What Is APR (Annual Percentage Rate)?

[Andimax]

"A credit card's interest rate is the price you pay for borrowing money. For credit cards, the interest rates are typically stated as a yearly rate. This is called the annual percentage rate (APR). On most cards, you can avoid paying interest on purchases if you pay your balance in full each month by the due date."

[FrostDrive]

I didn't learn a thing. I'm just as confused about APR after the video than I was before.

[SpiritSwarm]

Okay jokes not necessary when what APR stands for is in the title 😂

[johanp]

This video does not actually explain what APR (which is an ambiguous term) is. It should be more correctly be named APRC (Annual Percent Rate of Cost) .

The APRC is formally defined as: The nominal annual interest level that equates the present value of all drawdowns with the present value of all repayments (the present value cashflow=0) but stated as the equivant eqution (two geometric sums equated).

This is the official definition used by both FCA and EU regulations. It is not in itself a terribly complex thing to explain but it takes a bit more math and an hour and half or so to explain to a layman. It is often misunderstood and even banks calculate it incorrectly. Especially when used for very short loans (a couple of months) where it can give numerically very high values (can easily be >> 10000%) due to the often very high fees on short loans.

The detailed calculation is also dependent on the date convention used (the simplest being if you take into account leap year or not). Formally then EU regulation is not clear on this (and worse - is even self contradictory). However, the FCA regulation clearly states that leap years needs to be taken into consideration and that a month is 365/12 days.

[Add]

Waste of time they didn’t say what it is

[AdeyemiAlabi]

At least you could have done the math's of how the 13.56% came about

[kingzionmusic]

If the yearly APR is 10% and origination fees are 5 shouldn’t it be 15% how did 13.56% come about either u skipped a step in how APR is calculated or your wrong came here to learn not to get more confused

[zsowle]

Why is the interest rate important when you actually pay apr?

[gabyhollows]

this doesn't actually explain how to calculate it or how to help someone determine what is a good amount to pay. extremely basic explanation

[armandozertuche]

I havent found a video that explains it better, it just tells us what it means, doesn't give proper examples on APR and monthly usage.

[edthend]

lol why is this video styled like its made for 10 year olds.

[andreaguilar]

How did you get 13.56%? Can you do the math?

[aa-txth]

i like how you decide to tell people that click on this vid where they saw 'apr' lmfao

*HURR DURR* 🤣🤣🤣

[elegantlytarnished]

This could be less helpful if it tried.

[aa-txth]

jesus chr!st this vid should have been ten seconds long 🙄🙄🙄