Definition:
An interest rate is the rate charged or paid for using money. You are charged an interest rate when you borrow money and paid an interest rate when you loan money (placing it in a savings or investment account is like a loan to the bank).
With credit cards and loans, the interest rate directly influences the cost of borrowing. Lower interest rates mean you'll pay a lower cost, while higher interest rates mean a higher cost. You'll see the cost reflected in your finance charges.
Your interest rate is typically influenced by your credit score. Low credit scores lead to high interest rates and vise versa.
Interest rates are typically expressed as an annual percentage rate - the yearly cost (or benefit) of borrowing (or loaning) money.
