Why are my fixed rate cards changing to variable APR?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
3 posts
willie
 
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Joined: Tue Jul 28, 2009 12:36 pm
Location: WI

Why are my fixed rate cards changing to variable APR?

Postby willie » Tue Jul 28, 2009 12:40 pm

I got a few credit cards and I only carry a balance on one so this doe not bother me that much. But I am kind of worried about why all of a sudden they have been changing from fixed interest rates to variable interest rates. I know the prime rate is low right now and it won't matter but down the road when that goes up I think a lot of folks are going to be in for a ride.


jeffysdad
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Location: Texas

Same reason that's behind all the other changes...

Postby jeffysdad » Tue Jul 28, 2009 2:29 pm

Floating rates allow banks to follow the market and give them more flexibility to raise rates at random as well. This is happening in anticipation of the increased restrictions on bank practices taking effect. Anyone who has a balance should do what he/she can to pay it off now. I've read where some in the industry believe the fixed-rate cards are a thing of the past. I don't know if any of mine are fixed and can't remember when I last had a fixed-rate card for sure. I've been paying mine off in full every month for the last two or three years.

Since I'm no longer a revolver and am living the transactor life, I don't mind the shift to floating rates. I hope the banks make other changes to protect their revenue before they limit/do away with "no annual fees," grace periods and reward points/cash back. The thought of paying an annual fee for a credit card is bizarre to me now, as is anything less than a 20-day grace period, which now seems to be the norm where it used to be 25 days.
American Express: Blue Cash Preferred (groceries, 6%; gas, department store, 3%); Gold Delta SkyMiles (Delta Air Lines, 2 miles/dollar, free checked bag).
US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
FIA Card Services: Fidelity Amex (everything, 2%); Fidelity Visa (everything, 1.5%).
Chase: Freedom (rotating, 5%); Amazon (Amazon.com, 3%); PriorityClub (IHG hotels, 5 points/dollar); Sapphire (not in use).

*All cards are registered with PriorityClub IDine program for 8 points/dollar at participating restaurants.

1bootcamp
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Postby 1bootcamp » Thu Jul 30, 2009 12:06 am

And that 20 day grace period is from the date they print the statement. By the time you get it in your mailbox the payment may be due in 10 or 12 days. When you add in the time mailing it back it's really cutting it close. If you are on vacation for a week you are screwed.



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