Is the statement “The term 'APR' should always be used when discussing the cost of credit” true or false?

The statement "The term 'APR' should always be used when discussing the cost of credit" is indeed true, as it emphasizes the importance of using the Annual Percentage Rate (APR) as a standardized measure of the cost of borrowing in financial discussions. APR provides consumers with a clear understanding of the total annual cost of credit, expressed as a percentage of the loan amount. This standardized measure includes not only the interest rates but also any applicable fees associated with the loan or credit product, allowing for better comparison among various borrowing options.

Using APR helps consumers make informed decisions about credit, as it serves to represent the true cost of borrowing over a year. Therefore, it's crucial for discussions related to loans, credit cards, and mortgages to consistently include APR, ensuring transparency and clarity for consumers. This practice is vital in promoting responsible borrowing and protecting consumers from misleading representations regarding credit costs.