By Kenneth J. Benton, Consumer Regulations Specialist, Federal Reserve Bank of Philadelphia The Regulation Z amendments will be reviewed in two installments. In this issue, we will discuss the extensive changes to credit card application and solicitation disclosures under §226.5a of the regulation.
In the Second Quarter 2009 issue, we will discuss the remaining changes for account-opening disclosures, periodic statement disclosures, change-in-terms notices, and advertising. What is a schumer box.
what is a schumer box, The June 2007 rulemaking proposal would have required card issuers that impose penalty fees and penalty rates to cross-reference disclosures about penalty rates with the disclosure for penalty fees. This proposal was not adopted in the final rule because consumer testing suggests that cross-references from penalty fees to the penalty APR did not improve consumers’ understanding of the circumstances in which penalty pricing can be applied to their accounts.
The Board was also concerned about information overload in light of the testing results.
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About video of what is a schumer box
What is the purpose of a Schumer box?
A Schumer box is a summary of a credit card’s rates and fees—it lets you know what a given credit card is likely to cost you if you use the card overseas, take out cash advances or pay late. It also includes information about grace periods and penalty rates.
What is a Schumer box simple definition?
A Schumer [Charles Ellis Schumer (/ˈʃuːmər/ SHOO-mər; born November 23, 1950) is an American politician serving as the senior United States senator from New York, a seat he has held since 1999, and as Senate Majority Leader since 2021] Box is a required summary of a credit card’s rates and fees that is visible in credit card agreements. It shows what the card will cost consumers, including the various annual percentage rates (APRs), an annual fee, a cash advance fee, a late payment fee, and a returned payment fee, among other expenses.
What is a Schumer box example?
Say the Schumer box for one credit card shows that the card’s APR is 8.99%, 10.99%, or 12.99% based on a potential borrower’s creditworthiness. If a potential borrower’s credit score is 780, they can safely assume they’ll qualify for the 8.99% APR, based on their better-than-average credit score.
What is another name for the Schumer box?
That legislation is known as the 1968 Truth in Lending Act, and its purpose was to protect consumers in transactions with lenders and creditors.
Why is the Schumer box necessary?
The purpose of a Schumer box is to make it easy for consumers to compare the various rates and fees between credit cards and to avoid the possibility of any hidden or unknown fees that may not have been clear when the cardholder applied.
What are the 3 most important things about the Schumer box?
A Schumer box is a summary of a credit card’s rates and fees—it lets you know what a given credit card is likely to cost you if you use the card overseas, take out cash advances or pay late. It also includes information about grace periods and penalty rates.
What is included in a Schumer box?
A Schumer box is a summary of a credit card’s rates and fees—it lets you know what a given credit card is likely to cost you if you use the card overseas, take out cash advances or pay late. It also includes information about grace periods and penalty rates.
What are the 3 things in a Schumer box?
A Schumer box is a summary of a credit card’s rates and fees—it lets you know what a given credit card is likely to cost you if you use the card overseas, take out cash advances or pay late. It also includes information about grace periods and penalty rates.
What is a schumer box, Regulation Z currently requires issuers to disclose inside the Schumer box the name of the balance computation method used by the card issuer to calculate the balance for purchases on which finance charges are computed.
In the final rule, issuers must now disclose this information directly below the box because testing revealed that consumers do not rely on this information when shopping for a credit card.
The Board did not want to include information inside the box that is not important to consumers and that would detract from information that is important.
