How does APR work?
APR is expressed as a percentage, so you can quickly compare the cost of borrowing between different products and lenders.
The lower the APR is, the less you’ll have to pay in interest and charges. Bear in mind, the exact amount of interest you end up paying over the course of a year depends on:
- your credit card balance
- how much you pay off each month.
For example, you won’t pay any interest at all on card purchases if you clear your balance in full and on time, every time – no matter your APR (please note that cash advances or withdrawals are typically subject to a higher rate of interest and may incur additional charges). But any standard charges included in your terms and conditions will still apply (e.g., an annual fee).
What isn’t included in APR?
Late or missed payment fees won’t be included, as they only apply if you don’t pay on time, or completely miss one or more payments.
You could also be charged extra if you make cash withdrawals or go over your credit limit. So, it’s best to check the terms and conditions before you apply.
What affects APR?
Each lender uses their own criteria, but generally, the APR lenders offer you is affected by your individual circumstances and your credit history. If you’ve managed your money well in the past, you should be considered a low-risk borrower to lenders. As a result, you’re more likely to be approved for a credit card or loan with a competitive APR.
What does ‘Representative APR’ mean?
Where you see a ‘representative APR’ advertised, this means 51% or more of customers receive this rate or better.
What does APRC mean?
APRC (annual percentage rate of charge) is not to be confused with APR. APRC represents the total cost of a secured loan or mortgage to the customer, shown as an annual percentage of the total loan amount. It includes all interest rates and charges applied over the full loan term, making it useful for comparison.
How can you find out your eligibility for a credit card?
You can find out if you’re eligible for a credit card using an eligibility checker. This tool will show you the likelihood of being accepted, before you apply. Unlike a formal credit application, an eligibility checker won't leave a footprint on your credit report. So, you can use it to shop around and it won't impact your credit score.
Making multiple credit applications in a short space of time can give lenders the impression that you’re desperate to borrow – which may put them off. An eligibility checker can avoid this from happening and reduce the risk of rejection as a result.
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APR Representative (variable)
Intelligent Lending Ltd (credit broker). Capital One is the exclusive lender