Credit card question - sorry to sound so dumb!!

[blush09]

i have never had a credit card and was thinking about applying one for emergencies ..
sorry is this is a dumb question but:
is the apr the interest you pay over the year or with each monthly bill?
ie. if you owed 1k and the apr was 20, would you pay £200 averaged out over the whole year ?

 

[jonailtech]

hi hon apr stands for annual percentage rate, but make sure you check interest rates too and compare different credit card companys.. example if you borrow 10,000 and APR is 9percent after one year u will owe an extra 9percent on top of what you borrowed so you will owe an extra 900pounds if you borrowed 10,000..

 

[tog]

i have never had a credit card and was thinking about applying one for emergencies ..
sorry is this is a dumb question but:
is the apr the interest you pay over the year or with each monthly bill?
ie. if you owed 1k and the apr was 20, would you pay £200 averaged out over the whole year ?

Try and get a 0% interest one. If you look on a site like moneysupermarket.com you can find out who's doing those right now, and for how long the interest free period lasts.

 

[Ruth Mills]

Yes, the APR is the annual interest on the card; e.g. I have a Visa card where the APR is 16.9% but the monthly interest is 1.313% per month.

Usually, if you pay the entire statement amount off in full each month, then there should be no interest to pay.

And if you borrow on the card, you'll only pay interest in the months that you don't pay the entire balance off in full.

Be warned though, if you buy stuff on the card but don't pay off the full balance, then it can still work out expensive. e.g. if you buy something worth £1,000 on the card, but pay off £999 of that, leaving £1 left on the card, you'll still be stung with a large amount of interest; the bank will charge you interest on the £1,000 on a daily basis from the time the payment was debited from your card up until the time you paid them £999!

I'm a big fan of Martin Lewis' Money Saving Expert site, Money Saving Expert: Consumer Revenge - Credit Cards, Shopping, Bank Charges, Cheap Flights and more - be sure to check that out for the best deals on credit cards and cheeky tricks to stop the banks ripping you off too...