Help me understand

[Nosieparker]

sorry my brain is not working tonight 😴
is this the right amount of interest added to my account?

Yes it’s because your APR is astonishingly high. Is this a store card? Can you transfer the balance to a 0 per cent card? X

Yes, it also looks right to me - the APR is eye wateringly high, so your monthly payment isn't paying off much more than the interest alone.

It look high to me! If the monthly interest is 2.52% then shouldn’t it be £13.43 interest? Assuming “this period” is a month?

44.9% Apr means annual percentage rate of interest charged.
As a rough idea, your balance owed would mean you are charged about .67p per day, so that's going to be right.
It's best to pay off asap, as the minimum payment will barely cover the interest. Or transfer to a better rate if you're able.

It’s been calculated correctly as you use the APR to calculate interest which is approximately 67p per day.

OP or @EveryoneKnowsJuanita I am a qualified banker so I can’t give you financial advice but I am good with this stuff so any questions just ask!

@FionaSkates thank you I was thinking the same as @EveryoneKnowsJuanita that it should be £13.43 if the monthly interest is 2.52%

what does the period rate represent?

Thank you @FionaSkates what does the period rate refer to then? I have my CCs at various transfer rates and then pay them off, but I can see it would be easy to get caught out with numbers here!

With credit cards you pay interest from the time of purchase to when it's paid off so it goes like this:

Last day of month - statement made up
1st of next month - purchase made
30th of month - statement made up
25th of following month - payment made

So for some purchases they've been on your account for nearly two months before you pay for them which is why the interest is higher.

Even if you bought something late in the month its on the account for over 3 weeks so the average time it takes to pay off each purchase is around 6 weeks which is why the interest is higher than 2.5% of the balance.

Its only interest free if you pay the card off in full every month and if you don't do that it can suddenly jump to what looks like more than it should be.

What if the interest is accrued daily rather than monthly?

Go to Money Saving Expert (MSE) website for recommended credit card balance transfers. You could save yourself a heap of money.

£539.99 x 44.9% = £242.46 interest per year

£242.46 / 12 = £20.21 per month so not exactly £23 but close

No idea what "period interest rate" means or how that 2.52% is relevant.

So the interest is accrued daily like this:

Outstanding balance: 539.99/365 days in a year x 0.449 = 0.67p per day

Remember that the higher balance, the more interest you pay, so the above would be true only if the OP held the same balance all year long. Ideally she would pay it off.

based on the balance the OP holds…

@FionaSkates thank you your explanation makes sense now. Still no idea what period interest rate of 2.52% is, but it is misleading. I’ve just opened a 0% credit card so will pay it off with that 😊