APY

APY is how much your money grows over a year when you stake or save it, with compounding baked in — the return earning its own return. It’s the number that tells you what holding a yield-bearing asset actually pays.

Why it matters: don’t confuse it with APR, which runs the other way — APY is what you earn, APR is what you pay to borrow. On crypto cards the two often sit side by side: the same product can pay you a staking APY on your collateral while charging an APR if you spend on borrowed money. And because a quoted APY is usually variable, not fixed, treat it as today’s rate, not a guarantee — and remember a yield paid in a volatile token is only worth its fiat value at the moment you cash out.

For example: ether.fi earns a staking yield on the ETH backing its Cash card, so your collateral keeps working while it secures your spending. The same card charges a 4% APY on its Borrow Mode if you spend against that collateral instead of from cash — a neat illustration of why the earn rate and the borrow rate are two different numbers worth checking separately.