Friday, December 9, 2011
When is the last time you took a look at your credit card agreement? Have you ever actually read through your agreement, word for word? I haven’t, and I’m guessing you haven’t either. The reason we avoid muddling through our credit card agreement is because it is too dense and too difficult for most consumers to understand.
The Winston- Salem Journal has reported on a new and simpler credit card agreement that is being tested. A prototype of a simpler agreement was released Wednesday by The Consumer Financial Protection Bureau. The current average length for a credit card agreement is 5,000 words, packed with fine print and legalese. In contrast, the new prototype agreement is 1,000 words and organized into three key sections- costs, changes, and additional information. It is written in plain English in hopes of making it easier for consumers to understand a card’s costs and terms.
The form will be tested over the first half of 2012 with credit card applicants at the Pentagon Federal Credit Union. Some applicants will receive the existing version of the card agreement and some will receive the prototype, so that the agency can compare feedback. In addition to testing the credit card agreement, the agency is testing simplified forms for mortgages.
You can also provide feedback, after reviewing the form here. Would this form make it easier for you to understand your credit card agreement? Let us know what you think!