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.

The most common way in which credit card companies calculate your interest: by adding each amount owed daily and then dividing that total by the number of days in the billing cycle.

Moving the balance from one of your credit cards to a different credit card. On all credit cards you can always transfer a balance away from them (i.e. to another credit card). However, not all credit cards allow you to transfer a balance into them.

Your annual percentage rate expressed on a daily basis.

The penalty interest rate assessed on a credit card, which is in default. Default APRs are usually above 20 percent. The definition of whether you are in default or not varies between credit card companies and based on whether you are using a small business credit card vs. a general consumer credit card. For some credit card companies, having missed a payment and/or having gone over limit can be considered as being in default. Some cards have a 'Default APR' and a 'Max Default APR' for seriously defaulted accounts.

Monies charged to card holders by credit card companies or loan providers. These include interest, transaction fees, and service fees.

The number of days from the billing date of your last bill to the due date of your current bill when you can pay your balance in full without accruing finance charges. This period is generally from 20-30 days. Grace period applies only to purchases. Cash Advances and Balance Transfers do not have a grace period and therefore finance charges get assessed on the cash and balance transfer balances immediately.

Monies billed on the balance of a credit card or loan, usually expressed as a percentage of the amount of money owed. The specific rate of interest is referred to as an Annual Percentage Rate (APR).

The interest rate each month, expressed as 1/12th of the Annual Percentage Rate.

An interest rate based on the banking system's fluctuating rate, usually in accordance with the Prime Rate.

In order to appeal to new customers, a credit card or loan might have a low or zero-percent introductory rate. This rate is good throughout the introductory period of time, so long as you do not go into default. At the end of the introductory period, this rate generally rises to the regular rate. If you go into default during the introductory period, you might skip directly from the introductory rate to the default APR.

A bonus APR offered to new card holders. The intro rate is only good for a set period of time, and at the end of that period (or if you go into default), the APR generally rises to its regular rate.

The interest rate described in terms of an amount of time. The monthly periodic rate is the cost of credit per month, or 1/12th of the account's APR.

The interest rate charged by banks for loans to its largest and best-rated customers. The prime rate changes based upon the rate the U.S. Federal Reserve charges to its member banks, and also changes based upon the demand for money. It is a major economic indicator.

The interest rate that will be charged on your balances after the Introductory Period is over (if applicable), assuming that you have not gone into default. The terms Regular Rate and Regular APR are used interchangeably. If the 'Regular Rate / APR' is a Range (e.g. 10% - 15%), that's because the final rate will be determined after you submit your application. The credit card or loan company's decision will be based on your credit history.

The number of months that you can enjoy the 'Introductory Rate' of your new credit card or loan, assuming you do not go into default. If an 'Introductory Period' is listed as a range (for example, 3 - 9 months), the final period will be determined by the credit card company after you submit your application. Their decision will be based on the strength of your credit history.

The interest rate that will be assessed on your cash advances or ATM withdrawals. Cash advances are not subject to any introductory rate and they have no grace period (i.e. the finance charges will start as soon as you make the cash advance).

This is the interest rate that will get assessed on your credit card balance (excluding any balance that you accumulate as a result of any cash advances or balance transfers that you make).

The penalty interest rate assessed on a credit card, which is in default. Default APRs are usually above 20 percent. The definition of whether you are in default or not varies between credit card companies. For some credit card companies, having missed a payment and/or having gone over limit can be considered as being in default. Some cards have a 'Default APR' and a 'Max Default APR' for seriously defaulted accounts.

The penalty interest rate assessed on a credit card, which is in default. Default APRs are usually above 20 percent. The definition of whether you are in default or not varies between credit card companies. For some credit card companies, having missed a payment and/or having gone over limit can be considered as being in default. Some cards have a 'Default APR' and a 'Max Default APR' for seriously defaulted accounts.

Refers to the practice of considering someone in default on a loan or credit card due to late payments or defaults on an unrelated credit card, loan or bill. Example: Imagine you have a credit card and a mortgage. If your credit card company practiced universal default and you missed a payment on your mortgage, then the interest rate on your credit card would automatically increase to the Penalty/Default APR even though, for the purposes of this example, you have not missed a payment on the card.

The interest rate assessed on a credit card, which is in default. Penalty APRs are usually above 20 percent and apply to the entire credit card balance. For consumer and student credit cards, you are considered to be in default if you are more than 60 days late in paying your bill. For small business credit cards, the definition of whether you are in default or not varies between credit card companies. For some credit card companies, having missed a payment and/or having gone over-the-credit-limit can be considered as being in default. Some cards have a range for the Penalty APR, the max of which is referred to as a 'Max Penalty APR' and may be applied based on your creditworthiness and other factors. There may also be a different Penalty APR for cash advances, which is referred to as the 'Cash Penalty APR' and is usually higher than the Penalty APR applied to purchases and balance transfers.

This is the interest rate that applies to your balance for cash advances once your credit card is in default. Most credit cards apply the same Penalty APR to all portions of your balance, but some credit cards have a different Penalty APR for cash advances, which is usually higher than the Penalty APR applied to purchases and balance transfers. For more information, please see our explanation on the Penalty APR.

Double-cycle billing describes the credit card company practice of determining monthly finance charges by looking at your average balance over the last two billing cycles (i.e. 60 days) instead of the more common practice of considering the average balance of the current billing cycle (i.e. 30 days). This often results in consumers paying more in interest. Example: The formula used to calculate Finance Charges (FC) is: FC= (Average Daily Balance * APR * Days in Billing Cycle) / Days in Year Therefore, if your Average Daily Balance was $600 one month and $200 the next and your APR was 10%, your finance charge under a double-cycle billing system would be $3.28 ($400 * 10% * 30 /365). Under a single-cycle billing system, the Finance Charge would be roughly half that, $1.64 ($200 * 10% *30 /365).