Charge for credit?

jen111

I am applying for a new credit card with 0% interest for a couple of balance transfers but on reading the agreement under all the blurb about apr rates it states...............

'Total charge for credit:

At the time the agreement is made, is £494.52
Comprising interest in the sum of £494.52'

anyone explain exactly what this may mean as it doesn't explain this in any way? Was a bit concerned that I may get a lump sum added to the account for the privelage of using their card.

gingercordial

I'm sure someone can explain it better than me, but don't worry, it's not a lump sum to be added. I think it's just a demonstration of how much interest you'd pay if you borrowed a certain amount (sometimes seen it as £1000 and sometimes as £1500) then repaid it over a certain time period at the card's normal APR (not including any 0% deals). It's supposed to help comparisons but I think it just makes it more confusing!

YorkshireBoy

It's the total interest payable if, following your 0% introductory period, you go out and spend £1,500* on one purchase and then repay it in 12 equal monthly payments.

As gingercordial says, it's supposed to make credit card comparisons easier.


* If the card company knows what credit limit they have given you (ie, it's a personalised, rather than a generic, credit agreement), they will use that figure instead.

jen111

Many thanks for the explaination