What is a Schumer Box and what is it for?

Those who want to make intelligent decisions when comparing financing products, especially credit cards, should know what a Schumer Box is for.

Although you may not be familiar with the term, you will be more interested when we tell you about its usefulness. If you want to manage your money better, you can't miss this content.

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What is a Schumer Box?

It is an explanatory table showing the costs and fees associated with a credit card. It is relevant information that both the issuers of credit cards and the banks that promote these instruments must publish for the American people because it is required by the TILA (Truth in Lending Act).

Credit cardIt is called the Schumer table because it was named after the New York Senator who promoted this initiative, Charles Schumer.

At the time (1988), the Fair Credit and Charge Card Disclosure Act was a bill that called for credit card issuers to disclose all information related to their offers on long-term lines of credit to consumers.

This was later backed up with the enactment of the CARD Act (2009), a law enacted so that people could understand the full costs of credit cards.

This supplemental legislation also includes issues such as: balance obligations, overdraft fees and how long it could take you to pay off your debt by paying the minimum required.

When you apply for a new plastic, the Schumer chart should be on the back of the form, on a separate sheet that comes with the envelope or in a link if you order it online.

It is usually presented in boxed form and should not be difficult to understand. It often includes: grace period, annuity, balance transfer fee, cash advance fee, late payment fee, overdraft fee and various APRs (purchases, cash advance, transfers and penalty). 

Here is an example of what a Schumer Box looks like, in this case we have taken it from the Bank of America Cash Rewards credit card:

Schumer Box

What the Schumer Box is for

The Schumer Box serves as a tool for comparing various credit cards. In this sense, having access to different boxes with credit information allows you to establish differences and similarities between the products you are interested in.

This complements other essential data to make an informed decision, although to make an exhaustive and well-founded comparison, the Schumer Box lacks some significant data.

Among them, it is worth highlighting the ways to get the welcome bonus, how the credit card rewards program works, how to comply with the promotional zero percentage for balance transfer and other benefits (insurance, points, cash back, etc.).

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Still, the Schumer chart represents an important piece of information that is worth a leisurely review to get a good understanding of how credit card issuers and banks operate.

Any tool that offers a more detailed look at long-term financing conditions is useful for comparison, which also supports better economic decision making.

How to interpret the Schumer box data

While the Schumer box looks simple, understanding it requires some additional knowledge.

You must understand the Prime Rate to understand how it affects credit card interest rates. This knowledge helps you estimate the most likely APR based on your credit score.

That said, the Schumer box contains 11 items that we will explain below so that you know how to interpret its contents:

  • APR for annual purchases. There are usually 3 percentages from lowest to highest. These are the interest rates you could pay according to the prime rate and the credit score you have.
  • APR for transfers. Identical to the previous one, there are three levels of interest according to the score and the prime rate.
  • Penalty APR and when it applies. This is a reference percentage that can change based on the prime rate. It indicates what you will pay if you are 60 days late in paying and lasts indefinitely until you make 6 consecutive minimum payments.
  • Interest payment. Sets the grace period after the collection day, which can be 20 days or more. With cash advances, you begin to be charged from the time of the transaction.
  • Minimum interest charge. This is the smallest monthly amount you are charged for carrying a balance.
  • Tips about CFPB cards. This section invites you to visit the Consumer Financial Protection Bureau's website.
  • Annual fee. This is the amount you are charged annually for using your credit card.
  • Transaction fee. This indicates the fees for transfers and cash advances.
  • Penalty fees. Indicates the fees for late payment, overdraft and returned charges.

Along with the evaluation of the different Schumer boxes, you can support your decisions with Busconomico's comparator, an online source for the most relevant products.

English: Qué es una Schumer Box y para qué sirve