APR, interest rates and fees explained
It’s easy to be confused by the different interest rates and fees that can be charged to your credit card account. Below, we’ve listed the terms you’re likely to see and explained what these rates and fees mean for you.
APR stands for annual percentage rate. It tells you how much it’s likely to cost you to borrow money over one year. You'll see it as a percentage.
It’s not just about the interest you’ll pay. APR factors in both interest and any fees that are automatically charged to your account. This gives you a good idea of the overall cost and is useful if you’re comparing credit cards. Read our guide to find out more about APRs.Back to top
Credit card interest ratesInterest is the cost of borrowing money. The amount of interest you’ll pay is worked out as a percentage of the money you borrow – this percentage is called an interest rate.
Interest rates can vary depending on how you use your credit card. There are four types:
- Purchase rate
The interest you’ll be charged when you use your credit card to buy things. Normally you’ll have an interest-free period of up to 56 days if you pay the balance in full by the due date. Otherwise, interest is charged from the transaction date.
- Balance transfer rate
The interest you’ll be charged when you move the balance from one credit card or store card to another credit card. Find out more about balance transfers.
- Money transfer rate
The interest you’ll be charged when you move money from your credit card to any of your UK current accounts. Find out more about money transfers.
- Cash transaction rate
The interest you’ll be charged for cash transactions. These include withdrawing cash from a Cashpoint or over the counter, buying non-sterling currency, gambling transactions and other cash equivalents, including sending money order or wire transfers (other than balance transfers or money transfers), buying coins, banknotes or digital currency, paying government fines, enforcement, penalties, fees or costs, online trading such as share dealing or investments, purchasing or topping up electronic money, payment cards, mobile wallets or account dashboard services.
- Purchase rate
A promotional rate is a low or 0% interest rate offered for a set period of time. When this period ends, the standard rate will take its place. Promotional rates can be offered on balance transfers, money transfers and purchases. These offers can save you money, but look for what suits you and check if fees apply. For example, you may still get charged a fee for a balance transfer that has a 0% interest rate.Back to top
Credit Card Fees
Fees are charged to your credit card as either a percentage of a transaction or as a default charge of £12. Here are the most common types of fee you’ll see on Bank of Scotland cards
- Balance transfer fee
This is the fee you’ll be charged when you move the balance from one credit or store card to another credit card. Find out more about balance transfers.
- Money transfer fee
This is the fee you’ll be charged when you move money from your credit card to any of your UK current accounts. Find out more about money transfers.
- Cash advance fee
You can be charged for withdrawing cash from a Cashpoint using your credit card.
- Card processing fee
Some companies charge a fee for using your card for gambling transactions, buying postal orders or entering competitions.
- Using your card abroad
You may be charged additional fees and interest for making non-sterling transactions or buying non-sterling currency. Find out more about using your card outside of the UK.
- Late payment fee
You may be charged if you do not make your minimum payment by the due date on your statement.
Have you had a default charge?Back to top
If you’ve missed a payment or gone over your credit limit, there are steps you can take to get back in control.
- Balance transfer fee
Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628.