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I have decided to get a new credit card.
However, when looking through the various options for cards, it seems like all of them are variable rate cards.
What's the downside to using fixed- vs variable-rate interest credit cards.
Is the bank going to decide to hike my rate, if they've been having a bad year?
There is no downside if you don't carry a balance. Just pay it off every month and the interest rate is irrelevant.
With interest rates on credit cards, the bank can decide to up your rate at any time. I have a card that I got with a 9.99% interest rate that was fixed. After about a year it was upped. Now 5 years later the interest rate is like 18.99%. Since I don't carry a balance it has no affect on me.
John - you should find a card that offers the best rewards. 2% cash back is pretty high up there, some will offer more for specific purchases, but not all. Then you should pay the card in full each month. I get 2% into my daughter's 529 (college savings) account and I actually have no idea what the rate is. It could be 24% for all I know. I always pay in full so I don't care.
