Credit Card Agreements
BOSTON (CBS) - It is the fine print in the credit card document that spells out all of the fees. The big print giveth and the small print taketh away!
Often referred to as the Schumer box, named after Charles Schumer, then-chairman of the Senate Banking Committee that passed the consumer protection legislation which required the credit card companies to present their info in a standardized format.
The Schumer box essentially lays out all of the fees of the credit card so the consumer can easily understand the terms and compare them with other cards. When you are applying for a new card be sure to at least look at the Schumer box if nothing else in that multiple page document. And if you can, compare several credit card offers.
Here's what you will find in the Schumer box:
- Annual percentage rate for purchases - this is usually based on your credit score, the higher your score the lower that rate will be. You want a card with a fixed rate.
- The APR for transfers – these can vary and may be based on prime
- The APR for cash advances - which is always very high, it's a Gotcha moment
- The penalty APR - yes Virginia they can raise your rate if you make a late payment
- Minimum finance charges – usually 50 cents
- Grace period - The period between the end of a billing cycle and the date your payment is due. Your bills are mailed or delivered at least 21 days before they are due.
- Annual fee - the higher your credit score, the more no fee cards available to you. Look for a card that doesn't charge a fee.
- Transfer fee - usually 5%
- Cash advance fee - could be a dollar amount like $10 or a percentage of the amount
- Late fees - they start with $25 and the second time it's more. Make a note on your calendar as to when to pay your bill so it's never late.
- Over the limit fee – some companies don't charge others charge $39
- Returned payment fee - your check bounces, they charge you a fee, it increases your interest rate, and there's fees as well
- Foreign transaction fees - usually 3%
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You can hear Dee Lee's expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.
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