The idea of credit!!!

The cost of credit is the additional amount, over and above the amount borrowed,
that the borrower has to pay. It includes interest, arrangement fees and any
other charges. Some costs are mandatory, required by the lender as an integral
part of the credit agreement. Other costs, such as those for credit insurance,
may be optional. The borrower chooses whether or not they are included as part
of the agreement. Interest and other charges are presented in a variety of
different ways, but under many legislative regimes lenders are required to quote
all mandatory charges in the form of an annual percentage rate (APR). The goal of
the APR calculation is to promote ‘truth in lending’, to give potential borrowers
a clear measure of the true cost of borrowing and to allow a comparison to be made
between competing lending products.

From Wikipedia: I couldn’t have said it any better!