DEFINITION of 'Schumer Box'
A table that appears in credit card agreements showing basic information about the card’s rates and fees. The Schumer box shows information about the card’s cost to consumers, including its annual percentage rate (APR) for purchases, APR for balance transfers, APR for cash advances, penalty APR, grace period, annual fee, balance transfer fee, cash advance fee, late payment fee, overlimit fee and returned payment fee. Credit card issuers must provide the Schumer box with all credit card solicitations, whether the offer is online or through the mail.
BREAKING DOWN 'Schumer Box'
If you’re trying to decide among several cards, comparing the Schumer boxes for each can help you easily see the similarities and differences among them so you can pick the best card for your situation. Instead of having to read a bunch of fine print to figure out how much it will cost you to use a card, especially if you intend to carry a balance, you can just consult the Schumer box. The box is named after New York Senator Charles Schumer because he was involved in the legislation that created it, the 1988 Truth in Lending Act.
If you’re unfamiliar with how credit cards work, you’ll have to do some additional research to understand the information presented in the Schumer box. You’ll need to understand what the prime rate is and how it affects your credit card rate, and you’ll need to understand what APR the credit card issuer is likely to give you based on your credit score.
For example, if the Schumer box says that the card’s APR is 8.99%, 10.99% or 12.99% based on your creditworthiness and your credit score is 780, which is excellent, you can safely assume you’ll qualify for the 8.99% APR. On the other hand, if you have an okay credit score of 660, you can assume you’ll get one of the higher rates.
Also, while the Schumer box will tell you the name of the method the credit card company will use to determine how much interest you owe, such as the average daily balance method, you’ll still have to learn how that method works to really understand the interest that you could pay.
While the Schumer box can save you time reading the fine print for multiple cards, once you’ve narrowed it down to one or two cards you want to apply for, it’s a good idea to still read the fine print to understand, for example, how the credit card’s rewards program works or what you have to do to earn its sign-up bonus or to keep your promotional 0% APR on balance transfers. The Schumer box also won’t tell you about other cardholder benefits, like travel insurance and return protection. Those will be in a separate document.