What is APR (Annual Percentage Rate)?
Credit Card Glossary · Updated April 2026
The yearly cost of borrowing on a credit card, expressed as a percentage. Unlike a simple interest rate, APR includes fees that are required to borrow. Credit cards typically have separate APRs for purchases, balance transfers, and cash advances — cash advance APRs are usually 5-10 percentage points higher. APR matters only if you carry a balance; pay in full each month and your effective APR is 0%.
Frequently asked questions
What is APR?⌄
The yearly cost of borrowing on a credit card, expressed as a percentage.
What does APR mean on a credit card?⌄
The yearly cost of borrowing on a credit card, expressed as a percentage. Unlike a simple interest rate, APR includes fees that are required to borrow. Credit cards typically have separate APRs for purchases, balance transfers, and cash advances — cash advance APRs are usually 5-10 percentage points higher. APR matters only if you carry a balance; pay in full each month and your effective APR is 0%.
What terms are related to APR?⌄
Closely related concepts include Introductory APR, Variable APR, Grace Period. Each of these helps clarify different aspects of the same topic.
Where does APR apply?⌄
APR is a fees concept. It typically appears in the context of fees, APR, and how much a card costs to carry.
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