For credit card accounts, the term “fixed rate” usually does not mean that the rate can never be changed over the life of the account, although there are important limits. Starting February 22, 2010, credit unions cannot advertise a rate as fixed unless the ad also says how long the rate will be fixed and that it won’t increase during that period.

In general, if you opened your account on or after February 22, 2010, the credit union cannot change your fixed rate for one year after the account was opened. There are exceptions to the general rule. For instance, if you agreed to an introductory rate that ends after six months or more, or if you are more than 60 days late in making a required payment on your account, the credit union can increase the interest rate that applies to your existing balances and new transactions.

If you opened your account before February 22, 2010, the credit union does not have to wait 12 months to raise your interest rate for new transactions.  However, regardless of when you opened your account, the credit union usually must give you 45-days advance notice in writing before the interest rate change goes into effect.

After the interest rate change goes into effect, the credit union can apply the new rate to transactions that occur more that 14 days after it sent you the 45-day advance notice.  The old interest rate will apply to transactions that occurred before that.  There are also important limits on how quickly the credit union can require you to pay off the existing balance when it does this.

If you wish to avoid the interest rate increase, you should consider contacting the credit union to close your account or not using your card for further transactions.