Capital One total charge

Allan87

On my card agreement it says;

Total charge for credit:
At the time the agreement is made, is £257.78
Comprising interest in the sum of £257.78

What does this mean?

jamalfatty

There should be a bit more to this example of interest, I believe it is the total cost of borrowing £1500 over 12 months paid back in equal instalments, e.g. you would pay back £1757.78.
It's to give you an idea of how expensive the interest would be in real money rather than an APR

YorkshireBoy

jamalfatty wrote: »

There should be a bit more to this example of interest...

There is. It's explained fully in section 11 (3rd para).

Emsy1987

I am worried about this and still dont understand - i am using my card for the credit rating and he most i'll have on it is £10 ... would i have to pay £257 a year despite using it for this or nothing at all?

Emma

YorkshireBoy

Emsy1987 wrote: »

I am worried about this and still dont understand

Even after reading section 11 (3rd para) of your Capital One T&C's? (the answer is nothing at all if you clear your [£10] balance each month).

Emsy1987

Gimme a break :rolleyes: - it's my first credit card and im not sure of what is normal for the companies to say. Ive applied for it purely to increase my rating so will only be using it every few months for small amounts. I thought it might be an annual fee for getting the card or paying it before i even get it!?

Emma x

p.s. Thanks for the reply

YorkshireBoy

Emsy1987 wrote: »

Ive applied for it purely to increase my rating so will only be using it every few months for small amounts.

You would "increase your rating" far more by using the card every month.

When you repay your card on time each month, the lender places a '0' on your credit file (at the credit reference agencies). If you don't make a payment one month (because you haven't used the card the previous month), the lender has nothing to report so places a '?' or 'U' on your file.

Other lenders are looking for regular payments in the format 00000000000000000, which will show you are managing your account well.

If your report shows 0UUUU0UUU00????00UUU in won't look as good to other lenders (IMHO).

Stephen_Leak

Allan & Emsy: Well done for actually reading the T&C's (I wish more new bank and CCC customers did this) and, having found something you don't understand, finding this site and asking.

YB: Useful info'. Whilst my MS card was at 3% and my Cap1 card is at 4%, I didn't use my ASDA card for petrol. So, a "token" purchase and payment each month could be advantageous.

Redneps

I was also surprised about this, mainly due to the fact that it had no explanation arround it and it could easily mean a lot of things. So I phoned CapitalOne and even in the prerecorded section there was a message explaining this is just for example.

Karl.H_2

Yes, I have recently read it, and it's just an example. Don't worry, pay off in full, don't default, or withdraw cash, and you'll not be charged.

Emsy1987

Thank you all - that's helped me alot I will use my card each month as i've realised its best to do so and clear the balance asap! Ems x