Video

APR vs. APY: Understanding The Difference

Reading Time: 3 minutes
A pen rests on a credit card statement focused on the APR. Overlaid are the words: APR vs. APY: Understanding The Difference
Highlights
In this article

An annual percentage rate or APR is important for many types of credit. Learn more about what APR means, APR vs. APY, what it means for credit cards, and more. [Duration - 2:14]

Highlights:

  • Annual Percentage Rate (APR) is the total yearly cost of borrowing from a loan or credit card.
  • Annual Percentage Yield (APY) is the total amount of money earned on a savings account with compound interest.
  • Interest Rate is the price you pay to borrow money and can be charged annually, monthly or daily.
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