Why is the annual interest rate more important to a borrower who carries a balance than to a borrower who pays off the balance monthly?

The annual interest rate is crucial for a borrower who carries a balance because it determines the cost of borrowing over time, influencing how much interest accrues on the outstanding amount. For those who pay off their balance monthly, the interest rate has a minimal impact since they avoid accruing interest altogether by settling their debt in full. Therefore, borrowers with balances face higher costs due to interest charges, making the rate a key factor in their overall financial burden.