One of the biggest drawbacks a credit card can have is a high APR, or Annual percentage rate, and this is perhaps followed by the second drawback to credit cards and the reason they get a bad rap sometimes, and that is the fact that some of them actually carry an annual fee.
Now, I’m all for paying an annual fee for a credit card that I’m actually getting something for, like airline miles or some other sort of rewards or reward points toward something real and nice, but I’d never pay one simply for the purpose of having a fixed low APR. Well, I take that back, I’d probably pay for one that had a ridiculously low APR, but that’s about it – and it’d still have to be fixed for me to consider it any kind of “deal”.
You see, credit card companies make money on us, and there’s really no reason for them to charge an annual fee right now, unless they really are giving us something of value in exchange for using their card. Even then, they’re still most likely making out in the deal. Take for example my low APR airline miles credit card by Chase (it’s a Visa).
I do pay an annual fee for the card, however, I get a great fixed low APR on the card, and I also get airline miles for United, which is what I like to fly anyways, and those points really seem to build up fast, so there are little if any restrictions on what types of purchases “apply” to the point accumulation.
So, what are the advantages of finding a credit card with a low APR that is also a fixed rate? Well, first of all, it means you are paying less interest on your purchases and your carryover balances from previous months because they are taking a lower interest cut on the purchase price of new items or services, as well as a lower interest cut on the balances that carry over from month to month.
This is why credit cards are called revolving debt, because they continue to collect interest on your purchases and your balances that have carried over from the previous month, so they are collecting interest on the same purchases many times over if you continue to carry that balance forward instead of paying it off month to month.
See why credit cards with higher APR’s can be dangerous, or even credit cards with low introductory APR’s that do not convert into fixed rates after the intro period is over? The long and the short of it is that if the credit cards have not guaranteed you a fixed rate, you could see your rates fluctuate from good to bad, and also from bad to good several times during the duration of the time you have the credit card open with that particular creditor.
Applying for credit cards that have a low fixed APR can be done several ways. You can of course do a google or yahoo search for creditors who are offering these types of deals and be led to their sites, or follow ads that claim they are offering what you seek, from companies such as Bank of America, Chase, and Capital One.
If you have good credit, you’re going to have an easy time finding a credit card offer such as this, but you will have a harder time if your credit is on the fringe or is bad, because the creditors are really cracking down on extending lines of credit and low apr cards with fixed rates to customers with a bad credit history. So basically, it pays to have good credit in the end when it comes to credit card comparison shopping is what the moral of that story is.
Another option, if you want a fixed rate, is to buy certain prepaid credit cards, which offer a pre paid for line of credit that is often associate with an already determined interest rate since you are paying for all the interest up front. You usually will end up with a good deal with the prepaid cards in this way, because they are tacking the interest on up front and what you see is what you get.
Read the fine print when searching for deals on low APR credit cards with fixed rates though, because there could be stipulations to them, such as if you miss a payment or are late on so many payments, the deal is null and they can raise them on you if they want, or there is some other loophole or loopholes that you have to watch for to protect yourself and the initial belief that you are getting a great deal on your card at a low interest rate.
As far as recommendations, you will really have to do your own homework on that, and may even have to apply for a few to find out who’s willing to offer you that great of a deal and at what credit limit they are going to mark you. If they are only going to give you a 500 dollar limit for example, is that really worth it for you? Things like that always factor into comparison shopping for credit cards as well. Happy shopping!