Interest Rates?!

Staciep88

Hiya,

just a quick question as Im a little bit confused of what the interest rate is on OH's credit card:

On the statment it says;

Interest on Cash Balance - 2.207% - £4.50*
Interest on Standard Balance - 2.207% - £79.50*

*these are the exact figures (£'s) as I cannot remember off the top of my head

But but does this make the APR 26.484% or have I completly missed the point?

lrr_2

Staciep88 wrote: »

Hiya,

just a quick question as Im a little bit confused of what the interest rate is on OH's credit card:

On the statment it says;

Interest on Cash Balance - 2.207% - £4.50*
Interest on Standard Balance - 2.207% - £79.50*

*these are the exact figures (£'s) as I cannot remember off the top of my head

But but does this make the APR 26.484% or have I completly missed the point?

Yeap thats what it means im afraid _pale_

Staciep88

Thanks, was hoping it was wrong but lol there you go! Thanks again!

NickX

Staciep88 wrote: »

But but does this make the APR 26.484% or have I completly missed the point?

Actually I think your APR is 29.9% :eek:

Staciep88

oh god - how did you work that out?

dhassen

compounded interest isn't it? Not sure how you work it out but it isn't 'monthly rate x 12'

NickX

Staciep88 wrote: »

oh god - how did you work that out?

Yes it is Compound Interest :

((1.02207 ^ 12) -1) * 100 = 29.9% APR

Just multiplying by 12 is Simple Interest, but the APR is a compounded figure.

dhassen

Cheers Nick. I didn't realise, but this week's email contains a link to an article on interest rates and this exact thing. There's an interest rate converter tool below the middle of the article. http://www.moneysavingexpert.com/banking/interest-rates

Nice one