Credit Card Glossary
Annual Percentage Rate (APR)
Often the annual percentage rate is referred to by its an acronym of APR. This term refers to the interest rate as applied to the charges on your credit card. Your interest rate can be either a fixed rate or a variable rate although in truth all credit card annual percentage rates are all variable.
A variable rate ties your interest each month to a standard such as the U.S. Prime Rate that is published in the Wall Street Journal.
Another thing to note that even though it may be described as so, your credit card interest is never offered at a prime rate. Rather the credit card company calculates your credit card’s interest rate by adding a factor such as 5.99 percent to the Prime Rate. So your annual percentage rate of interest is based on a calculation that sets your credit card interest rate not just on one interest rate.