APR (Annual Percentage Rate) shows up on every loan, credit card, and finance agreement, but most people aren’t taught what it actually means.
If you're deep in debt and wondering why your payments never seem to make a dent, APR might be the main reason why.
💡 What Is APR?
APR stands for Annual Percentage Rate. It's the yearly cost of borrowing money, expressed as a percentage.
Unlike the basic interest rate, APR can also include other charges like:
- Origination fees
- Annual fees
- Finance charges
That makes APR a more complete picture of what you’re really paying.
📉 How APR Affects Your Debt
Let’s say you have a credit card with a 29.99% APR, a common rate for people with missed payments or damaged credit.
Here’s what happens:
- Interest is calculated daily, based on your average daily balance
- That interest gets added to your balance every month
- Your minimum payment mostly goes toward interest, not the actual debt
So even if you’re paying every month, your balance can still grow.
🧾 Real Example:
If you owe $1,000 on a credit card with a 29.99% APR and only make the minimum payment (~$40/month), it could take years to pay it off, and cost you hundreds in interest.
That’s how the debt trap works.
⚠️ Types of APR to Watch For
Some credit cards and loans come with multiple APRs, depending on how you use them:
Always check your credit statement to see which APRs apply to your balance.
🧭 What You Can Do
- Try to pay more than the minimum—even an extra $10 helps fight the interest
- Avoid cash advances—they usually have no grace period and higher APR
- Know your APR so you can prioritize high-interest debt first
And if your balance is already past due or compounding fast, it might be time to look into debt reduction options.
At Relief, we help people request lower balances from creditors, directly through the app. No paperwork. No calls. Just a chance to take back control.
⚠️ Disclaimer: Relief does not provide financial advice. The information in this article is for educational purposes only and should not be considered a substitute for professional financial guidance. Please consult a certified financial planner or advisor for personalized support.
Links to external websites are provided for convenience and informational purposes only. Relief is not affiliated with these third-party sites and does not endorse or guarantee the accuracy of their content.
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