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Can we advertise a credit card product as “fixed” if it has a fixed introductory rate?

Question: 
We have a credit card product that has an introductory “fixed” rate that changes after 12 months to a variable rate APR. Management wants to really promote that fixed rate period, but I don’t think we can use the word “fixed”, can we?
Answer: 

You may, but there are strings attached. 1026.5(a)(2)(iii) says “If an annual percentage rate is required to be presented in a tabular format pursuant to paragraph (a)(3)(i) or (a)(3)(iii) of this section, the term fixed, or a similar term, may not be used to describe such rate unless the creditor also specifies a time period that the rate will be fixed and the rate will not increase during that period, or if no such time period is provided, the rate will not increase while the plan is open.”
Credit card disclosures must be “presented in a tabular format”, so while you can use the term “fixed”, you must also state the time period it will last. Also, the APR must be more prominent than any other rate and must be at least 16 point font size.

First published on 10/27/2024

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