Credit Card Newbie - Few Things

24_bauer_24

Morning All,

Just after a bit of advice if possible...

I've never had a credit card before, have always paid for everything through Bank/Debit card - dont have any issues with overspending or going overdrawn.

Have a few big purchases coming up in the next few months, so am quite attracted to the AMEX 5% cashback card for obvious reasons

Just wanted to clarify that I understand the concept of it fully before I commit:

If I pay off the card in full every month i'm not subject to the APR rate?

Also have seen it says that spending is charged at 14% - may sound like a really stupid question, but what is this charge applicable to and how does it differ from APR?

Any help will be greatly appreciated.

Cheers
Tom.

[Deleted User]

If you clear in full each month, you'll pay no interest.

Don't know what you mean re spending is charged at 14%. What exactly does it say?

As you have little credit history, bear in mind that you may not be successful with getting the Amex.

24_bauer_24

Thanks for the reply.

Meant to put a link in to that - d'oh!

Rate: 18.7% representative APR incl £25 fee - spending is charged at 14%

Interest rate for purchases: 14.0% p.a. variable


That thought had crossed my mind, I have done the pre-check thing and have come out at 90% probability, so fingers crossed

[Deleted User]

Ah - it's the fee that takes the rate up to 18.7% in the representative APR. It's a regulatory thing.

So 14% effectively is the APR you pay on your balance.

Wywth

To clarify, the representative APR takes into account the £25 you are charged. (It should state the assumed lending amount to calculate the APR)

14% is the interest you will pay on the amount you borrow.

But as stated, you will not pay any interest if you pay the full amount off every month on time.
This only applies to purchases, not cash advances.
And you will have to pay the £25 fee even if you do pay the balance amount off every month.

JakeGreen

24_bauer_24 wrote: »

Rate: 18.7% representative APR incl £25 fee - spending is charged at 14%

Interest rate for purchases: 14.0% p.a. variable

Remember that they may not offer you the 14% interest rate.

If you clear the balance every month then you won't have to pay any interest apart from withdrawing from an ATM.

But try not to withdraw from an ATM using a credit card. It's expensive and it hurts your credit score.

You'll get 5% cashback on all your purchases. The cashback is paid out on the anniversary of your account.

24_bauer_24

Fantastic, understand now, consider that cleared up

Thanks guys, much appreciated.