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Question re interest rates

tryingtocutback
tryingtocutback Posts: 508 Forumite
Part of the Furniture 100 Posts Combo Breaker
in Credit cards
Hi Everyone

I have an Egg card with a balance of £4834.32 to pay.

The interest on the statement says "MERCHANDISE INTEREST AT 1.385 PER MONTH" but at the top of the statement it says "17.9% pa variable for purchases".

Can you explain what this means? I no longer use this card so I am just paying it off. I am just trying to work out how long it will take me to pay off but the interest is confusing me!

Thanks in advance.

Comments

  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    1.385% is the monthly rate of interest that corresponds to a yearly (APR ) rate of 17.9%

    so if you have a balance of say £1000 then you would expect to pay £13.85 in that month
  • tryingtocutback
    tryingtocutback Posts: 508 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Oh I see!

    The interest was around £70 last month (balance was £5383) so that makes sense.

    I have been paying the minimum so more interest than balance - Now I realise that I am definitely going to pay every extra penny off with one-off payments.

    Thank you so much.
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