APR
The yearly cost of borrowing money, expressed as a percentage — including interest and, in some contexts, fees.
APR — annual percentage rate — is the yearly cost of a loan expressed as a percent. On a credit card, it is the pure interest rate: a 24% APR means the card charges interest at a yearly pace of 24%. On a mortgage or an auto loan, APR is defined to include certain lender fees rolled into the rate, so it usually runs slightly higher than the note rate the loan actually calculates against.
APR is stated annually, but on cards it is applied daily. The issuer divides the APR by 365 to get a daily periodic rate, then applies that to the balance each day of the cycle. At 24% APR, one month of interest on a $5,000 carried balance is roughly $100.
APR excludes compounding — the interest your interest earns. That is why APR and APY, its saver-side cousin, are different numbers, and why a savings APY is comparable across accounts while a card APR is not directly comparable to one.
Plumb is financial education, not financial, investment, tax, or legal advice.