Every credit card offer has to give certain details about the credit card's pricing and fees. The Truth in Lending Act requires credit card issuers to include these credit card disclosures with credit card applications and with new credit cards. Here's what to expect in a credit card disclosure.
APRs
Credit cards often come with multiple APRs (annual percentage rate) and they must all appear in the credit card disclosure.
APR for purchases or regular APR. Several APRs or an APR range may be listed. The APR you qualify for is based on your credit history, amount of debt, and income.
Any promotional APRs must be listed, along with the promo rate's tlme limit, and whether certain actions will end the promo rate immediately.
Balance transfer APR. Any introductory balance transfer rate should be listed as well as the rate's time period, and post-promotional balance transfer APR.
Cash advance APR. The cash advance APR is typically higher than other APRs.
Each APR disclosure must state whether the APR is fixed or variable.
Penalty APR
The penalty APR, also called default APR, is the APR that goes into effect when you default on your credit card terms. The disclosure must state the penalty APR, what you do to trigger the APR, and how long it will last.
Grace Period
The grace period is the amount of time you have to pay your balance in full before you pay interest. The grace period may appear on the credit card disclosure in a section called “How to avoid paying interest on purchases.”
Note that grace periods usually only apply to purchases, not balance transfers and cash advances. That means interest begins accruing on those balances immediately.
Minimum Finance Charge
Credit card companies often specify a minimum finance charge that you’ll pay whenever you’re charged interest on the account. For example, your minimum finance charge may be $1.00 even if your calculated finance charge is $0.75.
Finance Charge Calculation Method
Credit card disclosure must state how your finance charges are calculated. Credit card issuers use a number of methods to calculate your finance charge using your interest rate and either your beginning balance, ending balance, average daily balance, or an adjusted balance. Finance charges may or may not include new purchases.
Credit card issuers are no longer allowed to assess finance charges on balances that have already been paid, i.e. the double billing cycle method of calculating finance charges.
Fees
Credit card disclosure must contain a list of fees associated with your credit card. While these fees vary by credit card, some common credit card fees include, but are not limited to: annual fee, balance transfer fee, cash advance fee, foreign transaction fee (also called currency conversion fee), late payment fee, over-the-limit fee, and returned payment fee.
