Glossary
APR (annual percentage rate)
APR (annual percentage rate) is the yearly cost of borrowing as a percentage: on a credit card, the interest rate on balances you carry; on a loan, the interest rate plus certain fees.
Lenders must disclose APR under the Truth in Lending Act and Regulation Z, so it is the standard figure for comparing credit. A card can have several: a purchase APR, a balance transfer APR, a cash advance APR and a penalty APR.
Card issuers charge interest daily: the daily periodic rate is the APR divided by 365, applied to your average daily balance. If you pay the statement balance in full by the due date, the grace period means no interest on purchases.
For loans, APR adds prepaid finance charges such as origination fees to the interest rate, so a loan with fees has an APR above its note rate.
Example
$5,000 carried on a card at 24% APR
- Daily rate
- 24% ÷ 365 days
- 0.0658%
- Time to pay it off
- Paying $200 a month
- 36 months
- Interest you pay
- On top of the $5,000
- $2,001
What you pay in all$7,001
$5,000 you borrowed$2,001 of interest
Where you’ll see it on RateHerald
- Variable card APRs today19.74–28.74%The prime rate plus a margin of 12.74 to 21.74 points, on the 11 cards whose terms state their margin over prime.
- Prime rate today7.00%In effect since Sep 17, 2026. Most variable card APRs move with it.
- 0% intro APR credit cards179cardsLongest 0% period first, then the lowest balance transfer fee. First today: U.S. Bank Shield® Visa® Credit Card, 0% for 21 months, 5% transfer fee.
Related terms
- APY (annual percentage yield)The percentage a deposit earns in a year, counting compounding: the figure banks must quote for savings accounts, money market accounts and CDs.
- Variable APRAn interest rate that moves with an index, usually the prime rate: the card or loan adds a fixed margin to the index, so the APR rises and falls with it.
- Penalty APRA higher interest rate, often near 30%, that a card can charge after you pay late: on new purchases with 45 days' notice, and on existing balances once a payment is 60 days late.
- Grace periodA credit card's grace period is the time between the end of a billing cycle and the payment due date, at least 21 days, during which new purchases charge no interest if you paid the last statement in full.
- Origination feeA one-time charge for making a loan, often 1% to 10% of the amount on personal loans, usually deducted from the money you receive and included in the loan's APR.
Sources: CFPB: Regulation Z, 12 CFR 1026.14 · CFPB: Regulation Z, 12 CFR 1026.22