What Is the Fair Credit and Charge Card Disclosure Act?

Even though credit card companies are required to disclose important terms to consumers, they often try to make those terms hard to find (and hard to understand). The Fair Credit and Charge Card Disclosure Act is a law aimed at curbing that behavior and making it easier for consumers to compare their options.

What is the Fair Credit and Charge Card Disclosure Act, and how does it impact you as a consumer? We’ll take a closer look.

What is the Fair Credit and Charge Card Disclosure Act?

The Fair Credit and Charge Card Disclosure Act (FCCCDA) was passed in 1988 as an amendment to the Truth in Lending Act (TILA). 

The TILA was passed in 1968, and it has been amended several times over the years. It applies to most creditors and lenders that routinely issue consumer credit. That includes the following:

• Banks
• Credit unions
• Other financial institutions
• Online lenders
• Retail stores that issue store credit cards
• Credit and charge card issuers

The FCCCDA is narrower in scope, as it only applies to credit and charge card issuers. It establishes transparency requirements for credit card companies, and it’s probably best known for establishing the Schumer box, a standardized table including key financial details of credit card agreements.

Notably, although the FCCCDA was passed in 1988, it took several years for some of its provisions to be put into practice. For example, the requirement for Schumer boxes to be included in promotional materials for credit cards didn’t take effect until 2000.

Why the FCCCDA was created

You may wonder: What is the Fair Credit and Charge Card Disclosure Act designed to do? It was primarily introduced to make the fine print of credit card agreements easier to identify and interpret. 

The FCCCDA also standardized reporting requirements for certain key numbers. For instance, card issuers must print the purchase annual percentage rate (APR) in an 18-point or larger font. 

The APR is one of the most important numbers for consumers who are thinking about applying for a credit card. That’s because it determines the amount of interest they will pay if they ever carry a balance.

The card’s APR and other important metrics must be included in a table format. This standardized format makes it much easier for consumers to compare credit cards and make smart financial decisions. 

Instead of digging through pages of fine print to find interest rates, you can just look at the table on each credit card issuer’s Schumer box and compare numbers.

What disclosures are required under FCCCDA?

The FCCCDA requires credit card issuers to disclose important information, including the following:

• The APR for purchases
• The APR for cash advances and balance transfers (if different)
• Whether the rate is variable (and how it’s calculated if it is variable)
• Annual fees
• Transaction fees
• Late payment penalties and penalty APRs
• Minimum finance charges
• Grace period information

You can find all of this information in the Schumer box.

How the Schumer box works

The Schumer box was named for Senator Chuck Schumer, who was a major advocate for the FCCCDA. 

If you’ve ever gotten a solicitation for a credit card in the mail, you’ve probably seen a Schumer box. It’s the table that includes certain numbers in larger, bolder fonts. Those larger, bolder fonts are mandated by law. They’re designed to make it easier for people to notice and read important information. 

The fine print in credit card agreements can be very small. It’s often printed in a 6-point font. In contrast, most of the information in a Schumer box has to be in a 10- to 12-point font, with very important information in 18-point.

What to do if a card issuer violates the FCCCDA 

Unfortunately, some credit card issuers may try to get away with violating the law. If you notice an FCCCDA violation, there are several courses of action you could take.

File a complaint with the Consumer Financial Protection Bureau 

The Consumer Financial Protection Bureau (CFPB) is in charge of enforcing the FCCCDA. If you notice a potential violation, filing a complaint with this bureau is a good way to start. 

The CFPB may or may not resolve your complaint on an individual level. However, if it gets several complaints about an issuer, it may launch an investigation and file a lawsuit.

Contact your state attorney general’s office

In many states, an attorney general will pursue legal action against businesses that have violated consumers’ rights. Check your state attorney general’s website for information on how to submit a complaint.

Talk to a lawyer

If you lost money because the credit card company failed to disclose all of the information the law requires, it might be worth talking to a lawyer. Many consumer protection laws intersect with the FCCCDA, and filing a lawsuit under one of these might make it possible to recover compensation.

Knowing your rights is just part of the credit-building journey

Are you trying to establish a strong credit history or working to rebuild your credit? Learning about your rights can help you make better choices and advocate for yourself.

If you want some help building your credit score, Kikoff is ready to assist. We make it possible to build credit, track your score, and access tools for financial empowerment right from your phone. We don’t run a hard check on your credit when you sign up, and it’s free to join. Get started with us today!