text: The APR is the annual percentage rate.  When this number is divided by the number of legal banking days (used to be 360), you get the daily rate.  The balance due on your credit card on any given day is multiplied by the daily rate.  The product is then added to the original balance due and carried over to the next day, then multipled by the daily rate again, etc, etc, etc.  The finance charge per month is all the daily rates added together.