Your monthly credit card bill got a makeover in 2009 thanks to lawmakers and federal banking regulators.
The monthly statement makeover is part of a much larger series ofÂ credit card regulation reformsÂ approvedÂ by the Federal Reserve BoardÂ in December 2008.
Whether you get your credit card statements in the mail or online, the documents have taken on a new look since the Credit Card Act of 2009 took effect.
The Act was implemented in three phases, with the first phase (which went into effect August 2009) requiring card issuers to provide customers a 45-day notice period before implementing any changes to the cardâs terms.
And new design and disclosure requirements mandated by theÂ Credit Card ActÂ took effect in February 2010.
TheÂ third phase, which involved an amendment to Regulation Z of the Truth in Lending Act, became effective in August 2010 and addressed unreasonable penalty and late payment fees.
Statements are now more user-friendly.
Statement designs have become more reader-friendly since then to help credit cardholders easily find important information on their monthly statements â namely, when payments are due, the amount owed, the consequences of making late payments and how much they are paying in fees and interest on different types of accounts.
Another feature warns consumers about the cost of making only minimum payments each month.
Each credit card bill also has a box that states how long (in months or years) it will take to pay off the entire balance if the cardholder makes the minimum payment compared to how long it might take to pay it off when making higher payments.
The box also states the total dollar amount cardholders would pay when both interest and principal is factored in â and this information has certainly been eye-opening for some borrowers.
The previous standard for credit card disclosure was the Schumer Box, which required key terms to be listed in a table and included in credit card offers, applications and monthly statements.
The current standard is like the Schumer Box on steroids, with much more details about terms and what they mean â and more tables.
See related: Whatâs the difference between statement balance and current balance?
Consumer feedback influenced implementation
The Fed conducted consumer tests of credit card statements to determine what worked best when providing key information.
Users complained that wording on the old statements was confusing, the type was too small and key information was missing.
Testers said they liked information presented in boxes that they could clearly read.
Capital One had also conducted consumer tests before redesigning its statements.
âWe wanted to maintain some consistency with statement usability toÂ ensure our customers didnât get lost in the new statement,â said Pam Girardo, former spokeswoman for Capital One.
âWe showed a variety of statement designs to understand whatÂ resonated and what didnât and to make sure consumers understood the information.â
Hereâs an explanation of some of the updated statements’ features, based on the Federal Reserve Boardâs samples.
Your statement may not look exactly like this because each credit card issuer uses its own.
XXX Bank Credit Card Account Statement
Account Number XXXX XXXX XXXX XXXX
February 21, 2021, to March 22, 2021
|Summary of account activity|
Past due amount
Statement closing date
Days in billing cycle
New balance $1,784.53
Minimum payment due $53.00
Payment due date 4/20/21
|Late payment warning: Â If we do not receive your minimum payment by the date listed above, you may have to pay aÂ late fee of up to XX and your APRs may be increased up to the Penalty APR of 28.99%.
Minimum payment warning: Â If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example, if you had a balance of $1,000 at an interest rate of 17% and always paid only the minimum required, it would take over 7 years to repay this balance. If you would like information about credit counseling services, call 1-800-xxx-xxxx.
|QUESTIONS?||Â Â Â Please send billing inquiries to:|
|Call customer service||
|Â PO Box XXXX, Anytown,
|Lost or stolen credit card||
|Important changes to your account terms|
|The following is a summary of changes that are being made to your account terms. Changes to the APRs described below are due to changes in market conditions. For more detailed information, please refer to the booklet enclosed with this statement.
These changes will impact your account as follows:
Transactions made on or after 4/9/21: As of 5/10/21, changes to APRs described below will apply to these transactions.
Transactions made before 4/9/21: Current APRs will continue to apply to these transactions.
If you are already being charged a higher Penalty APR for purchases: In this case, any changes to APRs described below will not go into effect at this time. These changes will go into effect when the Penalty APR no longer applies to your account.
|Revised terms, as of 5/10/19|
|APR for purchases||16.99%|
|Late payment fee||$32 if your balance is less than or equal to $1,000;
$39 if your balance is more than $1,000
|Reference number||Trans date||Post date||Description of transaction or credit||
Cash advance fee
Balance transfer fee
Cash advance fee
|Interest on purchases
Interest on cash advances
|2021 Totals Year-to-DateÂ|
|Total fees charged in 2021
Total interest charged in 2021
|Interest charge calculationÂ|
|Your Annual Percentage Rate (APR) is the annual interest rate on your account|
|Type of balance||Annual Percentage Rate (APR)||Balance Subject to
Balance transfers(v) = Variable rate
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Please detach this portion and return with your payment to ensure credit. Retain upper portion for your records.
|Please indicate address change and additional
cardholder requests on the reverse side.XXX Bank
P.O. Box XXXX
Anytown, Anystate XXXXX
Minimum payment due
Payment due date
|XXXX XXXX XXXX XXXX
Source: Federal Reserve Board