ANNEX 1 CALCULATION OF THE ANNUAL PERCENTAGE RATE IN CREDIT CARD |
| Annual Percentage Rate (APR) is the discount rate at which the present value of all payments and instalments that are due from the Cardholder, representing the Total Amount Payable by the Cardholder, equals the present value of all payments of the Amount of Credit available to the Cardholder on the date on which the Credit amount or the first payment thereof is available to the Cardholder, in accordance with the following equation: |
 |
| where: |
| m: is the number of the last payment to be received by the Cardholder |
| d: is the number of a payment to be received by the Cardholder |
| Cd: is the amount of payment (d) to be received by the Cardholder |
| Sd: is the period between the date of the first payment to be received by the Cardholder and the date of each subsequent payment to the Cardholder, expressed in years and fractions of year, therefore S1=0. |
n: is the number of the last repayment or payment of charges due on the
Cardholder |
| p: is the number of a repayment or a payment of charges due on the Cardholder |
| Bp: is the amount of repayment or payment of charges (p) due on the Cardholder |
| tp: is the period between the date of the first payment to be received by the Cardholder and the date of each repayment or payment of charges due on the Cardholder, expressed in years and fractions of year |
| X: is the Annual Percentage Rate (APR) |
| Assumptions for the calculation of APR |
- For the purpose of calculating APR, periods between dates shall be based on a year of 12 equal months or 365 days a year.
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- For the purpose of calculating APR, the Total Amount Payable by the Cardholder
shall be determined, including all unavoidable costs and fees with the exception of charges and fees payable by the Cardholder as a result of non-compliance with any of his commitments laid down in the Credit Card Agreement.
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- The calculation of the APR must be based on the assumption that the Credit Card Agreement will remain valid for the agreed period and that the Card Issuer and the Cardholder will fulfil their obligations under the terms specified in the Credit Card Agreement.
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- If the Credit Card Agreement contains clauses allowing variations in the charges
contained in the APR but unquantifiable at the time of calculation, the APR shall be calculated on the assumption that the charges will remain fixed at the initial level and will remain applicable until the end of the Credit Card Agreement.
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- For the purpose of calculating advertised APR, the following shall be assumed:
A) If the ceiling of the credit card has not determined, that ceiling shall assumed to be SAR 10,000;
B) The total amount of credit shall be deemed to be drawn down in full at the start of day 1;
C) The first year unavoidable fees (e.g. application fee, maintenance fee) shall be determined;
D) The credit is provided for a period of one year; and
E) The credit will be repaid in full in 12 equal monthly payments - If the contract contains clauses allowing different ways of drawdown with different charges or Term Cost, the Total Amount of Credit shall be deemed to be drawn down at the highest charge and term cost applied to the most common mechanism.
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- If there is a fixed timetable for payment received by the Cardholder but the amount of such payment is flexible, the amount of each payment shall be deemed to be the lowest for which the contract provides.
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- If the Credit Card Agreement contains clauses offering charges or term cost for limited period or amount, the term cost and charges shall be deemed to be the highest for the whole duration of the contract.
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- The Annual Percentage Rate must be calculated and expressed in percentage points with a minimum of two basis points, and rounding the following decimal place by one point if that place is greater than or equal to 5.
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