Fixed-Rate Credit Cards May Disappear
Got a fixed-rate credit card? Enjoy it while you can, says the Wall Street Journal.
Credit card issuers increasingly are switching customers from fixed-rate to variable-rate cards, in part because the new credit card consumer protection law will limit lenders’ ability to raise rates.
Reporter Andrea Coomes says that some 90 percent of credit card offers you get in the mail nowadays are for variable-rate cards.
The new credit card consumer protection law is, at least in part, to blame.
While that law limits the credit card companies’ ability to raise rates, it can not control changes in the Prime Rate — which most variable-rate cards are based on.
If the prime rate goes up — and “it’s got nowhere else to go but up from its low of 3.25 percent right now” — rates on variable credit cards will also rise. The same would not be true for fixed-rate cards.
