Borrow money at over 500% via Barclaycard

captainzapp

Sure all you clever people know about this but I'll post it anyway.
If you get a cash advance via Barclaycard say £10, the minimum, and you happen to borrow the money on the day your Barclaycard statement is made up (mine in on the 10th of each month) so it is included on that statement then the charges are as follows: £2.50 handling fee and two blocks of £1 interest (their minimum charge) spread over two statements. That means you borrowed £10 for in effect one month (in reality just over) and the interest rate works out at 45% per month or over 500% annualised. And of course it hits those who can't really afford to pay i:e the poorest. Sure it is the same with other cards.

Scandalous!

grumbler

45% per month is in fact 850% APR, however ...

I don't see anything 'scandalous' and your calculations are absolutely wrong IMHO.
For Barclaycard Inintial with 2.075% monthly rate and 27.9% APR (I assume that 'poorest' don't have Platinum ...) £10 cash advance with £2.50 fee will cost only £7.40 (in fee and interest) after 12 months. This is only 74% APR and not '500% annalised'. Even if the interest is £1 p.m. the annual cost will be £14.50 (145% APR).

It is always a bad idea to draw cash from a credit card.

captainzapp

Fraid I disagree - if you get £10 cash advanced on your statement date by drawing out of a cashpoint machine then you pay £4.50 in charges if you pay off straight away - that is over the next two statements. In the cold light of day you've only borrowed the money for a little over a month and you have paid 45% interest. By my simple calculations that is over 500% per month (I know APR is calculated differently). I still say scandalous and so should you!