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How does Representative APR differ from Typical APR

10/12/2015 16:36:30

Well , [Typical APR] was intended to be 'typical' of credit agreements the issuer entered into with a particular product, and as such it represented the interest rate which at least 66% of applicants would receive upon entering an agreement.

'Representative example' is designed to be 'representative', in that it is the rate which at least 51% of accepted applicants will receive. In effect this enabled UK issuers to offer 15% fewer customers their advertised interest rate (this change has arguably enabled issuers to offer the record breaking 0% balance transfer durations).