Can you decipher this for me please? (minimum repayment)

matt8787

Hi

Can someone decipher the following minimum payment text for me please:

'Interest, default charges and any payment protection insurance premium plus 1% of the principal, or 2.5% of the balance or £5 whichever is highest, or your statement balance if less than £5.'


So, on the basis of:
- £1,000 balance
- 0% interest rate


Would the minimum monthly payment be £10? (e.g. 1%)
or £25? (e.g. 2.5%)

thanks

[Deleted User]

£25. .

LuSiVe

£25.......

Anthorn

matt8787 wrote: »

Hi

Can someone decipher the following minimum payment text for me please:

'Interest, default charges and any payment protection insurance premium plus 1% of the principal, or 2.5% of the balance or £5 whichever is highest, or your statement balance if less than £5.'


So, on the basis of:
- £1,000 balance
- 0% interest rate


Would the minimum monthly payment be £10? (e.g. 1%)
or £25? (e.g. 2.5%)

thanks

That's confusing: The principal is the amount charged to the card which is also the balance unless there are two charges one covering the balance and one covering new additions to the balance. In the latter case for example you charge £100 (principal) to the card with £1000 balance so the charges are £1 plus £25. But don't quote me on that ROFL.

Cornucopia

Isn't it effectively saying:

The highest of:-

- 2.5% of balance, if there is one.

- or 1% of new transactions (if there's no balance)

- otherwise, £5

Nebulous2

It's trying to make sure you never end up in more debt at the end of the month.

For example If your £1000 includes £18 of interest and a £12 late payment fee, then using the 2.5% (£25) option means you have fallen behind that month, without buying anything further.

They would then charge you £12 fee + £18 interest + £10 (1%of £1000) = £40