Understanding the credit card summary box
Credit card companies have a standardized method for describing their terms and conditions behind each product.
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How much you need to pay, how often, and what interest rates are likely to be accrued are all covered in the credit card summary box.
The layout of this box is designed to give consumers a clear understanding of credit card policies. However, the wording in the credit card summary box can sometimes leave consumers unsure of what all of this means.
Our guide to the credit card summary area can help you figure out what you’re getting with each credit card and how much you’re likely to spend each month.
What’s in a credit card summary box?
As the credit card summary box is standardized among all credit card suppliers, you will always find the information relating to the credit card:
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Annual percentage rate (APR)
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Other interest rates
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Duration of interest-free periods
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Conditions of any introductory offer
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Minimum monthly repayments required
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Additional costs that may be incurred
All of this information should help you determine the main features, advantages and limitations of the credit card. If a standard credit card comparison chart doesn’t give you all the information you need, then the credit card summary area should help.
Credit card summary box explained
Below is an example of a credit card summary box with the terms and information explained
| APR | The typical annual percentage rate charged i.e. the annual cost of borrowing, for example 11.7% APR Variable |
| Other interest | Introduction | Monthly | Annually |
|---|---|---|---|
| Purchases | The introductory rate on purchases, e.g. 0% for the first 56 days | The monthly interest rate on Purchases, for example 0.97% | The annual interest rate is likely to be the same as the overall APR, for example 11.70% |
| Balance transfers | The introductory rate on balance transfers, e.g. 0% for the first 56 days | The monthly interest rate on balance transfers, for example 0.97% | The annual interest rate on balance transfers, for example 11.70% |
| Cash advances | You’re unlikely to get an introductory rate on cash advances, so expect this box to say N / A | The monthly interest rate on cash advances will be considerably higher than on purchases, for example 1.08% | The annual cost of cash advances will be higher than the cost of purchases, for example 13% |
| Interest-free period | This box will usually explain the length of the interest-free period and the terms, such as a maximum of 56 days for purchases if you pay your balance in full and on time. |
| Interest billing information | This will explain over which period interest will be charged. |
| Purchases | This will show all of your purchases on the card, usually from the date of the transaction to your monthly statement. |
| Balance transfers | This will show all of your balance transfers, again usually from the date of the transaction until you have paid it in full. |
| Withdrawal of money | This will show all of your cash withdrawals from the date of the transaction until you have paid it in full or it will continue to accumulate at a higher rate |
| Credit card checks | This will show all of the credit card checks you issued from the date your account was debited until you have paid it in full or it will continue to accumulate at a higher rate. |
| Allocation of payments | This box explains the priority to which each payment will be applied in order to clear the debt. Each credit card will have its own rules, but it will generally follow: 1. Withdrawal of cash 2. Unpaid interest 3. Balances transferred 4. Purchases 5. Cash |
| Minimum reimbursement | This will explain the minimum amount you can repay each month, but will often stipulate a priority. Some credit card providers will require you to pay all default fees and charges in addition to the minimum payment, while others will stipulate a minimum charge or minimum percentage. You have to repay a minimum of £ 5.00 per month, but if your balance is less than £ 5.00 then you need to repay that amount. |
| Credit amount | This will explain the maximum credit limit, but this is normally decided after you apply. It will also include the minimum credit limit. |
| Fresh | This box will be blank unless the credit card has an annual or monthly fee – generally applicable to Rewards credit cards |
| Charges | You will find all the information relating to cash withdrawal fees, foreign transaction fees and paper copies of statements. Cash withdrawals – 2% with a minimum of £ 2.00; Copies of statements – £ 1.50; Foreign operations – 2.95% |
| Default fees | If you are late with a payment or exceed your credit limit, you will be charged a default fee. Late payment fee – £ 25.00; Over Credit Limit – £ 25.00; Administration fee for returned direct debits – £ 15.00 |
Advantages and disadvantages of the credit card summary box
The credit card summary box is useful for two reasons. First, it’s consistent and consistent across all credit card products, which means the information you need to compare two credit cards is always easy to find.
Second, it sets out what charges you’re likely to incur if you don’t pay your credit card bill by the end of the month, and in what order those charges should be paid.
How much you have to pay, how often and what interest rates are likely to be accrued are all covered in the credit card summary
A regular credit card comparison chart will show you the details of each credit card, but the credit card summary box for each individual credit card goes further to explain all possible charges and minimum monthly repayments required.
However, the language used can often be difficult to understand, and the numbers are difficult to understand when you take them out of the context of credit cards.
The above credit card summary table should help you decode the real meaning of all the terms and decide which credit card features will be useful to you and what limitations you can and cannot afford to handle.