Summary
New rules would require credit card companies to disclose more details about credit terms before the card is used.
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Regulation Z requires creditors to disclose all costs and terms before a new credit card’s first use. However, according to the board, “Currently, there are few format requirements for these account-opening disclosures, which are typically interspersed among other contractual terms in the creditor’s account agreement.”
![]() ![]() ![]() ![]() 45 days’ notice Fixed rates APR disclosures Fee disclosures Account opening disclosures Periodic statement disclosures Changes in credit card terms Minimum payments Subprime credit cards |
The regulators want that to change. They would do away with the option of presenting account-opening information in tiny type legalese. The proposed account-opening disclosure is intended to organize the information in tables and standardize its presentation to allow easier comparisons.
Account-opening disclosures could include descriptions of items such as:
- APR for cash advances
- APR for balance transfers
- Minimum interest charge
- Grace period
According to regulators: “Consumer testing also indicates that consumers may not typically read their account agreements, which are often in small print and dense prose. Thus, setting apart the most important terms in a summary table will better ensure that consumers are aware of those terms.”
Discover bank, however, notes: ” … (W)e do not necessarily believe that a table is necessary to convey the required disclosures to consumers in the account-opening context … ” Read more (Page 2)
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