% intro APR is great for consolidating debt and gaining traction on your finances. You’ll generally have to pay a balance transfer fee of 3% to 5%, but you can still save significantly on interest, since many cards offer very long intro periods. And, there are even 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 and won’t tempt you to spend more than you can afford.

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.