Knowing how to find and manage different types of credit cards can be crucial to financial success. However, with so many options out there, making the best choice for your situation can be tricky to navigate. There are two basic types of credit cards to consider—fixed-rate and variable-rate cards. Each type has advantages for certain instances. See below to learn more about each card to find the one that’s right for you.
Fixed-Rate Credit Cards:
As the name implies, cardholders with fixed-rate credit cards qualify for one constant interest rate based on their credit worthiness at the time of application.
“Fixed interest rates remain constant throughout the duration of a loan or line of credit. This means that, regardless of market fluctuations or economic changes, the rate remains unchanged. This stability offers predictability and allows individuals to plan with certainty,” said Purdue Federal Credit Union Marketing Specialist John Metzinger. “Purdue Federal offers fixed-rate credit cards with interest rates ranging from 15.5% APR to 17.5% APR based on a cardholder’s credit worthiness at the time of application.”
A fixed-rate card offers peace of mind when it comes to budgeting. This is because having that fixed rate lets the cardholder know at all times how much is needed for each month’s interest charges. Additionally, having a fixed rate protects the cardholder from any interest rate increases, further adding to that sense of stability and predictability.
Variable-Rate Credit Cards:
Variable-rate credit cards, on the other hand, have interest rates that fluctuate with the market and can result in unpredictable monthly interest charges. With a variable-rate card, cardholders can benefit from interest rate decreases, but changing rates can make it difficult to budget and plan for payments.
“Variable rates fluctuate based on changes in benchmark rates, such as the prime rate. These rates can change periodically, resulting in varying monthly interest charges,” Metzinger said.
Making the Decision:
Picking the right card comes down to what will work best for each cardholder’s financial situation. If having a predictable, fixed rate is more appealing, consider applying for a fixed-rate credit card from a reputable issuer like Purdue Federal.
Metzinger noted Purdue Federal’s staff is always more than happy to assist with any questions or provide more information regarding credit cards. For those looking for more information about Purdue Federal’s fixed-rate credit cards, Metzinger also invites people to check out the credit union’s website.
“Any of our members can apply online through this link and clicking ‘Apply Now.’ They also can come into any of our branches during regular business hours,” Metzinger said.
For more information about Purdue Federal Credit Union, visit purduefed.com.
