However, they must disclose the actions that may trigger the penalty APR outside the box, where, according to consumer testing, this information often goes unnoticed. Under the proposal, therefore, card issuers would be required to include inside the box the specific triggers of a penalty APR – such as paying late on the account.
Creditors would also disclose the rate that will apply, the balances to which the penalty rate will apply, and the circumstances under which the penalty rate will expire or, if true, the fact that the penalty rate could apply indefinitely. The proposal would require card issuers to use the term "penalty APR" because testing demonstrated that some consumers misinterpret the term "default rate."