Capital One Classic Confusion

Misty_Blue

Hi everyone,

I recently applied for a Capital One Classic Visa, with the intention of using it to rebuild my credit rating. The agreement arrived today, and I intended to send it back later. However, there is one part of the agreement that is confusing me, and I thought I'd ask for clarification here before trying the notorious Capital One premium rate foreign call centre!

The section reads like this:

Total Charge For Credit:
At the time the agreement is made, is £257.78
Comprising interest in the sum of: £257.78

and that's it in its entirety. I might be being really dense here (back in the day I used to just sign anything and never read it ) but it almost sounds like they're going to charge simply for giving me the card. That can't be right, surely?

And help appreciated.

NickX

No, don't worry about this - it is just an example to demonstrate the interest you would pay over the course of a year if you borrowed a certain amount. The CCA (Consumer Credit Act) dictates that this has to be shown There is no fee to simply hold the card, so no problems :beer:

Misty_Blue

Great to know, thank you. :T

YorkshireBoy

Misty_Blue wrote: »

...and that's it in its entirety.

Many people see this figure, gulp(!), and don't read on to see the explanation.

The very next paragraph says...

See section 11 for assumptions for total charge for credit...

...and section 11 says...

In calculating the APR and Total Charge for Credit we are required by law to assume that:

• the credit limit will be £1,500 unless we know the credit limit when this agreement is made, in which case we will use that credit limit;
• the credit is provided for a period of one year beginning with the date of the agreement;
• the rate of interest payable in relation to the whole of the credit under this agreement is that applying to purchases;
• and that the credit is repaid in twelve equal monthly instalments, beginning one month after the date of this agreement.

skyrider007

Don't worry it's just an illustrative.