How to Read a Schumer Box - YouTube

[MUSIC] Ok. This tutorial is how to read a credit card offer.

So within every credit card offer you’re

going to get something called the Schumer Box. And basically, it’s a piece of paper

that has all of the terms and conditions for the credit card offer.

So, you can either get it with a credit card offer in the mail, or if you go to an online

website to get a credit card, then you will probably find a link called terms and conditions

and you’ll see this information right there. In this. It looks exactly like this with the

same information in the same order for every Schumer box. Its called a Schumer Box because

basically it was um… it was designed by a legislator named Mr. Schumer [clears throat]

back in 1989 ah when they came up with the legislation that they had to disclose all

the terms and conditions in a credit card offer before somebody signed up for the credit card.

Now don’t forget that you can avoid all the fees on a credit card and you can

avoid all of the interest rates and everything if you just pay it completely off on time

every month. So here’s all the information in a Schumer

Box. First of all you have the APR, or annual percentage rate. And that is going to be based

off of your creditworthiness. So if you have a low credit score, you’re probably goin]

to have to pay a higher interest rate. Or, if you have a higher credit score you’re

probably going to get the lower interest rate. These interest rates are going to change.

It’s called variable. The word variable means to change. And so, this is a variable APR

and it says it will vary with the market based on the prime rate. The prime rate is the interest

rate set by the Federal Reserve for interest rates and for borrowing. So, you could get

11.9 percent interest rate to start out, but if the Federal Reserve decides to um raise

interest rates a couple months from then, then this number is going to go up a certain

amount above that prime rate going up as well. [MUSIC]