Definition

APR expresses what a loan or credit card actually costs per year, bundling the interest rate with required fees so different offers can be compared on equal footing. For credit cards, the APR is essentially the interest rate, and balances left unpaid compound against you. For savings, the comparable measure is APY.

1. Annual Percentage Yield (APY)

   The real yearly return on savings, including the effect of compounding.
2. Compound Interest

   Earning returns on both your original money and on the returns it has already produced.
3. Revolving Credit

   A credit line you can borrow against repeatedly up to a limit, like a credit card.