All termsGlossary
What is an APR?
APR (annual percentage rate)
APR stands for annual percentage rate. It's the yearly rate a lender or card company quotes for borrowing. It doesn't count compounding (definition, opens in a new tab), the way interest (definition, opens in a new tab) gets charged on interest, so the true yearly cost is usually a bit higher. That higher number is the APY (definition, opens in a new tab). Loans and cards must show the APR before you sign.
Example
A card at 24% APR that charges interest daily costs 27.11% a year once compounding is counted.
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General education, not financial advice.