Help With Working Out APR!

southernscouser

OK, please bear with me as it gets messy and confusing!

When I got my Captial One card I'm pretty sure I was offered 3.9% for the life of balance for transfers.

Did this. No problems. However, stupidly I transferred money outside of the offer period and am not sure what I'm paying.

Could someone please take a look and tell me a) what rate I'm paying for the outside the offer transfer and b) what APR I'm paying on a whole.

Payment received = £242.81
Blance Transfer Interest = £19.66 @ 0.323%
Purchase Interest (transfers outside offer period) = £18.95 @ 1.039%

New Balance = £7,889.77

Thanks very much.

grumbler

If no debt was added to your account during last month, than your old balance had two parts:

19.66/0.323*100=6087
18.95/1.039*100=1824
6087+1824=7911

All your payments now go towards the first part with lower APR.

If the above assumption is wrong, more information is needed to calculate different parts of the balance more carefully.

southernscouser

I understand that the first bit gets paid first but how do I work out the APR's. Do I just multiply the monthly rates by 12 and how do I work out the average APR I'm paying for the 2 together?

southernscouser

Robert_Willing wrote:

You certainly do not multiply the monthly rate by 12 to get the APR..
You probably do not really want the APR you want the AER which may be the same as the APR or less than the APR.
You do not multiply the monthly rate by 12 to get the AER either.

What do I do then?

greenwich

southernscouser wrote:

What do I do then?

You can work it out to a pretty good approximation as follows:

Take the monthly rate, e.g. 2%
Divide by 100, in this example you get 0.02
Add 1, in this example you get 1.02
Do a "power of 12", i.e. multiply it by itself 12 times, in this example you get 1.2682
Take away 1, in this example you get 0.2682
Multiply by 100, in this example you get 26.82
That's your answer as a percentage.

You could also try asking the bank, though if you get through to someone clueless they could tell you anything.

Rafter

If you have access to microsoft excel or similar enter the following

=(1+0.323%)^12-1 = 3.9%

and

=(1+1.039%)^12-1 = 13.2% (probably 12.9% rounded up or something)

The average rate you are currently paying is about 6% and as grumbler points out this will rise towards the ~13% rate as your low rate BT is paid off first.

R.