Put simply, a credit card provides a
short-term loan from a bank that you are expected to repay quickly.
In exchange for giving you a short-term loan, the bank will charge you
interest — often referred to as an Annual Percentage Rate or
APR. An issuing bank will evaluate your credit-worthiness
and determine if you are a low risk candidate (likely to repay) or a
high risk candidate (unlikely to repay) for a line of credit, and will
offer you an APR based on your credit report and how it profiles you
financially. Some banks will offer you a “Teaser” APR —
essentially a low introductory rate that will change to a higher APR
six or more months later. We'll provide some guidance about
this concept below.