What is the significance of the Annual Percentage Rate (APR) for a credit card holder?

The Annual Percentage Rate (APR) is significant for a credit card holder because it indicates the yearly interest charged on borrowed money. This percentage is crucial as it allows consumers to understand the cost of borrowing on their credit card balance if they do not pay it off in full each month. The APR provides a standardized way to compare different credit card offers, as it includes not just the interest rate, but also reflects the fees associated with the credit. Therefore, a higher APR suggests that the cost of borrowing on that card will be greater, while a lower APR offers a more favorable borrowing rate. Understanding APR helps cardholders make informed financial decisions and manage their credit effectively.