50.1% apr?

Old Jan 12, 12, 7:27 pm
  #1  
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50.1% apr?

I'm lucky, I don't have any credit card debt other than the monthly cycle but who in their right mind would sign up for one of these with a 50.1% apr?


Introduce a friend? Introduce an enemy more like. I wouldn't want my friends to go near it.

(OK. I do have one of these for BA bookings).
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Old Jan 12, 12, 7:35 pm
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It's utter nonsense - they are required to reflect the annual fee in the APR, which totally distorts it. The same would be true of the VS AmEx or any other card with a fee.
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Old Jan 12, 12, 7:45 pm
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Originally Posted by G-BOAC View Post
It's utter nonsense - they are required to reflect the annual fee in the APR, which totally distorts it. The same would be true of the VS AmEx or any other card with a fee.
what he said

cs
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Old Jan 12, 12, 7:50 pm
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And who uses Amex as anything else than a chargecard? But then I live in a country where rolling balances are unheard of. Or at least require your left kidney as collateral.
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Old Jan 12, 12, 8:25 pm
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Originally Posted by G-BOAC View Post
It's utter nonsense - they are required to reflect the annual fee in the APR, which totally distorts it. The same would be true of the VS AmEx or any other card with a fee.
Good answer, thanks. That explains it.
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Old Jan 12, 12, 9:43 pm
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I am not sure if they require the disclosure about telling people how long it will take to pay the balance off if you just pay the min. My recent one with some work flights said it would take 165 years to pay off if only the min was paid.
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Old Jan 13, 12, 11:09 am
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Ah, the silliness of APRs in many situations (see last year's discussion)

This is what I wrote last year:

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.
The annual fee is tacked on to the interest that accrues from paying the card off in 12 equal payments through the year, hence the skewed APR.

For a similar reason, this is why the various short term pay day lenders have APRs in four figures. A 14 day loan has to be factored up so that it's a year long!
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Old Jan 13, 12, 11:23 am
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Originally Posted by Royce View Post
And who uses Amex as anything else than a chargecard? But then I live in a country where rolling balances are unheard of. Or at least require your left kidney as collateral.
Amex comes in a number of flavours primarily a) charge card - e.g. Platinum and b) BA Credit card.
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