APR stands for Annual Percentage Rate — the yearly cost of borrowing on a credit card, expressed as a percentage. In Canada, APR and the purchase interest rate are often the same number for credit cards, but understanding exactly what APR covers helps you compare cards accurately.
APR vs. Interest Rate: What’s the Difference?
In Canada, the terms are often used interchangeably for credit cards. Technically:
- Interest rate: The cost of borrowing, expressed as a percentage of the outstanding balance
- APR: A broader measure that includes the interest rate plus any mandatory fees, expressed annually
For mortgages and loans, the APR is always higher than the nominal rate because it folds in origination fees, broker fees, and other charges. For credit cards, APR typically equals the purchase interest rate because the annual fee is disclosed separately, not embedded in the rate.
Example: A credit card with a 19.99% purchase rate has an APR of 19.99% (assuming no required fees folded in). The annual fee is disclosed separately.
Standard Credit Card APRs in Canada
| Rate Type | Standard Rate | Notes |
|---|---|---|
| Purchase APR | 19.99% | Industry standard since 1990s |
| Cash advance APR | 22.99% | Higher; no grace period |
| Balance transfer APR | 19.99% (or promo rate) | Promotional rates: 0%–3.99% for 6–12 months |
| Low-interest purchase APR | 8.99%–13.99% | Specialty low-rate cards |
| Penalty APR | Up to 24.99% | Applied after missed payments on some cards |
How Daily Periodic Rate Works
Credit card interest is calculated daily, not monthly. The daily periodic rate (DPR) = APR ÷ 365.
Example with 19.99% APR:
- Daily rate = 19.99% ÷ 365 = 0.0548% per day
- On a $1,000 balance carried 30 days = $1,000 × 0.000548 × 30 = $16.44 in interest
The interest compounds daily — meaning yesterday’s interest is added to today’s balance, and tomorrow’s interest is calculated on the new total.
When Does APR Apply?
APR applies when you carry a balance past your payment due date. If you pay your full statement balance every month by the due date, you pay zero interest — the APR is irrelevant to you.
APR matters when you:
- Pay only the minimum or partial statement balance
- Take a cash advance (no grace period — interest starts immediately)
- Miss a payment due date
Comparing Credit Cards Using APR
| Card Type | Typical APR | Best For |
|---|---|---|
| Standard rewards card | 19.99% | Cardholders who pay in full every month |
| Premium travel card | 19.99%–20.99% | Full-payers who value perks |
| Low-interest card | 8.99%–12.99% | Cardholders who carry a balance |
| Secured card | 19.99%–22.99% | Credit building; not for carrying balances |
| Retail/store card | 22.99%–29.99% | Almost never worth carrying a balance |
FCAC Disclosure Requirements
Under FCAC regulations, all Canadian credit card issuers must disclose:
- Purchase APR (in the credit card summary box)
- Cash advance APR
- Balance transfer APR
- The minimum payment calculation formula
- Estimated time to pay off balance at minimum payments only
This standardised disclosure makes it straightforward to compare APRs across issuers.
Related Articles
- What Is APR in Canada? (Full Explainer)
- How Credit Card Interest Works in Canada
- Best Low-Interest Credit Cards in Canada
- Credit Card Grace Period in Canada
- Credit Card Basics — Canada Guide
APR figures are standard rates as of publication. Promotional rates and individual cardholder rates may differ. See our Advertiser Disclosure.