What Is a Schumer Box?

What information is in a Schumer box?

A Schumer box must include two important aspects of any credit card to meet legal requirements: the interest rates applicable and the charges it carries. Credit cards have varying interest rates for purchases, balance transfers, and cash advances. Similarly, credit cards may have fees for more than just late payments. Some card users can expect annual fees, foreign transaction fees, cash advance fees, and more.

Schumer box interest rate and charge explanations

• Annual percentage rate for purchases: Purchase APR is the rate of interest applied to your balances after the grace period has ended. You can easily avoid paying a purchase APR by paying your balance in full and on time every month. Some cards include an introductory low APR offer after you receive your credit card. Credit card companies should mention the offer APR and how long the promotional period is in the Schumer box.

• APR for balance transfers: Some credit cards are marketed specifically as balance transfer cards. These cards often offer a low or 0% APR on all balance transfers for a fixed period. When there’s no introductory offer, the rates may vary. Some card issuers may charge you the same purchase rate, while others may offer a lower APR specifically for balance transfers.
• APR for cash advances: Cash advances can prove expensive. The cash advance APR may be higher than a purchase APR, and cash advances usually don’t have a grace period. Check the cash advance APR and fees–which you can find in a Schumer box—before heading to the ATM. 
• Penalty APRs: Some card companies may charge you a penalty APR if you missed your payment due date, if the bank returns your payment, or if you exceed your credit limit. Discover has no interest increase for late payments.2
• The credit card's grace period: Credit card users may already know that the grace period refers to the time between the last day of your billing cycle and your payment due date. If you always pay your balance in full during this period (on or before the due date) - you will avoid interest charges as well as late fees.
• Minimum interest rate charged: You pay a minimum interest or finance charge when you carry a very small balance on your credit card. When the actual interest charge falls below a certain amount, the card issuer charges you the minimum interest instead.

Schumer box fee explanations

• Annual fee: Some credit card issuers may charge cardmembers an annual fee for processing and maintaining your card and account. Think of it as the price you pay for access to credit and the rewards and benefits your card offers.

• Transaction fees: Some card issuers charge additional fees for overseas transactions beyond purchases and bill payments. A Schumer box may show fees for transactions made abroad or purchases from foreign e-commerce sites (foreign transaction fee), cash advance fees, and balance transfer fees.
• Penalty fees: Some returned payment fees and late fees are penalty fees. Credit card companies issue these penalties to encourage responsible credit card use. Credit card issuers may charge you a flat late payment fee if you've missed your payment due date. You'll also pay a fee if your bank rejects a credit card payment due to insufficient funds. This is a returned payment fee.

The bottom line

A Schumer box helps clearly state credit card fees and interest rates for consumers. If you’re considering a new credit card, you may want to use the basic information from the Schumer box to compare cards, as well as research each credit card’s rewards program to help determine the best one for you.