Final answer:
The yearly rate of interest on a charge card is called the annual percentage rate (APR). It typically ranges from 12% to 18%, and cardholders have to pay it on any balance they carry beyond the grace period.
Step-by-step explanation:
The annual percentage rate (APR) is the yearly rate of interest on the charge card. When using credit cards, cardholders are borrowing money from the card's issuer with the agreement to pay back the borrowed amount plus interest. Most credit cards offer a grace period in which the loan can be repaid without incurring interest charges, but after this period, the APR applies.
A typical credit card APR ranges from 12% to 18%. For instance, with an average APR of 15% per year, Americans cumulatively pay tens of billions of dollars annually in interest on their credits cards, in addition to any fees for the credit card or late payments.