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APR Fixed or Variable...

Established Contributor

APR Fixed or Variable...

 

So in the T&C for Nasa FCU Visa Platinum Advantage Rewards it states this...

 

 

Annual Percentage Rate (APR)* For Purchases 9.9-17.99 when you open your account, based on your creditworthiness. After that, your APR will vary with the market based on the Prime Rate.

 

 

BUT

 

When I was approved it said this....

 

 

Loan Details:
   
 
Product:
Visa Platinum Advantage Rewards
 
Loan Amount:
$8,000.00
 
Term:
 
 
Rate:
10.900%

 

 

 

So, do I have a fixed at 10.9 or is it a variable ?  

 

I don't understand the verbage in the terms...."After that, your APR will vary with the market based on the Prime Rate."

 

what does after that mean?

Message 1 of 5
4 REPLIES
Valued Contributor

Re: APR Fixed or Variable...

Typically this works by defining a margin or offset.

 

If the prime rate is 3.25%, and your rate is 10.90%, then the margin is 7.65%, which will be added to the prime rate at any point to determine your APR.

 

So if the prime rate goes to 5%, the APR would be 12.65%.

 

How often the APR is reset (monthly, quarterly, etc.) depends on the T&C.

 

 

Message 2 of 5
Established Contributor

Re: APR Fixed or Variable...

 

But just looking at my 10,90 under my "Loan Terms" tells me its fixed...is this not the case?

Message 3 of 5
Valued Contributor

Re: APR Fixed or Variable...

I would go by the T&C, not a summary presented to you.

 

I don't know the answer, and only the T&C can really tell you.

 

Message 4 of 5
Senior Contributor

Re: APR Fixed or Variable...

It is a variable rate.   The spread (or range if you would) is what is stated on the above information, this basically assigns the applicant the applicable rate depending on creditworthiness factors.  Their lowest APR appears to be 9.9% (which is variable), you were assigned just one point higher at 10.9%, which is also variable.  It's still by far a great APR.  When the Feds make any changes (if any in the foreseeable future), then those would be visible with your APR.

Message 5 of 5