Alert
Close

Think you know AARP? What you don't know about us may surprise you. Discover all the 'Real Possibilities'

Highlights

Open

Contests and
Sweeps

Dream Vacation Sweepstakes

10 weeks. 10 amazing trips. Seize your chance to win!
See official rules. 

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

PROGRAMS

AARP Foundation Tax-Aide

You can get free, face-to-face tax assistance nationwide.

Money Matters Tip Sheets

Download and print out these PDFs to help with your financial matters.

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

webinars

Learn From the Experts

Sign up now for an upcoming Money webinar or find materials from a past session. 

Jobs You Might Like

most popular
articles

Viewed

Commented

Say Hello to Variable Rates

Q. My credit card was switched from a fixed to a variable interest rate “for my benefit.” True?

A. Yes, for now, because the rates are down. A variable interest rate is usually set by adding percentage points to the prime rate or a Treasury bill rate, so cardholders carrying a balance have benefited as the troubled economy has driven these rates to historic lows.

But in the big picture, the answer is no. The reason that millions of cardholders are being switched—predictions are that 87 percent of cards now have variable rates, up from 66 percent last year—is that card-issuing banks will eventually benefit more than customers.

Three reasons why:

• As the economy improves, the prime rate will certainly increase, pushing up a card’s variable interest.

• Unlike fixed-rate cards, variables are exempt from key provisions of the consumer-protecting Credit CARD Act of 2009. One provision requires card issuers to give at least 45 days’ notice before raising interest rates on cards with existing balances.

• With a variable rate, cardholders cannot opt out of an interest rate hike and pay off outstanding balances at their original rate. That’s another provision of the CARD Act that applies only to fixed-rate cards.

Sid Kirchheimer writes about money and consumer issues.

 

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Discounts & Benefits

Auto Insurance

Members can receive Lifetime Renewability from AARP® Auto Insurance Program from The Hartford.

Mature Woman in Her Garden

Members can convert their assets into guaranteed income for life with AARP Lifetime Income Program from New York Life.

AARP Visa Credit Card from Chase

Members can make a difference to help end hunger with the AARP® Visa® Card from Chase.

Member Benefits

Members receive exclusive member benefits & effect social change. Join Today

Being Social

featured
Groups

Hand holding credit cards

Pay Down Your Debt Challenge

Join others who are starting their debt-free journey. Discuss

savingchalleng

Savings Challenge

Have the gift of thrift? Share your tips.

Discuss