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What is a Purchase APR?

7 min read

Last Updated: February 4, 2026

Table of contents

Key Takeaways

Your purchase APR (annual percentage rate) is the interest rate you pay for purchases you make with your credit card.
Purchase APRs are either fixed (won’t change without advance notice) or variable (can fluctuate without notice).
Having a good credit score may help you qualify for lower available APRs.

You may have come across the abbreviation APR while comparing credit card options. APR is short for annual percentage rate, which determines the interest you pay yearly on a borrowed amount. While this seems simple, you might actually pay a different APR on your credit card for different types of transactions. So, what does that mean in dollars and cents, and how might it impact your credit card spending?

What is purchase APR? It’s the interest rate your credit card issuer applies to purchases you make with your credit card. However, they only charge interest if you don’t pay your credit card balance in full by the payment due date at the end of each billing cycle.

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Where might you find your purchase APR?

Your purchase APR may be found in a few places:

At the top (or near the end) of your monthly card statement, in a section explaining how your interest charges get calculated every month
In the terms and conditions agreement you receive with your credit card
In the account details documented in your online account

How do you calculate your interest based on your purchase APR?

Interest increases daily in a process known as “compounding.” To calculate how much interest you owe at the end of the month, convert your APR to a daily percentage rate by simply dividing your APR by the number of days in a year. At the end of each day, the card issuer will multiply your current balance by that daily rate to generate the daily interest charge in a process known as compounding.

Worried about interest charges? Paying your balance in full each month may help you avoid paying more than you have to.

Check out the Discover^® credit card interest rate calculator to calculate your credit card interest based on your APR, balance, and monthly payment, and see how adjusting your payment changes how long it takes to pay off your balance.

When does your purchase APR apply?

Your purchase APR is applied to all purchases made with your credit card. However, some credit card companies offer a grace period to pay off your balance. Discover Cardmembers have 25 days from the end of the monthly billing cycle before accruing interest. Any balance on the card after that is subject to your purchase APR, so paying it off every month is key to avoiding interest.

What’s a good purchase APR?

A good general guideline when comparing purchase APRs is to try to find one that’s as low as possible. Keep an eye out for rates below the national average. You may be able to take advantage of promo offers that lower your interest rate for a certain amount of time.

Are there different types of purchase APRs?

Purchase APRs come in a few unique forms, and they all impact your total balance differently.

Variable APR

A variable purchase APR fluctuates based on a bank’s prime rate, or the general rate banks offer to favored customers, like large businesses. Banks determine their own prime rates and use them as a benchmark for rates across their other products. The benchmark rate is influenced mainly by the federal rate banks use when borrowing from one another.

Your credit card company calculates your variable APR using the prime rate plus an added margin the company sets. The more it costs banks to borrow the money they lend you, the higher your APR might rise. However, your rate may also decrease if the prime rate goes down. Your credit card agreement should explain when the card issuer might adjust your rate.

Fixed APR

A fixed APR isn’t based on an index like a prime rate and may not change as often. However, this doesn’t mean they never change. In most cases, credit card companies must notify customers ahead of fixed rate increases. Credit card offers with a fixed rate are increasingly rare.

According to the Office of the Comptroller of the Currency, your credit issuer can’t change the rate for the first year after the card is issued, but there are exceptions. For example, late payments may trigger a rate increase, fixed APR or not.

Introductory APR

An introductory purchase APR is a temporary interest rate sometimes offered when you get a new credit card. At the end of this promotional period, your purchase APR will return to a regular rate and apply to your unpaid credit card balance and future purchases.

Did you know?

Introductory purchase APRs are usually much lower than regular purchase APRs, even as low as 0%. Credit cards with an intro 0% APR are ideal for making and paying off large purchases during the promotional period.

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Are there other credit card APRs besides a purchase APR?

Aside from your purchase APR, you may encounter other APRs when using your credit card.

Balance transfer APR

A balance transfer is when you move a balance from one credit card to another (usually with a lower interest rate to pay off debt). The interest charged on the balance transfer amount is your balance transfer APR. It may be higher than your purchase APR. Be aware that many credit card issuers also charge a balance transfer fee.

Some credit cards offer a low intro APR on balance transfers. With regular monthly payments, a low introductory APR can make it easier to pay what you owe.

Penalty APR

You may get charged a penalty APR if you make a late payment or exceed your credit limit. A penalty APR is higher than your purchase APR. Your terms and conditions agreement should provide your issuer’s late payment policy.

Cash Advance APR

Some credit cards let you withdraw cash up to a specified limit, called a cash advance. Your cash advance APR is usually higher than your regular purchase APR, and an intro APR rarely applies to cash advances.

How do you get a low purchase APR?

Now that you understand purchase APRs, you may be wondering how to get the best credit card interest rate. Credit card purchase APRs vary widely depending on the type of card you’re applying for.

One of the best things to do to get a low purchase APR is having a strong credit score. Building good credit may also qualify you for promotional offers, like a 0% intro APR. You’ll also need to show a history of on-time payments.

The bottom line

By understanding how a purchase APR is calculated and how it impacts your balance, you’ll be on the right track to managing your borrowing and making the most of your credit card balance. Remember, your purchase APR only effects the balance after the grace period. Stay on top of your payment due date, and you’ll feel confident controlling it instead of letting it control you.

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