The following are important terms to consider that generally should be disclosed in applications or in solicitations for credit that require no application. Ask about these terms when you’re looking for a card. Annual Percentage Rate. The APR is a measure of the cost of credit, expressed as a yearly rate. It also needs to be disclosed before becoming obligated on the account and on account statements. The card issuer also must disclose the “periodic rate” the rate applied to your outstanding balance to figure the charge for each billing period. Some cards allow the issuer to change the APR when interest rates or other 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 the account. If you’re considering a variable rate pre-approved card the issuer needs to provide various information that discloses: that the rate may change; and how the rate is determined – which index is used and what additional amount, the “margin,” is added to determine the new rate. At the latest, you also...
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