Money lenders of all types, ranging from credit card companies to mortgage lenders, are free to charge any interest rates they want to whichever customers they choose, up to the limits mandated by prevailing regulations. The maximum amount that payday loan companies may charge varies widely by state. Likewise, rates charged by credit card companies vary widely, with many offering rates that range between 7 and 30%.
Each country has its own laws regulating how lending companies are required to communicate interest rates. The term APR, which stands for annual percentage rate, is required to be included in advertising by lenders in the United States by the Truth in Lending Act. Different provisions require the same term to be included in Canadian money lending advertising literature. The APRs in U.S. and Canadian money lender advertising literature are calculated the same way. They represent the total cost of a loan over a full year expressed as a percentage of the total value of the loan.
Member countries of the European Union each have laws pertaining to how money lenders may advertise the amounts they charge. Countries such as Australia have strict requirements pertaining to lenders disclosing the APR of loans, and countries such as Somalia and North Korea have no laws at all.
In the U.S., global money lenders are free to charge as much as they want, up to regulated limits. The goal of lenders is to lend the greatest amount of money at the highest interest rate possible. Once rates become too high, borrowers are free to choose other lenders. If rates are too low, the lender might not make enough money to survive. There exists an equilibrium between money lenders' supply and borrowers' demand globally that sees interests rates for mortgages, as of January 2015, starting near 3%, interest rates for credit cards ranging from 7 to 30%, and payday loans with APRs starting at about 30% and higher, into the triple digits.