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APR: What That Percentage Really Means
A beginner-friendly explanation of borrowing costs on credit cards and loans.
Credit · 4 min
Step 1
APR stands for annual percentage rate. It is a standardized way to describe the yearly cost of borrowing, though the exact way interest is applied can vary by product.
Step 2
With credit cards, carrying a balance can make purchases cost more because interest may continue to accrue.
Step 3
When comparing borrowing options, look beyond the minimum payment. Pay attention to APR, fees, and how long repayment could take.
Try this: Use the Credit Card Payoff tool to explore how payment size changes payoff time.