Credit card APR explained
What representative APR means – with examples
A credit card’s APR helps you compare borrowing costs, but the advertised rate isn’t necessarily the one you’ll get. And a card offering 0% interest can still have a much higher representative APR. Here’s how to understand the figures and work out what matters when choosing a card.
There are regulations governing how APRs must be displayed, and below we have included credit card companies' official examples of how their interest rates work (see loan APR examples).
What is APR on a credit card?
APR stands for annual percentage rate. It combines the interest rate and compulsory charges, such as an annual or monthly card fee, into a single yearly percentage to help you compare the cost of borrowing (against other credit cards and loans).
For a credit card, the representative APR is usually based on its standard purchase interest rate. Cash withdrawals, balance transfers and money transfers can have different rates and fees, so check these separately.
APR doesn’t tell you exactly what you’ll pay. Your actual costs depend on how much you borrow, how you use the card and when you repay it. It also excludes some charges, such as late-payment fees.
Your lender must tell you the APR that applies to your credit card before you enter into the agreement.
What does ‘representative APR’ mean?
The term 'representative APR' or 'rep APR' is widely used on credit card (and loan) adverts, as the advertised APR isn’t guaranteed. It means a lender must reasonably expect at least 51% of customers taking out the advertised credit to get that APR or lower. Other customers could get a higher rate (this 51% excludes people whose applications are rejected).
For example, a card advertising 29.9% representative APR could offer you a higher APR following its assessment of your circumstances, so make sure you check your personalised offer before accepting.
For more information, see our guide to Interest rates.
Credit card representative APR examples
The table below shows examples of the difference between a card’s purchase interest rate and its representative APR, depending on whether it charges a fee.
Remember, repaying in full can avoid purchase interest, but it doesn’t remove the card fee. If you’re choosing a rewards card, consider whether you'll use the benefits to justify the cost.
Credit card | Annual purchase interest rate (variable) | Card fee | Representative APR (variable) |
|---|---|---|---|
American Express | |||
Cashback | 29.10% | £25 a year | 34.60% |
Cashback Everyday | 29.10% | None | 29.10% |
Nectar | 29.10% | £30 a year; free in first year | 35.80% |
Preferred Rewards Gold | 29.10% | £195 a year; free in first year | 85.80% |
Rewards | 29.10% | None | 29.10% |
Asda Money | |||
Select Credit Card | 39.80% | None | 39.80% |
Barclaycard | |||
Amazon | 28.90% | None | 28.90% |
Platinum | 24.90% | None | 24.90% |
Rewards | 28.90% | None | 28.90% |
Avios | 29.90% | None | 29.90% |
Avios Plus | 29.90% | £20 a month | 80.10% |
Capital One | |||
Balance Transfer Card | 34.94% | None | 34.90% |
Complete | 34.90% | None | 34.90% |
Fluid | |||
Credit Card | 34.95% | None | 34.90% |
HSBC | |||
Purchase Plus Credit Card | 24.90% | None | 24.90% |
Balance Transfer Credit Card | 25.90% | None | 25.90% |
Lloyds | |||
Dual Transfer and Purchase / Balance Transfer Card | 24.94% | None | 24.90% |
M&S Bank | |||
Purchase Plus | 24.90% | None | 24.90% |
Transfer Plus | 24.90% | None | 24.90% |
MBNA | |||
Long Balance Transfer Card | 24.94% | None | 24.90% |
Dual Offer Card | 24.94% | None | 24.90% |
Credit Card | 12.94% | None | 12.90% |
Natwest | |||
Travel Reward Credit Card | 27.90% | None | 27.90% |
Post Office | |||
Credit Card | 34.94% | None | 34.90% |
Santander | |||
Rewards Credit Card | 24.9% | None | 24.9% |
Tesco | |||
Foundation Credit Card | 29.90% | None | 29.90% |
Balance Transfer Credit Card | 24.90% | None | 24.90% |
Balance Transfer and Purchases Credit Card | 24.90% | None | 24.90% |
All Round Credit Card | 24.90% | None | 24.90% |
TSB | |||
Platinum Purchase Card | 24.95% | None | 24.90% |
Vanquis | |||
Balance Transfer Credit Card | 40.90% | None | 40.90% |
Virgin Money | |||
Virgin Atlantic Reward Credit Card | 26.90% | None | 26.90% |
Virgin Atlantic Reward+ Credit Card | 26.90% | £160 a year | 69.70% |
Balance Transfer Credit Card | 27.90% | None | 27.90% |
Travel Credit Card | 27.90% | None | 27.90% |
All Round Credit Card – poorer credit scorers | 29.90% | None | 29.90% |
Everyday Cashback | Not applicable | None | Not applicable |
Examples assume a £1,200 credit limit. Rates and credit limits offered depend on your circumstances. Transfer fees and other charges may apply.
Credit card APR FAQs
Why can APR be higher than the purchase interest rate?
If a card charges an annual or monthly fee, this is included in its APR. That can make the APR significantly higher than the rate used to calculate interest on your purchases.
For example, Amex Preferred Rewards Gold has a 29.1% annual purchase interest rate, but its £195 annual fee takes the representative APR to 85.8%. The fee is waived in the first year. All rates are variable.
That doesn’t mean purchases are charged interest at 85.8%. The purchase rate determines the interest charged; the APR combines interest and the card fee under standard calculation assumptions.
What is a good APR for a credit card?
The right comparison depends on how you’ll use the card.
If you’ll repay in full every month, the APR is less important because you can usually avoid purchase interest by paying your full statement balance by the payment due date. A Direct Debit for the full balance can help, provided there’s enough money in your bank account. Card fees still apply, and cash withdrawals generally attract interest even if you repay in full.
If you need to spread the cost of a purchase, compare 0% purchase cards. Focus on whether the interest-free period gives you enough time to repay, and check the rate that applies afterwards.
If you’re paying interest on existing card debt, a 0% balance transfer card could reduce your costs. Compare the transfer fee and length of the offer, as well as whether you’re likely to qualify.
For more on borrowing and savings rates, see our Interest rates explained guide.
Why do representative examples use £1,200?
Representative examples generally use an assumed credit limit of £1,200 to help you compare cards. This isn’t a promise that you’ll receive that limit.
The standard calculation generally assumes the amount is borrowed immediately and repaid over one year, with the borrowed amount repaid in equal monthly instalments, plus interest and applicable charges. Your actual borrowing and repayment pattern may be different.
Why does a 0% credit card still have a representative APR?
A 0% introductory offer applies to particular transactions for a limited time. The representative APR generally reflects the standard purchase rate and applicable card fees, rather than the temporary offer.
For example, a card can offer 0% on purchases for several months while advertising a representative APR above 20%. This doesn’t mean you’ll pay that rate on purchases covered by the 0% offer during its promotional period.
You must still make at least the minimum payment each month. Missing payments could damage your credit record and cause you to lose the offer. Aim to clear the promotional balance before the 0% period ends, when the standard rate will usually apply to anything remaining.
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