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A Schumer box is the table of the tariffs and fees that apply to a particular credit card. This “field” must be disclosed in a standardized format at the top of every cardholder contract as part of the Lending Truth Act. The purpose of a Schumer Box is to make it easier for consumers to compare the various tariffs and fees between credit cards and to avoid the possibility of hidden or unknown fees that may not be clear at the time the cardholder applied for it.
Credit card issuers are required by law to disclose the Schumer Box in all promotional materials, both by post and online. A Schumer box has a standardized format that must contain the basic tariffs and fees for a specific card and must be printed or visible in a conspicuous and understandable form and the shopping APR must be in a font size of at least 18 points.
Why is it called the Schumer Box?
In 1988, then Representative Chuck Schumer (D-NY) (now a New York Senator) endorsed a law called the Fair Credit and Charge Card Disclosure Act of 1988. That ruling changed the previous Truth in Lending Act (TILA) by adding issuers to it Requested that consumers provide important financial information about the tariffs and fees of a particular credit card. This information should be published in a table called the Schumer-Box.
Understand the Schumer-Box
Important information in a Schumer box
Several pieces of information must be disclosed in a Schumer box in a clearly legible format. These include:
- Buy APR. The interest rates must be visibly indicated for all purchases. Most credit cards use floating rates, which means they can fluctuate along with changes in the Federal Reserve’s policy rate.
- Other APRs. All other interest rates, including promotional APRs on purchases or credit transfers, must disclose the exact offer, the duration of the offer and the interest rate after the promotional period expires.
- Fixed / variable prices. When identifying the annual percentage rate of charge, it must be stated whether the interest rate is fixed or variable.
- Payment term. This is the exact amount of time, in days, that a cardholder must pay back their balance before they are charged interest.
- Annual fee. Any annual or periodic fees charged for holding the card must be clearly shown.
- Interest calculation method. Most, but not all, credit cards use an average daily balance method to calculate interest, which means that your interest is compounded and accumulated every day based on a daily rate. Whichever method your card uses, it must be clearly identified.
How to use the information in a Schumer box
The purpose of a Schumer Box is to provide an easy-to-understand way for consumers to review the prices and fees of a particular credit card so that they can make an informed decision about which card to choose.
For example, someone trying to decide between two cash back cards should look beyond cash back to see if one card is better suited than another. If both cards are earning rewards for the same price but one has an annual fee, the no-annual card is likely a better option. Likewise, someone who normally carries a balance may find that a card with an annual fee but a low interest rate is a cheaper choice than a card with no annual fee but a higher interest rate. Using the details highlighted in a Schumer box makes it much easier to compare the options.
Where can you find the Schumer-Box?
The Schumer-Box can be found in the cardholder agreement that is sent to you when you open a new account with your card. When you run out of it, you may be able to get your consent through that Consumer Financial Protection Bureau (CFPB) credit card agreement database.
The Schumer Box can usually be found by clicking a link on the card issuer’s main page, usually in smaller font near the “Apply Now” button. Issuers use different expressions to describe the link to the tariff and fee table. Here are some of the most common ways different issuers identify the link:
- American Express: Look for a link that says “Prices and Fees”.
- Bank of America: Look for a link that says “Check Rates and Fees” or “Terms and Conditions”.
- Barclays: Look for a link that says “Prices and Fees”.
- Capital one: Look for a link that says “See key rates and details”.
- Chase: Look for a link that says “Prices & Terms”.
- City: Look for a link that says “Pricing Details”.
- Discover: Look for a link that says “See prices, rewards, and other information.”
- US bank: Click the Apply Now button, then click the Terms and Conditions link.
- Wells Fargo: Look for a link that says “Important Credit Terms”.
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Is the Schumer Box a Law?
The Schumer-Box is the legally prescribed table of tariffs and fees that must be disclosed to potential cardholders and made available to existing cardholders in their cardholder contract. It has become a rule to include this information in the Fair Credit and Charge Card Disclosure Act of 1988 as part of updates and amendments to the Truth in Lending Act. Legislation on the fair disclosure of credit and charge cards was sponsored by then-Representative Charles Schumer of New York (now Senator).
How to read the terms of a credit card agreement sent by card issuers
The most important information about your credit card can be found in the Schumer box of your credit card contract. The Schumer box shows the interest rate or APR for all purchases you make when you have a balance, as well as any other applicable APRs, including if you decide to transfer a balance to the new card, use it to Receive a cash advance or pay late and trigger any penalty APRs that may be associated with the card. The Schumer-Box also lists all fees associated with card ownership, such as annual fees, foreign transaction fees and / or penalties.
In addition to the tariff and fee table, the text of the card agreement contains all other relevant details about your respective card, including the terms and conditions of welcome bonuses, the terms and conditions of all rewards programs associated with the card, and any additional cardholder benefits such as a free check pocket benefit on an airline -Card or extended warranty protection. It’s always worth getting to grips with all the details of your card because they can be money-saving features that you didn’t know about.
Are foreign transaction fees mentioned in the Schumer-Box?
Foreign transaction fees must be reported in the Schumer field in the fees section which lists other fees including annual fees, membership dues, or other recurring fees. The law requires that all fees associated with purchasing goods or services with a credit card be disclosed. So if a particular credit card raises a fee for the purchase of something in another country, this must be stated in the Schumer box.