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Annual Purchase Rate

I was looking at my credit card statement online today, and I saw "Annual Purchase Rate 12.40%". Now, I always pay for any amount I've used on the card straight away, so when the monthly statement arrives, it always says I've £0.00 to pay. For example, if I buy something costing a fiver from Amazon, I go into my banking straight away and pay the £5 to my credit card company. I've never had to make an interest payment.

So what is this Annual Purchase Rate thing? Does it mean I'm going to be paying 12.4% on everything I've bought on the card over the past year? Will I avoid paying it because I pay the card off in full all the time?


  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    You won't pay anything. The APR is charged on money you don't pay off.

    But - and please don't take offence - you should probably take a read of your terms and conditions so you know what a credit card is and how it works.
    CLAPTON Posts: 41,865 Forumite
    Combo Breaker First Post
    there is no need to pay off the amount of each purchase immediately

    you will get charged no interest if you pay the amount on the monthly statement before the date that is specified

    the APR is the rate you would get charged if you did not pay the bill within the permitted time.
  • Solomon_Broad
    Solomon_Broad Posts: 407 Forumite
    you should probably take a read of your terms and conditions so you know what a credit card is and how it works.

    You're probably right. :rotfl:

    I try to pay off the purchases right away so that I never spend more on the card than I have available in the bank. I like to keep track of where money is going, and I find it so easy to just spend and spend. At least this way, I know where I stand and how much I have left.
  • Jon_B_2
    Jon_B_2 Posts: 832 Forumite
    First Post
    Most cards have an interest free period. On my Halifax card I don't get charged interest for the first 59 days after a purchase.
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