which you would know if you read the fine print.

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I read credit card terms around the clock, and in building a large-scale credit card information website like NerdWallet, I have to be able to break down every extraneous fee and every reward contingency into easily digestible information, so that consumers can understand them.? And I can tell you that standardizing credit card agreements into a two-column box is impossible, and that changing the font size isn’t going to fix that.? Most credit card resources on the web do little more than reproduce that box, along with bullet points provided by the issuer, but how is that really helpful?
Then there are the rewards programs,[link widoczny dla zalogowanych], which aren’t covered at all by consumer protection laws like the Card ACT.? There is no reference to rewards in any Schumer Box disclosure, so credit card companies are free to scatter rewards information willy-nilly so that no one truly understands how issuers manipulate their rewards programs.? How much do you need to accrue before you can redeem? When do the points expire?? How much do you need to spend to earn maximum rewards, and how much can you spend before your rewards get capped?? Do purchases at bars qualify for bonus rewards on restaurants?? These are all common questions that are different across cards and not listed in any standardized box.? For many cards they’re not even listed on the terms and conditions, but buried in a completely different rewards disclosure.
As I said before, these agreements are complicated for a reason.? The more we try to standardize the disclosures, the more bells and whistles these companies will add that will allow them to shuffle details under the carpet.? The only defense that we, as consumers, have is education.? There are resources all over the web (like one of my favorites – My Journey to Millions) that try to teach us about personal finance, investing, and how and when to borrow money.? Only by arming ourselves can we really understand the nitty gritty of credit card offers.
Yes and no.? Of course it’s better that credit card companies be forced to disclose interest rates and fees, rather than stuffing them into the fine print.? But the methodology is still deeply flawed.
For example, say you’ve finally found the low APR credit card you’ve been looking for.? The Schumer Box clearly tells you that the interest rate on purchases is 7%, variable (asterisk).? Why is there an asterisk?? Because the interest rate varies based on the prime rate, which you would know if you read the fine print.? How often can the interest rate change?? Check the fine print.? How high can it go?? Read the fine print.? How much notice will they give you before changing the rate?? Also in the fine print.? You can see where I’m going with this.? While that 7% number is somewhat helpful, it’s based on an incomplete snapshot of how things are today; the Schumer Box does nothing to explain what will happen tomorrow.
Annual fees, if any
APRs for purchases
Other APRs for balance transfers, cash advances, and penalties/defaults
The grace period, or how long you have to pay after a statement closes before you accrue interest
The interest charge calculation methodology
And any transaction fees on balance transfers, cash advances, late payment, or over limit charges But that’s a good thing, no?
Credit card agreements are inherently complex.? Issuers do this on purpose, so that people who don’t take the time to understand the contracts that they are signing will think they’re getting a better deal than they really are.? Anyone who signs up for a credit card needs to fully understand the ins and outs of the interest rates and fees they’ll be charged, or the pros and cons of the rewards they’re trying to accumulate.? And very little of this information is actually listed in the Schumer Box.
Where disclosure is lacking
The “Schumer Box” is the summary of credit card fees and interest rates that you now see on credit card agreements and terms and conditions pages.? It’s named after Chuck Schumer, a congressman from NY who was responsible for pushing through the legislation that created the Box back in 2000.
According to his legislation, long-term credit card interest rates have to be displayed in at least 18-point type, while other disclosures are required to be in 12-point.? There are also rules dictating what needs to be disclosed:
What can be done?