BA or bust

I have just see this in a banner on the ba.com home page.

What a great way to advertise the BAEC Amex card.

I am not convinced that anyone would want one at that rate! Especially given that UK bank base rate (sets the base level for a bank's cost of borrowing) is 0.5% currently - one hundredth of that figure.

Paralytic

The rate is due to the annual fee and financial advertising rules means they must show the APR. Not much Amex can do about it if they want to advertise the card.

If you use it to pay for everything you can, and pay it off each month, its basically free miles at no cost other than the annual fee; the APR is irrelevant.

GavT_london

Nope very true but CC companies legally have to show the full APR including any annual membership fees, hence it being SO high. I think the APR (as used to be stated) is around 28/29% - which is still high...but then i pay mine off each month so never paid a penny ;-)

Disco Volante

.....

OPebble

Hate to think what the Titanium card APR is! (OK I know it is a charge card but....)

Polk

There is no APR as you don't borrow on it.

BA or bust

Accept all the points about it being legally required etc. But my real point is what does this do to the BA brand (which is why I did not post in the Amex thread).

So in your face advertising, to potential customers of a product which looks extremely expensive, in the current economic climate. I think that is not actively promoting the BA brand in a positive way!

The Saint

Well, what does it do to the BA brand? Can't see any impact, apart perhaps from deterring a few people who are too stupid to understand what the APR shows.

where2travel

This BA Amex card was the subject of a few press articles a year or so back. It was brandished as "the most expensive credit card" or something like that with an APR of about 46% and how it was all so scandalous blah blah.

As already mentioned, although the APR is a measure by which one credit card can be compared against another, it's a very small part of the picture, particularly as it can include no measure of the benefits of any cards.

For me, the BA Amex is great - a £30 fee (okay, that bit isn't great in isolation), the ability to earn a 2 for 1 voucher, BA miles for each £ spent and no interest payments as I pay my monthly balance off in full. In this situation, the APR is almost a meaningless number.

donkeyk

Rather cheap compared to wonga.com's 4214%...

EGLL_Director

The APR on the card is really 19.9% (slightly above a normal credit card) ie 1.4% a month. The 50.1% is misleading for the reasons others have stated. If you pay the £150 fee and pay that off immediately then the rest of the year the card is paid at 19.9% APR.

I know this sounds mean - but I suspect the only people who understand the APR issues will be in a position to apply for the card anyway.

OPebble

If you don't pay the bill on it's due date you DO get hit with interest charges!

LondonAndy

For me it positively enhances the BA brand given the 241 voucher - I agree with the comment above that those not understanding the APR would (generalising) not be in a position to apply for it....

sunrisegirl

Indeed

baggageinhall

It was only 46.1% when this topic last came up in July 2010!

APR's were designed to allow people a simple way of comparing financial products. The reality is however, that they can be as misleading as they might be helpful.

Take credit cards. The APR on a credit card must be based on an assumed credit limit of £1500, where the consumer spends £1500 on day 1 and then, without spending any more on the card, pays off the balance in 12 equal instalments.

The APR is supposed to reflect the true cost to the consumer of borrowing £1500 on the card despite that perhaps being wholly unrepresentative of how the card should be used or is likely to be used by the consumers that it is aimed at and will be provided to.

The BA Amex Premium Plus card has an annual fee of £150 which skews the APR hugely. 'Lifestyle' credit cards such as the BA card are not really aimed at people who are going to (a) carry a balance and/or (b) spend just £1500 per year.