Working out what APR actually means?

stevus_uk

You'll have to forgive a simple question like this, but I wanted to know what APR actually means in terms of payments etc. so I can work out the best deal for me - not just in my example below, but generally so I can use it moving forward.

I have 2 overdrafts which cost about £85pm between them in fees and interest. I've looked at some options to do a money transfer to a "lifetime of balance" card which charges 6.9% APR. Does that mean cheaper payments per month or not?

Sorry to ask such a simple question - hopefully someone can enlighten me?

happy_bunny_2

Probably. Most ODs are 15% up and with other fees. Depends on your bank. What's the OD balance?

~Beanie~

Depends of the interest rate being charged on your overdraft/s. If its higher than 6.9% APR then the balance transfer will be cheaper!

Tixy

To work out if its cheaper you need to consider the cost of the money transfer fee as well as the APR for the cc option.

Then compare that to the interest & charges you would pay if you stick with the overdraft.

You'll then need to work out how long it will take you to clear the debt, i.e. what is the starting balance and how much can you afford to repay a month.