Santander APR on authorised overdraft of £12.01

cos_2

It's interesting to look at the numbers but they're meaningless in terms of APR. You're trying to use APR in a situation where it doesn't apply. Just because it's money it doesn't necessarily have an APR attached.

If I park my car in a car park I may buy a ticket for, e.g., £3. I don't come back within the time and end up paying a £10 surcharge. What's the APR on that little scam? Clearly, it isn't.

APR is a defined, legal term that doesn't apply to overdrafts no matter how often we try to work out equivalences. Which, I must admit, are interesting!

YorkshireBoy

smallbiznewbie wrote: »

And yes, I've opened an A/C with the coop, which charges something like 12% APR on authorised O/Ds...

The Co-op charge 15.9% EAR on authorised overdrafts but not for much longer...I've been notified by letter today that it's rising to 18.9% EAR from 6th August 2012.

Cell

cos wrote: »

It's interesting to look at the numbers but they're meaningless in terms of APR. You're trying to use APR in a situation where it doesn't apply. Just because it's money it doesn't necessarily have an APR attached.

If I park my car in a car park I may buy a ticket for, e.g., £3. I don't come back within the time and end up paying a £10 surcharge. What's the APR on that little scam? Clearly, it isn't.

APR is a defined, legal term that doesn't apply to overdrafts no matter how often we try to work out equivalences. Which, I must admit, are interesting!

Aye, fair point. But the whole argument of the Payday loan industry is that although they (theoretically) lend for only short periods of time they have to quote an APR.

If I borrow £100 off a friend for a couple of days, pay him back and buy him a pint to say thanks what's the 'APR' on that?

It's a purely academic argument, of course, but the problem, to me, is not that Payday loans charge a high APR but that they encourage easy to obtain debt and allow rollovers which are punitive.