How To Read Your Credit Card Statement

by Hank Coleman

Can credit cards make you a millionaire?Have you noticed the box or table at the bottom of your credit card statements which has all of your rates, fees, terms, and conditions? It’s actually called a Schumer Box and is named after Charles Schumer, the New York Congressman, who was responsible for the legislation that required credit card companies to provide an easy-to-read table that discloses the rates, fees, terms, and conditions.

The box spells out your credit card agreement so you can easily understand it. It is a new requirement under the Federal Truth in Lending Act (TILA). Credit card companies must now use the same standardized format so consumers can easily compare rates and fees and hopefully understand how much having credit card debt actually costs them.

Now there is no more fine print…literally. The box also prints the long-term rate information in 18-point type or greater and the remaining terms of the credit card agreement in at least 12-point type.

Key Information From Credit Cards Displayed In The Schumer Box

  • Annual Percentage Range (APR) for purchases (or interest rate) – may include introductory and long-term rates
  • Other APRs – interest rates for balance transfers, cash advances, default, etc.
  • Variable rate information (if applicable) – explaining that your interest rate can (and will) change.
  • Grace Period – the period of time after your bill when interest charges are not yet applied on your debts.
  • Finance calculation method – applies if the credit card balance is not paid in full each month.
  • Finance Charges – the minimum amount charged if a balance is carried over month to month.
  • Annual Fee (if applicable)
  • Other fees – transaction fees, balance transfers, cash advances, late payments, over-limit, etc.

An Example Schumer Box And Where To Find Information

CARD DISCLOSURES
Annual Percentage Rate (APR) for purchases 0.00% for 7 months from date of account opening. After that, 17.24% variable.
Other APRs Cash advance APR: 25.24% variable.
Default APR: 29.99% variable. See explanation below.*
Variable rate information Your APRs may vary each billing period.**

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The purchase APR equals the Prime Rate plus 13.99%.
The cash advance APR equals the Prime Rate plus 21.99%.
The default APR equals the greater of (1) the U.S. Prime Rate** plus up to 23.99% or (2) up to 29.99%.
Grace period for repayment of the balance for purchases At least 20 days if you pay the total balance in full by the due date every billing period. If you do not, you will not get a grace period.
Method of computing the balance for purchases Average daily balance. This includes new purchases.
Minimum finance charge 50 cents.
Annual fees None.
Fee for foreign purchases 3% of the U.S. dollar amount of each purchase made outside the U.S. whether made in U.S. dollars or in a foreign currency.
Other fees
Balance transfer fee: 3% of each balance transfer; $5 minimum.
Cash advance fee: 3% of each cash advance; $5 minimum.
Late fee: • $15 on balances up to $100
• $29 on balances of $100 up to $250
• $39 on balances of $250 and over
Over-the-credit-line fee: $39
* How can your actions trigger the default APR? If you default under any card agreement you have with us because you
• do not make the minimum payment when due,
• go over the credit line, or
• make a payment to us that is not honored,
all your APRs may increase to the default APR as permitted by law. We set your default APR by reviewing (1) the seriousness of your default with us and (2) your credit history.
** How do we calculate variable rates? For each billing period we use the Prime Rate published in The Wall Street Journal two business days before the Statement/Closing Date.
When can we change the rates, fees, and terms of your card agreement? We may change the rates, fees, and terms of your card agreement from time to time as permitted by law. We will give you advance notice of the changes and a right to opt out to the extent required by law.

 

The box or table at the bottom of your credit card statements which has all of your rates, fees, terms, and conditions is called a Schumer Box and helps you understand how to read your credit card statement.

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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 575 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


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{ 1 comment… read it below or add one }

Chris

Now i Know the importance of Credit card statement this contains the information about Credit limit, cash limit, minimum amount due etc.,,,,,

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