Thursday, February 5, 2009

Pulaski Bank Can Fix Your High Credit Card Rates

It can be mighty tempting to pounce on every 0% APR credit card offer that comes in the mail each week. But for those consumers who have grown tired of temporary credit card teaser rates, there is an excellent alternative in the Pulaski Bank Visa or MasterCard credit card.

Pulaski Bank, a relatively small bank headquartered in Arkansas, has successfully differentiated itself by offering the lowest fixed rate credit cards in the nation. Their business strategy isn't entirely altruistic, however. Rather, it is largely mandated by Arkansas state usury laws which prohibit banks headquartered in that state from charging over 10% interest. So, with that limitation in place, Pulaski Bank decided to take lemons and make lemonade. As a result, they have largely captured this particular slice of the credit card market.

The only caveat for consumers with this type of credit card product is that Pulaski Bank requires exceptionally good credit to qualify as a cardmember. This requirement is in place to protect their bottom line because they are operating on fairly thin margins with such low rates (currently 7.99% fixed APR). If Pulaski Bank did not maintain tight control on their credit underwriting, the losses would sink their bottom line.

But, if you are someone who has a squeaky clean credit record and a credit score of which you're unabashedly proud, this could be the ideal card for you. Of course, that is only if you need to occasionally "borrow" money at a low fixed rate. If you are someone who pays off your credit card religiously, then there are probably other options that would allow you to earn cash back rewards or airline frequent flyer miles to boot.

Fixed rates were a staple of the credit card industry in days past, typically 18% when Visa and MasterCard first started becoming widely used by Americans. But then, the concept of variable rates caught on with issuers and consumers alike. And this actually became a marketing bonanza for issuers, since they could then advertise "Prime" plus some small index, and only defining what the prime rate was in the fine print.

So, simply the fact that Pulaski Bank offers such an anachronistic product is boon for consumers, if for no other reason that they are up front with their pricing. Deciding whether it is the best option for you is just a matter of whether you have an appetite for the rate chasing game or like a sure thing.

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