EyeOnKey terms A–Z
Quick definitions in plain English. Meanings and rules can vary by country and provider.
- APR
- The yearly cost of borrowing as a percentage, including interest and some fees.
- Balance transfer APR
- The rate charged on debt moved from another card, often lower than the purchase rate for a limited time.
- Cash advance APR
- The rate for cash withdrawals on a card. It is usually higher than the purchase rate.
- Comparison rate
- A rate used in some countries that rolls interest and fees into one figure for easier comparison.
- Daily periodic rate
- The APR divided by days in the year, used to calculate daily interest.
- Effective annual rate (EAR)
- The true yearly rate once compounding is included.
- Fixed APR
- A rate that does not change during the stated period.
- Introductory APR
- A temporary low or 0% rate that ends after a set period.
- Nominal rate
- The stated rate before compounding is taken into account.
- Penalty APR
- A higher rate some lenders apply after missed payments.
- Personalised APR
- The rate you are actually offered after the lender reviews your application.
- Purchase APR
- The rate that applies to everyday spending on a credit card.
- Representative APR
- A headline rate that must be offered to a set share of approved applicants.
- Standard APR
- The ordinary rate that applies once any promotional rate ends.
- Variable APR
- A rate that can move up or down with a benchmark rate.
What APR Is and how it’s reported
Annual Percentage Rate (APR) expresses the annual cost of borrowing as a percentage. It typically combines the interest rate with certain mandatory fees that apply during the life of a credit product, so it can help you compare different offers on a similar basis. APR is a tool for comparison, but it may not include every optional or penalty charge, so check full pricing details in loan documents.
Terms used to describe annual cost can vary by market and by product. You may also see a mortgage-specific label in some regions (local term: APRC). Lenders sometimes provide a nominal rate and an effective or annualized rate that takes compounding into account; understanding the difference helps you see the likely cash cost over time.
Common APR types and product labels
Fixed APR and variable APR describe how the rate behaves during your agreement. A fixed APR stays the same for the stated period, which can help with predictable payments. A variable APR can change in response to a reference rate or lender policy, so monthly payments or the total cost can vary over time.
Product-specific APR labels explain how different transactions are charged. Purchase APR is the rate for routine spending on credit, while cash advance APR applies to cash withdrawals and often starts accruing interest immediately. Balance transfer APR applies to debt moved between accounts and may be offered for a temporary promotional period. Penalty APR can apply if contract conditions are breached. Introductory or promotional APRs are time-limited and usually revert to a standard rate afterward; check any fees linked to those promotions.
Comparing APRs and estimating total cost
Some offers show example or representative APRs to illustrate typical pricing for applicants who meet certain criteria; your personalized rate can differ based on credit history and other factors. When comparing, review both the APR and any mandatory up-front or ongoing fees, and confirm which fees are included in the APR calculation and which are not. Use prequalification or soft-check options where available to see tailored price indications before a formal application.
To estimate cash flows, review the total amount payable: the sum of the amount borrowed plus all interest and mandatory fees over the contract term. Calculators and side-by-side examples can help you compare scenarios by changing assumptions such as term length, extra repayments, and upfront charges. Consider asking for an itemized cost breakdown and sample repayment schedule so you can compare offers on consistent terms.