The Pros and Cons of Fixed-Rate Plans
Are you on the hunt for new energy plans?
If you live in Texas, you have the power to choose your energy plan because Texas is a deregulated state. And odds are if you are searching for a new energy plan, you have come across the fixed-rate plan.
These plans are really popular for a lot of good reasons. But it is important that you know what you are getting yourself into before taking our word for it. You need to know if this type of plan works for your budget and family’s energy usage.
About Fixed-Rate Energy Plans
A fixed-rate energy plan is simply a type of energy plan where the customer pays a fixed price for their electricity each month.
Sometimes this price is different than the current market rate, and sometimes it is exactly equal to the current market rate. To compare plans, you’ll need to know how they each will affect your budget and usage over time.
Some people shy away from fixed-rate energy plans because they feel like there can be a high risk of getting stuck with a high bill if they cannot manage their energy usage. This is actually not the case! Fixed-rate plans are very flexible and can change as you go along so that it is easy to avoid surprises on your bill.
These plans are usually the best choice for people who want to know exactly what they will be paying in order to make their budget. This is also a good plan for families who go through wildly different seasons of energy usage and would like to adjust their plans accordingly.
The Pros of Fixed-Rate Plans
1. Predictable monthly bills:
When you’re on a fixed-rate plan, you know exactly what your bill is going to be each month. This can be helpful for budgeting purposes.
2. Protection from price hikes:
Fixed-rate plans protect you from sudden price hikes, which can happen when you’re on a variable rate plan.
3. Easy to understand:
Fixed-rate plans are typically very easy to understand. There aren’t any surprises with these plans, which is why they’re popular among consumers.
The Cons of Fixed-Rate Plans
1. Can be inflexible:
If your needs change (you need more or less data, for example), it can be difficult to switch to a different type of plan. This is one reason why we recommend variable rate plans: they allow you to make changes according to your needs and budget at the time.
2. Could be higher than market rates:
As mentioned above, sometimes fixed-rate plans are found at a higher price than the market rate. If you’re looking to save money, this might not be the right plan for you.
3. Lock in rates:
Fixed-rate plans lock you into a fixed rate for the term of your contract, which could be months or years depending on how long it takes you to pay off your credit card or other means of payment. This means your rate can be higher than the market price of credit card interest rates happen to go up in the meantime.
If you are interested in learning more about fixed-rate plans, visit our Energy Outlet home page and enter your zip code to find out more information about the fixed-rate plans in your Texas city.