Do You Still Need to Read Your Credit Card Contract's Fine Print?

credit card application
credit card application

Sometimes public pressure really does pay off: There are signs that complaints from consumers and regulators about the lack of credit card contract transparency at banks have not fallen on deaf ears. recently released the results of its 2011 Credit Card Application Study. They visited the websites of the top 10 issuers, based on outstanding balances, and assessed how clear essential information was based on how easily they could locate it. Issuers lost points for making the information harder to find, if clicking to a new page to find pricing information was necessary, and if consumers had to dig deep and read the find print to find vital info. (Cardhub didn't make a similar study of the banks' hard copy documents.) focused on a set of specific information important to the customer: Did the banks' websites make plain how rewards points were earned and how much they were worth to the customer? Were annual fees clearly and prominently displayed? Was it easy to determine the introductory and regular APRs without having to go hunting through the fine print? How about for balance transfer fees?

Credit card transparency
Credit card transparency

The good news for consumers is that credit card issuers are getting a less enigmatic and opaque: The majority of issuers improved their absolute scores in the 2011 study relative to 2010.

"The most significant thing about these findings is that we are really starting to see increased transparency across the industry," says Odysseas Papadimitriou, CEO of "I think this is a direct result of the CARD Act and the fact that regulators are once again doing their jobs."

Capital One, (COF) and Bank of America (BAC) continue to be the best performing issuers, with top scores of 98.6% and 97.9%, respectively. The most improved issuer was U.S. Bank, (USB), which improved its score by 32.1 percentage points. The two issuers that scored the lowest were Discover (DIS) and Citi, (C), with scores of 82.5% and 82.1%, respectively -- identical to their scores from the year before. Both issuers fell by four positions in the rankings as other banks improved. But overall, the gap between the highest and the lowest scores is less than half as large as it was in 2010.

The big surprise says Papadimitriou, was U.S. Bank. "It drastically improved the clarity of its online applications since last year, and I think it's a great credit to them that they made these changes. It went from a score of just 59.3% in the 2010 study to 91.4%."

What does all this mean for you? "With all top 10 issuers getting a score between 82% and almost 99%, the average consumer can feel pretty confident that without reading the fine print they will be able to get all the key information that they need in order to make an informed decision as to the attractiveness of a particular credit card offer," says Papadimitrou. "That's not to say that they should not still read the fine print of the credit card they decide to apply for, but for comparative purposes they no longer have to do that."

There is still room for improvement though. Says Papadimitrou, "Information related to how valuable your rewards points and miles really are and information on the balance transfer fee continue to be the areas that lack the most transparency and therefore consumers should proactively seek that information. Be proactive in getting that information."

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