Credit cards
We have a range of credit cards available to suit your needs. They offer you a way to make flexible payments, all with the UK’s original ethical bank.
On this page
• What does APR mean?
• What is a representative APR?
• What is a personal APR?
• What is the difference between variable and fixed APR?
• Choosing a credit card with the right APR for you
• Payment example
What does APR mean?
APR (Annual Percentage Rate) is an illustration of the cost of borrowing over a year taking into account the interest rate and any additional fees.
A simple way to remember APR is:
Interest percent + Fees = APR (Annual Percentage Rate)
APR does not include:
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Extra charges — such as cash withdrawal fees, late payments, or charges for exceeding your credit limit which some lenders may impose.
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Rates for balance transfers, money transfers, and cash withdrawals which might be higher than a standard purchase rate.
Before applying for a credit card, it’s important to know what APR is, as well as the different types of APR. This will help you choose what borrowing is best for you, in line with your needs and circumstances.
What is a representative APR?
APR is a helpful tool to compare lending products like credit cards, overdrafts and unsecured loans and their costs. When comparing different lending products, you will come across the term “representative APR”.
This is the rate offered to the majority of customers (more than 51%) who have taken out the credit card you may be considering.
Representative APRs help you compare the cost of different products and make an informed decision on what might be the best offer for you.
Your personal APR will be based on your circumstances and does not necessarily align with the representative APR of the product.
How can representative APR be useful?
A representative APR allows you to compare different borrowing costs between lenders, and gives you an estimate of what annual percentage rate you could receive.
Thorough research is always advised before applying for any borrowing product, to make sure it’s suitable for your needs beyond knowing just the representative APR. Always read the terms and conditions and other important documents listed before taking out a loan or credit card.
An example of comparing representative APR on credit cards
Representative APRs account for not just the interest charged, but also any associated fees and charges that may apply when obtaining a credit card. As a result, two credit cards with the same interest rate can have different APRs if their fees differ.
Example
Card A
Card B
Example Credit limit
Card A £1,200
Card B £1,200
Example Standard Purchase Interest Rate (variable)
Card A 18.9%
Card B 18.9%
Example Annual card fee
Card A £0
Card B £150
Example Representative APR
Card A 18.9%
Card B 31.5%
What is a personal APR?
Some borrowing options will often offer you an APR rate based on your individual personal and financial circumstances, such as your credit score history. This is in addition to your desired borrowing amount and length of borrowing and is known as a personal APR.
It’s important to understand that your personal APR may be different from the representative APR you see advertised as it reflects your personal circumstances. In some cases this may be considerably different from other customers who’ve applied for the same borrowing option.
If you’re not sure what your personal APR is, you may not find this out until after you’ve applied for a credit card, which could affect your credit rating.
What is the difference between variable and fixed APR?
What is a variable APR?
A variable APR means that it could go up or down. It can be influenced by changes to the Bank of England’s base rate.
What is a fixed APR?
A fixed APR means your interest rate will not change for a set period of time.
Some providers offer credit cards with a fixed rate period. After the fixed rate period is over, the APR will be based on a higher interest rate. You should always check to see how long your fixed rate period lasts.
Choosing a credit card with the right APR for you
Whilst APR can help you understand the cost of borrowing, there are lots of other factors to take into account when choosing a credit card, such as potential fees and charges. It’s also important to know that if you pay your credit card bill in full and on time each month, your APR will not affect you as you will not pay any interest (unless you’ve used your credit card to withdraw cash).
Some credit cards have higher or lower APRs because they’re designed for specific uses. And sometimes, credit cards with higher APRs come with benefits such as cashback or loyalty points. In this case, you’d have to work out whether having the benefits of a reward card is worth the higher APR.
We have a range of credit cards to compare. These include:
If you paid the minimum payment each month.
If you paid £50 each month.
This is the interest you would be charged in year one without any introductory rate being applied.
If you paid the minimum payment each month. £162.69
If you paid £50 each month. £133.39
This is the interest you would be charged in year two without any introductory rate being applied.
If you paid the minimum payment each month. £151.11
If you paid £50 each month. £48.64
How long would it take to clear the balance?
If you paid the minimum payment each month. 25 years, 9 months
If you paid £50 each month. 2 years, 0 months
The above example assumes the following:
- the transaction takes place on 1 January and you make no further transactions
- your statement is produced on the 1st of each month and you always make the payment on the payment due date each month.
Important information on minimum payments with us
Your monthly minimum payment with us will be one of the following, whichever is the highest amount:
- 2% of the total balance on your statement (including interest and charges);
- £5; or
- the sum of (i) interest for the period from your last statement, (ii) any charges and (iii) 1% of the total balance on your statement (excluding interest and charges).
If you only make the minimum payment each month it will take longer and cost more to clear your balance.
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See how long it could take to pay off your credit card balance, how much interest you may pay and how increasing your monthly payments would save you time and money. Try our credit card repayment calculator.
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