Recently you received a Change in Terms letter that informed you about the change to the Index for your account from Prime to LIBOR. Here are some quick questions and answers to help you understand this change better.

What is changing on my account?
The Index we use for variable rate accounts is changing from Prime to LIBOR.

What does LIBOR mean?
LIBOR stands for London Interbank Offered Rate. LIBOR is the rate of interest at which banks use to lend money to other banks in the wholesale money markets in London.

Where can I find the LIBOR Index?
The LIBOR Index is published in the northeastern edition of The Wall Street Journal in its Money Rates table, as well as numerous online sites.

How is LIBOR used?
LIBOR, like prime, is an index that is used to set the interest rates for various variable-rate loans, including credit cards. Lenders use such an index, which varies, to adjust interest rates as economic conditions change. Lenders also add a certain number of percentage points called a margin, which doesn’t vary, to the index to establish the interest rate you must pay. When the index goes up, the interest rates on any the loans tied to it also goes up. Although it is increasingly used for consumer loans, it has traditionally been a reference figure for corporate financial transactions.

Why are you changing from Prime Rate to LIBOR?
LIBOR is a better measure of global economic conditions than Prime which is exclusively used in the U.S.



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