What is APR?

You may see commercials all the time for credit cards that carry low APR, and wonder what that means.

For one thing, you need to keep in mind that an APR - which stands for "annual percentage rate" - isn't always the same as an interest rate. That's because, sometimes, APR includes not only interest, but also some of the fees associated with the account. So, what that basically means is if you have a credit card with an APR of 15 percent and you have a balance of $1,000 and neither add to nor subtract from it, over the course of the year the interest rate and fees associated with the card will add $150 to your balance.

This isn't true of all credit cards, though, and some might list their APR as one number without including fees in it. For that reason, it's important to take a close look at the terms of any card you apply for.