Although it is mostly industry practice to charge a variable rate of interest on outstanding credit balances at a certain percentage rate above Prime Lending Rate, it is possible, these days, to obtain a fixed rate credit card. So, when would you want to apply for a fixed rate credit card over a variable rate credit card?
Debt Consolidation And Credit The answer to this may not actually sound as simply as you may think. Two factor need to be borne in mind: first, what is the Prime Lending Rate at the moment; and second, what are the chances of the percentage rate plus Prime Lending Rate going above the fixed rate?
A fixed rate mortgage loan means that the rate of interest charged on your loan amount is fixed and does not change, unlike a variable rate or a tracker mortgage. A fixed rate mortgage removes the uncertainty of a variable rate mortgage guaranteeing a stable rate for a fixed period. This fixed rate usually applies from anywhere between 2 to 5 years. The longer the fixed period usually means the higher the interest rate that is set.
Check Credit Rating If you feel that borrowing rates are cheap at the moment and that it is unlikely that Prime Lending Rate is going to go up in the near future, then in all likelihood having the variable rate credit card is going to be more of a benefit to you than having a fixed rate credit card. However, if the opposite is true, and you believe that there is a good chance that Prime Lending Rate is going to up in the near future, there may be a very good reason for you to want to lock-in your interest rate at the current fixed rate being offered by the card provider.
An administration fee is applicable. There is an early repayment charge during the fixed period. this type of mortgage combines a fixed and tracker rate. 50% of your mortgage rate will be fixed and the other 50% will be set at a variable tracker rate. The fixed rate can be renewed after a 2 year term (for a renewal fee). Otherwise the fixed rate part reverts to a variable tracker rate for the rest of the mortgage term.
Improve Credit Rating One exception to the fixed rate vs. variable rate credit cards debate comes into play if you can manage to obtain a fixed rate with a card provider on the transfer of your credit card balance to a new card provider. In this circumstance it could prove to be a very useful money saving policy to agree to the fixed rate for the initial 6 or more month period as, traditionally, fixed rates for transferring balances are very low. You do, however, need to be extremely careful that any variable rate that comes into play following the fixed rate period is not excessive.
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Credit Online Rating Report Alternatively, you need to ensure (a) that you have made as much of a repayment as is possible during your fixed rate term that you only have a minimum outstanding balance on the day the balance transfers over to a variable rate; or (b) you have the option of transferring the credit card balance outstanding to another new card provider who is also offering a very low fixed rate of interest.
The most common ones in South Africa are the fixed, variable rate mortgage as well as, more recently, the interest only mortgage. A fixed rate mortgage means that your repayments remain the same over a certain period. The only increase that you can expect is the result of increases in insurance rates and property taxes. With a variable rate mortgage your monthly repayments will fluctuate. If interest rates are going down your monthly repayments will decrease, but should rates go up your payment will increase accordingly.
Credit Score Rating Scale In any case, these days the debate over fixed rate vs. variable rate credit cards is certainly more interesting than was ever the case previously!
Credit card exchange rates are based on the Visa and MasterCard wholesale rates, with a loading percentage usually added by the card issuers.
Bad Card Credit Credit People Joe Kenny writes for Credit Card Guide, offering the latest information on credit cards in the UK, visit them today us to apply for a balance transfer credit card and start clearing credit card debt today.
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Bad Credit Rating Joseph Kenny is the webmaster of the loan information site http://www.ukpersonalloanstore.co.uk. At the Personal Loan Store you can find some of the latest personal loans explained in detail.
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