Panicking, Apr going up to 20% next month!

Stephjade86

Hi guys, I am new on here. I have a Virgin credit card which I used for a balance transfer of 900 and I used the remainder of the credit to pay off my very account. The total is £1850 on my Virgin card at the moment. The Apr goes up to 20% next month. I am freaking out as I thought it was 0% on everything for 24 months. Does this mean it will be 20% Apr on the full £1850? Or any future purchases as of next month?.
Thanks 

ThisnotThat

It depends on the card you have.

Only the all-rounder card offers long 0% balance transfers and purchases. The normal balance transfer card only offers 0% on purchases for 3 months.

Stephjade86

Hi, thank you for replying. I have rang virgin up. So it would be 20% Apr on £900. I really don't know how apr works, would it be 20% of £900 for the minimum payment? 
Thanks again

eskbanker

Stephjade86 said:

I have rang virgin up. So it would be 20% Apr on £900. I really don't know how apr works, would it be 20% of £900 for the minimum payment?

APR is the Annual Percentage Rate, so £900 at 20% would incur £180 of interest over a year, or £15 a month.  The minimum repayment won't just be the interest though, there'll be an element of balance clearing too, as there presumably has been all along so far?

Ebe_Scrooge

Stephjade86 said:

Hi, thank you for replying. I have rang virgin up. So it would be 20% Apr on £900. I really don't know how apr works, would it be 20% of £900 for the minimum payment? 
Thanks again

APR is basically the interest charged per year.  So 20% APR means you'll be charged 20% of £900 every year.  To convert to monthly, divide by 12.  20% divided by 12 is 1.67% per month, which equates to roughly £15 per month in interest.  This will reduce each month, as each month you'll pay off the £15 interest plus a bit of the capital.

That's a bit rough & ready, but it's near enough to give you a guide.  Each month the statement will tell you what next month's interest will be if you only pay the minimum amount.

Stephjade86

Thanks guys, I was panicking so much. Minimum payment has been £25 so far. It's such a relief. I'm wondering if it would be worth transferring the £900 on to another 0% card? The one I am eligible for is 0% for 6 months then 34% Apr after 6 months.
Thanks again 

Vinknut

Your minimum payment will be 1% of the TOTAL balance plus the interest charged on the £900 per month.
Presumably you will already have been paying at least the minimum which would be £25 as I think they have a minimum of £25.
Your new minimum payment will be about £33.50 (1% of 1850 + 1.67% of 900).

Please bear in mind that if you only pay the minimum it'll take over 4 years to clear the balance, and after 18 months making the minimum payments you'll get a letter asking you to increase your payments or discuss options, as per the "persistent debt" rules.

jay1804

Only if you will be able to pay it off before the 0% finishes. Also there's a chance you won't get an high enough limit

Stephjade86

Thank you all so much, it means a lot 🙂