Cardholder Statement Summary Box

Cardholder Statement Summary Box - PUBLISHED 1 July 2012

Page 2

Table of contents

1 Introduction....................................................................................................................................................1

2 Cardholder Statement Summary Box Best Practice Guidelines ............................................................. .........2

2.1 Background............................................................................................................................... .........2

2.2 Objectives………......................................................................................................................... .........2

2.3 Content and order................................................................................................................... ............2

2.4 Usage................................................................................................................................ .................3

2.5 Timing……………………………………..............................................................................................3

2.6 Compliance.........................................................................................................................................3

3. Appendix……………………………………………..………………………………………………………………………….…………..4

4. Foreign Usage Common terminology ……………………………………………………..……………………………….………..5

Page 1

1. Introduction

The introduction on of a standardised Summary Box of key product features on credit card statements makes credit cards easier to understand and promotes competition

The Summary Box gives consumers a simple way to compare credit card products – presenting key product features in an easy to understand format. Since October 2003, UK Cards Assoc members have published a Summary Box with all marketing and pre-contract material, making it easy for customers to understand how credit cards work and to choose a card that best suits their needs.

In March 2005 credit card issuers took the next step in improving the transparency of products and increasing competition and agreed to provide a Summary Box on monthly credit card statements by 31 December 2005.

With this innovation consumers have been better able to check the features of the credit card they hold, are kept informed of a card’s features on a monthly basis, and can make an informed judgement on whether another card would be better suited to their needs. The following guidelines outline the commitment members have made to include the Summary Box on statements.

These guidelines are included in the Lending Code.

2. Cardholder Statement Summary Box Best Practice Guidelines

2.1 Background

Through The UK Cards Association, the credit card industry has developed a set of best practice guidelines for a

statement version of the Summary Box for card issuers to observe when presenting the key product features of their

customer’s card on his or her monthly statement. These guidelines cover discrete areas including content and order

and where the table should be displayed.

Card issuers will adopt a minimum‐plus approach, presenting at the very least the information set out within the

table below, with issuers having the discretion to display the existing pre-contract version in full. Any issuer not using

the full pre‐contract version will ensure that the omitted dynamic information e.g. interest rates and credit limit etc.

is shown elsewhere on the statement. In line with Lending Code requirements additional information e.g. estimated

monthly interest if the minimum payment amount is made on the last day for payment and details on expiry of

promotional rates will also be shown on statements.

2.2 Objective

The primary objective of these guidelines is to remind cardholders’ of the key features of their credit card to allow them to compare their current card with others should they wish to review whether their existing product continues to best suit their needs.

2.3 Content and order

The content and order of the statement version of the Summary Box are as follows. No row in the table should be omitted and the sequence of information should be the same. Whilst overall size, fonts etc. are not specified, presentati􀆟on should be both clear and legible. The format is more prescriptive in relation to foreign usage as presentaion has been used to reinforce the cumulative nature of certain charges. The industry agreed terminology set out in sec􀆟on 5 of this document must be used.

A generic name for this variation of the Summary Box has not been specified and it will be le􀅌 to card issuers to decide how they wish it to be known. Some issuers will simply name it the Summary Box with others opting for suitable alternatives e.g. “Useful Information”. Whilst the title heading below has been included for illustration purposes only, issuers adopting this ‘slimmed down’ version must reproduce the text accompanying the heading in full.

SUMMARY BOX – Cardholder Statement Version (Issuers to decide)

The informatton contained in this table summarises the key product features not displayed elsewhere on the statement and is not intended to replace any terms and conditions Interest free period Interest charging informa􀆟on

Allocation of payments

Minimum repayment

Fees

Charges

Default charges

Foreign usage

Page 3

2. Cardholder Statement Summary Box Best Practice Guidelines

2.4 Usage

The table of information should appear prominently either on the front or reverse of the cardholders’ monthly statement.

2.5 Timing

Card issuers will implement this revised statement of the Summary Box by the end of December 2012.

2.6 Compliance

Issuers are expected to apply the guidelines in the spirit in which they have been developed. The table of information displayed will cover the key features of the credit card to which the statement refers. Please be aware that all guidelines are advisory (rather than mandatory). The guidelines set out best prac􀆟ce to encourage a consistent approach across the industry. They are not legally binding. Any failure to follow them does not give rise to any right of ac􀆟on.

These guidelines have been incorporated into the Lending Code.

3. Appendix

Interest free

period

Expressed in maximum days, for those types of

transac􀆟on for which an interest free period

applies.

If there are condi􀆟ons associated with the

interest free period these should be shown here.

Maximum 55 days for purchases if you pay your balance in full and on 􀆟me.

