Nothing is Constant Except Change: the Fixed Rate Credit Card
Contributed by Alix Mcmurray
Nothing is Constant Except Change: the Fixed Rate Credit Card
You may have ignored the dazzle of promotional and introductory APRs, and think you have a fixed rate credit card in your wallet. Well, that "fixed" rate is itself variable, that is, vulnerable, to a host of fluctuations. The disclaimer typically made in the card's Terms and Conditions statement is that this so-called fixed rate is "not explicitly tied to changes in other interest rates." Well, maybe not explicitly, but implicitly, it most certainly is, and in ways you never dreamt of.
Conspiracy Theories for the Middle Class: What Unseen Forces are Affecting Your Fixed Rate Credit Card?
In the recent national Credit Card Survey by Consumer Action (CA) (released 03-11-2003) it was reported that more than one-third of surveyed credit institutions will not confirm a new cardholder's APR until a credit history screening is complete. This means that the APR which may have been quoted is intentionally vague, misleading, false, or swiftly revised. And even if you're swimming along with an existing credit card and think you are "in like Flint" with a fixed rate, beware.
Again, more than a third of financial institutions in this survey admitted to increasing percentage rates in response to customers' relationships with creditors other than the one in question. That is, even if you've been paying consistently to Credit Card Company A, if you tripped up a bit with Company B, Company A could still slam you with an unexpected hike in your percentage rate -- all without advance warning.
