However, another important part of the debate focuses on the confusing language card companies often use to make it more difficult for consumers to understand the terms they are actually signing up for.
In a recent article, CNN asked 13 credit card customers to review a typical agreement with a card company. According to the report, only four of these people were able to even find the annual percentage rate for the card in question, and they reportedly found even that process confusing.
One man who runs a marketing firm that specializes in simplifying contract language told CNN that currently, credit card contracts tend to be filled with “gobbledygook” and that they reflect “total disregard” and disrespect for customers.
The report also noted that the credit card industry says that it supports the simplification of contract language but is facing some “constraints.”
The federal Credit CARD reform act does deal with the contract language issue to some extent. For example, a White House fact sheet from earlier this year notes that the bill will require “plain language in plain sight.”
This means that creditors will be required to disclose account terms before an account is opened, and clearly-worded statements will need to be provided in monthly statements afterward. Some examples include conspicuous display of fees paid in the current month as well as year to date.
The CARD act also requires lenders to provide periodic information on how long it could take to pay off an existing balance, and how much it would cost in monthly payments to pay it off in 36 months.
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