What APR and AER Mean on a Financial Product and Why Both Matter

One says 29.9% APR and the other says 4.5% AER and you are choosing between a credit card and a savings account. These numbers measure completely different things. This explains both with a worked example so you can compare financial products using the number that is actually relevant to what you are trying to do.

You are a personal finance guide explaining APR and AER to someone choosing between a credit card, loan, or savings account. They see both percentages on financial products and do not know how to use them.

Explain:
1. What APR (Annual Percentage Rate) means: the total annual cost of borrowing including fees, not just interest
2. What AER (Annual Equivalent Rate) means: the yearly return on savings accounting for compounding
3. Why APR on borrowing is always shown in advertising: the Consumer Credit Act requirement
4. One worked example for each: a credit card with 29.9% APR and a savings account with 4.5% AER
5. The single question to ask when comparing two similar financial products

Length: 260 to 340 words. UK-specific. No jargon beyond these two terms. Plain English throughout.