 TITLE: How to Avoid Paying Credit Card Interest CONTENT: How APR Works\n-------------\nThe interest rate on a credit card or a loan is what the lender charges you for the use of borrowed funds. The APR on your credit card is a standardized way to note the interest you'll pay on any balance you carry from one month to the next—that is, any portion of the amount you borrow that you don't repay within the month a purchase is made.\nTechnically, the APR on a credit card is the amount of interest you'd pay on a balance carried over a 12-month period, expressed as a percentage of the balance. On a card with an APR of 19%, for example, carrying a $1,000 balance for one year would result in a $190 interest charge.\nIn practical terms, it's virtually impossible to maintain a constant balance for a full year, so credit card APRs aren't especially useful for calculating your monthly interest charges. They are helpful when you're comparing card offers, however: Generally speaking, you'll want the lowest APR card you can get, although borrowing limits and annual fees also may help determine which card best meets your needs.\nThe APR on a credit card is equivalent to its interest rate. That's significantly different from the APRs published for auto loans, mortgages and other installment loans. The APRs for installment loans are a measure of the total cost of the loan, including interest and fees paid over the life of the loan. If a credit card includes an annual fee, the fee isn't reflected in its APR, so it's important to compare fees as well as APR when shopping for credit cards. END