Advice on APR

ihavenoidea

Hi, I'm after a bit of advice with regards to a credit card I have. I've recently re-financed to consolidate some debt and do some home improvements and I have money in my current account waiting to clear a couple of cards.

One of the cards is puzzling me a little bit... Because I tend to use an app to manage the card, I'd no idea what the APR was on it (sorry, I realise how naive that makes me!). I did think though, that the minimum monthly payment and interest looked really low...

On a balance of £7135 the minimum monthly payment is £80.69, and the estimated interest next month is only £8.37.

This seemed too good to be true until I've looked at the statement which states 'This month's interest on standard purchases is based on the simple annual rate of 1.530%'.

Is this normal? I'm now wondering whether they've made an error and will be coming to me to try and get more money back.

I'm even wondering whether I'd be best keeping the money I've got to clear this card in an ISA or something and paying it off monthly.

Any advice really appreciated.

grumbler

ihavenoidea wrote: »

On a balance of £7135 the minimum monthly payment is £80.69, and the estimated interest next month is only £8.37.

This seemed too good to be true until I've looked at the statement which states 'This month's interest on standard purchases is based on the simple annual rate of 1.530%'.

Is this normal?

1.53% is a surprisingly low interest rate for a CC. Can you check older statements to make sure?

I'm even wondering whether I'd be best keeping the money I've got to clear this card in an ISA or something and paying it off monthly.

ISAs are far from being the best savings accounts nowadays. You can get up to 5% gross interest on a limited balance with some current accounts and up to 6% with regular saving accounts.

MSE articles:

• Cash ISAs
• Top Savings Accounts

However, it hardly makes sense to 'consolidate' and 'refinance' for paying off a CC with ~1.5% rate or for putting the borrowed money into a savings account. Can you not pay back what you borrowed instead?

ihavenoidea

grumbler wrote: »

1.53% is a surprisingly low interest rate for a CC. Can you check older statements to make sure?

It was an old paper statement I checked earlier, however I've just logged onto the full website (rather than the app) and looked at several PDF statements and they all say the same.

You're right though, it seems too low to me so hoping they've not made an error and don't want to backdate interest.