APR question

skyranger

Hi all

Might sound like a silly question, but I have a Virgin credit card which has 0% on all new card purchases till 10th December and 0% on balance transfers till 9th December when it bumps up to 17.9%

I've performed both on this card and have about £500 left on the account and don't intend to use the card again.

My question is after the 10th December, will the APR of 17.9% be backcharged to my £500 so I will then have £89.50 added to my debt. And if I paid off the card completely by say 10th January - would I have to pay that extra £89.50 or just a months worth of the £89.50?

bengalknights

You will pay a months worth of interest

Hominu

My understanding is that if you pay off before the end of the interest free period, you will pay no interest whatsoever, otherwise you will incur interest from the date of the transaction, but check your card T&Cs, which will describe in more detail.

chattychappy

Hominu wrote: »

My understanding is that if you pay off before the end of the interest free period, you will pay no interest whatsoever, otherwise you will incur interest from the date of the transaction, but check your card T&Cs, which will describe in more detail.

Not quite. If you don't pay off the balance in full by the due date on the statement, you pay interest from the date of transaction. BUT, that interest rate is, of course, 0% until the end of the offer period. (So less of a "gotcha" than in the normal case where you lose your up to 56-days interest free period on all transactions just by failing to pay the balance in full by the deadline. No "back charging" as the standard rate.)

In this case, pay the balance back ONE day after expiry of the offer - then it's ONE day's interest.

On the figures given, the OP would pay about one month's interest. Once beyond the expiry date, then it's best to pay as much as you can as soon as you can, even if this means multiple payments in the month. Watch out for the interaction of manual payments and DDs (if one is in place) and residual interest. (Ie after paying the balance in full, there will likely be a small amount of interest on the following statement.)

guesswho2000

Hominu wrote: »

My understanding is that if you pay off before the end of the interest free period, you will pay no interest whatsoever, otherwise you will incur interest from the date of the transaction, but check your card T&Cs, which will describe in more detail.

Promo balances don't incur interest for their duration, it only begins to accrue from the day the offer expires, or is removed due to breach of T&Cs.

A standard purchase balance is generally not interest free, rather the interest is waived if the balance is cleared in full, hence they accrue interest at the standard rate from day one, but it is only charged if the balance isn't cleared in full.