What does APR mean and how does it work?

The term “annual percentage rate” (APR) refers to the cost of borrowing money (also known as the interest rate on your credit cards), and it is the primary means through which the majority of creditors generate the majority of their revenue.

Credit card firms utilize the APR, which is stated as an annual rate, to compute the interest that is charged on a daily basis, and then they bill you on a monthly basis for this amount. To put it another way, you may convert your annual percentage rate (APR) to a daily percentage by dividing it by 365 in order to determine how much interest you will be charged for each day that you carry debt.

Your credit card firm will do a calculation at the end of each day that involves multiplying the existing amount on your account by the daily rate. After that, the next day, that daily interest charge will be charged to your existing amount.

Comparewise Credit Card Banner 728X90

Read other Q&As

How to Improve Your Credit Score
How to Buy Stock In Canada
What are Child Tax Loans
How to Invest In Canada
How to Choose Health Insurance for Seniors
Refresh Financial
Smarter Loans
MBNA True Line Gold Mastercard
Scotiabank Gold American Express Card
BMO Cashback World Elite MasterCard
Home Trust Secured Visa Card
RBC Avion Visa Infinite
Brim World Elite Mastercard


Didn’t find an answer to your questions?

Send us your questions and we will get back to you.

Car loan?
Personal Loan?

Top deals await you just a short
application away!