Fair Credit and Charge Card Disclosure Act
Definition - What does Fair Credit and Charge Card Disclosure Act mean?
Fair Credit and Charge Card Disclosure Act is a legislative bill passed in 1988, specifying the terms and conditions for credit card issuers to follow when distributing credit card application notices via direct mail service or by soliciting to potential customers by telephone who are pre-approved for credit card issuance. The mandate was developed as a means to educate consumers about credit card and charge card use and risks. It requires card issuers to provide detailed information covering different aspects of obtaining a credit card and/or charge card including annual percentage rates (APR’s), attachment fees, credit limits, outstanding balance, renewal/cancellation privileges, and grace period extensions.
WorkplaceTesting explains Fair Credit and Charge Card Disclosure Act
Due to high interest rates and unclear terms, credit card dept was a crushing problem in the United States. Because of this, the Fair Credit and Charge Card Disclosure Act of 1988 was passed to require more transparency in the issuance and operating procedures of credit card companies. In spite of this, credit card debt remains a widespread issue.
For many people owning credit cards and/or charge cards is an essential means to build good financial standing with creditors, making small and large purchases and paying the balance either in full or on a periodic basis with monthly installment payments. The Fair Credit and Charge Card Disclosure Act requires issuers to notify consumers aware through direct mail notices and/or telephone contact about the latest updates that affect their credit card and/or charge card service options. For instance, credit card interest rates can fluctuate periodically, sometimes placing financial constraints on people who prefer paying off the balance in monthly intervals over time, while charge cards can carry steep annual fees with variable rates.