Capital One Platinum Card Help Please

danuk

Hi i have just applied and am waiting for my Capital one platinum card.

My question is i am doing a number of balance transfers off two/three cards on to it ( if limit enough ) as it is 5.9% for life of balance. I have just realised however that it says 5.9% for life of balance BUT it also adds the words VARIABLE after the 5.9%.

Should i be worried about the variable part, it says something about base rate following. Just want to pay my debt off and this looked to be the best way,



Any help would be appreciated.

Thanks

Martinslovechild

According to the T&C's on the Capital One website, the monthly interest rates are equal to one twelfth of the sum of the Base Rate as at the seventh day prior to the beginning of the statement period, plus for purchases a margin of 1.03%.

Therefore, the card works in a very similar way to a Tracker Mortgage. The BOE Base Rate is currently 4.75%. Add 1.03% to this which gives you 5.78%, equal to an APR of 5.9%.

If the Base Rate increases by 0.25%, your rate would increase to 6.15% and so on. Many financial analysts predict maybe one more base rate increase of 0.25% before we hit a maximum, so I wouldn't be too worried about the rate going through the roof.

imported_TinCan

Just replying via another user name i set up for work email as i wanted to log on from home and work and set it up before i realised.

Anyway... Thanks a lot for the advice

They have been great so far and i was worried about the vaiable part but you have put my mind at rest. They offered me a good credit limit too, well once its in writing ill believe it but it sounds good.

Time to sit back and wait for the new card

Thanks again.

danuk

Hi,

One last questions but i jsut noticed on their web site the words "Typical 12.9% APR variable"

What does this mean?

IS it they can set it at that if they wished too, but they would tell me. Or is it something else. ITs for the platinum card.....

Thanks

Martinslovechild

The 5.9% Life of Balance rate is offered just for the first 6 months, i.e. as long as you transfer a balance during that time, the rate is 5.9% for as long as it takes you to pay off the BT.

After 6 months, both the BT rate and purchase rate revert to a higher rate, 12.9%. Credit card companies have to quote the typical APR rate for a card excluding any introductory deals.

Be very careful that you don't spend on this card.  Monthly payments are usually credited to the card according to the lowest rate first up to the highest rate.

I say this because there is 0% for 6 months on purchases, which looks very tempting.  However, let's say that you're offered a £10K limit and you transfer £5000 BT's and spend £5000.  The BT is 5.9% and the purchases are 0% initially.  A minimum monthly payment of 3% would hit the 0% proportion first while the BT wouldn't be hit at all until you've paid off the entire £5000 of purchases, thereby maximising the interest charges on the BT proportion.  Assuming you only pay the minimum 3% each month, then after 6 months, the 0% purchase rate would expire and purchases would automatically move onto the 12.9% rate while the BT remains at 5.9%.  Now, following the rules mentioned earlier, payments would then hit the BT first (because it's now the lower of the 2 rates) and the purchases would be accruing interest at 12.9% and not be chipped away at all until the £5K BT is paid off in full !!

In summary, it will be far better to treat this card as a BT-only card and never be tempted to use it for purchases.

imported_TinCan

GReat fully understand it now, i will only be using it for BT anyway.

THanks a lot