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Money Savvy Weekend

Fed Targets Credit Offers' Fine Print

May 19, 2000|From Associated Press

WASHINGTON — Annual interest rates on credit cards and other key data would appear in larger type instead of the tiny print usually used during special offers and applications for new accounts, under a proposal approved Thursday by the Federal Reserve.

In a move to improve information for consumers, the central bank put out the proposed regulations for public comment until July 18.

The rules would require credit card companies to print long-term annual percentage rates, known as APRs, in 18-point type, roughly a quarter of an inch. Other data, such as minimum finance charges, late fees and the method for calculating charges on account balances, would have to be in 12-point type.

Under current law, credit card issuers must display such information "clearly and conspicuously" in a box on offers and applications, but those terms are not precisely defined.

Regulators believe disclosing long-term rates is especially important in the case of low-interest, introductory "teaser" rates used to lure customers, which are replaced by higher rates after several months.

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