Maybe a stupid question about Lloyds TSB CC's

Roysterfivenine

Hi, im new to this forum and thanks for reading.

Ive been reading the tips on credit cards and balance transfers and such and have decided to apply for a British Airways Amex card with a life balance interest rate of 4.9% and transfer my balance from my LloydsTSB Classic Credit Card to (hopefully) this BA Amex card.

After i applied i looked at the Lloyds TSB statement and saw this following message....

Your account monthly rate of interest is:
1.492% for purchases
1.496% for cash

Now for the stupid question. Is this the rate which governs my minimum payment? Because the last i read the classic TSB Credit card has an APR of 17.9% so surely 1.49% isnt the APR??

Im sorry if the question is very stupid, but i want to make sure just incase ive made a big mistake of applying for a balance transfer on a card which i thought was going to save me money (the 4.9% BA Amex), but actually isnt.

I hope this makes sense and if you have any questions just ask away

Thank you so much for your help.

.Roy

Cumbrian_Male

The rate you quoted from your statement is the MONTHLY rate and needs compounding to get your ANNUAL percentage rate ( APR).

I cant do the formula but someone will probably tell you how to work it out.

Also the thing with stupid questions is they are not stupid BUT the people afraid to ask them for fear of appearing stupid ARE STUPID as they end up getting it wrong and cost themselves hundreds of ££££££.

Welcome to MSE happy saving

YorkshireBoy

Your account monthly rate of interest is:
1.492% for purchases
1.496% for cash

Now for the stupid question. Is this the rate which governs my minimum payment? Because the last i read the classic TSB Credit card has an APR of 17.9% so surely 1.49% isnt the APR??

You're right - it isn't. 1.49% is the monthly rate.

The 'A' in APR stands for annual.

You will pay 1.492% per month interest on your purchases balance. When this is 'compounded' up for the year, it works out at 17.9%.

You need to compare 4.9% with 17.9%, ie compare the APR's.

Roysterfivenine

Thanks guys.

Actually after submitting the email and going back and thinking about it, it suddenly struck me that it was maybe the monthly amount but thanks alot for confiming it for me

*phew*

Thnaks again

.Roy