Understanding Your APR
Everything you need to know about Annual Percentage Rates, how they affect your balance, and most importantly, how to avoid paying interest entirely.
The essentials of APR
Understanding these three core concepts puts you fully in control of your account balance.
What is APR?
APR stands for Annual Percentage Rate. It represents the yearly cost of borrowing money on your credit card balance, expressed as a percentage.
How it's calculated
Your APR is divided by 365 to determine your daily periodic rate. This daily rate is then applied to your outstanding balance each day.
The Grace Period
If you pay your full statement balance by the due date every month, you won't pay any interest on your new purchases.
See how it affects your balance
Let's say you make a £1,000 purchase. If you pay it off entirely before your statement due date, you pay exactly £1,000. However, if you carry that balance to the next month, your daily periodic rate kicks in, adding interest charges to your total amount owed.
Statement Breakdown
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