| There is no doubt that low interest rate credit cards | | | | of protection for consumers. |
| benefits cardholders in a variety of ways. The interest | | | | That legislation states that card issuers will no longer |
| rates we refer to are known as the annual | | | | be able to raise the APR on a fixed account. They |
| percentage rate (APR). This is basically the cost of the | | | | can however raise rates on the variable APR |
| credit that is extended to the account holder. | | | | accounts. Because of this new law many of the banks |
| Now understand that if you do in fact pay your bills in | | | | and credit card issuers are moving away from |
| full each and every month and do not carry over a | | | | fixed-rate cards altogether. They want to retain their |
| balance from one billing cycle to the next then the | | | | right to raise rates. |
| interest rate has actually no effect on you. It only | | | | In many cases the fixed low interest credit cards will |
| affects those of us that carry balances. | | | | be accompanied by an annual fee. The consumer |
| When we speak of interest rates in the context of | | | | must take into account how much the fee is and |
| credit cards they come in two forms, variable and | | | | decide for themselves if paying it is worth the savings |
| fixed. Variable simply means that the interest rate, or | | | | that the low interest rates will bring. Like so many other |
| APR, can be adjusted up or down (guess which way | | | | things in life it's a balancing act of sorts. |
| it usually goes) by the credit card company at their | | | | Prevailing rates are typically tied to the Fed funds |
| discretion. | | | | rates and to treasury securities. They can and do |
| Fixed rates, or a fixed APR if you prefer, do not | | | | fluctuate as market conditions warrant. The |
| change. Typically if the cardholder follows the terms of | | | | prospective cardholder must decide for themselves |
| service then they will not have their interest rates | | | | which type of card better suits their financial means. |
| raised. That means making all payments on time and | | | | A credible website will allow you to compare offers. It |
| paying the minimum payment threshold or more. | | | | should clearly list all of the pertinent information making |
| Some issuers however, have recently taken heat for | | | | it easy to conduct side-by-side comparisons. Pertinent |
| raising fixed rates and that predictably angered | | | | information includes the APR and annual fees. |
| account holders and drew the ire of Congress. That is | | | | Other important information such as grace periods, |
| one the reasons for the credit card reform legislation | | | | penalties and lines of credit can be found in the |
| that was recently enacted by Congress as a means | | | | disclosure statement and should be carefully read. |