Is 6.9% Per Annum Alot Of Money

[phleb]

on a £1600 balance on a credit card? How much is that per month?

[craft1948]

110.40

[craft1948]

The the next month if you haven't paid any off it's another 118.01

[WyeDyed]

A quick calculation:
1600 + 110.40 = 1710.40
1710.4 / 12 = 142.53 (and a bit)
So, you'll be paying £142.54 per month to pay it off in one year

[craft1948]

But surely interest is added each month on the unpaid amount?

[WyeDyed]

I'm no financial expert but that's how it works for my O'level maths.

[WyeDyed]

You're probably right Crafty. I never really got the hang of compound interest :-(

[craft1948]

lol Wye, can you tell I've never had an unpaid credit card bill. But that is very cheap borrowing if it's only 110.40 interest altogether.

[WyeDyed]

Well it says "per annum"; and you're right, I only budget for what I can afford before the due date :0)

[craft1948]

http://www.whatsthecost.com/creditCard.aspx

[WyeDyed]

So, based on the minimum payment, phleb will finish paying in 2028!

[phleb]

£110.40 over the whole year? is that right, not bad then hey

[WyeDyed]

And will have paid £2173.98

[craft1948]

phleb post the details into the link I've put up :-(

[WyeDyed]

^^^
Crossed post. That was a reply to my own post.

[Wharton]

phleb - Follow the advice given by craft1948 re posting details into the link she gave.

[phleb]

Thanks for the link...I have found my answer. You guys are so clever lol. I must admit I am a thicko ;-P at maths. Always have been. I will be looking for a 0% balance transfer for 16 months.

[WyeDyed]

Well done phlep. I've just been tying myself up in knots trying to work out the minimum payment to pay it off in 12 months.
Time for bed, I think.

[phleb]

Night night then xxx

[Peter Pedant]

the discussion is basically whether the amount of debt is compounded annually at 6.9% - which means that the debt doubles every seven years

or whether it is compounded monthly at a rate of 6.9/12 %.
This by the miracle of compound interest is more than 6.9% annually
and is why the regulators have 'APR's

it isnt a bad rate considerign credit cards are around 20-25% p a