Understanding your variable interest rate

Overview

This article will help you understand how your variable interest rate is calculated and answers common questions about the changes made by Capital on Tap.

How your variable interest rate is calculated

In February 2023, Capital on Tap changed how interest rates are calculated for all new customers and eligible existing customers by switching from a fixed interest rate to a variable interest rate. Your variable interest rate is calculated by adding your Business Rate and the Bank of England Bank Rate.

The Bank of England Bank Rate is the interest rate the Bank of England charges other banks to borrow money. The Bank of England reviews and potentially changes this rate eight times a year based on the country’s financial situation.

FAQs

Can my rate go down as well as up?

Yes. If the Bank of England Bank Rate decreases, this saving will be passed on to you from the first billing period that starts after the new Bank of England Bank Rate becomes effective. If the Bank Rate becomes negative, Capital on Tap will pass on a Bank Rate of 0%.

Will Capital on Tap notify me when my rates change?

Yes, Capital on Tap will notify you in your online account and let you know what the interest rates will be for your next billing period.

What is the difference between my Card Variable Rate and Cash Variable Rate?

Your Card Variable Rate will apply to card purchases. As always, if you pay your balance in full at the end of each billing period, you will not be charged any interest on your card purchases. The Cash Variable Rate will apply to cash drawdowns and ATM withdrawals.

How can I opt out of the variable interest rate?

If you received an email about the change and would like to opt out, you must do so by the date specified in the email. If you opt out, your account will be closed, and your full balance will be due and payable. If you do not let us know that you want to close your account, we will treat you as having accepted the change.