What does APR stand for in the context of credit cards?

In the context of credit cards, APR stands for Annual Percentage Rate. This term represents the yearly interest rate charged on borrowed money, allowing consumers to understand the cost of borrowing on credit cards and loans. The APR is a crucial figure because it encompasses not just the interest rate but also any other fees or costs associated with taking out a loan or using a credit card. This comprehensive measurement helps consumers make informed decisions about their credit usage and compare different credit products effectively.

Understanding APR is essential for managing credit wisely, as it can significantly impact the total repayment amount over time. Consumers who are aware of their card's APR can better gauge how much interest they will pay if carrying a balance, leading to more informed financial decisions.