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Truth in Lending: 6.5.3.3.1 General

Credit and charge card issuers are required to disclose any annual or other periodic fee or any one-time fee imposed for the issuance or availability of a credit or charge card (such as a membership fee), including fees based on account activity or inactivity.667 Note that Regulation Z’s substantive provisions prohibit the imposition of fees for account inactivity for a credit card under an open-end (not home-secured) consumer credit plan.668

Truth in Lending: 6.5.3.3.2 Application fees

Because application fees were considered administrative fees for processing applications for credit rather than fees for the issuance or availability of credit, the official interpretations previously exempted them from disclosure.683 However, this exemption was deleted as of July 2010, and thus application fees must be disclosed in the required table.684

Truth in Lending: 6.5.3.3.3 Membership fees

If an application or solicitation to become a member of an organization results in the automatic issuance of a credit or charge card, the application or solicitation for membership would be considered one to open a credit card account requiring disclosures.685 However, if the membership fee merely results in being eligible to apply for an account, it need not be disclosed.686

Truth in Lending: 6.5.3.3.4 Fees for credit card “enhancements”

Whether credit or charge card enhancement fees (such as travel insurance or card registration services) are required to be disclosed as fees for the issuance or availability of a card depends on whether such fees are payable at the cardholder’s discretion.687 For example, a card issuer may offer a credit card account on which a $20 fee is imposed for the issuance of the card with optional enhancements available for an additional $10 fee. Only the $20 fee is required to be disclosed.

Truth in Lending: 6.5.3.4 Minimum Interest Charges

Credit card issuers must disclose any minimum interest charge or fixed finance charge that could be imposed for any period during which any extension of credit that is subject to a finance charge is outstanding.693 This would occur where the amount of minimum interest charge is greater than the interest that would otherwise be imposed for such period under the applicable APR.

Truth in Lending: 6.5.3.5.1 General

Credit and charge card issuers must disclose any transaction charge imposed in connection with the use of the card to purchase goods and services.703 This provision does not cover fees for cash advances, which are required to be disclosed separately.704 Regulation Z states that card issuers providing disclosures under this section have no responsibility to disclose transaction charges imposed by a person other than the card issuer, such as a seller of goods honoring a credit or charge card.

Truth in Lending: 6.5.3.5.2 Foreign transaction fees

Previously, “currency conversion” or foreign transaction fees imposed on the consumer’s account by the Visa and MasterCard networks (which are not considered creditors) were not required to be disclosed in application disclosures,710 although they were required to be disclosed in some cases under state law.711

Truth in Lending: 6.5.3.6 Grace Period for Purchases

Credit card issuers must disclose the grace period for purchases, i.e., date by which, or the period within which, any credit extended under a credit card account for the purchase of goods or services must be repaid to avoid incurring a finance charge due to periodic interest.728 Issuers must disclose the grace period using the phrase “How to Avoid Paying Interest on Purchases” as the heading for the row describing the grace period.729

Truth in Lending: 6.5.3.7 Balance Computation Method for Purchases

Credit card issuers are required to disclose the method of computing the balance on which finance charges will be calculated for the purchase of goods and services.748 (No disclosure of the method of computing the balance for cash advances is required.) The disclosure of the balance computation method must be made directly beneath the required table but not in the table.749 TILA actually requires the balance computation method to be included in the required table;

Truth in Lending: 6.5.3.8 Due and Payable Statement

Charge card issuers must disclose that charges incurred by use of a charge card are payable when the periodic statement reflecting those charges is received by the cardholder.760 The disclosure should be substantially similar to that set forth in Regulation Z; it does not have to be identical. Language in the disclosure may be modified to more accurately reflect the circumstances of repayment under the charge card account.761

Truth in Lending: 6.5.3.9 Cash Advance Fees

Credit and charge card issuers are required to disclose fees for cash advances.762 These fees must be disclosed in the required table.763 Consumers incurred $750 million in cash advance fees in 2019,764 which dropped to $500 million in 2020 during the COVID-19 pandemic.765

Truth in Lending: 6.5.3.12 Required Credit Insurance, Debt Cancellation, or Debt Suspension Coverage

Issuers that require the consumer to purchase credit insurance, debt cancellation, or debt suspension coverage as part of a credit card plan must disclose the fees for such coverage in the required table.789 In addition, issuers must include a cross-reference to where the consumer can find additional information about such coverage, if applicable.790 Another volume in this series discusses these products in detail.791

Truth in Lending: 6.5.3.14 Reference to CFPB Website

The final disclosure required for the application/solicitation table is a reference to the website containing educational information about credit cards.802 This reference must include a statement that consumers can obtain information from this website about shopping for and using credit cards.803

Truth in Lending: 6.5.4.2 Electronic Applications and Solicitations

TILA requires that any solicitation to open a credit card account using the internet or other interactive computer service must clearly and conspicuously disclose the information described at § 6.5.3, supra, for credit cards.807 Thus, card issuers who provide applications and solicitations by electronic communication must make the disclosures described at

Truth in Lending: 6.5.4.3.1 Coverage

Regulation Z sets forth the disclosure requirements for telephone solicitations and certain telephone applications to open a credit or charge card account.812 These requirements apply if a telephone conversation between a card issuer and consumer may result in the issuance of a card as a result of a card issuer-initiated offer to open a credit or charge card account for which the card issuer does not require any application (that is, a “preapproved” or “prescreened” telephone solicitation).

Truth in Lending: 6.5.4.3.2 General disclosure rule

Regulation Z requires card issuers to orally disclose the APR, fees for the issuance or availability of credit (e.g., annual or periodic fees), minimum finance charge, transaction charges, grace period, balance computation method, and, for charge cards, the due and payable statement.

Truth in Lending: 6.5.4.3.3 Alternative disclosures

Regulation Z makes alternative disclosures available for telephone solicitations and applications for both credit and charge card issuers.824 The requirements for these alternative disclosures involve whether the issuer charges a fee for the issuance or availability of credit, e.g., an annual or periodic fee.

Truth in Lending: 6.5.4.4.1 General

Regulation Z provides two disclosure options for applications and solicitations that card issuers make available to the general public, such as “take-ones” and those contained in catalogs, magazines and other generally available publications.836 However, if a primary purpose of a card issuer’s mailing is to offer credit or charge card accounts (e.g., if it sends catalogs to a list prescreened for credit), then the direct mail rules apply.837

Truth in Lending: 6.5.4.4.2 Required credit disclosures

Under this option, the card issuer must provide all the required credit disclosures described at § 6.5.3, supra, as applicable, in the requisite format on the application or solicitation, and indicate: (1) that the disclosures are accurate as of the date they were printed; (2) the date of printing (disclosure of the month and year is sufficient to fulfill this requirement); (3) that the terms are subject to change after suc

Truth in Lending: 6.5.4.4.3 Alternative to disclosures

A card issuer may also provide a statement on the application or solicitation that there are costs associated with the use of the credit or charge card and that the applicant can contact the card issuer to request specific information about those costs by calling a toll-free telephone number or by writing to an address specified on the application or solicitation.845 The card issuer would have to provide both a toll-free telephone number (for nonlocal calls made from an area code other than that used in the card issuer’s dialing area) and a

Truth in Lending: 6.5.4.4.4 Prompt response

Regardless of the option used, TILA provides that, upon receiving a request by a consumer for any of the credit information required to be disclosed under the Act, card issuers must promptly give all of the required credit disclosures.848 Information is promptly disclosed if it is given within thirty days of a consumer’s request for information but in no event later than delivery of the credit or charge card.