What is APR on credit cards?
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In short: APR (Annual Percentage Rate) is the yearly cost of borrowing on a credit card, including interest and mandatory fees, expressed as a percentage. The representative APR is what at least 51% of accepted applicants receive; your actual rate may be higher depending on your credit profile.
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Credit card APR shows the annual cost if you carry a balance and pay in a standard way. It combines the purchase interest rate with certain fees spread over a year. If you pay your statement balance in full each month by the due date, you pay no purchase interest — so APR matters most when you revolve debt.
Advertised cards show a 'representative APR'. Under FCA rules, at least 51% of people approved for that product must get that rate or better; the rest may be offered a higher APR based on risk. Cash withdrawal APR is almost always higher than purchase APR and applies from the moment you withdraw — there is no interest-free period on cash.
Many cards offer introductory 0% periods on purchases or balance transfers. When the promotion ends, the standard APR applies to any remaining balance. Always check the revert rate, not just the headline 0% offer.
APR does not capture every cost — annual fees on premium cards, foreign transaction fees and late payment charges are separate. To compare cards fairly, look at representative APR for purchases, the length of any 0% deal, and whether a fee applies. Clearing debt within an interest-free window beats chasing the lowest APR on ongoing balances.
Primary source: moneyhelper.org.uk/en/everyday-money/credit/credit-cards
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