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The Truth in Lending Act - Advertising Consumer Credit - Open-End Credit Disclosures

Required Disclosures

Under the Truth in Lending Act, if an advertisement for open-end credit contains any of the "triggering terms" below, the ad must also contain the following information:

(1) any minimum, fixed, transaction, activity, or similar charge that could be imposed;

(2) any periodic rate that may be applied, expressed as an annual percentage rate; and

* The term "annual percentage rate" or an abbreviation such as "APR" must be used, and, if the plan provides for a variable periodic rate, that fact must be disclosed.

(3) any membership or participation fee.

Triggering Terms

The "triggering terms" are:

(1) The periodic rate used to compute the finance charge or the annual percentage rate.

* For example: "Less than 1 1/2 percent per month" and "14 percent APR."

(2) A statement of when the finance charge begins to accrue, including the "free ride period," if any.

* For example: "Up to 30 days of free credit if you pay in full each month" and "We charge interest from the date we receive notice of your purchase."

(3) The method of determining the balance on which a finance charge may be imposed.

* For example: "A small monthly service charge on your remaining balance each month" and "Interest will be charged on your average daily balance each month."

(4) The method of determining the finance charge, including a description of how any finance charge other than the periodic rate will be determined.

* For example: "You only pay $ 1 each time you write an overdraft check" and "Minimum finance charge: 50 cents per month."

(5) The amount of any charge other than a finance charge that may be imposed as part of the plan.

* For example: "There is a $ 25 annual membership fee to get your card."

Non-triggering Terms

The following terms do not trigger the required disclosures: "Charge Accounts Available," "Open a Revolving Budget Account," "Just Say 'Charge It,'" "1,411 Major Credit Cards Honored," and "Charge Some Cash."

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