The letters A-P-R stand for annual percentage rate, as in, the interest rate you pay on unpaid balances.
"Annual percentage rate was created, historically, more than 25 years ago as regulators were trying to make it easier for us to compare interest rates, " notes University of Wisconsin financial specialist Michael Collins.
Collins has done studies with consumers in which he's found most people don't know what an annual percentage rate is or how it works on their money.
"A.P.R's can be confusing. An interest rate is how much interest we pay each year. An A.P.R. is just an attempt to make an annualized rate in a standardized way."
The A.P.R. is a number you can use to help shop for money, whether it's a credit card, mortgage or car loan. The lower the number, the less interest you'll have to pay on the money you borrow or, with credit cards, the balance you don't pay off each month. Experts suggest you get three different offers before you decide, but Collins advises against basing your decision entirely on the interest rate.
"It is a good way to compare one loan to another, but you always need to be aware of what's included in an APR and are there any up front fees that are spread out over the period of the loan. Look at the fees, particularly with credit cards. If you pay off your loan balance every month but occasionally get socked with an over the limit or late payment fee, those can add up to a lot more than your APR."