Money Basics
What APR Means
APR stands for Annual Percentage Rate, and it tells you the yearly cost of borrowing money on a credit card or loan.
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Simple idea
A higher APR means borrowing money costs more. If you carry a credit card balance, the issuer uses the APR to calculate interest over time.
APR is yearly, but interest is added more often
Even though APR is an annual rate, credit card companies usually calculate interest using a daily periodic rate.
Why it matters
If you pay your credit card in full every month, APR may not affect purchases much. If you carry balances, APR matters a lot.
Example
With the same balance, a card with 29 percent APR will cost more in interest than a card with 19 percent APR.
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