Accepted for card, query with Capital One T&C

TheBlueSaint

The following is in the small print:

Total Charge for credit:

At time the agreement is made, is: £257.78
Comprimising interest in the sum of: £257.78

This isn't a one off security deposit is it?

YorkshireBoy

They try to explain it further down the T&C's in section 11...

In calculating the APR and Total Charge for Credit we are required by law to assume that:

• the credit limit will be £1,500 unless we know the credit limit when this agreement is made, in which case we will use that credit limit;
• the credit is provided for a period of one year beginning with the date of the agreement;
• the rate of interest payable in relation to the whole of the credit under this agreement is that applying to purchases;
• and that the credit is repaid in twelve equal monthly instalments, beginning one month after the date of this agreement.

Total Charge for Credit is an illustrative figure that lenders are required (by regulation) to provide, so that the customer can compare credit deals on a like-for-like basis.

It's based on the following...

Ignoring any introductory (eg 0%) rates, if you were to spend your entire credit limit (or £1,500 if they don't know your limit when they provide the figure) on a single purchase, and then pay it off over 12 months with EQUAL monthly amounts, then the total charge for credit would be the total amount of interest paid over the 12 month period.

TheBlueSaint

Thanks YB, didn't realise it was only an example.