Low Fixed Rate Credit Card

Find Out The Difference Between A Low Fixed Rate Credit Card and One without A Fixed Rate

Low Fixed Rate vs. Fixed Rate

A fixed rate credit card is a card that has one set rate throughout the life of the card and it doesn't change. The rate of a credit card is normally based upon the prime rate. The prime rate is the rate by which the government loans money to banks and other lenders. In other words, the prime rate is usually the lowest rate you can obtain with any type of loan. This sometimes varies because of special promotions or the type of lender. A fixed rate or even one that isn't fixed is normally a certain amount of percentage points above this prime rate. For example the prime rate may be 5% but the fixed rate can be 7% or even higher. The fixed rate is determined by the lender and would not change as long as the consumer was in possession of the credit card and actively using it.

A low fixed rate credit card is the same as a fixed rate one but the rate is usually lower than the average credit card rate. For example, the average credit card rate may be fixed at 19% but some credit card issuers may fix theirs at 10%. This is done for many reasons but the main reason is so that more consumers will choose or apply for their cards before applying for someone else's. This allows competition from lender to lender and creates a good market for the consumer.

Fixed rate and low rate credit cards both have the advantage of being less then the rates of the normal credit cards and can therefore save the consumer some money throughout the years. Both perfect credit and not so perfect credit consumers can benefit from these types of credit cards but they are more then likely offered to perfect credit consumers more then less then perfect consumers.