Credit Card Annual Percentage Rate.
The APR is a measure of
the cost of credit, expressed as a yearly rate. It also must be disclosed
before you become obligated on the account and on your account statements.
The card issuer also must disclose the “periodic rate” — the rate
applied to your outstanding balance
to figure the finance charge for each billing period.
Some credit card plans allow the issuer to change your APR when
interest rates or other economic indicators — called indexes —change.
Because the rate change is linked to the index’s performance, these
plans are called “variable rate” programs. Rate changes raise or
lower the finance charge on your account. If you’re considering a
variable rate card, the issuer must also provide various information
that discloses to you:
- That the rate may change; and
- How the rate is determined — which index
issued and what additional amount, the “margin,” is added to
determine your new rate.
At the latest, you also must receive information, before you become
obligated on the account, about any limitations on how much and how
often your rate may change.
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