What does Apr mean on a credit card?

The rate you pay is the card's APR – a figure expressed as a percentage. A card's APR is the annual cost of borrowing money using the card. For instance, say you make a $1,000 purchase using your credit card but can't pay the balance in full. If your credit card has an APR of 22%, you will pay $220 in interest over the year to borrow that $1,000.

What is an APR & how does it work?

Here’s what you need to know. How does an APR work? APR stands for Annual Percentage Rate and it represents the yearly cost of borrowing money. It includes the interest rate that applies to your account (credit card, mortgage, line of credit, etc.) plus other fees related to that account.

What are the different types of APR on a credit card?

Credit cards can have multiple types of APR. These may include: Purchase APR: The rate for purchases made with your credit card. Balance transfer APR: The rate for balances you transfer to your credit card. Cash advance APR: The rate for credit card transactions classified as cash advances. Introductory APR: A special introductory rate, often 0%.

What is a purchase Apr?

Purchase APR: The rate applied toward new purchases on a credit card that are not paid in full by the due date and are carried forward into the next billing cycle. This is the most commonly-encountered type of APR for credit card users and is what people are conventionally referring to when they mention credit card APRs.