APR stands for annual percentage rate and is basically a percentage that helps you understand the cost of borrowing. In a nutshell, it’s the interest rate plus the additional charges of holding a balance on your credit card and as a rule of thumb the lower the APR the less interest you’ll pay over time. Before you apply for a credit card, all lenders have to tell you the APR and it can help you make sure you’re getting the best deal if you are someone who typically holds a balance on a credit card. APR can be a good way to compare different credit cards but it’s worth noting that what you actually pay in interest depends on how and when you pay off your debt. Generally, APR rates on credit cards range from 15% to 25%. The higher your credit score, typically the lower the percentage. A good credit score makes it a lot easier to get a favourable APR, so improving your credit score is a good first step toward a better APR. It’s worth noting that these rates are usually based on rates for making new purchases (e.g. buying something online or instore). Rates for other transactions, such as cash withdrawals or balance transfers, may be different. What APR your credit card has affects how much you pay so it’s worth doing your research – some offer 0% APR for a promotional period on new purchases or balance transfers, but always check the terms and conditions carefully to make sure you’re aware of exactly what you’ll be paying.