Can you help me work out the minimum repayment please?

leestafford

Hi,
If I use my virgin money credit card to transfer £5,700 into my current account..
Annual interest rate is 19.17%

From my statement I am informed...

Each month you must pay at least the minimum payment in pounds sterling, shown on your statement. This will be the greater of:
£25, or the whole balance shown on your statement if it is less, or
the interest and any default charges and annual card fee, plus 1% of the remaining balance.

This means nothing to me but I know £25 per month wouldn't cover the interest.

Any idea how much I'd pay back monthly or where I can find out?

Thanks in advance.

Paul_1977

Just used a calculator, to pay it back within five years, its £148 a month.

10 years = £107 a month.

I think paying it back within a few years is much better.

Within two years it would cost £287 a month.

YorkshireBoy

19.17% is the annual non-compounded rate, so the APR is 20.9%.


Your monthly rate is 19.17% / 12 = 1.5975% (you'll find this on your statement).


One month's interest is therefore £5,700 x 1.5975% = £91.06


1% of the balance is £57


Monthly minimum repayment is £148.06 (or thereabouts) at the outset. Obviously this will reduce with time.

leestafford

leestafford wrote: »

the interest and any default charges and annual card fee, plus 1% of the remaining balance.

Thanks in advance.

1% would be £57 but
what does "the interest and any default charges and annual card fee" mean?

I put it through a calculator online and it said £57 is less than the interest

SeduLOUs

Interest about £90 per month, 1% of balance £57. Minimum payment roughly £150 until your balance starts reducing (which it won't by much if you only make minimum payments).

SeduLOUs

leestafford wrote: »

1% would be £57 but
what does "the interest and any default charges and annual card fee" mean?

I put it through a calculator online and it said £57 is less than the interest

The interest is calculated monthly, but is based on an annual charge at your agreed APR (the 19% figure).

Your terms say that your minimum payment is 1% of balance PLUS whatever interest has been charged for the month.

If you miss a payment and get a charge for doing so then this will also be added onto the minimum payment next month.

Annual card fee means the annual fee you pay for the card will also be added onto the minimum payment - I don't know how much this is but you should?

YorkshireBoy

I didn't factor in the MT fee in my post above, so your MT balance isn't £5,700, it'll be around 4% higher at just over £5,900.

leestafford

A big thank you.

leestafford

> Money Transfer transaction fee: 5.00%, min: £5.00

So I guess that's 5% of £5,700 = £285

and a new balance of £5,985.

I'm still not sure how to work out the interest but I know you do!

YorkshireBoy

leestafford wrote: »

I'm still not sure how to work out the interest

Why not? I've already given you the formula above. It's a simple calculator button press...isn't it? Use the windows calculator:


5
9
8
5
x
1
.
5
9
7
5
%


and the answer given is 95.61 isn't it?

leestafford

yes, I just didn't press the % button so it went pear shaped.

Anyway, objective achieved & thanks for your help