The credit card issuers have to follow interest rates set by the Federal Reserve, so when the Fed’s start cutting interest 
rates, who do you think benefits most? Definitely not the card providers issuing credit cards with variable rates! As the prime rate decreases, credit card companies have to decrease their variable rate cards as well – and they don’t like to receive less interest than they had planned when lending their money!
When credit cards are issued with a fixed interest rate, credit card issuers know exactly how much interest their fixed rate cards will generate, and they can legally set the rate and regulate it on their own. Fixed rate credit cards are not affected by the Federal Reserve’s prime rate. Many credit card lenders have resorted to switching their variable rate interest cards to fixed rate interest cards.
Several credit card companies have changed their variable rate cards to fixed-rate cards. If the prime rate continues to stay where it is, or drops lower, then many consumers obtaining credit cards are likely to be offered fixed-rate cards.
Fixed rate cards are usually set at higher rates than variable interest cards – so at first glance consumers might hesitate when applying. The nice thing about fixed rate cards though, as far as consumers are concerned, is that they know what the interest rate is going to be regardless of what’s happening in the economy around them. Also, consumers with fixed rate cards will not be in danger of having a big increase in their interest rate should the Federal Reserve decide to increase the interest back to more “normal” levels. Variable rate consumers enjoying a lower credit card interest rate at the moment may be in for a shock when their interest rate (and monthly minimum payment) skyrockets when the prime rate goes back up.
While declining, there are still variable rate credit cards among many different credit card lenders. You can get a card now with low variable rates, but there is nothing that says your rate won’t double or more when the economy recovers.
Is a fixed rate card better than a variable rate interest card, then? A fixed rate card should offer stability so you’ll know exactly how much interest you’re paying for the life of your balance, right? With a good credit score, you can often get a fixed rate of 9% or lower – although the lower fixed rate cards are much harder to qualify for during our current economic climate. Unfortunately – even fixed rate credit cards are being changed currently by a number of lenders who claim there are provisions in the terms and agreements of the card that “reserve the right to change the interest, any time, for any reason”. So while it’s true a fixed rate card is not tied to the fluctuations of the prime rate, it’s also possible that the credit card provisions allow the company to change that fixed rate to anything they want, anyway.
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