Quarterly Report of Credit Card Plans

INSTRUCTIONS FOR PREPARATION OF

Quarterly Report of Credit Card Plans
FR 2835a

General Instructions

Line 1:

Purpose and Scope

The nominal finance rate is the nominal APR disclosed to
cardholders, as required by Regulation Z (Truth-inLending).

This report is collected quarterly for the months of
February, May, August and November. It collects information on two measures of a depository institution’s
average finance rate applicable to its credit card accounts.
Include:
Only third-party, general-purpose cards (such as Visa,
MasterCard, Discover, and Optima). All accounts serviced by your institution, whether active or inactive.
Securitized accounts serviced by your institution, but not
carried on your balance sheet. Accounts with low introductory (teaser) rates.
Exclude:
Private label cards administered for retail stores, usable
only at those stores.

Nominal Finance Rate (Lines 1 and 2)
The nominal finance rate is a simple average of the
nominal APR for purchases across all accounts. Conceptually, this measure represents a depository institution’s
offering rate to all credit card holders and is independent
of the manner in which accounts are actually used (that
is, whether accounts are active or inactive, or whether
balances were or were not paid in full during the latest
billing cycle).
If your institution has different finance rates for purchases and for cash advances, report the rate applicable to
purchases, not the rate for cash advances.
Report data in lines 1 and 2 as of the last day of the report
month.
Report the rate in line 1 to two decimal places (for
instance, 16.08%).
FR 2835a
General Instructions

March 2012

Average nominal finance rate, all accounts

To obtain the average nominal finance rate, use either of
two comparable procedures (A or B below), depending
on which procedure is more easily carried out with your
depository institution’s data processing system.
Note: If your institution charges tiered rates that vary
with the amount of the balance owed, use the rate that
applies to the first tier (lowest amount of dollar balances).
Procedure A. Compute a simple average rate by summing across all accounts the rate applicable to each of
your credit card accounts, and dividing by the total
number of accounts.
Example: If an issuer has eight accounts, and the rates on
these accounts are 18%, 16%, 16%, 13%, 16%, 18%,
13%, and 16%, the average nominal finance rate is
calculated:
(18+16+16+13+16+18+13+16) = 15.75%
8
Procedure B. Assuming all accounts under a particular
plan have the same nominal APR, compute a weighted
average rate by weighting each distinct rate by the
number of accounts with that rate, summing the weighted
figures, and dividing by the total number of accounts.
This measure uses the following formula:
R=

Sum (r * n)
N

where:
R: weighted average rate
r: rate at end of month for particular plan or
type of account
GEN-1

General Instructions

n: number of accounts with rate r
N: total number of accounts in all plans
Example: If an issuer has three plans, with 300 accounts
under the 13% plan, 500 accounts under the 16% plan,
and another 500 accounts under the 18% plan, the
weighted average rate is calculated:
R=

(13*300)+(16*500)+(18*500) 20,900
=
= 16.08%
(300+500+500)
1,300

Line 2:

Total number of accounts

Report the total number of accounts referenced in determining the average nominal finance rate. Report the
actual number, not rounded.

Finance Charge Data (Lines 3 and 4)
The second measure of average finance rate will be
computed by the Federal Reserve from information supplied on this form. This measure will be calculated by
dividing total finance charges assessed during a period by
the sum of the balances on which those finance charges
were calculated, and multiplying the result by 12 (to
obtain an annual rate). Conceptually, this measure represents the APR charged to those cardholders who used
their accounts to obtain extended credit during the report
month.
The finance charge data will be used to estimate an
average finance rate for cardholders who revolve their
balances, by dividing total finance charges assessed
during a period by the total balances on which finance
charges were calculated (dividing line 3 by line 4). The
finance charge data draw upon two items provided on
cardholder billing statements: the periodic finance charge
and the balance on which charges were based (for
instance, the ‘‘average daily balance’’ for institutions
using that base for assessing finance charges).
Report data in lines 3 and 4 for the full month, or for the
complete billing cycle ending closest to the last day of
the report month.
Report data in lines 3 and 4 in thousands of dollars (for
instance, report $16 million as $16,000).
Line 3: Total finance charges billed in period
Report the amount of finance charges billed to all
accounts. On an individual credit card statement, this

GEN-2

item would be found in the field labeled ‘‘periodic
finance charge.’’ Sum across all accounts assessed a
finance charge during the billing period to obtain the total
amount of finance charges. Exclude non-interest charges,
such as late or over-the-limit fees.
Line 4: Total balances on which finance charges
are computed
For all accounts that were assessed a finance charge,
report the total amount of balances on which the finance
charges were computed.
Exclude from the calculation of the total all accounts for
which no finance charge was assessed during the period.
For most respondents, the balance on which finance
charges are computed is the ‘‘average daily balance.’’ If
your institution uses some balance concept other than
average daily balance to determine finance charges, use
that alternative balance concept in reporting on line 4.

End-of-Period Balances (Lines 5 and 6)
The data on end-of-period balances will provide a measure of the proportion of total balances during a period
accounted for by cardholders who revolved their previous balance. The balance concept to be used for lines 5
and 6 is the ending balance, generally identified on a
billing statement as the ‘‘new balance,’’ calculated as the
‘‘previous balance’’ less payments and credits, plus new
purchases and advances, plus finance charges.
Line 5:

Total ending balances for all accounts

For all credit card accounts, report the total amount of
ending balances. On an individual credit card statement,
the item is found in the field generally labeled ‘‘new
balance.’’ Sum across all accounts, whether or not
assessed a finance charge, to obtain the total amount of
ending balances.
Line 6: Total ending balances for all accounts with
finance charges
For credit card accounts with finance charges during the
period, report the total amount of ending balances. On an
individual credit card statement, the item is found in the
field generally labeled ‘‘new balance.’’ Sum across only
those accounts assessed a finance charge in the period to
obtain total balances in ‘‘revolved’’ accounts.

General Instructions

FR 2835a
March 2012