Annual Percentage Rate (APR)

Explanation: The rate on how much money the financial institution charges you on your credit card balance or loan, expressed as an overall percentage of your balance.

For example, if your loan has a 10% APR, you will pay $10 annually for every hundred dollars of balance.

Usually, different types of credit card transactions have different APRs. One card might have a different APR for cash advances than for purchases or balance transfers. Also, some credit cards appeal to consumers with a low introductory APR; for example, 0% APR on balance transfers (or purchases) for six months.

Our Thoughts: The way you manage your credit card payments can reflect upon your APR: miss a couple of payment deadlines and your APR might go into "default" and skyrocket by 10-20 percent!