APR

What does APR mean?

Annual percentage rate

APR, or Annual Percentage Rate, is the interest charged during a year. It’s a way to measure how much a loan or credit card is going to cost you. It’s not just about the interest, either. Sometimes, the APR can include extra fees tied to the loan.

So, if you’re looking at a loan or credit card, don’t just look at the interest rate. The APR might be higher because it includes those extra costs. It’s a more accurate measure of the total cost of borrowing.

Most credit cards have an APR that falls between 10% and 25%. But here’s the thing: if you have a good credit score, you might be able to get a lower APR. That’s because lenders see you as less of a risk.

Example for using ‘APR’ in a conversation

Hey, I’m thinking of getting a new credit card. Have you heard of APR?

Yeah, APR stands for Annual Percentage Rate. It’s the interest rate you’ll be charged on your credit card.

Ah, got it. So, is it the same as the interest rate?

Not exactly. The APR includes both the interest rate and any additional fees associated with the credit card.