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APR - Credit Cards and Loans?
Silky_Racing
Posts: 49 Forumite
in Credit cards
Morning guys,
I’ve got a question about interest rate I hope you can help me with…
Say I’ve got a credit card at 13.9% APR and that has a balance of £5,000. Does that mean over a year I will pay 13.9% interest and the total will be £5,695 after 12 months? What about compounded interest though? Is the interest worked out on a monthly/daily basis, so a days worth of £695 (£1.90) will be added everyday and then the next day the interest will be worked out on that?
If that’s the case a £5,000 loan at the same APR rate would be much cheaper, as that is a fixed total payable amount?
Cheers guys!
I’ve got a question about interest rate I hope you can help me with…
Say I’ve got a credit card at 13.9% APR and that has a balance of £5,000. Does that mean over a year I will pay 13.9% interest and the total will be £5,695 after 12 months? What about compounded interest though? Is the interest worked out on a monthly/daily basis, so a days worth of £695 (£1.90) will be added everyday and then the next day the interest will be worked out on that?
If that’s the case a £5,000 loan at the same APR rate would be much cheaper, as that is a fixed total payable amount?
Cheers guys!
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