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APR vs. APY: Understanding The Difference

Reading Time: 3 minutes
Highlights
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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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