Fixed rate credit cards are fixed only if they are not changed by your card issuer. Yes, despite what your credit card issuer says, these fixed rates are actually susceptible to increases whether you like it or not.

So, what’s the point of calling it fixed rate if they are not really fixed to begin with? The most obvious reason is to distinguish them from variable rate cards. The other reason is to make the offer more attractive to consumers.

Variable credit cards can rise and fall without the card holder knowing it. These interest rates are pegged at the prime rate index. When the index rises, the interest rate also increases and vice versa – although the latter rarely happens, if it ever does happen. Changes to fixed rate credit cards, on the other hand, do not happen as often as variable rate increases and card holders are usually notified of any forthcoming changes. The current law requires at least 15 days notice but it will soon be increased to at least 60 days when the new law becomes effective.

It goes without saying that fixed rate credit cards are not actually fixed. They can be re-fixed by issuers provided the card holder knows about it. Although the consumer is informed of these increases, they cannot do anything to avert it. Notices usually include the number of days within which the card holders can communicate their dissent, failure to do so within the period shall be deemed implied acceptance. If you don’t accept the increase, it’ll most probably result in a closure of your account. At least, you’ll know when your credit card’s interest is no longer worth it and when it’s time to shop for a better deal.

Fixed rate credit cards may soon become extinct or turn out to be a rare luxury for the few. The new credit card law makes it more difficult for issuers to increase fixed rates such as the requirement for a 60 day notice and a ban on increases for the first year after opening of the account. With these cumbersome conditions, many credit card issuers may think twice in offering fixed rate cards. In fact, conversion of a substantial number of fixed rates into variable rates is now becoming the general practice for many issuers. So, for those thinking of getting fixed rate cards, don’t forget to make credit card comparison and make sure to read the fine print because there might just be a catch somewhere.