The annual interest rate you're charged on any credit card balance you don't pay off in full.
APR, or annual percentage rate, is the yearly interest rate charged on any balance carried on a credit card past the due date, and it tends to run far higher than almost any other common form of borrowing, often well above 20% a year. Paying a card off in full each month avoids it entirely, but carrying a balance means that rate compounds against the cardholder the same way interest can compound in their favor in a savings account, just working against them instead. It's one of the most expensive ways to borrow money in ordinary personal finance.
Part of the Open Bell Glossary — plain-English explanations of the terms that come up on the show. Browse every term.