2 min

What APR is (and what it costs you)

APR is the price of borrowing, counted per year.

APR means annual percentage rate. On a credit card, it's what you're charged on the balance you don't pay in full. Each month you're charged about the APR divided by 12.

Example

You owe $1,000 on a card with a 24% APR. That's about 2% a month: around $20 in interest, even if you buy nothing new.

If you pay the full statement balance every month, you usually pay no interest on purchases.
Paying only the minimum makes the debt last years and cost much more.
Store cards and quick loans usually have the highest APR.