Schumer Box

What Is A Schumer Box?

A Schumer box is a legally required table that lists the rates and fees that apply to a credit card. The table helps consumers compare various credit cards offers.

Deeper Definition

“Schumer box” was named after Charles Schumer, a Senate Majority Leader, in 1988. The NY Congressman at the time sponsored a bill known as the “Fair Credit and Charge Card Disclosure Act.” It required credit card issuers to divulge all information relating to the interest rates and fees on lines of credit they offer to consumers.

There is broadly two critical pieces of information a consumer can obtain from the Schumer box, they are:

1. The credit card’s interest rates. They are usually expressed as Annual Percentage Rates (APR) and as variable ranges. Depending on the lending rate banks offer to customers with the best credit, they change from time to time. Typically, customers with a FICO score of 720 or higher get the lowest APRs.

2. The credit card’s fees: credit card issuers charge various kinds of fees, and they include:

• Annual fee: This is an amount a customer pays every year for holding a credit card.

• Balance transfer fee: Credit card issuers charge customers to transfer existing debt from another institution. Usually, it is a percentage of the transferred debt.

• Cash advance fee: Customers get charged this fee when taking out cash against their credit limit. It could be a flat per-transaction fee or a percentage of the amount taken.

• Foreign transaction fee is charged when a customer makes a transaction overseas or with a foreign merchant.

• Late fees: This is a penalty fee charged when a customer fails to make a payment on a debt.

While the information offered is enough to help most customers decide whether getting a credit card from an issuer is worth it, it may not be best to base that decision solely on the box.

Schumer Box Example

Schumer box helps a potential customer decide where to get a credit card. For example, someone who wants to get a credit card could compare the Schumer box of two issuers. Let’s say the first issuer charges an annual fee and offers a 7% APR, and the second issuer 7.2% APR without a yearly fee. The person may decide to go with the second issuer.