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Credit card APR is the Annual Percentage Rate charged on carried balances. Compounded monthly or daily, it's the dominant cost factor in credit card debt.
Credit card APR is calculated and charged monthly (sometimes daily compounding), not annually. A $5,000 balance at 22% APR accrues approximately $91 in interest the first month if no payment is made. APR is the dominant cost factor in credit card debt — small APR differences result in large differences in total interest over multi-year payoffs.
A $10,000 balance at 22% APR with $200 monthly payment takes approximately 109 months to pay off and costs ~$11,800 in interest. The same balance at 18% APR with the same payment takes ~80 months and costs ~$6,000 in interest. Same balance, same payment — 4 percentage points of APR makes ~$5,800 difference.
APR vs APY: APR doesn't include compounding effects; APY does. Credit cards typically advertise APR. Variable vs fixed APR: Most credit card APRs are variable, tied to the prime rate, and can change based on the issuer's discretion. Promotional APR: 0% intro APR on balance transfers or new purchases is a common feature; reverts to standard APR after the promotional period.