A credit card offers fixed rate feature is typically not what applicants perceive it to be. Unlike home loans, the word “fixed” doesn’t mean anything in the credit card world. According to US law, “fixed” simply means 15 day notice before an annual percentage rate (APR) increase. Most people don’t realize it, but they don’t even have to sign a contract to be subject to the new rate change. In fact, once you get the notice in the mail, the first time you use your card you’ve agreed to the new terms and conditions. If that sounds surprising, here are some more shockers:

• In 2004, the credit card industry broke all previous profit records in terms of APR charges and late fees. They added up to more than $30 billion dollars.
• Minimum payments are low on purpose. If somebody has $100 to spend towards credit card debt relief, you can either extend them a credit limit of $2,000 with a 5 percent monthly minimum payment or extend them a credit limit of $5,000 with a 2 percent monthly minimum payment. Guess which one the credit companies choose?

A credit card offers fixed rate feature, while appearing to be a great idea, may not be the best deal to go for long term. Make sure you know when and by how much your rates will increase before signing a contract and activating the card.