50% APR Amex [UK]

Old Mar 10, 12, 2:34 pm
  #1  
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50% APR Amex [UK]

Is this a typo or do I just not get it?

BA Amex Premium Plus- 50.1% Variable APR.

http://www.americanexpress.com/uk/br...CPID=100031185

Last edited by mia; Mar 11, 12 at 9:04 pm
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Old Mar 10, 12, 2:39 pm
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Must be a new tactic in marketing. Who thinks they can pay their bills off in full each month and steal 18,000 avios points for this deal of the year?! I'm not sure what "representative" means in the British credit laws.
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Old Mar 10, 12, 2:53 pm
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There must be different British laws vs. US around calculation of APR. The annual fee and interest assumptions appear to both be included.

"50.1% APR. We assume you use your card for a purchase of 1,200 at the commencement of this agreement and repay it together with applicable interest and charges by 12 equal monthly instalments over the period of one year at the standard interest rate for purchases set out in section 3 "The interest rates which apply to the credit agreement" and does not take into account any promotional rate that we may apply or any change in the interest rate. Using this agreement for transfers and transactions other than card purchases may result in a higher APR."
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Old Mar 10, 12, 3:09 pm
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So basically if you spend 1200 quid and repay it over a year, the interest is effectively 50.1%?
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Old Mar 10, 12, 3:12 pm
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The card does look very nice though
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Old Mar 10, 12, 3:14 pm
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Small sign up bonus but companion pass after 10K pounds is great.
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Old Mar 10, 12, 9:32 pm
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WOW...finally a Mafia affinity card! What are the perks. I assume they take you for a ride for free. 10% discount of Soparnos DVDs? Entrance to the Godfather Lounge in Palermo?
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Old Mar 10, 12, 9:49 pm
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Yeah, don't miss a payment or da family is gonna breaka yah legs.

Originally Posted by larrythai View Post
WOW...finally a Mafia affinity card! What are the perks. I assume they take you for a ride for free. 10% discount of Soparnos DVDs? Entrance to the Godfather Lounge in Palermo?
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Old Mar 11, 12, 1:51 am
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The standard official APR calculation has to include the annual fee. This distorts things somewhat.
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Old Mar 11, 12, 6:21 am
  #10  
mia
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If you take the time to look at advertisements for a range of UK rewards cards you will see that this is a mandatory formula in which the annual fee is treated as part of the finance charges. This isn't a bad approach, but the hypothetical transaction is unrealitically small.
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Old Mar 11, 12, 1:41 pm
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Originally Posted by redshift27 View Post
The [British] standard official APR calculation has to include the annual fee. This distorts things somewhat.
A similar thing happens in the US if you do a cash advance on a credit card: the service charge is added to the interest on the first month's statement after the advance and converted into an annual rate. So, if your card charges a 4% fee plus 20% interest for cash advances, the first month will show a 66% annual interest rate on the first month, and then 20% annual rate on subsequent months until you pay off the advance. This is because the 4% service fee is considered as interest that covers the month that it was charged, and this works out to 48% if expresses as an annual rate.
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Old Mar 11, 12, 5:47 pm
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50%

Yes it is correct, mandatory to express it in this full rate charge inclusive fashion.
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