There is no interest free period on cash withdrawals or balance transfers

Interest

charging

informa􀆟on

Expressed in either tabular or textual format,

informa􀆟on on the dates between which interest

is charged for different product features e.g.

purchases, cash withdrawals and balance

transfers (where applicable) must be shown.

The periods over which interest is charged are as follows:

Purchases – If the balance is not repaid in full, interest on the outstanding

balance is charged from the date the transac􀆟on is debited to the account

un􀆟l payment is posted to the account.

Cash withdrawal– interest is charged from the date the transac􀆟on is debited

to the account un􀆟l payment is received.

Balance transfers – interest is charged from the date the transac􀆟on is

debited to the account un􀆟l payment is received. Interest free period only

applies to the introductory period.

Alloca􀆟on of

payments

Succinct descrip􀆟on of the order in which

payments will be allocated to the account. From

01 January 2011, payments must be allocated to

the highest rate debt first. It is acceptable to

refer the consumer to the more detailed

descrip􀆟on in the full terms and condi􀆟ons by

means of a footnote.

If you do not pay off your balance in full we will allocate your payments to the

most expensive debt first

Minimum

repayment

Succinct descrip􀆟on xx% or minimum £x.xx.

All default fees / charges, annual fees that may be levied and interest plus 1%

of the principal.

Fees Any fee levied in order to have the account,

whether annual, monthly or other. If none, then

this box should state “none” or “not applicable”.

If there are condi􀆟ons associated with such fees

then these should be shown .

£15.00 annual fee. This fee will be waived if your annual expenditure exceeds

£2,000.

Charges In order to be future proofed it is not possible to

provide a defini􀆟ve list of those charges to be

covered here, but it should cover the likes of cash

fees ( domes􀆟c), Payment Protec􀆟on Insurance (if

mandatory), duplicate statement fee etc.

Either con􀆟nuous form or tabular form are

acceptable formats.

Cash Fees subject to a handling fee of x.x% subject to a minimum of £x.xx etc.

Default

charges

Again, in order to be future proofed it is not

possible to provide a defini􀆟ve list of those

charges to be covered here, but it should cover

the likes of late payment fees, over limit fees, non

‐ac􀆟vity fees etc.

Either con􀆟nuous form or tabular form are

acceptable formats.

Late payment fee £xx; over‐limit fee £xx etc

Comments Example Text

Foreign usage Agreed industry common terminology as set on

Pg. 5 should be used

Use of descriptors (Non‐Sterling & Foreign ) may

be omi􀆩ed in accordance with the common

terminology requirements

The scheme who provides the exchange rate

may be named or the generic term Payment

Scheme Exchange Rate used.

Must be set out in the same order as specified

on page 7 of the Credit Card Summary Box

Guidelines.

Par􀆟cular fees may be excluded from the list if

they do not apply.

Text “one or more of the following may apply “

is mandatory

All current and future fees must be shown

As prescribed in the Credit Card Summary Box Guidelines

SUMMARY BOX – Cardholder Statement

The informa􀆟on contained in this table summarises the key product features not displayed elsewhere on the statement and is not

intended to replace any terms and condi􀆟ons

American Express/

MasterCard/ Visa / Payment

Scheme Exchange

Rate

The base exchange rate used in the settlement of the traction

between issuer and scheme. Issuers may refer to the

more generic term where the communication covers multiple

scheme card payment products.

Exchange Rate Adjustment

The margin added, by certain issuers, to the scheme rate in

order to arrive at the exchange rate quoted as the refer-

American Express/

MasterCard/ Visa / Payment

Scheme Exchange

Fee

Any payment network fee applied to some or all nonsterling

or foreign transactions that issuers recover directly

from cardholders.

Non-Sterling Transaction

Fee

A fee applied to all types of non-sterling transactions. The

descriptor Non-Sterling may be dropped if the fee also applies

to domestic transactions.

Non-Sterling Purchase

Fee

An additional fee applied to certain retail transactions. The

descriptor Non-Sterling may be dropped if the fee also ap-

Non-Sterling Cash Fee An additional fee applied to certain cash withdrawals. The

descriptor Non-Sterling may be dropped if the fee also applies

to domestic transactions. The fee may apply in some

circumstances to quasi-cash transactions e.g. gambling.

Foreign Purchase Fee An additional fee applied to Sterling retail transactions

made abroad e.g. DCC. Where a purchase fee is applied

irrespective of whether it is a DCC transaction or a Non-

Sterling transaction this term may be used.

Foreign Cash Fee An additional fee applied to Sterling cash withdrawals

transactions made abroad e.g. DCC. The fee may apply in

some circumstances to quasi-cash transactions e.g. gambling.

Where a cash fee is applied irrespective of whether it

is a DCC transaction or a Non-Sterling transaction this term

4. Common Industry Terminology