halifax classic credit card

kiliansmummy

ive been on halifax website reading up on credit cards and it says ths is the best 1 if this is your first credit card which in my case it is i was reading the terms and conditions that come with this card and i saw this

".1 The total charge for credit is £209.92, consisting of £209.92 interest. This is based on credit of £500 being borrowed at the start of the agreement over one year at the standard interest rate for purchases set out in condition 3.2 below and repaid in equal monthly instalments beginning one month after the start of the agreement."

it started with the heading other financial information

can anyone tell me what this means?? does it mean that even if i dont use my card that ill still have to pay them that money??

am so confused i want the right credit card for me at no costs if i dont use it. is that possible???

YorkshireBoy

It's purely an example of the cost of borrowing, and is required by legislation to be provided in all sales material so that the consumer can compare products on a like-for-like basis.

Each line should really be prefaced with an "if", ie

If your interest rate is the typical one quoted, and
If you spend £500 on one item, and
If you then repay it over a year, and
If each payment is 1/12th of the amount spent, and
If the first payment is made one month after purchase...

then the total interest paid (ie the 'total charge for credit') will be £209.92

BTW, are you sure it's based on £500? If it is, that's a very high interest rate indeed. The figure normally quoted is £1,500

kiliansmummy

okay thanks for that.

to answer the question you asked me it says £500 i don't know
i wouldnt be intending to use the full £500 anyway altho i just wanted to know what it meant.

what is the normal interest rate for £500??

i feel so stupid i havent got a clue

YorkshireBoy

kiliansmummy wrote: »

to answer the question you asked me it says £500 i don't know
i wouldnt be intending to use the full £500 anyway altho i just wanted to know what it meant.

You were correct, it is shown as £500. It's just that lenders' standard figure for 'total charge for credit' illustration purposes is normally shown as £1,500. Strange that they quote £500 when the max credit limit available on this product is £2,000.

what is the normal interest rate for £500??

The typical rate is 27.9% APR. I say 'typical' because you're not bound to get that rate. Yours could be higher (or possibly lower), but 66% of those accepted for the card must be given the typical rate (or better).

i feel so stupid i havent got a clue

Then I suggest you spend some time reading Martin's credit card articles for the basics.