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Fixed-rate cards are a shield against Fed rate hikes


Fixed-rate cards are hard to find, but they are a way to hold steady your interest costs as the Federal Reserve continues to hike rates. No major credit card issuers offer fixed-rate cards, but credit unions do.

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Fixed-rate cards can be a shield against Fed rate hikes

The content on this page is accurate as of the posting date. Some of the offers mentioned below may no longer be available. Please review our list of best credit cards to find our current offers, or use our CardMatch tool to find cards matched to your needs.

Five more times. That is – potentially – the number of interest rate increases you could see on your credit card by the end of 2019, according to some analysts.

The Federal Reserve already has boosted the federal funds rate seven times since late 2015, including the latest rate hike in June. With each hike, rolling over your credit card debt gets more expensive.

There are, of course, three tried-and-true ways to combat higher card interest rates: Pay your bill on time and in full, find a low variable rate credit card or apply for a balance transfer credit card that offers a long interest-free introductory period.

There is another option: a fixed-rate credit card. If you must carry a balance or think at some point you might, fixed-rate cards typically offer both certainty regarding what you’ll pay and a low interest rate, much lower in fact, than the national average variable APR.

See related:Best credit union and regional bank credit cards

Fixed-rate cards are hard to find

Fixed-rate cards aren’t a mythical product, but they’re pretty difficult to find, as banks shifted almost exclusively to variable-rate products following passage of the Credit CARD Act, which took effect in 2010.

Today, you’ll mostly find fixed-rate cards offered by credit unions, which see them as a way to fulfill their member-centered missions. No major issuer offers fixed-rate credit cards.

“A fixed-rate card is a way for a lot of our members to get out of higher interest rate payments,” says Natasha Ranchigoda, assistant vice president of marketing at UNIFY Financial Credit Union, based in Torrance, California. “It’s definitely a product that is going to benefit our membership.”

The credit union says its Fixed Rate Visa Credit Card is tailored for members who are unable to pay off their balances in full every month.

The credit union’s Fixed Rate Visa has an APR as low as 8.99 percent. Balance transfers are charged an APR as low as 4.99 percent for 12 months with no balance transfer fees. (Most balance transfer cards – but not all – charge balance transfer fees ranging from 3 to 5 percent of the balance.) New cardholders may get an APR of as little as 4.99 percent for six months.

As with most credit cards, your APR will be determined by your creditworthiness.

UNIFY operates about 60 branches in 17 states. But you don’t have to live near a branch to join. Anyone can qualify for membership by joining one of two nonprofit organizations, the Friends of Hobbs State Park, based in Arkansas, or The Surfrider Foundation, which works to protect oceans and beaches.

See related: Shopping for a new credit card? Don’t overlook smaller banks

Other fixed-rate credit card options

UNIFY isn’t the only institution offering fixed-rate credit cards, but there aren’t a bunch of options. Here are a few more examples:

  • FD Community Federal Credit Union in Waterbury, Connecticut, charges 8.95 percent APR on its fixed-rate Visa Classic credit card. Membership is open to people who live, work, worship or attend school in Waterbury and a number of nearby communities.
  • Purdue Federal Credit Union’s Visa Traditional Credit Card has a fixed rate starting at 11.5 percent. Membership in the West Lafayette, Indiana-based credit union is primarily open to students or alumni of Purdue University and their families. You can join the Purdue Alumni Association for a $50 fee to make yourself eligible as well.
  • Qside Federal Credit Union offers an APR as low as 12.9 percent on its Visa Classic Credit Card. Membership in the New York City-based credit union is open to people who live, work, worship or study within certain areas of Queens, their family members and employees at select companies.
  • Truliant Federal Credit Union in Winston-Salem, North Carolina, charges 9.9 percent APR on its Visa Platinum card. If you live outside an area served by the credit union, you can join by first enrolling in the American Consumer Council for an $8 fee.

“At this point, (the fixed-rate card) has become a benefit that really isn’t something that’s offered out there anymore,” says Liane Ashikawa, UNIFY’s marketing product manager. “We do it really to offer a competitive option with our credit card line.”

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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