When Your Credit Card’s Fixed-Interest Rate Suddenly Rises

It sounds like a misnomer, right? Fixed interest is supposed to be fixed, so why would it rise?

Regardless of what you’ve been told by the credit card agent who sold you into applying or what the advertisement said, credit card companies can raise the APR on your fixed-rate credit card according to their discretion. Even if they sold you with a bolded “Fixed Rate For Life” on the flyer, don’t believe it for a second. The lender always reserves the right to update your interest rates - check the terms, it’s true.

While variable-rate credit cards can see their interest rates fluctuate with no word to the consumer, fixed-rate credit cards are required to provide you with a written notice 15 days before the change. That, pretty, much is all that really sets them apart.

With that settled, certain things can prompt credit card companies to suddenly raise your interest rates. A series of late payments, sudden balance increase and going over your credit limit can not only stifle your credit power but similarly prompt your credit card company to pad your interest rates.

If you own multiple credit cards and exhibit any of the above behaviors with one of them while taking proper care of your obligations with the others, don’t be surprised if you find an APR increase across all of your cards. Lenders often apply a universal default clause to your account if they find that you are delinquent with at least one credit card in your name, effectively allowing them to raise their rates.

The universal default clause can really dig you in a hole, essentially giving credit companies to kill off your current rates without due case. To avoid it, you can try shopping for a new fixed-rate card that comes without the universal default clause. It may not be easy to find them but there’s probably one there somewhere among the pile.