What is a variable rate credit card?

A variable rate credit card is a type of credit card that has an interest rate that can change periodically. This rate is usually based on a benchmark such as the U.S. prime rate or the London Interbank Offered Rate (LIBOR). The rate will usually adjust when the benchmark rate changes, and is usually written into the cardholder agreement. In Montana, variable rate credit cards are regulated by the Montana Uniform Consumer Credit Code. This code provides general regulation and protection to cardholders. It outlines terms and conditions, including how often the interest rate can be changed and how much notice the card issuer needs to provide. It also details how the issuer can calculate and charge interest and late fees to cardholders. Furthermore, the Code outlines the obligations of the card issuer to the cardholder, including notification of changes and how disputes should be handled. Variable rate credit cards can be beneficial if the rates charged are lower than fixed rate cards. However, given the potential for rate volatility, cardholders should carefully read their credit card agreement and understand all fees, rates, and terms before applying for a variable rate credit card.

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What is a variable rate credit card?

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